Miami Herald: FPL accused of not sharing its tax break
Jan 6, 2010
The Miami Herald published this article on January 6, 2009.
BY MARY ELLEN KLAS
Herald/Times Tallahassee Bureau
The Florida Public Service Commission said Tuesday it is looking into anonymous allegations that Florida Power & Light’s parent company took an estimated $1 billion in tax credits — and didn’t pass the savings on to customers.
A letter sent to the PSC Monday claims that the parent company of both FPL and NextEra Energy Resources benefited by taking federal tax credits for NextEra’s wind-energy production but did not apply the savings to FPL customer bills. The company, FPL Group, pays the taxes for both FPL and NextEra.
The letter was signed by three “concerned and fearful current employees” of NextEra.
Mike Davis, FPL’s vice president of accounting, in a letter to the PSC Tuesday dismissed the allegations as full of “misstatements and fundamental misunderstandings.” He said all Florida utilities and “the overwhelming majority of the electric utilities in the country” use that same tax calculations FPL did when deciding how much in taxes should be paid by consumers.
Davis said the parent company received a tax reduction becauseNextEra, the unregulated subsidiary, receives federal credits for wind energy. But he said FPL customers are charged the full tax rate because regulators do not allow a company’s unregulated subsidiary to subsidize the part that is regulated.
PSC general counsel Curt Kiser said that the commission is “taking the letter very seriously” and is trying to determine if “there something here that is inappropriate or should have been disclosed.”
Davis said the allegations of misuse of tax credits were raised before and dismissed by both the PSC staff and by the Third District Court of Appeal in Miami in a 2006 lawsuit. He speculated that the “true intent” of the letter to commissioners is to “deceptively incite negative media coverage in order to distract from the facts of FPL’s base rate proceeding.”
The PSC will vote Jan. 13 on FPL’s request to raise its base rates by $1.3 billion a year.
Mary Ellen Klas can be reached at meklas@MiamiHerald.com