Wednesday, April 25, 2018
Business

Big disparities in utility rates may stunt Florida's economic growth

Sharply different electric rates grate on me. They should bug you, too.

If you are in Tampa Electric territory, you are better off than Progress Energy customers across the bay. But all of you pay a lot more than your counterparts south of Tampa Bay.

The gap between the highest and the lowest price is enormous. And it may grow larger in coming years.

The difference has grown so noticeable that it may start influencing where people and new business choose to live and operate. That would place parts of Tampa Bay at a competitive disadvantage.

Electricity prices "are a critical factor in economic development," says Florida Retail Federation CEO Rick McAllister. "People look at that."

Let the rubbernecking begin.

Florida Power & Light, whose service territory stretches from South Florida to the southern borders of Pinellas and Hillsborough counties, charges just $94.62 (before fees and taxes) for 1,000 kilowatt hours of electricity. That amount is about what a small residence uses in an average month.

Progress Energy Florida currently charges $123.19 for that amount of electricity. That's one-third more than Florida Power & Light, an annual difference of about $336 — no small sum in these lean times.

The third big utility here serving Hillsborough and parts of some adjacent counties, Tampa Electric, charges residential customers $106.90 — still 13 percent cheaper than Progress Energy.

The difference in residential rates generally holds true for the rates the same utilities charge businesses, from retail stores to big industrial plants. Florida Power & Light is cheapest. Tampa Electric is mid-priced. Progress Energy Florida is the most expensive.

Why do power companies with monopoly control in adjacent service territories charge wildly different prices for the same basic commodity?

Utilities say their costs vary based on the types, age and quality of power plants they own, the kinds of fuels (natural gas, coal, oil, nuclear and alternative energy like solar) they use to generate electricity, the accuracy of their own fuel forecasts, and even environmental issues.

That complex mix is reflected in the price they then charge customers.

No argument there. But let's add another factor. Management — the ability to operate efficiently and control internal costs — also factors heavily in whether electricity prices are lean or bloated.

Some things especially aggravate me:

• Progress, with its high rates, also ranks dead last in both residential and business customer satisfaction in the latest J.D. Power regional surveys. High rates, low customer satisfaction — not the best pitch for attracting new companies to the area.

• Progress Energy, headquartered in North Carolina, charges significantly lower electric rates to its Carolina customers than it does in Florida. And its Carolina utilities rank higher in customer satisfaction among their peers in J.D. Power surveys.

• Progress Energy Florida and Florida Power & Light, Florida's two operators of nuclear power plants, benefit from a Florida law passed in 2006 that lets them charge their customers long in advance for proposed nuclear power plants — in Levy County, north of Tampa Bay, for Progress Energy and in South Florida for Florida Power & Light.

That pay-in-advance law will raise Progress Energy's rate from $123.19 to $128.12 next year. In similar fashion, Florida Power & Light expects to raise its price by about $6.80 a month, subject to state approval, which will still keep its rates among the lowest in the state.

• If Progress Energy commits to build the Levy County nuclear plants, then the pay-in-advance fees it can levy on customers will spike significantly to cover rising plant costs. (Florida Power & Light's prices also will increase.) Translation? The $128 price tag Progress Energy will charge next year may soon look like a bargain.

• Another wild card: Progress' sole nuclear plant in Florida is broken and has been out of commission since 2009. If the Crystal River plant is repaired, and for now that remains unclear, it won't be fixed until at least 2014. The repair bill and extra costs of buying replacement electricity will also affect future rates.

None of this bodes well for Florida Gov. Rick Scott's quest to make Florida a super-low-cost place for business.

Statewide, Florida's electricity rates already fare poorly compared to other Southern states. A report issued last fall by Theodore Kury at the University of Florida Public Utility Research Center concluded that electricity costs in Florida "appear to be higher on average than costs in neighboring states."

Now add to that expert forecasts that electricity rates will generally rise in the coming decades. And the rates at some utilities clearly will rise faster than others.

That's hardly reassuring for an area desperate to get back in the economic fast lane.

