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Another hit for hurricane victims

For Floridians who suffered major financial losses during last year's hurricane season, Progress Energy has this message: We share your pain. We're just not willing to share your losses.

The St. Petersburg-based utility is trying to recoup $231.8-million in hurricane costs by soaking its ratepayers with a surcharge. The company last week proposed issuing corporate bonds, which would mean lower monthly costs spread over a longer period than its original notion of a $4.30 to $5.30 monthly rate increase.

In either case, however, the storm-ravaged customers, not Progress Energy's shareholders, will take the financial hit. Making matters worse for consumers, the utility is also asking the Public Service Commission for permission to boost its base rates.

PSC staff has approved the utility's plan to pass through the hurricane costs, and the commission is expected to take up the issue today. The discussion should be focused not on the merits of these two funding mechanisms but on the simple question of fairness.

Consumer advocates correctly point out that Progress' base rate ensures profitability for shareholders while also covering risks such as storm damage. In short, ratepayers already have paid plenty to shield Progress Energy's investors from any financial harm.

By agreeing to a surcharge, the PSC would be putting the entire cost of the hurricanes on the utility's customers, tens of thousands of whom endured devastating damage themselves. Many are still trying to recover financially, and they do not have the option of passing their costs off to others.

If the PSC agrees to Progress Energy's hurricane recovery plan, fairness dictates that the utility's base rate increase be denied. Progress sees these two issues as separate; its customers do not.

[Last modified June 21, 2005, 02:30:30]