Notice to Customers

NOTICE TO CUSTOMERS

On August 22, 2024, Florida Public Utilities Company (“FPUC” or “Company”) filed a Petition with the Florida Public Service Commission (“Commission”) seeking approval to increase rates and charges to produce an additional $12,593,450 in revenues. The proposed increase, if approved, would increase the total bill in January 2025 for an average 1,000 kWh/month customer by up to $17.91/month or 10.66% over the current average bill. The Company has taken steps in other areas that may reduce other charges on customers’ bills, which will potentially lessen or partially offset the impact of any approved base rate increase. The Company is also requesting interim rate relief to temporarily increase its revenues by $1,812,869, pending the Commission’s decision on the Company’s request for a permanent increase. The Florida Public Service Commission Docket number assigned to this request is Docket No. 20240099-EI.

FPUC’s last rate case was conducted in 2014. Since then, FPUC has made significant capital expenditures, particularly associated with reliability improvements. The Company has, over the same period, faced increased operating and maintenance costs associated, to a significant degree, with customer service improvements, increased regulatory requirements, and system improvements to enhance reliability. Inflation over the past ten years has also had a significant impact on costs.

The Company has taken steps over the years to try to control its costs in order to delay this filing and has continued its efforts to address other costs that impact our customers’ bills. One benefit of the Company’s ability to delay its current rate case until now is that, shortly after any rate increase associated with this request is implemented, the Company will also be removing the surcharge associated with cost recovery associated with Hurricane Michael, which should mitigate the total bill impact for our customers. In spite of its efforts to control costs, the Company has experienced notable cost increases associated with insurance, as well as costs associated with the implementation of newer technology, including enhanced cyber security. The Company has also invested in its electric transmission and distribution system to ensure that it is able to continue providing safe and reliable service to its customers. Most notably, the Company is purchasing the northwest Florida substations and will be refurbishing and rebuilding certain existing substations.

While the Company has experienced cost increases and made necessary investments in its system, the Company’s projected net operating income in 2025 is projected to be $991,558. The projected rate of return is, consequently, projected to be 0.66 percent, while the return on common equity is projected to be negative 3 percent in the test year. As such, without the requested revenue increase, FPUC’s ability to continue to provide the safe, reliable service its customers expect and deserve will suffer. Rate relief will also ensure that capital-intensive reliability projects will not be delayed or abandoned.

While not yet defined by the Commission, the amount of any such approved increase will not exceed the amounts identified in the chart attached hereto in the column “Proposed Rates.” The chart also reflects certain proposed increases in the Company’s charges for certain services. The amount in the “Interim Rates” column is the amount the Commission approved at its October 1, 2024, Agenda Conference, and those rates will become effective on November 1, 2024. These rates provide temporary relief for the Company while the Commission processes the Company’s request for the permanent relief. Filings in the case are accessible at: https://www.psc.state.fl.us/clerks-office-dockets-level2?DocketNo=20240099 . Information regarding the Company’s request is also available at https://fpuc.com/electric-rates/ or by calling the Company at 1-800-427-7712. You may also obtain information by calling the Florida Public Service Commission at the following, toll-free number: 1-800-342-3552.