Regulators Eye Plan on Utility Pandemic Costs

Posted By: Garnie Holmes Legislative/Regulatory,

Florida PSCThe Florida Public Service Commission should approve a plan that could lead to Gulf Power Co. eventually recouping coronavirus-related costs from customers, commission staff members have recommended. Gulf, the largest utility in Northwest Florida, said in a filing last month that it received about $6 million less in customer bill payments in April than it ordinarily would have collected during the month. About $2.1 million is considered “bad debt,” up from the historical average for April of about $300,000, the company said.

Also, the utility said it had millions of dollars in costs for safety-related measures stemming from the pandemic, including monitoring the health and temperatures of employees and contractors at power plants and other facilities and buying personal-protective equipment such as masks and gloves. The regulatory commission is scheduled July 7 to consider a Gulf plan to set up an accounting process to record the pandemic-related costs, with the possibility of recovering the money from customers in the future.

Commission staff members issued a four-page recommendation Thursday that said the plan should be approved. “The concept of deferral accounting allows companies to defer costs due to events beyond their control and seek recovery through rates at a later time. The alternative would be for a company to seek a rate case each time it experiences an exogenous event,” the staff recommendation said. “The costs in the … (Gulf) docket are attributed to the COVID-19 pandemic. Due to the uncertainty of this situation, Gulf states that it is not possible to fully anticipate the scope or timeframe of the financial impact on the company and its customers related to COVID-19. Because of the unique circumstances resulting from the global pandemic, staff recommends that the commission approve Gulf’s request to establish a regulatory asset for recording costs incurred due to COVID-19 and defer commission consideration of the potential recovery of the amounts recorded … to a future proceeding.”

Article reposted with permission from The News Service of Florida.