Three major Florida utilities likely to raise rates

in Uncategorized by

Jim Saunders of the News Service of Florida reports that customers of three major Florida utilities likely will see increases in their monthly electric bills in 2012, though many Tampa Electric Co. customers could enjoy a small drop.

The four utilities — Florida Power & Light, Progress Energy Florida, Gulf Power and Tampa Electric — were required to file proposals Thursday with state regulators about their fuel costs for 2012.

While fuel costs are expected to decline at least slightly for three of the companies, they are only part of customers’ monthly bills. If the companies’ other proposed costs are factored in, bills would increase.

The exception is Tampa Electric, which said a residential customer who uses 1,000 kilowatt hours of electricity a month would see a drop from the current $107.02 to $106.92. The dime drop stems from lower costs for fuel and purchased power, which is another source of electricity that allows utilities to meet demands.

“In these challenging economic times, a decrease is a move in the right direction,” company president Gordon Gillette said in a statement after the proposed fuel costs were released. “We are pleased to be able to maintain low, stable bills while providing outstanding value to our customers.”

Fuel costs are one part of a customer’s monthly electric bill, which also includes such charges as base rates and environmental-compliance costs. Utilities are allowed to pass along fuel costs to customers, though they cannot profit from fuel charges.

The Florida Public Service Commission in the coming months will consider the fuel filings and other proposals before deciding how much money the utilities can collect from customers in 2012. That leaves uncertainty about the extent of the hikes.

As an example, Pensacola-based Gulf Power said Thursday it expects fuel costs to drop $1.62 a month for residential customers who use 1,000 kilowatt hours.

Spokeswoman Sandy Sims said in an e-mail that coal prices are projected to drop because of the end of contracts that can be replaced at lower costs. Also, she indicated the company will rely more heavily on cheaper natural gas for power generation in 2012.

But while Gulf customers will see lower fuel costs, the company also is seeking PSC approval of a significant increase in base rates. The PSC has approved an interim base-rate proposal that will increase 1,000-kilowatt hour bills this month from $122.67 to $127.16, and Gulf is seeking a further permanent hike that would take effect next year.

Progress is the only one of the utilities to propose an increase in fuel costs. With major repairs shutting down a nuclear plant in Crystal River, Progress has needed to use more natural gas, which has led to higher costs.

A Progress residential customer who uses 1,000 kilowatt hours of electricity a month would see a $5.99 increase in 2012 because of the costs of fuel and purchased power.

When all parts of the bill are factored in, that residential customer would see a jump from $119.34 this year to about $125 in 2012, according to Progress. Utilities commonly use 1,000 kilowatt hours as a measuring stick, though many homes use more electricity than that.

Florida Power & Light, the state’s largest utility, is projecting that a 1,000-kilowatt hour residential bill would increase from $96.54 to $99.10 next year.

FPL’s fuel costs for such a customer would decrease 4 cents, but the company is seeking to pass along other expenses for projects such as upgrading nuclear reactors in St. Lucie and Miami-Dade counties.

Mayco Villafana, an FPL spokesman, said such projects benefit customers because they ultimately lead to lower fuel costs.

Peter Schorsch is the President of Extensive Enterprises and is the publisher of some of Florida’s most influential new media websites, including SaintPetersBlog.com, FloridaPolitics.com, ContextFlorida.com, and Sunburn, the morning read of what’s hot in Florida politics. SaintPetersBlog has for three years running been ranked by the Washington Post as the best state-based blog in Florida. In addition to his publishing efforts, Peter is a political consultant to several of the state’s largest governmental affairs and public relations firms. Peter lives in St. Petersburg with his wife, Michelle, and their daughter, Ella.