Florida power companies propose 10% to 20% rate hikes for April

TAMPA, Fla. (WFLA) — Florida residents weren't the only ones impacted by Hurricanes Ian and Nicole. Three of the state's largest power companies, Tampa Electric Company, Duke Energy Florida, and Florida Power & Light, have each proposed rate hikes to cover the cost of restoring power after the storms wreaked havoc across the state.

Depending on how the Public Service Commission votes, TECO and FPL customers could see another 10% tacked onto their monthly bills, beginning in April. For Duke customers, the company is proposing a 20% increase starting in April. If the increases are approved, it will be among multiple hikes planned for the early months of 2023.

In a multi-month process, FPL, TECO, Duke Energy Florida, and the Florida Public Utilities Company have had several rate hikes approved, with the new requests an additional proposed increase.

Some of the hikes are due to the companies' reliance on natural gas for power plants, which has become more expensive over the last few years.

Other rate hikes were approved in 2022 to help strengthen the state's electric grid and prevent further destruction due to hurricanes and powerful storms that hit Florida. The first hike came in January, following a December request.

The latest proposed hike would cover the cost of repairing the grid and restoring power after the two storms. If approved, the hike would take effect in April. It should be noted that previous requests to increase revenue via consumer payouts have yet to be voted down by PSC members.

"FPL is seeking recovery of $1.3 billion for incremental restoration costs from Hurricanes Ian and Nicole," the company said in a statement. "As part of FPL's plan, customers would pay a temporary storm surcharge for 12 months, beginning in April."

The FPL asked for an additional rate hike to cover the cost of higher natural gas prices in 2022. TECO, FPL and Duke Energy also requested a 15% fuel cost hike in September.

"FPL is also seeking permission to recover about $2.1 billion to make up for the difference between projections and actual costs for natural gas in 2022," the company's statement continued. "FPL's proposal would spread these unrecovered 2022 fuel costs over a 21-month period beginning in April 2023 to reduce the impact on customer bills."

FPL said its plan would "minimize bill adjustments to pay for two hurricanes" and said the rate hikes would be temporary.

TECO made its own 10% rate hike request. The Tampa-based company asked for "the replenishment of the company's storm reserve for a total amount of $130,880,964," spread in monthly payments to its 810,000 customers.

In a letter from Archie Collins, President and CEO of TECO, the company said the proposed rate hikes were to "seek uncollected fuel costs from 2022 and expenses for the prompt restoration efforts after Hurricanes Ian and Nicole. The extreme volatility of natural gas prices in 2022, which increased by more than 70 percent over the previous year, resulted in home energy costs reaching near 10-year highs in the United States."

Speaking more directly, Collins said in a statement that "one of the best ways to ease the impact is to spread these costs over a longer time frame. We also encourage customers to use our many free programs to better manage electricity use, which translates into lower bills."

The increases would be spread out over nearly two years, from April 2023 to December 2024. Separate to their fuel-related price hike, TECO said "storm costs would be spread over 12 months. Fuel and storm costs are passed directly to customers without any markup by the utility."

Duke Energy said that their requests were also to handle storm-related restoration costs, as well as fuel cost recovery for 2022. Based on the combined requests, Duke Energy is requesting increases that will amount to more than $1.23 billion in rate hikes, from a combination of "net fuel costs" recovery and "storm restoration work, mostly associated with hurricanes Ian and Nicole."

The statement from Duke said the costs included 2022's "under-recovery" of $1.18 billion, which they said was a decrease of $385 million in 2023, as a result of projected lower costs for natural gas.

"If approved by the FPSC, the changes will be effective in April 2023. The monthly bill impact to a typical residential customer using 1,000 kWh will increase $33.49 or about 20% beginning in April," Duke Energy said in a statement.

Duke Energy, TECO, and FPL are private, for-profit companies. While it's not legally required to have power for your home, there are not many alternatives when it comes to energy providers. Additionally, even customers who have renewable setups, such as solar panels, still have to go through power companies to manage their usage.

For the most recent fiscal quarter, NextEra, the parent company of FPL, reported "strong third quarter results" through September.

"Turning now to our financial performance, NextEra Energy delivered strong third quarter results, with adjusted earnings per share increasing by approximately 13% year-over-year," a third quarter earnings call said. A fourth quarter earnings report is expected Wednesday. From Oct. 20, 2022 to date, NextEra Energy's stock price has gone up $11.79 per share, though with some minor fluctuations.

Emera Incorporated, the parent company of Tampa Electric, reported a 37% increase in cash flow, minus fuel and storm cost deferrals, as of their own third quarter earnings call. The company reported a $167 million net income.

Duke Energy previously announced plans to request funds via additional rate hikes for storm damages and recovery, though their own petition to FPSC has not yet been submitted. In its own corporate filings for third quarter, Duke reported "third-quarter segment income of $1,540 million" for its electric utilities and infrastructure, representing "an increase of $0.06 per share."

The cost recoveries requested by Duke, TECO, and FPL will be accomplished through direct increases to Florida consumers, should the Public Service Commission approve them. Voting on the requests is expected in March.