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Why do electric rate hikes differ so much?

While utilities push to raise electric rates 31 percent on both sides of Tampa Bay, millions of South Florida residents will see their bills increase by only 7 percent.

Florida Power & Light, the state's largest utility, has filed plans to keep its increase to $8.29 per 1,000 kilowatt hours, while both Progress Energy and Tampa Electric are predicting increases of about $34 driven largely by rising fuel costs. Why the walloping difference?

"It is definitely not fair, and the Public Service Commission needs to crack down on these guys and see what's going on. They need to investigate and see why there's such a big difference," said Bill Newton, executive director of the Florida Consumer Action Network.

The three utilities summed up the reasons for the difference:

• Florida Power & Light can spread its costs over more than 4.4-million customers. Progress Energy has about 1.7-million customers, and Tampa Electric fewer than 670,000.

• FPL gets about 20 percent of its electricity from its four nuclear reactors. Nuclear is often the cheapest power because fuel costs are so low. Progress Energy gets 13 percent of its power from its nuclear. Tampa Electric doesn't have a nuclear plant.

• FPL's new nuclear project is cheaper than Progress Energy's $17-billion nuclear project in Levy County. FPL is building its two new reactors at its existing Turkey Point power station. Progress Energy's project is at a new site, which increases costs for land, permitting and transmission.

Rick Morera, spokesman for Tampa Electric, also pointed out that Tampa Electric didn't ask for a midyear increase to pay for fuel, even though the utility was paying more for fuel than expected. That means the utility spent more money on fuel in 2008 than it got back from customers. So next year, customers will have to pay for the remainder of 2008 fuel costs on top of higher 2009 prices. FPL raised rates in August to pay for 2008 fuel costs this year.

Increases are subject to approval by the Public Service Commission. Hearings are this fall.

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

>>FAST FACTS

Specifics of rate hike proposals

Progress Energy asked the Public Service Commission for its rate increases on Friday, and both Tampa Electric and Florida Power & Light petitioned the commission Tuesday. All three utilities had already released details on the increases, and the petitions to the commission were expected. Here are the highlights:

• A Tampa Electric bill for 1,000 kilowatt hours costs about $114 today and could cost close to $150 by next summer.

• Progress Energy asked for increases that would bring the cost of 1,000 kilowatt hours from $110.59 to $145 starting in January.

• Florida Power & Light plans to increase bills for 1,000 kilowatt hours by $8.29, to $119.41 starting in January.

Why do electric rate hikes differ so much? 09/02/08 [Last modified: Friday, September 5, 2008 11:06am]
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