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11/01/2022
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11/01/2022
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1/5/2023 9:57:40 AM
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Meetings
Meeting Type
BCC Regular Meeting
Document Type
Agenda Packet
Meeting Date
11/01/2022
Meeting Body
Board of County Commissioners
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ORDER NO. PSC-2022-0358-FOF-EI <br />DOCKET NO. 20210015 -El <br />PAGE 4 <br />DECISION <br />ROE Trigger <br />On October 27, 2021, FPL filed a notice advising that the 30 -year U.S. Treasury Bond <br />yield rate as of August 10, 2021 was 1.99 percent a We have reviewed the rates published by <br />the U.S. Department of Treasury and confirmed that the 30 -year U.S. Treasury Bond yield rate <br />on August 10, 2021 was 1.99 percent. On August 31, 2022, FPL filed Exhibit No. 4, the daily <br />Treasury par yield curve rates released by the U.S. Department of Treasury for the period <br />February 23, 2022 through August 22, 2022.5 We have reviewed the rates published by the U.S. <br />Department of Treasury and confirmed that, by operation of math, the average 30 -year U.S. <br />Treasury Bond yield rate for this six-month period is 2.91 percent. <br />We have also reviewed the 30 -year U.S. Treasury yield rates published by the U.S. <br />Treasury Department and confirmed that the ROE Trigger provisions of the 2021 Settlement <br />Agreement have been met. Per Section 3(b) of the 2021 Settlement Agreement, if at any time <br />during the term of the agreement the average 30 -year U.S. Treasury Bond yield rate for any <br />period of six consecutive months is at least 50 basis points greater than the yield date on the date <br />the agreement was filed with us (ROE Trigger), FPL's authorized return on equity (ROE) shall, <br />after an elective filing by FPL, be increased by 20 basis points to be within a range of 9.8 percent <br />to 11.8 percent with a midpoint of 10.8 percent.b <br />The average 30 -year U.S. Treasury Bond yield rate for the period February 22, 2022 <br />through August 19, 2022 of 2.91 percent is more than 50 basis points greater than the 30 -year <br />U.S. Treasury Bond yield rate of 1.99 percent on August 10, 2021, the date the 2021 Settlement <br />Agreement was filed with us. Thus, we have confirmed that the ROE Trigger provisions of the <br />2021 Settlement Agreement have been met. <br />Return on equity <br />Per Section 3(b) of the 2021 Settlement Agreement, if the ROE Trigger is reached, FPL's <br />authorized ROE shall, after an elective filing by FPL, be increased by 20 basis points to be <br />within a range of 9.8 percent to 11.8 percent with a midpoint of 10.8 percent. Section 3(b) also <br />specifies that the effective date of the revised authorized ROE midpoint and range shall be the <br />first day of the month following the day in which the ROE Trigger is reached. Because the ROE <br />Trigger was reached on August 22, 2022, the effective date of the revised authorized ROE <br />midpoint and range is September 1, 2022. <br />Application of revised ROE <br />Per Section 3(c) of the 2021 Settlement Agreement, the revised authorized ROE midpoint <br />and range will be used prospectively for all regulatory purposes. However, in the Notice FPL <br />filed on August 23, 2022, the Company stated that it would not reflect the revised authorized <br />ROE in any of the clause recovery factors to be implemented January 2023. Instead, FPL <br />intends to reflect the revised authorized ROE in the clause recovery true -ups that will be filed in <br />'Document No. 12427-2021. <br />s Document No. 05885-2022. <br />6 Order No. PSC -2021 -0446 -S -EI, p.p. 26-27. <br />1�� <br />
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