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Tampa Electric strikes deal to raise rates nearly $7 a month

Published Sep. 7, 2013

The average monthly Tampa Electric bill is expected to rise by $5.67 beginning Nov. 1 and an additional $1.27 two months later, as a result of an agreement the utility reached with consumer advocates late Friday.

Tampa Electric's rate hike would raise the average residential customer's bill from $102.58 to $109.57, which the company says will help offset rising costs and sluggish growth.

The subsidiary of TECO Energy had previously requested a slightly higher rate of $114.26 a month. But the utility settled for the lower amount for the next 12 months during last-minute negotiations ahead of hearings before state regulators on Monday.

The agreement also calls for smaller increases in 2014 and 2015, then in 2017 another substantial increase to cover an expansion at the utility's Polk power station.

The state Public Service Commission still must approve the deal, but a settlement agreement makes it more likely that regulators will support it.

"The proposed settlement represents a fair and constructive outcome," said John Ramil, TECO Energy president and chief executive officer. "We are pleased to reach agreement with groups representing all our customers."

J.R. Kelly, the state public counsel who represents consumers before the PSC, said the settlement helped reduce TECO's initial request of $135 million for next year by half and delayed some of the impact on customers.

"We negotiated a long time on this," Kelly said. "I think it's a fair deal. I think it's better than what the consumers would have gotten if we had litigated.

"The good thing about the step increases is the rates will go up the most next year and then a little bit the next year and a little less the next year," he said. "The economy's getting better, and hopefully that will help."

The initial increase on Nov. 1 will generate $57.5 million in revenue for TECO. That will cost the average residential customer $5.67 a month.

Neither Kelly nor the utility could say Friday how much rates will go up with the additional steps, but the revenue totals are a more modest $7.5 million in 2014 and $5 million in 2015.

But in 2017, when TECO customers must pay for the expansion of the Polk power station, the utility will send them a bill for $110 million, which could lead to another significant increase in rates.

"We appreciate the spirit of cooperation among the groups who worked diligently to reach a constructive resolution for all Tampa Electric customers," said Gordon Gillette, president of Tampa Electric. "This settlement would eliminate the need for the lengthy hearing — which was scheduled to begin Monday — and it would provide closure and clarity to the complex regulatory process."

Tampa Electric's request comes on the heels of a $350 million rate increase approved last year for the state's largest investor-owned utility, Florida Power & Light, which serves South Florida.

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FPL wants an additional $5 added to monthly bills beginning Jan. 1 to cover fuel expenses.

Even with last year's rate increase and the proposed fuel adjustment, FPL would remain lower than Tampa Electric and Duke Energy Florida at a cost of $100 per 1,000 kilowatt hours.

Duke customers currently pay $116.06 per 1,000 kilowatt hours. Duke wants to increase that to $124.30 on Jan. 1.

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


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