Under the agreement, 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. These amounts will be from FPL Group shareholder funds and will not affect customer bills.

On Feb. 26, 2008, FPL's transmission system -- the high-voltage power lines that carry electricity from power plants to substations -- experienced a service interruption as a result of human error. A field engineer was diagnosing a switch that had malfunctioned. Without authorization and contrary to FPL's policies and procedures, the engineer disabled the primary and backup equipment that prevents electrical failures at a switch from spreading. A failure occurred at the switch, and because both levels of protective equipment had been disabled, it caused an outage that affected approximately 600,000 FPL customers in southeast Florida for an average of one hour.

FERC's Office of Enforcement had asserted potential violations of industry reliability standards by FPL in connection with the event. FPL believes it was in compliance at all times. As part of the settlement agreement, FERC does not conclude in any manner that FPL violated any reliability standards or laws, and FPL does not admit any violations or liability in connection with the outage.

FPL noted that in a number of instances the standards it was alleged to have violated are ambiguous and subjective. The company agrees with the view stated by FERC Commissioner Philip D. Moeller, who said in a concurring opinion in today's order approving the settlement, that "[t]hose who are subject to Commission penalties need to know, in advance, what they must do to avoid a penalty."

"We deeply regret the inconvenience this incident caused our customers and the communities we serve. However, we disagree with the assertions of FERC's Office of Enforcement. We believe the evidence and the findings of independent investigations demonstrate that FPL was in compliance with industry reliability standards and that this incident was, unfortunately, the result of the inappropriate and unauthorized actions of an individual," FPL President and CEO Armando J.