Posted on 09/26/2004 9:04:24 PM PDT by BenLurkin
MIAMI, Sept 26 (Reuters) - Florida's biggest electricity company, Florida Power & Light Co., said on Sunday that this year's successive hurricanes almost certainly exhausted its $350 million storm fund but that it did not expect total repair costs to exceed that figure by much.
FPL President Armando Olivera said the company, whose transmission lines have been battered and downed by hurricanes Charley, Frances and now Jeanne, might end up drawing on its credit lines but did not foresee any impact on third-quarter results or future investment plans due to repair costs.
"At this point it's way too early to have any estimate of cost," Olivera said on a teleconference call with reporters after Jeanne roared ashore late on Saturday on Florida's Atlantic coast -- delivering a record fourth hurricane strike in one season to the state.
"In the meantime we will have bills to pay like everybody else and if need be we'll draw on our credit lines to pay for it," Olivera added.
With Jeanne still over Florida, company officials said the final costs of repairing power lines and damage to other infrastructure was impossible to establish. It depended to some extent on whether restoring power turned out to be a rebuilding exercise or just a repair exercise, said Geisha Williams, vice president of electricity distribution.
By midday Sunday, Jeanne had left 1.5 million FPL customers without power compared to 2.8 million after Frances struck the same area on the Atlantic coast on Sept. 5.
Around 900,000 FPL customers were also affected when Hurricane Charley came ashore on the southwest Gulf Coast on Aug. 13. Hurricane Ivan, which slammed into the Gulf Coast between Florida and Alabama on Sept. 16, devastated an area largely served by other utility companies.
"A good chunk of the costs of these three hurricanes was already covered by the existing storm fund that we had," Olivera said.
"We are almost certain that we have exhausted that storm fund but the difference between that -- it's almost $350 million -- and whatever the total turns out to be, I don't believe that's going to be a huge number."
He said power lines were a regulatory asset that would not have to be expensed in the third quarter results. He did not discuss any estimate for lost revenue or the financial impact of outages at the company's St. Lucie nuclear reactors.
The company's plans to spend about $6.4 billion between 2004 and 2008 on new power plants and transmission lines to keep up with increased customer demand for electricity should not be materially affected, he said.
Olivera also said it was too early to determine whether customers might end up paying the bill. FPL customers now pay a surcharge of 20 cents per month to replenish the storm fund. In Florida, all storm costs are recoverable.
FPL, a subsidiary of Juno Beach, Florida-based energy company FPL Group Inc. (FPL.N: Quote, Profile, Research) , serves 4.2 million homes and businesses in Florida.
FPL Group reported second-quarter net income of $257 million, or $1.43 a share, up from $239 million, or $1.34 a share, a year earlier.
Exactly the info I was wanting to know earlier today. Thanks for the post.
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