Electric bills will be going up all over Tampa Bay next year, and customers of Duke Energy will end up shouldering some of the highest bills in Florida — and the entire Southeast.
Duke rates, already high, have been held down by refunds the utility agreed to give its 1.7 million customers because of a botched attempt to upgrade the Crystal River nuclear plant. But most of the refund money, along with insurance payments related to the now-closed plant, has already been returned.
At the same time, Duke plans to add a new natural gas plant by mid 2018, which would inflate customer bills even more. Exactly how much is not yet known.
Duke wants to raise residential electric bills on Jan. 1 from $116.06 to $124.30 for customers who use the average of 1,000 kilowatt hours a month. That makes its rates the highest among Florida's three largest investor-owned utilities, far higher than the state average and the average of all of the Southeast.
Tampa Electric and Florida Power & Light, also want their customers to fork over more money for electricity in 2014. But neither would force its customers to pay as much as Duke.
"We didn't ask for this," said Lisa Bright, a speech pathologist who lives in Clearwater. Duke, she said, should take responsibility for the broken Crystal River nuclear plant that it inherited when it merged with Progress Energy a year ago. And she resents paying for a new nuclear plant in Levy County that Progress planned and Duke recently killed.
The utility will charge its customers about $3 billion for the twin failures.
"You can't tell me Duke is so strapped for money that they can't fix this without gouging us. I'm not destitute by any means. But 8 bucks a month? Give me a break."
Economist Mark Cooper, who specializes in nuclear power issues, says Bright has a point.
"There's a famous expression: 'Everybody's got to take their haircut,' " he said. "Is the utility taking any haircut at all?"
Call it a trim.
Duke is reducing customers' bills by almost $700 million over several years. The amount was negotiated with the state Public Counsel's Office and represents various expenses related to the Crystal River fiasco.
And Duke will lose out on $800 million it would have collected as part of its return and potential profit had the nuclear projects not failed.
In exchange, the utility avoided public hearings on what went wrong.
Sterling Ivey, a Duke spokesman, pointed out that insurance payments for Crystal River nuclear refunds for the purchase of alternative electricity have dropped significantly and will continue to do so.
In 2013, insurance payments totaled $326 million. Next year, that number will be $164 million.
"Every utility has different usage and generation characteristics, which cause differences in rates," Ivey said. "Fuel prices have a significant impact on overall rates. Regulations of each individual state clearly play a role in customer rates."
TECO has its hand out, too
Tampa Electric, a subsidiary of TECO Energy, appears before the state Public Service Commission on Monday with one of its two requests. Tampa Electric wants first to raise base rates — the money the utility collects for expenses and profit — by $5.67 a month for the average customer. The company settled on that amount with consumer advocates late Friday.
"We're seeking a rate increase for several reasons: rise in cost, significant investment in our system, in addition to a sluggish economic recovery," said Cherie Jacobs, a TECO spokeswoman.
In addition to the base rate increase, Tampa Electric wants an additional $1.27 for increased fuel costs that would bring bills to $109.52 for 1,000 kilowatt hours of electricity use.
FPL wants $5 more to raise its customer bills to $100 for 1,000 kilowatt hours. The statewide average rate is $112.90, and throughout the Southeast the average rate is $116.70.
And then there's Duke.
It wants $8.24 added to the average bill for a total of $124.30.
Bright, the Duke customer from Clearwater, is troubled by the impact the big rate increase would have on the seniors and the families with disabled children that she serves.
"Poor people on a fixed income, they're going to really suffer," she said. "It really hurts the elderly citizens. That could be a prescription medication. It could be a short taxi ride.
"The honest-to-god truth is we can't do a whole lot about this unless a lot of us speak up."
Experts point the finger at state leaders, whom they say are failing the people by ignoring sensible approaches to meeting electricity needs.
"What's outrageous is we can do so much better reducing people's energy bills by investing in cost-effective energy efficiency," said Susan Glickman, director of Florida operations for the Southern Alliance for Clean Energy. "To do that, we need to look at utility regulation that rewards construction of power plants.
"Past decisionmaking brought us this expensive attempt to bring on nuclear power," Glickman said. "Until we realign the incentives, we will continue to get expensive power."
Cooper, an economist with Vermont Law School's Institute for Energy and the Environment, said he and other experts have delivered detailed analyses to state regulators, showing flaws in Florida's energy policy but to no avail.
"Unfortunately, Florida has gotten to the point where it's all politics," Cooper said. "This should be a big election issue next year.
"You have to unelect the people who let this happen and elect the people who won't allow it anymore," he said. "The only way to do it is in the electoral process."
Ivan Penn can be reached at [email protected] or (727) 892-2332.
* Proposed rate per 1,000 kilowatt hours, the monthly average.
Duke Energy Florida
South Atlantic average
Florida 2013 average
Florida Power & Light
$ 1 00
"Poor people on a fixed income, they're going to really suffer. It really hurts the elderly citizens. That could be a prescription medication. It could be a short taxi ride."
LISA BRIGHT, a Duke customer and speech pathologist in Clearwater