Florida Power & Light Co., a subsidiary of FPL Group Inc. (FPL), Thursday said it has agreed to pay $25 million in settlement with the Federal Energy Regulatory Commission and the North American Electric Reliability Corp. related to a power outage in Florida last year.
Under the settlement, FPL will pay $10 million each to the United States Treasury and NERC, and will invest $5 million in transmission system reliability enhancements above and beyond already planned investments.
The company noted that the settlement amount will be paid from FPL Group shareholder funds, and will not affect customer bills.
FPL President and CEO, Armando Olivera, said, "This event dates back to February 2008 and could take several more years and be very costly to resolve through litigation with a federal regulatory agency. Litigation would require the time and attention of the same people who are responsible for the reliability of the grid. As a result, we believe a settlement is an appropriate course of action at this time."
On February 26, 2008, FPL's transmission system experienced a service interruption as a result of human error. It caused an outage that affected approximately 600,000 FPL customers in southeast Florida for an average of one hour.
While FPL disagrees with the Office of Enforcement's assertions regarding potential violations of industry reliability standards, the company readily agreed to implement several additional measures in areas such as training and enhanced operating procedures to further strengthen the system against human error.
The company said it has already implemented most of these actions based on its own post-incident assessment, demonstrating commitment to industry-leading reliability.
FPL is currently trading at $53.29, up 40 cents.
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