Could American households-already operating on razor-thin budgets-afford the largest utility rate hike in U.S. history? In February 2025, Florida Power and Light, serving approximately six million customers, asked for a nearly $9 billion hike over four years to raise its return on equity from 10.6% to 11.9%. The utility cautioned that, absent the rate hike, its earned ROE would plummet to an projected 8.84% in 2026, a figure still substantially higher than what many analysts regard as a reasonable rate of return for a monopoly utility.

If approved, the rate change would add an estimated $12 monthly to residential bills starting in 2026 atop the existing $12 hurricane recovery surcharge from 2024. Annual costs to households are expected to grow at least $288, besides other surcharges that may be added in. Food & Water Watch put the total impact-with extras included-at as high as $360 a year by 2027.

Public reaction has not been late in coming. In a national FPL Rate Case Press Briefing, U.S. Rep. Kathy Castor pointed out, “Floridians need relief from skyrocketing electric bills, but too often utility companies and politicians secretly act to make energy more expensive and boost shareholder profits rather than serve the public.” Those concerns were echoed by consumer advocates, who urged the PSC to rebuff the request and put affordability first. Susan Glickman with The CLEO Institute added, “Families shouldn’t have to choose between paying their power bill and putting food on the table.”

That is not some abstract financial concern: Data presented during the briefing reflected that from March 2024 through February 2025, FPL disconnected power to 1.216 million residential customers for non-payment-roughly one-fifth of its customer base. This rate increase could further exacerbate what energy justice experts refer to as “energy burden,” or the share of income that goes to utilities, for low-income households and seniors. According to the American Council for an Energy-Efficient Economy, households that spend more than 6% of their income on energy are considered burdened, while those that spend over 10% are severely burdened.

That accordingly means 47% of residents in Florida already struggle to meet basic costs of living; many forced into “heat or eat” dilemmas. Of course, the problem is basically structural and therefore deep: historical housing segregation and aging, inefficient stock means low-income and minority communities are often saddled with higher utility bills because of their poor insulation, outdated appliances, and inadequate weatherization. This situation is then exacerbated by the rental properties through the so-called “split incentive” problem, wherein landlords have little incentive to invest in energy efficiency when someone else is paying the bills. These can waste up to 20-30% of the energy consumed, keeping the costs high. High returns on equity, as requested by FPL, drive large swaths of customer bills, experts say.

One think tank, Rocky Mountain Institute, puts the share at 15-20%. Meanwhile, there is also reason to believe the ROEs that many utilities are allowed to set are well above the cost of equity-or the return investors really need-thereby favoring capital-intensive projects over potentially cheaper alternatives like energy efficiency. There is this so-called “capex bias” that may delay the wider use of cost-effective, clean energy options while keeping prices higher. Of all the immediate defenses available to households bracing for higher rates, the closest to a real go-to and game-changer would be reducing their consumption.

Energy-saving strategies-sealing air leaks, adding insulation, replacing inefficient appliances, and installing programmable thermostats-can pare down usage. Behavioral changes also count: flicking off lights not in use, limiting reliance on hot water, and unplugging idle electronics can help yield incremental savings. Some nonprofits and utility programs offer free or discounted weatherization services, which can especially be handy for those in older homes. According to policy advocates, long-term relief requires reform. Bringing ROEs better in line with true investor needs can save US electric consumers billions each year.

Energy upgrades in subsidized housing and scaling up low-cost weatherization programs on rentals could attend both economic and environmental dimensions of energy burden. With a decision by the PSC set for later this year, the stakes are stark for households in the Sunshine State: Left unchecked by regulators, one proposed rate increase would inflate the financial burden on families, giving way to a debilitating cycle in which utility costs outpace incomes, forcing hard choices about basic needs.