Will customers pay for utilities’ COVID-19 expenses? Some may.

Gulf Power and TECO Peoples Gas both filed for cost recovery for coronavirus.
Will customers pay for utilities’ COVID-19 expenses? Some may. Pictured are Duke Energy Florida workers in 2018. [CHRIS URSO  |   Times (2017)]
Will customers pay for utilities’ COVID-19 expenses? Some may. Pictured are Duke Energy Florida workers in 2018. [CHRIS URSO | Times (2017)]
Published Aug. 10, 2020

State regulators paved the way last month for one of Florida’s major power companies to charge paying customers for money it lost from those who are delinquent on their bills because of the coronavirus.

It also said Gulf Power Co. could track and charge customers for other pandemic-related expenses, both moves that other utilities may now seek to copy.

But customer advocates say the additional expenses should be treated as the cost of doing business. Despite the costs, the Office of Public Counsel argued, all five investor-owned Florida electric utilities are still earning as much of a return on investment as they do during non-pandemic times.

“It will not surprise me at all if the other utilities will come in and file on that because it appears the (Florida Public Service Commission) is willing to give it to them,” said J.R. Kelly, lawyer with the Office of Public Counsel.

Related: Tampa Bay power companies among first to resume shutoffs

The commission gave Gulf Power a green light in July to begin tracking its pandemic expenses, specifically bad debt from customers not paying their bills and “safety-related costs” for both customers and employees. The company’s bad debt as of April was $2.1 million, a 14 percent increase from its typical April average, and it estimated that safety costs will surpass $4 million for the year.

Gulf Power can use this data to ask regulators for permission to charge paying customers and request a specific amount at a later date.

Neither of Tampa Bay’s major electric utilities have filed to track COVID-19 costs as of this week.

Tampa Electric Co., spokeswoman Cherie Jacobs said, will not file for pandemic expenses. But its natural gas sister company TECO Peoples Gas did request to begin tracking COVID-19 expenses.

And Duke Energy Florida is considering filing. Spokeswoman Ana Gibbs said the utility has incurred costs from customers who haven’t paid their bills, waived customer fees and personal protective equipment for its employees. At the commission workshop last week, Duke said it was $18 million short in revenue from April 1 to June 1 compared to the same period last year.

“(Duke Energy) has been experiencing effects from COVID-19,” Gibbs said in a statement. “We are monitoring those impacts to determine whether to make any filing with the Florida Public Service Commission.”

Florida Power & Light, the state’s largest electric utility and Gulf Power’s sister company, will not be filing for COVID-19 costs, spokesman Chris McGrath said.

The Office of Public Counsel’s Kelly said it would be unfair for utilities to charge customers for pandemic costs because of the rate of return that the five investor-owned utilities are already earning.

In Florida, investor owned utilities are allowed to earn money back on capital investments, such as building new power plants. The commission sets a percentage range that utilities can earn and if their earnings dip below that because of increased costs, for example, they can request to increase their customers’ bills to get back within that range.

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Duke Energy, for example, earned a 10.75 percent return in May according to its most recent filing, while Gulf Power earned 10.07 percent.

“We appreciate (the Office of Public Counsel)’s comments and concerns,” Gibbs said. “We always take into consideration impacts to our customers and will continue to contemplate many factors before filing for (COVID-19) cost recovery.”

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