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FPL Reaches Deal with Cities on Underground Wires

The state's largest electricity provider agreed Wednesday to connect with municipalities on the best way to pay for putting some of its power lines underground.

Putting power lines and other equipment underground comes up frequently in hurricane-prone Florida, but power companies have generally said that it doesn't solve the problem - underground facilities can be harder to repair and underground problems can be harder to find.

With that history as a backdrop, the Florida Public Service Commission (PSC) planned to conduct a hearing Wednesday morning to take up petitions by Florida Power & Light related to underground distribution (Docket Nos. 070231-EI and 080244-EI). However, at the start of the meeting, the company said it was near a deal with the Municipal Underground Utilities Consortium (MUUC) and the City of South Daytona that would remove the necessity for a full PSC proceeding if it was approved by the regulatory panel .

The PSC had planned to consider the appropriate tariffs for underground power distribution that FPL would charge for residential and commercial development. The charges, known as underground residential distribution (URD) charges, were approved by the PSC in 2007, but challenged by the municipalities in 2008.

The fees at issue, typically paid by developers, were divided into low density lots (210 lots), high density lots (176 lots) and group meters. The previously approved rate for low density lots was as high as $731.23, as much as $280.19 for high density lots and as high as $96.15 for group meters.

But the parties told the panel that they have reached a proposed settlement and asked the PSC to postpone its hearing to allow the deal to be formalized and to let PSC staffers review it and create recommendations. The commission unanimously agreed, though spokeswoman Kirsten Olsen said the approval came with a few conditions.

"The settlement reached by the parties is contingent on several conditions," she said in an e-mail. "The cities represented by MUUC must approve the settlement, FPL must revise some tariffs related to these dockets and the commission must review and approve the amended tariffs as well as the settlement itself."

The PSC ‘s 5-0 vote will bring the settlement back before the regulatory panel, chairman Matthew Carter said.

"The game plan is for all of this to come back to us in a neat package," Carter told representatives of all the parties after the PSC reconvened Wednesday afternoon.. "This way, the parties have an opportunity to go through their neighborhoods and city councils and county commissions and this gives us an opportunity to do our deliberations and have full disclosure of the terms."

The PSC did not set a date for taking up the settlement.

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