Less than a week after two Tampa Bay utilities sharply increased electric bills to pay for higher fuel costs, the state's largest utility announced that it will lower electric rates starting in January.
Florida Power & Light, which serves 4.4-million customers in South and East Florida, announced Monday that it will lower electric rates by 1.4 percent because of plunging fuel costs.
"Our bills are among the lowest in the state and well below the national average today, and we're working hard to keep them that way by making smart investments," said Armando Olivera, president and chief executive of FPL.
Progress Energy bills will be going up 25 percent starting in January, to pay for higher fuel costs and to pay for the early stages of its $17-billion nuclear project. Tampa Electric's bills will jump 12 percent to pay for fuel, and the utility is asking for additional increases that, if approved, would hit electric bills in May.
Starting in January, FPL wants to charge $109.55 for 1,000 kilowatt hours. Progress will charge $138.87 and Tampa Electric $128.44. The average homeowner uses about 1,200 kilowatt hours each month.
So how can the price of fuel in South Florida fall while it rises in the Tampa Bay area?
In a word: coal. Progress Energy generates nearly 40 percent of its electricity from coal, and Tampa Electric more than half.
"Natural gas prices have fallen sharply and are lower than they were a year ago," said Progress Energy spokeswoman Suzanne Grant. "But we run 40 percent on coal. While coal prices are down, they are more than 100 percent above where they were a year ago."
FPL gets less than 10 percent of its electricity from coal plants. More than half of its power comes from natural gas, which is down 15 percent to 20 percent since last year, Olivera said.
The falling cost of natural gas was not enough for Tampa Electric and Progress Energy to offset the higher prices for other fuels.
Grant said Progress Energy, the St. Petersburg utility, will continue to monitor fuel costs. If fuel prices continue to fall, the utility could lower bills in mid 2009 or early 2010, she said. Rick Morera, a spokesman for Tampa Electric, said the Tampa utility will do the same.
Under state law, the utilities are not allowed to profit from fuel. It is a pass through to customers.
Asjylyn Loder can be reached at email@example.com or (813) 225-3117.