The Florida Public Service Commission (PSC) has approved a proposal by Florida Power & Light (FPL) intended to provide an incentive for local governments to move overhead power lines underground. FPL requested the change to its operating tariff in order to improve reliability of service and reduce vulnerability to storm damage.

“The approved tariff provides local governments with a viable new option to use as a means of strengthening their electric infrastructure,” said PSC Chairman Lisa Polak Edgar. “The Commission will continue to encourage Florida’s investor-owned utilities to implement strategies to minimize future storm damage and reduce the resulting outages experienced by customers.”

Under FPL’s previous operating tariff, the company required local governments requesting a conversion project to pay the full cost of moving overhead power lines underground. FPL’s revised tariff now credits the sponsoring local government 25 percent of the total expense.

An analysis by FPL indicates the 25 percent undergrounding credit represents the average savings in storm restoration costs the utility’s entire customer base would share following a major weather event.

The PSC approved the tariff as a limited time pilot project, expiring in October 2008, when more information on storm hardening is filed and additional cost/benefit reviews can be initiated. At least 60 days before the tariff expires, FPL is required to file a report with the PSC with updated information on the initial estimated storm restoration costs and provide actual figures if they are available. At that time, FPL should be prepared to petition the PSC to continue, modify, or discontinue the tariff.

The PSC is committed to making sure that Florida's consumers receive their electric, natural gas, telephone, water, and wastewater services in a safe, affordable, and reliable manner. The PSC exercises regulatory authority over utilities in the areas of rate base/economic regulation; competitive market oversight; and monitoring of safety, reliability, and service