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Duke Energy, TECO plan to cut electric rates with fall in fuel prices

 
Published Sept. 1, 2015

ST. PETERSBURG — Tampa Bay residents should see their electric rates drop in 2016 because of the falling price of the natural gas generating most of the state's power.

On Tuesday, Duke Energy Florida and Tampa Electric filed their electric rate proposals for 2016 with state regulators who must approve them after a hearing in November. Since the rate proposals provide cuts for customers, approval is expected.

Duke, which serves 1.7 million customers in Pinellas and parts of Pasco, Polk and areas to the north, said in a filing with the Florida Public Service Commission it proposed lowering residential rates by $4.18 per month for an average customer using 1,000 kilowatt hours. That is a 3 percent drop to $117.41 per month.

Tampa Electric's PSC filing said it will reduce residential electric rates by $2.25 per 1,000 kilowatt hours, a drop of 2.1 percent to $106.22. TECO serves 700,000 customers, mostly in Hillsborough.

Both utilities said they also would lower commercial and industrial rates — between 3 and 4.8 percent for TECO customers, and between 4 percent and 6 percent for Duke.

Gulf Power, the state's smallest investor-owned utility serving 444,000 customers in northwest Florida, said it would lower rates by $3.71 to $135.58, a 2.7 percent drop.

Florida Power & Light, which does not have customers in Tampa Bay, had not yet filed its rate proposal, though FPL also is likely to file for a rate decrease. FPL is the state's largest utility with 4.7 million customers.

Those reductions are mostly a reflection of falling natural gas prices, which have been driven by the discovery of massive new domestic gas reserves through what is commonly called fracking. The process involves the injection of liquids into the earth to free up natural gas. Duke, for example, said its retail fuel costs are down by 20 percent.

Duke noted its customers next year will be paying nearly 15 percent less for electricity than they were in January 2009. TECO customers would pay 17 percent less.

"Our successful cost management and careful planning is helping lower customer rates while we invest in affordable, clean energy and improve reliability for our customers every day," Duke's Florida president, Alex Glenn, said in a statement.

Duke's rate proposal assumes the PSC gives the utility permission later this year to issue bonds to pay costs associated with the shutdown of its Crystal River nuclear plant. Those bonds will cost residential customers $3.26 monthly per 1,000 kilowatt hours, a cost included in the calculation of a 3 percent rate decrease.

The average national cost of electricity in May was $129.50 monthly per 1,000 kilowatt hours, according to Energy Information Administration.

Contact William R. Levesque at levesque@tampabay.com or (813) 226-3432. Follow @Times_Levesque.