Saturday, September 22, 2018
Business

State regulators may change rules allowing utilities to collect more expenses

State regulators voted unanimously today to revisit a rule that could lead to higher utility customers’ bills. The rule, which hasn’t been changed since 1995, restricts how much utilities can seek from ratepayers to reimburse them for economic development expenses, such as marketing.

Currently, utilities are allowed to collect either 95 percent of approved economic development costs from customers, or the amount approved by the PSC in the utility’s last rate case, whichever is larger. But the amount they collect cannot be more than $3 million in approved costs from customers, or 0.15 percent of gross annual revenues, whichever of those two is smaller.

The rule covers expenses such as participating in trade shows, marketing, research and working with state and local government agencies to develop "strategic plans" for economic development activities.

Three utilities — Tampa Electric Co., Florida Power & Light, and Gulf Power — say the rule is restrictive, as it hasn’t been adjusted to account for inflation. FPL, the filing said, is limited to collecting $3 million from customers because 0.15 percent of its gross annual revenues is always significantly higher than that.

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The three utilities propose that the collection allowances be moved up gradually over five years — to 0.175 percent by 2020 and to 0.25 percent by 2023. They also asked that utilities be allowed to collect whichever is larger, $3 million or 0.15 percent of gross annual revenues, as opposed to the current limit of whichever is smaller.

That would allow FPL to collect $16 million, while Tampa Electric and Gulf Power could collect $3 million each year from customers. Under those projections, Tampa Electric bills would increase by 10 cents per month.

Today’s decision by the Florida Public Service Commission doesn’t change the rule. Instead, it starts a potentially year-long process during which regulators will consider if and how the rule should be adjusted.

Charles Rehwinkel, representative for the consumer advocate Office of Public Counsel, urged the commissioners at the Wednesday hearing to take their time with the process.

"Our ask is that this not be rushed along and that this be given the deliberation and time it deserves," he said.

Rehwinkel noted that the commission has taken more than a year on another unrelated rule for water utilities that OPC requested.

"We want to observe and note that there may be a difference," he said. "We hope that’s not the case between the powerless and the powerful in this state when it comes to getting what people need and what they want."

OPC does not oppose revisiting the rule.

Two commissioners — Chairman Art Graham and Commissioner Donald Polmann — said they shared OPC’s desire to give the rule necessary deliberation.

"This is a very significant issue to our state," Polmann said. "I want to make sure that the appropriate people are benefitted and that this isn’t simply a burden on ratepayers, (which) is not at all the appropriate thing to do."

Contact Malena Carollo at [email protected] or (727) 892-2249. Follow @malenacarollo.

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