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Progress surcharge targeted in appeals

By LOUIS HAU
Published August 16, 2005

Consumer advocates, led by the state Office of Public Counsel, have appealed the Florida Public Service Commission's approval of a Progress Energy Florida customer surcharge to cover hurricane costs.

The appeals, which were filed Friday and Monday, legally block Progress from collecting the surcharge pending a ruling on the matter by the Florida Supreme Court.

But because Progress began collecting the surcharge this month, the St. Petersburg utility expects to continue doing so until it receives further guidance from the PSC, company spokesman C.J. Drake said.

The PSC could allow Progress to continue collecting the surcharge on the condition it refund customers if the Supreme Court rules in the public counsel's favor.

On Monday, the St. Petersburg utility filed a motion with the PSC asking the commission to do that.

The commission has not decided when to rule on Progress' motion but may do so during a regularly scheduled public meeting Aug. 30, PSC spokesman Kevin Bloom said.

In June, the PSC voted to allow Progress to pass on $231.8-million in hurricane costs to its customers, slightly less than the $251.9-million the utility had sought.

The costs are to be passed on to customers via a two-year surcharge of $3.35 per 1,000 kilowatt hours of electricity consumed per month, raising Progress' monthly rate for residential customers to $97.78 per 1,000 kilowatt hours.

In their appeals, public counsel and consumer groups reiterated arguments that Progress should not have been permitted to recover any hurricane costs unless its regulated return on equity - a measure of profitability - had fallen below 10 percent.

Progress' rate of return in 2004 exceeded 13 percent.

Although Progress has secured the PSC's approval to recover its hurricane costs over two years, the company has said it plans to take advantage of legislation signed into law in June by Gov. Jeb Bush authorizing electric utilities to issue corporate bonds to pay for repairs caused by catastrophic weather events.

Issuing corporate bonds would enable Progress to collect its money immediately. And it would lower the size of the monthly surcharge on customers, although the surcharge would be collected over a longer time.

But the consumer advocates' appeals of the PSC decision could delay those plans.

Progress spokesman Drake said Monday that the company is "weighing the possible effects that the public counsel's appeal will have on ... our options."

--Louis Hau can be reached at 813 226-3404 or hau@sptimes.com

[Last modified August 16, 2005, 01:28:10]