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Progress Energy to seek rate hike

The utilities are not allowed to profit from fuel fluctuations. It's a direct pass-through to consumers.

SCOTT KEELER | Times

The utilities are not allowed to profit from fuel fluctuations. It's a direct pass-through to consumers.

If you like the price of gas, you're going to love your electric bill.

Monthly bills may soon reflect the soaring costs of natural gas and oil. Progress Energy could ask state regulators for an increase as early as Friday, spokesman C.J. Drake said. Drake would not say how much of an increase, describing it only as significant.

"We are carefully analyzing our fuel costs," Drake said. "We have noticed significant increases in the cost of coal and oil and purchased power."

The utilities are not allowed to profit from fuel fluctuations. It's a direct pass-through to consumers. Each year, the utilities predict their fuel costs and ask the Florida Public Service Commission to approve the monthly cost to customers. Utilities can ask for a midyear correction if its estimate was significantly off.

Drake said Progress Energy is considering a midyear change. If approved, customers would see the increase late this summer.

Other utilities face the same problems. Laura Duda, a spokeswoman for Tampa Electric, said the utility is burning more coal to avoid burning high-cost natural gas. Tampa Electric has said before that it plans to ask for a rate increase some time this year, but Duda said there were no plans for a midyear increase in fuel charges.

This year, power plants will pay 54 percent more for fuel oil, 33 percent more for natural gas and 6 percent more for coal, predicted the Energy Information Administration, the statistical arm of the Energy Department. Spot prices also have risen sharply.

"Just like at the gasoline pump," David Parker, a senior utility analyst with Robert W. Baird in Tampa. "It's the same ouch."

Progress Energy's fuel charge is currently $42.78 for 1,000 kilowatt hours. The possible fuel cost increases come on top of its plans to raise bills to pay for its $17-billion nuclear project. If it is approved, residential customers could see an increase of about $9 a month starting next year.

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

Progress Energy to seek rate hike 05/28/08 [Last modified: Friday, May 30, 2008 11:55am]
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