The cost of Charley and Frances probably will exceed the utility's storm fund. That could result in a rate hike.
By LOUIS HAU nd LEONORA LAPETER
Published September 9, 2004
After knocking out power to hundreds of thousands of Tampa Bay area customers, Frances now presents customers of Progress Energy Florida with another unwelcome development: the possibility of a rate hike.
The St. Petersburg utility said Wednesday that the recovery costs it has incurred from Frances and Hurricane Charley are likely to exceed the $40.9-million it has in its storm reserve fund.
Progress and other investor-owned utilities are allowed to accumulate such funds via monthly customer bills to help cover the cost of restoring power after major storms.
If the costs exceed what a utility has in its reserve fund, the company may ask the Florida Public Service Commission for permission to add a surcharge to customer bills to make up the difference.
Progress spokesman Mike Hughes said it was too early to determine whether the company would ask for a surcharge.
Tampa Electric Co., which has a much smaller service territory than Progress, believes its reserve fund of about $40-million should be enough to cover its recovery costs from Frances and Charley, spokesman Ross Bannister said.
Both Progress and Tampa Electric acknowledged that the power outages would reduce electricity sales, hurting third-quarter revenues. Progress also said that it has temporarily suspended production at some of its coal-based synthetic fuel facilities.
Progress is eligible for federal tax credits on synfuel production. Since storm recovery costs will lower the company's tax burden, it is cutting back on synfuel production.
But Hughes stressed that financial concerns were not the company's top priority at the moment. "We are exclusively focused on restoration and not calculating costs," he said.
Tampa Bay utilities continued to make headway Wednesday in restoring electricity to customers, but the decline in outage totals slowed as line crews began turning their attention to the scores of smaller repairs that affect fewer customers.
"Early on you get all that low-hanging fruit," Hughes said of the restoration process. "Later, you get into outages that affect fewer and fewer customers...It's a dynamic we see in every major storm."
Bannister said Tampa Electric expects to fully restore power to its customers by the end of Friday.
On Wednesday, many customers continued to suffer through the heat without electricity. Along 27th Avenue S in Gulfport, one side of the street had power, the other did not.
Adam Daudelin is among the latter group. At night, he can sit in his darkened living room, where the thermostat reads 90 degrees, and look enviously at his neighbor across the street with lights, air conditioning and TV.
Daudelin and his wife, Cindy, have spent three days grilling soup and hotdogs and living by lantern and candlelight. His aunt in West Palm Beach lost her roof and fence to Hurricane Frances and she had power back in 24 hours.
"One of the most frustrating points is that it's only our side of the street," said Daudelin, 25, a property maintenance supervisor who was told he would likely get his power back today. "It kind of feels like our little section got put on the back burner. It's only a group of eight to 10 houses and obviously they're getting to us last."
Mike Beilis, a 77-year-old retired AT&T executive who lives on the water in St. Pete Beach, has been without power since Monday afternoon.
Like his neighbors, Beilis is frustrated with refrigerators full of bad food and the inability to use his computer or TV. The humidity inside the house is curling his books and making his carpets swell. He can't use his pool-cleaning equipment or boat lift.
Beilis is annoyed that Progress can't tell him more about why he doesn't have power or when it will be restored. He said he's called and heard the recordings, but he can't seem to get through to get any more information.
"Someone has to raise the voice of indignation," Beilis said. "At what point does the public utility have the responsibility to be held accountable, to be candid, to share the problems so people can have an understanding. My point is if you have an understanding of the problem, you become more tolerant."
Louis Hau can be reached at hau@sptimes.com or 813 226-3404.
