Tuesday, May 22, 2018
Business

Electricity prices: Duke Energy to hike, Tampa Electric to drop on lower fuel costs

Duke Energy Florida residential customers can expect to dig deeper into their pockets for power next year, while the average Tampa Electric customer across the bay would see their monthly bill drop about a buck-and-a-half, according to projections filed with state regulators on Thursday.

Utilities typically file projected fuel costs with the state Public Service Commission at this time of year in advance of hearings on next year's rates. The cost of fuel represents about one-third of a residential customer's power bill.

Duke said its rates would increase by about 4 percent, bumping the bill for 1,000 kilowatts of power up $4.39, from $111.76 to $116.15. Commercial and industrial customers would see similar rate changes resulting in a 4 percent to 10 percent hike.

The increase is largely due to the utility's fuel costs being artificially lowered for the last four years by a settlement agreement that called on Duke to refund $388 million to customers by passing it through fuel costs. The settlement has now expired.

At Tampa Electric, the bill per 1,000 kilowatt hours was originally expected to rise $6.68 on Jan. 1 as the utility's Polk Power Station expansion goes online. But Tampa Electric filed new projections that would lower bills by $8.18 — offsetting the Polk increase and, with a slight tax adjustment, result in a net reduction of $1.54 a month for the average residential customer.

Tampa Electric president Gordon Gillette noted that the local utility's rates are 19 percent lower than the national average. "Many times when a utility adds a large new asset like a power plant, bills go up, but in this case, they're going down," Gillette said in a statement on the filing. "We're very proud of that and are very pleased for our customers."

The new rate would be a 1.4 percent decrease in the average residential customer's bill, from $106.22 to $104.68. Commercial rates would decrease by 5 percent, and industrial by 12 percent.

Low natural gas prices are credited for the bill reduction. The company estimated that by the end of 2016 it will spend $98 million less on fuel than originally projected.

The PSC is expected to vote on the local utilities' requests after hearings scheduled to begin Nov. 1.

Tampa Electric's Polk expansion, which began in 2014, involves redirecting waste steam into power generation. It will generate another 450 megawatts of electricity, enough to power more than 100,000 homes, Tampa Electric said. The company serves about 730,000 customers centered on Hillsborough County.

Duke Energy Florida serves 1.7 million customers in west-central Florida.

Duke has also started the review process related to the cost for purchasing the Osprey Energy Complex and final upgrades to the Hines Power Plant. If approved, Duke's base rate would increase by $1.50 per 1,000 kilowatt hours starting in February.

The PSC has already allowed Duke to bill customers an additional $1.57 a month next year in costs relating to the shuttering of the Crystal River nuclear power plant.

Contact Jerome R. Stockfisch at [email protected]

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