$61.99M Gulf Power base rate hike likely – settlement would bypass hearing

Gulf Power, in a March 20 release, announced that a settlement with Florida’s Public Counsel, that includes a base rate increase, is imminent.  The announcement came just before Public Service Commission hearings on the case that had been scheduled through this week.

Gulf Power says the agreement includes provision that customers’ current $18.60 minimum fixed billing charge will not increase to the proposed $47.40.

“The proposed residential Advanced Pricing Package, which included an increase to the fixed charge and a decrease to the energy charge, is not a part of the settlement agreement and will not be implemented,” according to the company.

Neither the company nor the settlement draft specifically detailed what, if any, fixed rate increases may be implemented.

The settlement would hike base rates by $61.99 million, per a draft on the Public Service Commission’s website. The overall impact to customers would be $54.29 million, however, due to customer credits stipulated in the agreement.

The new rates would take effect July 1. The company had been seeking a $106 million base rate increase.

Per the draft agreement:

“Beginning on the Implementation Date, Gulfs rates will be adjusted to provide an overall net customer impact of approximately $54.29 million as provided in subparagraphs (a) and (b) below ($61.99 million less an estimated revenue credit of approximately $7.7 million to be provided to customers through the Purchased Power Capacity Clause (“PPCC”)). The total base rate increase ($56 million from subparagraph (a) plus $5.99 million from subparagraph (b) below for a total of$61.99 million) [bold added] will be applied to rates using the rate design filed in Gulfs rate case, except that residential rate design shall continue to be as provided in the 2013 Settlement.”

Gulf Power had the highest residential fixed minimum rate of all Florida municipal and investor-owned utilities as of December 2015, per the Public Service Commission.  Fourteen of sixteen cooperative utilities had higher fixed rates than Gulf Power.  Cooperative utilities typically serve rural areas, and are co-owned by customers.

Gulf Power press release text follows:

Gulf Power and the Office of Public Counsel are asking the Florida Public Service Commission to approve a settlement relating to a rate request filed in October. The energy provider’s request would allow them to continue to invest in the reliability of the energy grid and maintain a balanced energy mix including 24/7 energy sources as well as renewables like wind and solar. A balanced energy mix ensures customers have energy whenever they need it and helps keep prices lower.

“This compromise is good for all involved, including Gulf Power’s customers,” said Stan Connally, Gulf Power Chairman, President & CEO. “Most importantly, it supports our current infrastructure investment — which ultimately helps us continue to provide our customers with long-term, reliable service with a balanced energy mix across Northwest Florida.”

The proposed residential Advanced Pricing Package is not a part of the settlement agreement.

“We will continue to explore other options that give our customers the value that they expect through bill predictability and choice in pricing based on how our customers prefer to control their energy usage,” said Connally. “We will continue to gather customer feedback and find opportunities to deliver service to fit the lives of our customers.”

The average residential customer bill is currently $144. If the settlement is approved by the FPSC, that same bill will increase to an estimated $151. This new amount would be less than the average residential customer paid in 2015. Originally, the energy provider filed a request that, if approved, would have increased the cost for an average residential customer to $158 per month on July 1.

Connally cited the need to continue to invest in the reliability of the grid to ensure a secure energy future.

“Our obligation is to have the electricity available when and where our customers need it,” Connally said. “This investment is necessary to meet the expectations of our customers now, and for future generations.”

Gulf Power residential price changes (Average residential customer monthly bill)

January 2009
$143.58
Increase

January 2010
$155.50
Increase for Scrubber

January 2011
$141.66
Decrease

September 2011
$146.76
Increase

January 2012
$138.29
Decrease

March 2012
$134.59
Decrease

April 2012
$138.65
Increase

July 2012
$127.64
The largest decrease in company history

January 2013
$130.05
Increase

January 2014
$149.59
Increase for largest power grid construction project in company history

January 2015
$156.36
Increase

January 2016
$148.64
Decrease

January 2017
$144.01
Decrease

July 2017
$151
Estimated base rate increase if settlement is approved by the FPSC.

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