If you pay your telephone bills to GTE Florida Inc., a decision is about to be made that could increase your basic phone service by more than $40 a year.
If you pay your electric bills to Tampa Electric Co., a decision is about to be made that could increase those bills by more than $115 a year.
The Public Service Commission hearings begin today and Tuesday. But the five-member PSC will not hear each case. Instead, the cases will be heard at once. Two commissioners will consider GTE's $66-million case, and three will hear TECO's $98-million case.
The plan suits both utilities. But consumer advocates are aghast.
"Here you've got two of the largest utilities in the state coming in for major rate hikes, and all five commissioners can't seem to make the time to hear the case," said Monte Belote of the 37,000-member Florida Consumer Action Network.
"If the commission were to do what we believe is appropriate, they would hold up a stop sign, slow these rate cases down and go through them thoroughly with all five commissioners."
Public Counsel Jack Shreve, who represents Florida consumers in utility cases, tried to force the PSC to have the full commission review each request. He said the eight-month deadline after a utility files a rate case can be extended.
The GTE case is to be decided in December, the TECO case in January.
"They are certainly major cases," Shreve said, "and very important cases to people in the St. Petersburg, Tampa and Clearwater areas."
Commission Chairman Thomas Beard says the PSC can't waive the eight-month rule. The utility would have to ask for the extension.
"What I'm doing is perfectly legal. I was very careful in setting this thing up," he said, noting that the PSC split up during heavy caseloads in the 1980s.
Beard assigned himself to the GTE case. He has heard the objections that he's too sympathetic to GTE.
"Quite frankly, what you've got is some people who want somebody else on (the GTE case) besides me . . . and it's cable television," he said. "It smacks of commissioner shopping, and I don't like it."
Peter Dunbar, who represents the Florida Cable Television Association, opposes a split commission.
The industry is concerned the PSC will make precedent-setting decisions in the GTE case that could hurt cable TV's ability to compete. The industry fears telephone customers will end up footing the bill for expensive new technology that would give GTE an advantage in emerging technologies, such as video transport of cable TV signals and medical imaging.
The cable TV industry would be at an unfair disadvantage, Dunbar said, and consumers would get stuck with artificially expensive telephone service.
The GTE case
Some of the expenses GTE Florida wants customers to pick up:
$15,000 a year for chauffeur service for GTE executives.
$380,000 a year to operate four fitness centers for GTE employees.
$2-million a year for free or lower-cost telephone service for GTE employees.
Consumer advocates wonder if the utilities deliberately include obviously controversial requests to distract the public from issues more subtle, but more meaningful, such as the 13.6 percent profit it wants to pay stockholders.
"Sometimes I wonder if the utilities don't throw a few slow pitches in there," said Harold McLean, who works for Shreve.
"Nobody should be paying for GTE's CEO to ride around in a limo," McLean said. "We shouldn't have to pay for the moving expenses of an executive to move to Florida. The ratepayer gets 2 percent or 3 percent on his deposits, and they're asking to give investors 13.6 percent?"
If GTE gets its $66-million increase, telephone rates would go up 30 to 50 percent for 1.8-million customers in Pinellas, Hillsborough, Pasco and four other counties.
The average residential customer would pay $3.42 more a month, from $11.37 to $14.79. Business charges would climb an average of $14.08 a month, from $29.14 to $43.22.
The public counsel says GTE's rates should be lowered by $126-million and its return on equity set at 11.3 percent. Shreve also wants the PSC to investigate GTE's huge purchases from affiliated companies.
Why is the state's second-largest phone company asking for an increase when its largest phone company, Southern Bell, has filed for a decrease?
GTE says that after 11 years without an increase, it needs to cover rising business costs, address customer demands for lower toll rates and local calling plans, and position GTE for increased competition.
Beard and Commissioner Susan Clark will hear the case, which starts Tuesday.
GTE's request would reduce day toll rates 33 percent; in-county toll calls and some toll calls across county lines would drop 60 percent.
Belote says it's a smokescreen. "Once you get past GTE's greedy grab for higher profit, their biggest effort is to shift costs onto the backs of basic-rate payers.
"Their whole rate restructuring plan proposes to continue lowering long-distance charges, which benefit only a handful of high-volume customers, while raising everyone's basic phone rates by 30 percent to 50 percent."
The TECO case
TECO already has the highest retail rates of Florida's investor-owned utilities, consumer activists say, so why should it get a big rate increase?
"TECO is soaking us for power plants instead of pursuing lower-cost alternatives," Belote said.
TECO says it's unfair to compare utility rates. Utilities use "different rate-making methodologies," said spokesman Mike Mahoney.
TECO sells electricity to 467,000 customers in Hillsborough and parts of Polk, Pasco and Pinellas counties.
The utility wants to raise its rates 10.3 percent by early 1994. A customer who uses 1,000 kilowatt hours a month would pay $9.30 more. The monthly bill would go from $77.95 to $87.25.
PSC Commissioners Betty Easley, J. Terry Deason and Luis Lauredo will hear the case. It begins today.
"It's been a long time since we've asked for a price change," said Girard Anderson, TECO president. "Frankly, there is just no escaping the cumulative impact of customer growth, environmental regulations and inflation despite the successful efforts of all our employees to hold down costs."
Construction projects, including a new power plant in Polk County, also are driving the rate increase, Anderson said.
TECO wants a $98-million increase and a return on equity of 13.75 percent.
Public Counsel Shreve says TECO should have a rate decrease of $22-million and a return on equity of 11.25 percent.
Deputy Public Counsel Roger Howe says it's wrong for ratepayers to foot the bill for ongoing construction work. "You're asking customers to pay a current return on assets that can't provide any service. It would be almost analogous to asking the customers to pay the cost of building an electric utility before they're receiving any electricity."
Anderson said the company needs to earn a return on the construction work to maintain its favorable bond rating, which lowers its borrowing rates. TECO will invest more than $1-billion in the next five years in construction. "In order to make that investment, we're going to have to borrow more money," Anderson said.
The hearings in both GTE and TECO's cases are expected to last into next week.