State regulators approved an agreement that will increase Tampa Electric customers' rates by $5.67 to $108.25 for the average customer starting Nov. 1.
Rates could increase even more on Jan. 1 if the Public Service Commission approves an additional $1.27 increase the utility has requested for fuel costs. That would bring the Tampa Electric rates to $109.52 for 1,000 kilowatt hours of electricity use.
The settlement agreement between Tampa Electric and consumer advocates reduces the initial impact of the utility's proposed increase by almost half.
"I think this is such a good deal now, the last thing I want to do is start monkeying around with it," said Commissioner Art Graham. "It feels good to see everybody sitting at the table and singing Kumbaya."
Tampa Electric, a subsidiary of TECO Energy, requested a $10.41 increase in its base rate, which is used to cover the utility's expenses and profit. The utility said it needed the additional revenue to cover rising costs as well as to compensate for the sluggish economy.
Under the agreement, Tampa Electric will receive smaller increases over the next few years, with the $5.67 increase on Nov. 1 that will generate $57.5 million in revenue.
That will be followed by "step" increases of $1.09 per 1,000 kilowatt hours on Nov. 1, 2014, and 46 cents per 1,000 kilowatt hours on Nov. 1, 2015.
The agreement also includes a $110 million increase when the Polk Power Station expansion is complete. The projected completion date is January 2017.
"This settlement provides closure and clarity to a complex regulatory process," said Gordon Gillette, president of Tampa Electric. "This is a fair resolution for all Tampa Electric customers — and we could not have achieved it without the dedicated work of all the groups working together to reach this constructive compromise."
The commission still must consider Tampa Electric's request for an increase in fuel charges.
All three of the state's largest investor-owned utilities — Tampa Electric, Duke Energy and Florida Power & Light — are asking for more money through increased fuel charges.
Hearings are scheduled Nov. 4 on the fuel requests.
If the commission approves all of the money Duke wants to add to customers' bills for fuel and other charges, the utility's $116.06 current rate for 1,000 kilowatt hours of usage will rise to $124.30.
FPL wants to add $5 to its rate, which would keep it the lowest of the three utilities at about $100 for 1,000 kilowatt hours of electric use.
Ivan Penn can be reached at email@example.com or (727) 892-2332.