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Progress Energy customers to see bills rise next year

Progress Energy customers can still expect their bills to be higher next year, but not quite as much as forecast.

The average bill is projected to rise by about $3.92 to $123.26 a month for 1,000 kilowatt hours, down from the $6.11 increase Progress had requested.

Most of the difference came Monday when the state Public Service Commission decided to delay repaying some of the utility's nuclear expenses, a savings of $1.75 on the average bill.

The commission still must confirm fuel and other costs before customers will know for sure what they will be paying starting Jan. 1.

Commissioners said Monday that they lowered the nuclear fee because they wanted to give customers a break at a time of continued economic distress.

"I think anything we can do to minimize the impact today is a good thing," said Art Graham, PSC chairman. "The mission of our governor is to do whatever we can to minimize the electric rates, so we're encouraging more business to come here."

Graham said the hope is that the economy will improve and give customers an increased ability to pay for the costs Progress Energy is incurring in its effort to build a $20 billion nuclear plant in Levy County. The plant is not expected to come online until 2021 at the earliest.

"This is considered the Wimpy financing: 'I will gladly pay you Tuesday for a hamburger today,' " Graham said.

Progress Energy sought to recoup about $141 million in expenses related to the project, but the commission sided with consumer advocates, led by the state Office of Public Counsel, to repay just over half that amount.

Customers still must pay the rest of the money and will not get it back if Progress does not build the Levy nuclear plant. And like paying a minimum amount on a credit card, they will incur added fees for not paying down the principle on the debt.

Moreover, those monthly nuclear costs are expected to jump to as much as $50 a month for the average customer in the years immediately before the plant's projected completion.

"We know this is a difficult time for everyone in our state," said Suzanne Grant, a Progress spokeswoman. "We're pleased that the Public Service Commission has confirmed our plans to make nuclear power more of an asset of our portfolio."

In 2006, state lawmakers passed legislation that allows utilities to charge customers in advance for construction of nuclear plants. The idea was to encourage growth of the nuclear industry in Florida.

Progress Energy began charging customers in 2009 for the two reactors it plans for its second nuclear plant in Florida.

Progress customers currently pay $5.53 per 1,000 kilowatt hours of electric usage to pay for costs related to development and construction of the Levy County nuclear project and for expenses related to its Crystal River nuclear plant. The PSC voted Monday to decrease that amount to $2.93 beginning Jan. 1.

Progress Energy had estimated that the nuclear cost recovery fee would drop just 85 cents.

The public counsel's office recommended the PSC reduce the recovery amount even more than the $1.75, arguing during hearings this summer that there is evidence that Progress might delay construction of the Levy plant until 2027 — if the utility moves forward with the project at all.

"I felt more in line with (the public counsel) that we need to keep customers' rates as low as possible," said commissioner Julie Brown.

The state's largest utility FPL got approval during Monday's commission meeting to charge customers in advance for new nuclear power at its Turkey Point plant. FPL customers will see their bills increase an average of $2.20 a month next year.

Correction: The average Progress Energy bill is projected to rise by about $3.92 to $123.26 a month for 1,000 kilowatt hours starting next year. An earlier version of this story used a higher number for the increase.

Ivan Penn can be reached at [email protected] or (727) 892-2332. Follow him on Twitter at and find the Consumer's Edge on Facebook.

>>Fast Facts

How charges break down

Progress Energy's projected fee changes for 2012:

• Fuel: projected increase of $3.99 (from $44.61 to $48.60)

• Purchased power: projected increase of $2 (from $9.74 to $11.74)

• Environmental compliance: projected increase of $0.54 (from $4.91 to $5.45)

• New nuclear generation: decrease of $2.60 approved (from $5.53 to $2.93)

• Energy-efficiency programs: a slight decrease projected at
11 cents from the current $2.99 charge.

Progress Energy customers to see bills rise next year 10/24/11 [Last modified: Wednesday, October 26, 2011 3:57pm]
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