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Progress Energy seeks 31 percent rate hike

Electric bills from Progress Energy could jump 31 percent starting in January, driven by the rising cost of fuel and a higher-than-expected charge for the utility's $17-billion nuclear project.

That's a $34 per month increase in the cost of 1,000 kilowatt hours, from $110.59 to $144.86. The average household uses considerably more electricity, so most customers will see bills that are substantially higher.

"It's the new energy reality," said Jeff Lyash, president and chief executive of Progress Energy. "It's a global escalation in fuel prices and commodity prices that we're all going to have to deal with."

Electricity prices have gone up throughout the country, largely because of higher fuel costs. Utilities will pay 33 percent more for natural gas, 54 percent more for oil and 6 percent more for coal than they did last year, according to the Energy Information Administration, the statistical branch of the U.S. Department of Energy. Florida's utilities often pay an additional premium for the trains, barges and pipelines that bring the fuel into the state.

"It's like every time you turn around something costs more money," said Sherry Haller, 50, co-owner of Haller's Automotive in New Port Richey. Haller said her west Pasco County business has seen costs rise across the board: insurance, taxes, the price of oil and cleaning products, even uniforms. With prices everywhere going up, she lamented the timing of Progress Energy's increases.

Customers in Florida pay 11.1 cents for a kilowatt hour of electricity, above the national average of 10.4 cents. The higher price in Florida reflects the state's reliance on pricey natural gas for about 40 percent of its electricity. Progress Energy's increases, if approved by state regulators, will push electricity costs up to 14.5 cents per kilowatt hour. Both Florida Power & Light and Tampa Electric — the other two of the state's three largest utilities — have also announced sizable increases in electric bills.

"It's huge, and it's on top of everything else too," said Joe Thielbar, 44, of Pinellas Park. Thielbar's wife died four years ago, and he's trying to raise his 11- and 4-year-old sons on an income of $45,000 a year. He's cut back on day trips to museums and Sarasota and virtually eliminated their Thursday night treat of eating out.

"It's this and everything else," he said. "It's really getting tough to do anything anymore."

Progress Energy plans to raise its fuel charge to $69.93 for 1,000 kilowatt hours, adding $21.12 for rising fuel costs. The utility on Aug. 1 increased its fuel charge by about $6. Florida utilities are not allowed to profit from fluctuating fuel costs but can "pass through'' that cost to its customers.

Progress Energy's planned Levy County nuclear plant will add about $11.42 to the cost of 1,000 kilowatt hours, up sharply from the company's prediction of $7.50 earlier this year. The average customer uses about 1,200 kilowatt hours a month, so the increase would have been around $9. With the new numbers released Friday, customers can expect an increase of more than $13 starting in January.

Lyash said the overall price tag of the nuclear project has not changed. The cost to customers is higher this year because the utility decided not to wait to pay for certain long-lead items, like metal forgings. That sets a portion of the price, and protects the utility from increases in labor and materials costs, Lyash said.

The Public Service Commission will hold hearings on the proposed increases starting in September.

Times staff writer Jamal Thalji contributed to this report. Asjylyn Loder can be reached at aloder@sptimes.com or (813) 225-3117.

Your electric bill

Now ... Starting Jan. 1

• Base rate and other charges, including Levy County nuclear plant $61.78 ... $74.93

• Fuel cost $48.81 ... $69.93

Total $110.59 ... $144.86

Source: Progress Energy

*All amounts are residential prices for 1,000 kilowatt hours. The average Progress Energy customer uses close to 1,200 kilowatt hours.

Progress Energy seeks 31 percent rate hike 08/29/08 [Last modified: Wednesday, September 3, 2008 4:57pm]
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