Florida Power & Light will not have to share its $772M tax savings with customers, after the Florida Public Service Commission rules FP&L can keep the money because it used the savings to cover the costs of recovering from Hurricane Irma in 2017 without seeking to increase customers' bills.
Morgan Stanley analysts say the ruling will allow parent NextEra Energy (NEE +0.4%) to continue to earn near the 11.6% upper end of the authorized return on equity range and potentially avoid a rate case through 2022.
Stanley says the ruling confirms NEE's current treatment of tax reform savings is satisfactory, i.e. the offsetting of Hurricane Irma costs with utilization of reserve amortization and subsequently restoring reserve amortization through tax savings.
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