Florida Electricity Consumers Burdened With Historic Rate Hike

Florida is not in a good place. Where once many people thought they’d be forever living in a low-cost tropical bliss, the severe storms, pandemic fallout, tariff-induced economic meltdown, and diseased citrus groves have shattered that illusion. The housing market is cooling, foreclosures are rampant, rents are too damn high, and home insurance is astronomical.

Earlier this month, a Florida Atlantic University Business and Economics Polling Initiative poll uncovered that roughly half of Floridians were “seriously considering” or “somewhat considering” leaving the state due to the cost of living. Asked about inflation, specifically grocery and energy costs, a healthy majority of the 1,000 people surveyed had worries about rising prices.

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Floridians got a reprieve from hurricanes this year, but late last month Florida Power & Light (FPL) did its part to pummel half the state with a $7 billion rate hike, the largest in the country. The utility, which is the largest in Florida and one of the largest in North America, is the latest to concede to data center–fueled rate hikes that tend to hit low- and middle-income ratepayers the hardest.

FPL’s desire for a higher return on investment is also in play: Roughly one-third of the first year’s rate increase under the new rates would boost its profits. Daniel Lawton, an economist working in utility consulting, offered written testimony on the rate increase to the Florida Public Service Commission (PSC) in June. “I have reached one major overall conclusion,” he wrote. “FPL’s shareholder profit request is a substantial overreach resulting in excessive rates and harms all Florida customers if such request is granted by this Commission.” Yet the PSC approved the increase.

An analysis by national advocacy group Food & Water Watch indicates that Floridians in regions served by FPL—about 12 million residents—will have to spend on average more than $14 each month in 2026; that translates to customers paying an additional $175 annually in energy, fuel, and taxes. Residential customers will pay $1 billion more; small businesses would pay about $75 million more.

The Office of Public Counsel, which represents consumer interests in utility issues before the PSC, offered up a $5 billion plan that would have trimmed the base bill for the average residential customer, instituted a rate freeze and a minimum bill, and still delivered a comfortable return on equity (ROE) for FPL.

Jason Garcia, an Florida investigative journalist, noted on his “Seeking Rents” Substack that a “small change in ROE has a big impact on rates. A single percentage point increase to the ROE for FPL’s shareholders equals roughly $500 million—half a billion dollars—extracted from FPL’s customers.”

But neither the Office of Public Counsel nor any of the consumer groups invested in the case were in the room when the deal happened. The PSC had paused to consider an agreement between the utility and an umbrella group representing data center representatives, as well as Walmart, Wawa, and industry groups like the Florida Retail Federation.

What the PSC voted on after that meeting was FPL’s third increase since 2021, which was the largest in the history of the U.S. at that time. Under the new rate schedules, smaller data centers under 50 megawatts would save more than 50 percent on their utility bills. The original FPL proposal put forward an overall 65 percent increase on data center rates.

FPL has said the rate increase would only amount to $2.50 per month for the “typical 1,000-kWh residential customer bill” since some other surcharges would decrease. This year, customers are also paying a monthly $12.02 “interim storm restoration charge,” implemented after the 2024 hurricane season.

The five-member PSC voted unanimously to approve FPL’s increase. Appeals are expected, and the case may end up before the Florida Supreme Court. That would be an interesting proceeding, considering that Florida Supreme Court Chief Justice Carlos Muñiz has already blasted the commission after presiding over the Office of Public Counsel’s appeal of a 2023 rate hike for a natural gas company.

“The PSC is a black box,” Muñiz said at the time. “And administrative procedure is not supposed to be [a black box]. It’s supposed to be the opposite of a black box. That’s the only justification for this whole mousetrap is to have reasoned explanations for fact-based decisions. And, instead, we get a regurgitation of the evidence and then like, ‘Oh, because so-and-so said this, we think that this is appropriate’ … That is literally every order that we see from the PSC.”

The widespread dismay about electricity rates and the affordability nightmare that has riled up voters promises to roil the 2026 legislative session and the midterm campaign season. A bipartisan group of state lawmakers objected to the increase to no avail. State Sen. Don Gaetz (R-Pensacola; and yes, the father of Matt Gaetz, the former member of Congress) has introduced a bill mandating a slate of PSC reforms that would increase the number of commissioners to seven and require a major overhaul of how the body studies and sets rates, mandates a utility’s ROE, and reports its findings. Whether his bill will be buoyed by voter outrage remains to be seen; Gaetz’s last reform attempt died in committee.

On the campaign trail, the Democratic candidate for Florida attorney general, Jose Javier Rodriguez, the former Biden Labor Department assistant secretary for employment and training and former state senator, has embedded affordability and the controversial rate increase into his messaging. On his way into an October hearing on the rate increase, Rodríguez slammed FPL for telling the PSC that “their shareholders will somehow be disappointed if they don’t get the increase. The only reason why they say that stuff,” he continued, “is because institutional corruption runs rampant here in Tallahassee. Florida Power & Light and special interests like them get whatever they want.”

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