Increased fuel costs lead to higher electric rates

www.sun-herald.com By CHRIS CURRY Staff Writer 03/05/03

Based on a spike in fuel costs, the state agency which regulates utilities approved a rate increase for Florida's three largest electric companies Tuesday. The Florida Public Service Commission will reconsider the mid-year fuel adjustment, at its regular fuel hearings in November.

"You have the largest oil strike ever in Venezuela, unusual cold weather in North America and Canada increasing demand for natural gas and the threat of war in the Middle East," PSC spokesperson Kevin Bloom said. "You put all those together, the rate adjustment was unavoidable."

Under the changes, which begin in the April billing period, Florida Power & Light residential customers, including those in Charlotte and Sarasota counties, will see a $4.75 increase from $76.85 to $81.60 for every 1,000 kilowatt hours of use. FPL commercial rates will increase 7.3 percent and industrial rates will rise 11.6 percent. Customers with Progress Energy Florida and the Tampa Electric Co. will also see rate increases.

Bloom said under state law, utility companies operate under a "straight pass-through" system and cannot make a profit.

"If during the year, the cost projections drop back down, than customers will see a refund in November," he said.

But if costs rise higher, the PSC will likely need to raise rates again at the November meeting.

Florida Public Counsel Jack Shreve, the state's advocate for all utility customers said if costs drop, the PSC should not wait until November to lower rates.

"If prices were to turn around and come down, we should turn around and get the rates down for the customers as quickly as we got them up for the companies," Shreve said. "But we don't know exactly what's going to happen. Right now, costs are significantly up all the way around and they may stay that way until we have some change in world affairs."

FPL spokesman Bill Swank said the utility's rates were highest in April 2001, when tension in the Middle East contributed to a rise to $87.98 for every 1,000 kilowatts per hour.

"We're hoping to see fuel prices go back down again," Swank said. "We understand it's real frustrating to see not only gas prices go up but electric prices as well."

Swank said since November, FPL has seen an 8-percent rise in oil prices and a 16-percent spike in the cost of natural gas. He said the company offers a number of billing and conservation options for customers, including a program which levels customer bills over a 12-month span so they do not feel the financial burden from increased use in the summer and winter months. The company also offers customers energy audits to determine if they are wasting electricity. More information on the programs can be found on the computer at www.fpl.com

FPL serves 4 million accounts in the state and approximately 8 million people.