Tampa Electric Fuel Cost Hike Supported

Posted By: Dave Heller Industry , Legislative/Regulatory ,

Tampa Electric Co. should be able to collect more money from customers starting in April because of higher-than-expected fuel costs for power plants, staff members of the Florida Public Service Commission recommended Thursday.

The utility last month sought approval to pass along an additional $165 million in fuel costs to customers. The Public Service Commission is scheduled to take up the issue March 1.

Under the proposal, Tampa Electric residential customers who use 1,000 kilowatt hours of electricity a month would see their bills go from the current $120.91 to $131.87, according to the commission staff recommendation.

In addition to the higher fuel costs, the proposal also takes into account an increase of about $3 million in what are known as “capacity” charges.

The utility industry uses 1,000 kilowatt-hour bills as a benchmark, but electricity use varies widely among customers. Utilities generally are allowed to pass along fuel costs to customers and are not supposed to profit from those costs.

Each year, the commission sets the amounts that utilities can collect for fuel in the following year. But if costs are higher than expected, utilities can seek what are known as “mid-course corrections” that allow them to increase the amounts that customers pay.

The industry has grappled for months with natural gas prices, and the commission has approved mid-course corrections for Florida Power & Light and Duke Energy Florida.

Article reposted with permission from the News Service of Florida.