There is a very interesting press release on BusinessWire.com titled “Florida PSC Approves FPL’s Fuel Cost Adjustment for 2006 Bills, Reflecting Volatile Global Fuel Costs and Hurricane Impacts in the Gulf
I highly recommend that you read it carefully and consider just how large the electric fuel business is, even in a limited service territory that also has four nuclear power plants in operation.
One particular item that I want to you pay attention to – FP&L’s Public Relations (PR) people go to great lengths to carefully explain that FP&L does not make any money at all on fuel purchased to provide electricity; it is a direct pass through in cost to consumers.
That should make some people feel better about the 19-41% increase in their electric bills, but others might wonder why the electric company gets to pass on their costs while truckers, small manufacturers, and other energy intensive businesses must absorb part of the cost increases with little ability to pass them on to their customers.
Though there is no profit in fuel, there is also little profit in making hard investment choices where the only possible return on the investment is in a fuel cost savings. One reason that new nuclear power plants have not been a top choice for electric utilities, even though fuel prices have increased fairly steadily for at least the last four years, is because the cost advantage for nuclear plants is lost when fuel costs are ignored by the decision maker.
(Disclosure – I grew up in an FP&L household.)
