Florida Public Service Commission approves storm recovery costs for utilities
The Florida Public Service Commission (PSC) approved the storm recovery costs for the state’s major utilities, Florida Power & Light, Duke Energy Florida, and Tampa Electric.
“The utilities’ storm protection activities help reduce restoration costs, minimize outage times, and increase reliability,” PSC Chairman Gary Clark said. “At today’s hearing, all case issues were agreed upon by the parties, and we approved the costs as reasonable for recovery through the SPPCRC.”
By Florida law enacted in 2019, investor-owned utilities (IOU) must explain their storm hardening programs and projects for the coming year and show that the projects are consistent with their approved storm protection plans. The PSC is required to determine the costs that can be recovered through the SPPCRC during the subsequent year. Each utility must file an updated storm protection plan at least every three years covering the next 10-year period.
Previously, Florida’s IOUs had storm hardening programs financed through base rates. The new law establishes a separate cost recovery mechanism for storm protection activities. Florida Power & Light Company (FPL) and Gulf Power Company (Gulf) got approved cost recovery of $233,114,170 if the PSC approves unified rates for FPL and Gulf, or $214,467,156 for FPL and $18,607,637 for Gulf if unified rates are not approved in the pending rate case. For Duke Energy Florida, it was $104,303,849, and for Tampa Electric, it was $47,955,157. Florida Public Utilities Company had been granted a one-year delay in filing a storm protection plan, so the utility did not file for cost recovery.
Also, the PSC approved a fuel factor increase for Tampa Electric Company (TECO) and Duke Energy Florida, resulting mainly from unexpected natural gas price increases attributed to increased demand, and reduced production and storage.
“Natural gas prices have increased since TECO and DEF submitted their 2021 fuel cost projections to the Commission, creating a cost under-recovery for both utilities,” Clark said. “Utilities do not earn a profit on fuel charges, and the PSC will continue to ensure utilities have done everything possible to keep fuel costs reasonable while maintaining a reliable fuel supply.”
With this approval, TECO residential customer’s monthly 1,000-kilowatt-hour (kWh) bill for September through December will be $118.07, an increase of $12.82. Duke residential customer’s monthly 1,000-kWh bill for September through December will be $132.24, an increase of $4.28 over the current bill.
The fuel and capacity costs are set for each calendar year, but mid-course corrections are used when a utility’s costs increase or decrease significantly in the interim. However, utilities can request an additional adjustment when costs are expected to change by more than 10 percent.
TECO officials point out that even with this increase, the typical residential bill will remain among the lowest in Florida and significantly below the national average of $137 per month.
