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Under rising pressure, state utility regulator to call Duke Energy in to justify rate charges

Responding to mounting pressure from state lawmakers, the chairman of the Public Service Commission on Friday said he is asking Duke Energy Florida to appear before regulators to address what some are calling an "unfair, unreasonable and unfairly discriminatory" rate practice.

In a statement to the Tampa Bay Times, PSC Chairman Art Graham said he wants answers from Duke about the impact of charging some customers higher rates while the utility revamps its meter-reading process.

"I plan to send a letter Monday to Duke Florida asking them to come to our Sept. 4 agenda conference and tell us more exactly what happened, how it affects customers, and to discuss a remedy for those customers," Graham stated.

Pinellas County lawmakers increasingly called on the commission — which many Floridians have long seen as favoring utilities over the interests of consumers — to intervene on behalf of customers over the charges.

Duke is making changes to its meter-reading routes to make them more efficient. Those changes led the utility to temporarily extend as many as 267,000 customers' billing cycles, typically a month, by as many as 12 days. Customer bills revealed additional charges in some cases of $100 or more for the extended days and, for some, the additional days bumped them into a higher rate class.

That's because Duke charges customers $11.34 for every 100 kilowatt hours of usage up to 1,000 kilowatt hours. But above that, it charges $13.70 for every 100 kilowatt hours. That's before taxes and other government fees.

Flanked by a dozen protesters carrying signs that read "Stop Duke RIP-OFF," state Rep. Dwight Dudley told reporters on Friday that it is past time for the PSC, the governor and the Legislature to investigate the utility and its operations.

"Here we go again, Duke trying to bill or bilk customers," Dudley said during a news conference held outside Duke's St. Petersburg headquarters. "We're waiting for the good corporate citizen to show up, but we don't see it."

Sen. Jack Latvala, R-Clearwater, sent letters directly to Graham and to Duke Energy Florida president R. Alexander "Alex" Glenn, calling for an end of the rate practice that he described as arbitrary.

"Although it might be legal for them to squeeze the additional money from consumers in this manner, it certainly isn't moral," Latvala wrote to Graham on Friday morning, reiterating the same message he delivered in a letter to Duke a day earlier.

Duke said Thursday that it would respond directly to Lat­vala. The utility did not respond to requests Friday for comment about Latvala's separate letter to the PSC.

The letters from Latvala, Pinellas County's most powerful legislator, were followed by one from Sen. Jeff Brandes, R-St. Petersburg, to the PSC chairman. Brandes said the practice employed by Duke against its customers "warrants immediate relief from the Public Service Commission in favor of Duke Energy's customers."

"It is a quintessential responsibility of a public regulator to prevent actions from regulated entities that profiteer from the inability of consumers to exercise their preference for a competing service provider," Brandes wrote. "Fundamental values of free and open markets are violated any time that prices are manipulated by a private entity enjoying monopoly control over a market."

The unusually high-profile and sometimes terse criticism of Duke's actions by lawmakers on both sides of the aisle crystallized the outrage the utility's actions elicited from many Duke customers.

Some ratepayers this week called for a class-action lawsuit against Duke and the PSC. Others posted on the Times' website that lawyers are questioning whether the utility's recent action constitutes a "material breach" of contract that could allow the people to break ties with Duke by ending its monopoly franchise agreements.

Raymond and Barbara Smith of Pinellas Park, for instance, fired off a letter to Brandes, urging the senator to take some action to protect consumers after a growing number of anti-consumer actions by Duke.

"I am writing to you in hopes that you can do something about Duke Energy over charging its customers," the Smiths' letter stated. "It appears that the PSC is in the pocket of Duke Energy, because it certainly isn't looking out for us, but is looking out for Duke's investors."

The billing controversy comes on the heels of the power company's two failed nuclear efforts that are costing customers $3.2 billion. The botched upgrade at the Crystal River nuclear plant forced the permanent and premature closure of the utility's lone reactor in Florida, and the company canceled its proposed Levy County nuclear project — though customers continue to pay for both in their bills.

Duke now wants its 1.7 million Florida customers to pay $2 billion to build new natural gas facilities and other improvements to make up for the power that the nuclear plants would have produced. The PSC will hold hearings next week on those proposals.

Meanwhile, Duke wants state regulators to gut its electricity conservation goals by nearly 90 percent. At the same time, the utility's power reserve or excess capacity stands at 25 percent this summer — 5 percentage points above state requirements for utilities to have for emergencies. Those reserves will increase to 38 percent this winter.

The Smiths stated that they, as other customers have called for, would like to take Duke to court. "We will look into whether or not a class-action suit can be filed against Duke Energy and the Public Service Commission."

Contact Ivan Penn at or (727) 892-2332. Follow @Consumers_Edge.

Under rising pressure, state utility regulator to call Duke Energy in to justify rate charges 08/22/14 [Last modified: Friday, August 22, 2014 9:05pm]
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