The case of the shrinking electricity demand
The bad news at TECO Energy, parent of Tampa Electric, is that it lost more customers than it added in the third quarter -- a seemingly impossible feat for an electric utility in Florida. "We've never seen this since I've been working at Tampa Electric," said TECO chief financial officer and 26-year veteran Gordon Gillette, according to this St. Petersburg Times story. What happened? Plenty of new meters but they got counted as customers when, in fact, they were attached to vacant homes that were never occupied and used a minimum 300-kilowatt hours a month (about a quarter of what is more typical). "Actual new customer additions of 1 percent are being offset by meters being disconnected due to foreclosures and vacancies," Gillette said.
The good news, what little there is: Tampa experienced a 38-percent increase in existing home sales in September. "Our belief is that housing prices have perhaps been driven down to a level that bargain hunters are now finding good values in homes they are now buying," Gillette told analysts in a conference call Thursday.
* On growth: "Overall, the year-to-date customer growth has been 0.3 percent, which is below our first quarter expectation for customer growth of more than 0.6 percent for the year." Look for the credit market crisis and its resulting economic impact to delay economic recovery until well into 2010.
* On slowing commercial and industrial energy sales: "The statewide economic situation is also driving lower electric and natural gas sales to commercial and industrial customers that supply the housing industry and consumer discretionary purchases. We believe we are experiencing some voluntary conservation by our electric customers due to consumers paying more for basics, such as food and consumer's general concerns regarding the economy."
* On slowdowns beyond housing sector: "Florida and the Tampa region have higher unemployment rates in a national level that we are initially driven by a drastic slowdown in the construction industry but increasingly other industries are now a factor in the high unemployment levels due to the overall economic slowdown.
Perhaps the most novel explanation for the drop in electricity use comes from John B. Ramil, TECO president: Those darn kids and their conservation ethic.
"We know that kids are coming home from school, and have become the Turn Off The Light Police, and that people are replacing bulbs with the compact fluorescents, and that's a fairly new phenomenon and that's reducing some of the residential consumption as well."
Tampa Electric, recently revising its electricity pricing, says a bill for a 1,000-kilowatt per month residential customer will be $128.44, compared to the original projection of $139.25. That does not reflect recently announced plans to request an increase in base rates and services charges. If approved , they would add another $10 to the bill effective in May 2009.
-- Robert Trigaux, Times Business Columnist