Carl
Level 15

Get your taxes done using TurboTax

@Opus 17 Maybe this will be helpful?
There's a friend of mine across town that when through this same scenario in 2022 with their 2022 taxes. I accompanied him to his appointment with the local tax advocate. (I was his ride while car was in the shop). Here's what I learned from the tax advocate.
There's two perspectives to understand here. The power company's perspective (FPL in this case) and the taxpayer/client's perspective.
From the power company perspective, they are required to report as income all funds they receive from any source, for any reason pertaining to the product or service they provide. In this case, the project they received money for was electricity.  When later discovered they had overcharged the customer, it wasn't as simple as "here's your refund". They needed to "show" where that money went and why it was not longer taxable income to the power company.  Also, the power company has no way of knowing if what you paid them originally was fully or even partially tax deductible for the customer when they paid it. Therefore a 1099-MISC was issued to the customer that received the refund. (A bit over $1K in this case).
From the customer perspective, the customer paid tax on that money "before" they paid it to the power company. So why should they have to pay taxes on it again when it's refunded to them as reimbursement for a product the customer never received from the power company?
It's a catch-22 for both. However, the taxpayer can "offset" the taxing of that refund on their tax return. I don't recall the specific line numbers of course. But I know there's a way to "cancel it out" in TurboTax. When doing this, it is important that the taxpayer keep all correspondence related to the "incident" for at least 3 years, recommended 7 years. It'll save your butt should the IRS question the "offset" of it's taxability in the future.

My 2 cents. Take it or leave it.
To avoid all this crap, I'd ask the power company if they would just keep the money as a credit against my future use/billing.  I don't know if @mkm24 lives in a location where their local provider will accommodate that. But maybe it's worth asking?