Tampa Electric wants its average residential customer to pay an extra $10.41 a month.
The utility, which filed its rate request with the state on Friday, also wants to bump up what its commercial and industrial customers pay by 6 percent.
The rate hike is needed to offset rising costs and sluggish growth, the utility said.
"It is important to remember that while the cost of nearly everything has gone up in recent years, Tampa Electric bills have gone down," said Gordon Gillette, president of Tampa Electric, part of TECO Energy. "We empathize with our customers who also are feeling the effects of a difficult economy.
"There is never a good time to raise rates, but even with this increase, Tampa Electric bills would remain among the lowest in Florida," Gillette said.
The state Public Service Commission must approve proposed the rate hike, which would increase the average residential customer's bill from $102.58 per 1,000 kilowatt hours of usage a month to about $113.
Later this year, the commission will consider fuel costs, which will also affect the final rate. About 50 percent of Tampa Electric's energy comes from coal and 50 percent from natural gas. Coal prices have largely been stable, but natural gas prices have increased slightly over a year ago after reaching historic lows.
If approved, the $10.41 increase would take effect Jan. 1.
State consumer advocates, led by the state Office of Public Counsel, said they would oppose the rate increase. J. R. Kelly, the state public counsel, said Tampa Electric's rate of return already is one of the highest in the state.
"It's extremely high," Kelly said. "We're going to have to take a very close look at everything. I don't know what the drivers are (for their request) . . . until we get into the weeds with their documentation."
Cherie Jacobs, a spokeswoman for the utility, said the rate increase will help cover the costs of $770 million in improvements to Tampa Electric's system, including 170 miles of new power lines, new fuel handling equipment at the Big Bend power station and a reclaimed water pipeline at the Polk Power Station.
"There's a number of factors at play," Jacobs said. "We've invested a significant amount in our network to improve reliability for our customers."
Even with the $10.41 increase, Tampa Electric's rates would remain below the rates for Progress Energy Florida, a subsidiary of Duke Energy and the Tampa Bay region's dominant power provider. Progress' rates stand at $116.06 per 1,000 kilowatt hours of usage.
Progress cannot seek an increase because of a settlement agreement that freezes rates through 2016.
Tampa Electric's request comes on the heels of a $350 million rate increase approved last year for the state's largest investor owned utility, Florida Power & Light, which serves South Florida.
Kelly's office fought FPL's rate increase to no avail. In the end, the utility bypassed the public counsel and reached a deal approved by the Public Service Commission.
Ivan Penn can be reached at firstname.lastname@example.org or (727) 892-2332.