Robert Trigaux can be reached at [email protected]

Comments
Yelp search results reflected racist stereotype that Asian American restaurants serve cat and dog

Yelp search results reflected racist stereotype that Asian American restaurants serve cat and dog

A strange thing happened when typing "dog menu" into the restaurant ratings website and app Yelp. It automatically generated suggested searches. There were dog massage, hot dogs, pet groomers. Also: "dog meat." But it got more disturbing. Take Yelp...
Updated: 7 hours ago
As more emotional support animals fly on U.S. airlines, Congress eyes new ways to tighten the leash

As more emotional support animals fly on U.S. airlines, Congress eyes new ways to tighten the leash

WASHINGTON — With hundreds of thousands of emotional support animals taking to the skies on U.S. airlines, Congress may start pulling a tighter leash.Two new legislative options emerged this week to address a hairy issue for American Airlines, Southw...
Updated: 7 hours ago
Duke Energy announces new Florida leadership

Duke Energy announces new Florida leadership

ST. PETERSBURG — The head of Duke Energy Florida is leaving his post to take a new role with the utility’s parent company June 1, the company announced on Wednesday.Harry Sideris, 47, was appointed this week to serve as vice president and chief distr...
Updated: 7 hours ago

Comcast challenges Murdoch with rival bid for U.K.-based Sky

LONDON — U.S. media giant Comcast on Wednesday offered $30.7 billion for Sky PLC, topping a bid from Rupert Murdoch’s 21st Century Fox and setting up a bidding war for Britain’s biggest satellite TV company.Comcast said it would pay approximately $17...
Updated: 8 hours ago
Sprouts Farmers Market to open new store in Pasco County

Sprouts Farmers Market to open new store in Pasco County

TRINITY — Pasco County will be getting its first Sprouts Farmers Market, the organic grocery chain announced Wednesday. The new store will open at the Village at Mitchell Ranch on State Road 54 and Little Road. Officials with the speciality st...
Updated: 8 hours ago
Circle K launching own gas at eight Hillsborough locations

Circle K launching own gas at eight Hillsborough locations

TAMPA — Circle K is converting the gas station portion of eight of its Hillsborough locations to Circle K fuel. Previously, the fuel was provided by other brands, such as Shell. The new Circle K branding also brings with it the Canadian-owned conveni...
Updated: 8 hours ago
Florida leads other hurricane-prone states in quality of its building codes

Florida leads other hurricane-prone states in quality of its building codes

Florida has the strongest residential building codes among 18 coastal states, according to a new study by the Insurance Institute for Business & Home Safety. Florida’s rating is 95, almost three times higher than lowest-ranked Texas. Other states wit...
Published: 04/25/18
Study: Tampa Bay homes in once ‘redlined’ neighborhoods worth half those in other areas

Study: Tampa Bay homes in once ‘redlined’ neighborhoods worth half those in other areas

Times staffRedlining’ — banks’ refusal to make mortgage loans in certain areas — still has a huge effect on housing values even though the practice was banned 50 years ago. According to Zillow, a Tampa Bay house in a once-redlined area is worth less ...
Published: 04/25/18
Tex-Mex chain Chuy’s opens first Tampa restaurant, Nebraska Mini-Mart grab-and-go coming soon

Tex-Mex chain Chuy’s opens first Tampa restaurant, Nebraska Mini-Mart grab-and-go coming soon

NOW OPEN: TEX-MEX CHAIN CHUY’SThe Austin, Texas-based Tex-Mex chain Chuy’s opened its first Tampa restaurant on Tuesday, giving away free Chuy’s for two for a year to the first 50 customers. I know, we missed it, it’s a bummer, but we can still visit...
Published: 04/25/18
Clearwater looks to move out of City Hall to speed up Imagine Clearwater waterfront redevelopment

Clearwater looks to move out of City Hall to speed up Imagine Clearwater waterfront redevelopment

CLEARWATER — Elected officials have talked about relocating City Hall from the downtown bluff for a good 30 years. Now there’s a jolt of urgency to actually do it.Voters backed a referendum in November that essentially greenlighted the $55 million re...
Published: 04/25/18