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Tampa Electric electric bills to fall 6 percent

TAMPA — Electric bills will likely drop more than 6 percent for Tampa Electric customers starting in May, despite a base rate increase approved Tuesday.

State regulators agreed to allow the utility to raise its base rate for the first time since 1993.

At the same time, Tampa Electric wants to lower bills by $13 per 1,000 kilowatt hours because fuel prices have plummeted amid a worldwide economic slowdown.

As the base rate per 1,000 kilowatt hours rises by less than $5, and the fuel rate falls by about $13, customer bills should drop about $8 per 1,000 kilowatt hours. Exact rates won't be set until an April 7 Public Service Commission hearing.

If approved, customers will start seeing the savings in their May bills.

The decrease provides welcome relief for strapped Tampa Electric customers, whose bills rose 12 percent in January to $128.44 per 1,000 kilowatt hours, largely to pay for sharply higher 2008 fuel costs.

Now, fuel prices have dropped and Tampa Electric plans to pass that savings on to consumers. Under Florida law, utilities are not allowed to profit from fuel. It's a pass-through to customers.

However, discerning the impact on individual bills is further complicated because the average residential customer uses about 1,200 kilowatt hours a month. The utility also wants to switch to tiered rates in which the first 1,000 kilowatt hours are cheaper than electricity used beyond that threshold.

The Public Service Commission's action on Tuesday granted a base rate increase that the Tampa utility had been seeking since summer. However, the commission didn't give Tampa Electric as much as it wanted.

In August, the utility asked for a base rate increase of $228.2 million a year, which came to about $10 on a monthly bill for 1,000 kilowatt hours.

On Tuesday, however, the commission improved an increase of about $104.3 million a year starting in May.

"Although the company did not receive its entire request, we respect the commission's decision,'' company president Chuck Black said in a statement. "We understand the challenging economic circumstances faced by our customers and are doing our best to minimize costs while safely and reliably delivering electricity."

Base rates pay for things like building, operating and maintaining power plants and transmission lines. Base rates also include the utility's profit.

Starting in January, customers also will pay another $33.6 million a year for natural gas generators that will come online later this year.

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

Tampa Electric electric bills to fall 6 percent 03/17/09 [Last modified: Tuesday, March 17, 2009 11:31pm]
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