Lessons from Hurricane Matthew helping in more than $1 billion utility recovery costs expected in Irma

NASA image of Hurricane Irma as it passed the east end of Cuba headed toward Florida early Sept. 8.  

With restoration costs for 2016's Hurricane Matthew now resolved, Florida's Office of Public Counsel is turning its attention to last year's Hurricane Irma and its utility recovery cost estimates that are expected to top $1 billion, the head of that office said during a recent interview.

"Matthew is now put to bed and we are turning our attention to Irma," Florida Office of Public Counsel Chief J.R. Kelly said during a Florida Business Daily telephone interview. "We've got four cost recovery dockets for Irma. That's Duke Energy Florida, Tampa Electric Company, Florida Public Utility Company, and Florida Power and Light. So we've got a lot of work ahead of us in the next few months."

The Office of Public Counsel's office will be using lessons learned during Hurricane Matthew to help tabulate utility recovery costs for Hurricane Irma, however.

"It will give them a  leg up as to how Florida Power and Light accounted for certain expenses, that they will know what to look for and how to look for it," Kelly said.

Florida Office of Public Counsel Chief J.R. Kelly   Photo courtesy of J.R. Kelly

"It's always easier to apply those lessons than the first time you look at somebody's book records because now you know the pattern, if you will. Irma will be a lot more work than Matthew just because of the sheer volume and the magnitude of Irma. Having Matthew under their belts, so to speak, will certainly help them."  

That lengthy and detailed process already is underway as figuring out utility costs for Matthew informs those of Irma, Kelly said. 

"It will help us as we begin reviewing the storm recovery for Irma, which is going to be quite a bit more money, about $1.3 billion," he said.

"That's what FPL has indicated they're going to be seeking. We don't know the exact amount yet because they have not yet filed their discovery."

FPL's discovery filing is expected in the next few days, Kelly said.

Hurricane Matthew was a Category 5 hurricane that hit in September 2016 while Irma was a particularly powerful and catastrophic Category 5 Cape Verde hurricane, the strongest storm ever recorded in the open Atlantic region, that hit last fall.

Earlier this month, Florida's Public Service Commission unanimously approved a settlement between Florida Power & Light and the Office of Public Counsel for almost $28 million in refunds to customers for Hurricane Matthew's restoration costs. Customers who typically use 1,000 kilowatt hours of electricity per month may notice the refund as a one-time credit of approximately $3 on their electric bills in August. 

"This sensible resolution puts a little more money back in our customers' pockets," FPL President and CEO Eric Silagy was quoted in a utility press release.

"Importantly, it speaks to the fact that we never lose sight of our responsibility to operate efficiently while executing an aggressive and rapid response to a major hurricane to safely restore power to all customers as quickly as possible."

Part of that efficiency shows up in the diligence in documenting how much recovery costs, according to the process Kelly described. 

"It's a tremendous amount of paperwork that we pour through, that our storm experts are pouring through," Kelly said during his Florida Business Daily interview.

"For example, some of the crews came from Canada, Missouri, Texas and points in between. We have to review all the information and make sure it gets charged to the right utility. We've come across some invoices where crews come into the state and they start helping with one utility and that utility releases them and they go help another utility."

With that much activity on the ground in an emergency situation, double billing - unintentional or otherwise - does happen and documentation for Irma is proving to be no different, Kelly said. 

"It's going to be quite a mountain to climb in terms of paperwork," he said.

That job becomes more frequent and even more unpredictable as experts say the number of highly destructive Category 5 storms are likely to increase this century due to greenhouse-gas-induced global warming

"That's always the unknown, how many hurricanes are going to hit this year or are any going to hit this year," Kelly said.

"When they do hit, they disrupt the current, ongoing process. I recall one episode a few years ago, I don't recall which hurricane, but we were in the middle of a Florida Power and Light hearing and the hearing had to be suspended because Florida Power and Light officials had to leave because they had to go deal with a hurricane that was hitting."

Despite the unknowns, the process continues, if largely quietly, Kelly said. 

"We're just going through our due diligences and our processes," he said.

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Florida Power And Light Group Incorporated Florida Public Service Commission

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