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Details differ for utilities - but rate hikes look the same

There are shocks from electricity and shocks from electricity prices. Avoid the former. Brace for the latter.

Florida's "Big 3" electric utilities - Progress Energy Florida, Tampa Electric and Florida Power & Light - are slowly but surely raising the price of electricity for their residential customers. Prices may seem to dip and rise seasonally, and can even drop significantly for a while. But over time, electric rates seem headed in one direction.

Up.

In 1995, for example, the average of the Big 3's residential rates for 1,000 kilowatt hours was $80.30. (It takes about 1,400 KWH to power an average home for a month.) That average rate rose quickly to $89.77 in 2001, dipped in 2002, then jumped again.

Come January 2004, the Big 3's average will be $91.52, a 14 percent increase from 1995 and a record for recent years.

Progress Energy Florida, St. Petersburg. The Florida operation, which became a unit of a North Carolina power company three years ago, is the dominant electricity provider in Central Florida. It also was the most expensive provider of electricity of the Big 3 in 1995. Prices soared over the next several years, topping $93 per 1,000 KWH in 2001. In a deal with state regulators, Progress Energy agreed to drop its rates dramatically to $81.62 in 2002. Alas, it was not to last. The $83.71 now charged by the utility will rise to $89.11 in January.

Still, that figure is less than the price of electricity charged by Florida Power just before it was acquired by Progress Energy, says company spokesman Keith Poston. On the other hand, Progress Energy customers in the Carolinas pay less, $84.97 for their electricity, than the company's customers will in the Sunshine State.

Tampa Electric, Tampa. Owned by struggling parent TECO Energy, Tampa Electric is under pressure to perform well because so many other units of the corporation are sucking wind. Unfortunately, Tampa Electric's rates have spiked through the roof from $82.17 in 1995 to more than $99 starting in 2004. The utility, heavily dependent on coal for fuel for many years, is trying to add more natural gas - just as gas prices have increased sharply.

Florida Power & Light, Miami. Part of giant FPL Group, the state's largest utility supplies electricity to South Florida and the state's east coast at rates that would often make the customers of the other two big utilities jealous. Florida Power & Light's rates are consistently below the average of the Big 3, thanks in part to sheer economies of scale. Operating four nuclear power generation plants helps.

It has been nearly six months since an Indiana jury ordered Tampa's Outback Steakhouse Inc. to pay $39-million to a couple hit and severely injured in 1997 by a drunken driver after he left one of the company's restaurants. The liability judgment is the largest ever against Outback, which is appealing the decision. But Outback's not the only restaurant chain to face such liability issues, according to Nation's Restaurant News. T.G.I. Friday's paid $21-million to settle a lawsuit filed by the parents of two teenagers killed by a drunken driver who crashed into the teens' car in Kentucky. And the California restaurant chain Chevys Inc. settled for $25-million a wrongful-death lawsuit involving drinking and driving.

In Outback's case, the company says if it must pay the $39-million, its primary liability insurer is expected to cover the first $21-million. But a second insurer that Outback wants to cover the remaining $18-million has sued, saying it was not notified of the case and is not responsible for the verdict. Outback, in an SEC filing, says it has other legal avenues to pursue if the second insurance company succeeds in court.

It's the most wonderful time of the year ... for Tampa Bay area community banks. There's growing interest by bigger banks to enter the Tampa Bay market. And that means smaller local banks will be ripe for the picking and commanding top dollar. Among the recent deals is Palm Harbor's Peoples Florida Banking Corp., the parent of Peoples Bank that was founded and run by Pinellas banker David Dunbar. Last month, Georgia's Synovus Financial Corp. agreed to buy the local bank. It turns out Peoples started looking for a buyer last May when it hired financial adviser Hovde Financial to start matchmaking. Hovde will do well when this deal is sealed in early 2004. Its fee for bringing buyer and seller together: a cool $1.1-million.

- Robert Trigaux can be reached at trigaux@sptimes.com or 727 893-8405.

Florida's "Big 3" utilities continue to raise electricity prices to reflect underlying higher costs of oil, natural gas, coal and nuclear power used to generate power.

Coming Now 2002 2001 2000 1995

- Takes effect January 2004 Source: Companies, Times research.