Dive Brief:

• Florida Power & Light wants to continue an asset optimization program it says is benefiting both shareholders and customers alike, but some critics say it is rewarding the utility for simply doing its job.
• Public counsel J. R. Kelly told Politico Florida the mechanism credits the utility for making least-cost purchases and taking other actions which other utilities do without the incentive.
• FPL filed its request in April; the utility points out that in addition to profiting from the sale of energy the program provides incentives for efficient leasing of gas pipelines and power transmission lines.

Dive Insight:

FPL's incentive program is producing benefits for customers—$22 million to customers over the last three years—but critics of the program say that the utility should be doing some of these things simply as a matter of course. This request comes as part of the utility's upcoming rate case, which asks for a $1.3 billion rate increase. 

Public Counsel J. R. Kelly told Politico Florida "There is nothing like that out there across the nation where utilities are getting incentive payments, for example, for making least-cost (power) purchases... They are already supposed to do that. They are already supposed to buy the cheapest."

As part of the program, FPL shareholders have benefited $3 million.

The Florida Public Service Commission approved the incentive program as part of the utility's 2012 rate case. Though the utility said it is difficult to make an accurate estimate, FPL believes the plan is saving customers money.

"It is difficult to make a complete comparison of the benefits to customers under the two mechanisms because FPL was already actively engaged in both economy sales and purchases when the current Incentive Mechanism was approved," according to its filing. Though it added that it has expanded those activities since the mechanism was approved.

For a "simple and conservative comparison," FPL pointed regulators to value generated its natural gas transportation, storage and trading optimization activities. Those are essentially new, and show a benefit of $21.7 million for the years 2013, 2014, and 2015, the utility said.

While there is a threshold of savings that must be reached before shareholders can be included in the savings, FPL is proposing to lower the threshold from $46 million to $36 million. 

In another proposed change, FPL would eliminate a 514,000 MWh threshold after which is would be allowed to recover variable power plant operating and maintenance expenses.