The biggest challenge to Duke Energy's image makeover turns out to be Duke Energy. It hasn't been a month since the electric utility persuaded state lawmakers to pass legislation that would cut $600 million off the cost to ratepayers for the closed Crystal River nuclear plant. Yet Duke is already taking the luster off that good news by refusing to refund overcharges to some businesses and churches that have been paying higher rates than necessary. For Duke, it's always one step forward and two steps back.
The Tampa Bay Times' Ivan Penn reported last year that Duke Energy customers that included businesses and churches were paying high rates when they could have been paying less. Unlike residential customers, businesses have multiple rate tiers. Duke never ensured businesses were paying the lowest possible rate, and now more than a dozen businesses and churches (including the Poynter Institute for Media Studies, which owns the Times) have filed complaints with the Florida Public Service Commission and demanded refunds. Duke's response: Tough.
It's unclear how many businesses have been paying more for electricity than necessary, as is the total amount of the overpayments to Duke. But First Baptist Church of St. Petersburg says that it is owed $37,000 in overpayments and that a change in rates lowered its electric bill by 15 percent. Other businesses report that their bills could have been 10 percent lower than they paid. Yet Duke is callously rejecting requests for refunds of overpayments even though a utility bill analyst who reviews bills for businesses says the utility had been giving refunds until last spring.
Of course, consumers usually bear most of the burden of seeking the best price for goods and services. And Duke says it sends out annual notices to commercial customers about various rates and suggests they ask for a rate review. But buying electricity is not the same as buying a car or an appliance. Customers can't compare prices and shop around for the best deal because the electric utilities are regulated monopolies. That should make it incumbent upon the utility to offer the lowest rate possible, rather than force the customer to decipher rate structures. That's what Tampa Electric already does automatically for its commercial customers, and there is no reason why Duke Energy should not do the same.
This is not the first time Duke has been so tone deaf, even after billing customers more than $3 billion for the broken Crystal River nuclear plant and another nuclear plant that will not be built. It charged some customers higher rates triggered by the utility's changes to meter routes last year, which lengthened some billing cycles. Duke refunded the money and apologized after a public outcry, and now it finds itself in a similar situation.
This sort of exploitation of hostage customers should not be a problem in the future. Legislation that Gov. Rick Scott should sign into law (HB 7109) would ban utilities from charging customers higher rates because their billing periods were extended. It also would require utilities to help customers get the lowest rates, and it includes the change to allow Duke to lower financing charges on the Crystal River nuclear plant clean-up by $600 million. But the reforms would not address the complaints by businesses and churches about previous overpayments because of unnecessarily high rates.
There is a way out of this for Duke, which has been on the rebound with the reduction in Crystal River plant costs and new interest in investing in solar energy. The utility should review all commercial accounts and provide refunds covering a reasonable time period for those ratepayers who were not paying the lowest possible rate. If Duke won't take that practical step on its own, the PSC should force it to do the right thing.