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PSC staff to review Tampa Electric's request for an 10 percent rate increase

TALLAHASSEE — Tampa Electric made its first pitch for a proposed 10 percent rate hike to the state's Public Service Commission staff Wednesday, detailing how increased costs from improvements to plants and operations to support customer growth are driving the increase.

The utility's presentation to the PSC staff closely followed a discussion by senior officials at the TECO Energy parent company with analysts about a drop in first-quarter earnings and the outlook on rates.

"We had hoped to avoid seeking rate relief for as long as possible, and we've done everything we could to try to achieve that outcome," said Sandra W. Callahan, TECO chief financial officer, accounting officer and senior vice president of finance and accounting.

"What is driving this is … more than $770 million from investments made to safely, reliably and cost-effectively serve customers," she said.

The proposed rate increase would raise the average residential bill by $11 a month per 1,000 kilowatt hours of usage. That amounts to about $113 for 1,000 kilowatt hours. The rate had fallen from $106.90 per month in 2012 to $102.58 this year. Tampa Electric, a TECO subsidiary, last sought a rate increase in 2008.

J.R. Kelly, the state public counsel who represents consumers before the PSC, said his office is reviewing documents submitted by Tampa Electric and is assembling a team of experts to challenge the rate increase.

Kelly said Tampa Electric's return already is "astronomically higher" than other large investor-owned utilities in the state. The PSC had approved a rate of return for Tampa Electric of 11.25 percent, higher than the 10.5 percent returns okayed for both of Florida two biggest utilities: Duke Energy and Florida Power & Light.

"We will definitely be contesting their request," Kelly said.

Cindy Muir, a PSC spokeswoman, said the full commission will travel to Tampa on May 29 and to Winter Haven on May 30 to hear public comments about the proposed rate increase. She said Tampa Electric, Kelly's office and other consumer advocates will make presentations during the public meetings.

Utilities have increasingly been challenged on rate increases by consumer advocates. The AARP recently wrote the Florida Supreme Court to voice its opposition to an increase the PSC awarded last year to the state's largest utility, Florida Power & Light.

Cherie Jacobs, a Tampa Electric spokeswoman, said the company continues to work to keep rates low.

"Even with the increase, customers will be paying bills that are lower than six years ago," Jacobs said.

In addition to basic rate increases, Tampa Electric told the PSC staff that it also wants to raise fees for reconnecting services from $25 to $28 for a normal reconnect, and from $65 to $75 for a same-day reconnect.

For the first quarter, TECO Energy reported net income of $41.2 million, or 19 cents a share, compared with $44.6 million, or 21 cents a share, in 2012.

Ivan Penn can be reached at or (727) 892-2332.