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Progress Energy to lower bills 11 percent

Progress Energy Florida customers reeling from a recent 24 percent increase in their electric bills will get some welcome relief in April, but it may be short-lived.

The St. Petersburg utility announced Thursday that it would lower bills by 11 percent — about $15 for 1,000 kilowatt hours — starting in April. For the average residential customer using 1,200 kilowatt hours, the difference comes to more than $18 a month.

That $18 savings could be wiped out early next year by another increase.

"It's a small victory for the customer, in my opinion, but we still have battles ahead of us," said state Sen. Mike Fasano, one of several Tampa Bay lawmakers who pushed the utility to reconsider its recent rate increase. He has asked state regulators to make the rate cut effective immediately.

Progress Energy said lower fuel costs and a gloomy economy led to its decision to lower rates. The company decreased its fuel charge, which soared last year as the cost of coal, oil and natural gas climbed. The utility also decided to forgo collecting some preconstruction costs on its $17 billion nuclear project in Levy County.

"We recognize the current economic downturn and the circumstances that we're in. We're sensitive to that," said Jeff Lyash, president and chief executive.

The utility has begun negotiating with lawmakers to modify legislation passed in 2006 that allows it to start charging for early costs of new nuclear plants years before the plants start producing power. This year, the utility began charging residential customers $11.42 per 1,000 kilowatt hours for the new nuclear project. Sticker shock led to a backlash against the law, and Tampa Bay legislators began pushing for changes. The utility has been talking to lawmakers about spreading the costs over a longer time.

Progress Energy Florida also asked Thursday for an increase in its base rate, which accounts for about one-third of a customer's total bill. If approved, the base rate increase would take effect in January and would increase residential bills by about $15 for 1,000 kilowatt hours. The utility may also seek incremental increases later this year.

"What will the final rate be to the customer?" Lyash said. "Well, that's hard to predict."

Fuel accounts for more than half of a customer's bill, and the cost fluctuates from year to year. Lyash said the utility won't know what the nuclear and fuel charges will be until later this year. Once those charges are determined, the utility will have a better idea what electric bills will be next year.

Asjylyn Loder can be reached at aloder@sptimes.com or (813) 225-3117.

EARNINGS

Progress Energy

The Raleigh, N.C., parent of two utilities, Progress Energy Carolinas and St. Petersburg-based Progress Energy Florida, said it was able to offset flat customer growth and shrinking customer electricity use by cutting operations and maintenance cost, expanding electricity sales to wholesale customers, and winning regulatory decisions that help the company recover costs. The surge in earnings since last year reflects the company's divestiture of nonutility businesses.

20082007

4th qtr. earnings$107M$103M

4th qtr. per share41 cents40 cents

Annual earnings$830M$504M

Annual per share$3.19$1.97

Progress Energy to lower bills 11 percent 02/12/09 [Last modified: Monday, February 16, 2009 11:00am]
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