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Bigger rate hikes sought for power

Progress Energy and Tampa Electric want to charge more to cover costs

By LOUIS HAU
Published October 15, 2005

of rising fuel prices.

While hurricanes Katrina and Rita bypassed the Tampa Bay area, the storms will make their mark on local electric bills next year.

Progress Energy Florida and Tampa Electric said Friday a continued rise in the cost of natural gas and oil has prompted them to toss out their September requests to raise electricity rates to cover their costs. Now they have submitted larger rate-hike requests to pay for the rising costs of fuel used in their power plants.

The primary culprit? The havoc caused by Katrina and Rita, which shut down or damaged numerous oil and natural gas platforms in the Gulf of Mexico.

Progress of St. Petersburg wants to raise its monthly residential rate of $97.78 for the first 1,000 kilowatt hours of electricity by $11.78, or 12 percent, to $109.56.

That's $1.25 more than the rate increase the company applied for in September.

For customers who use more than 1,000 kilowatt hours, the price will be higher. Progress charges customers an extra penny for every kilowatt hour above 1,000. Now it is seeking permission to charge an additional penny.

Tampa Electric said it plans to increase its monthly residential rate of $98.07 per 1,000 kilowatt hours by $11.53, or 12 percent, to $109.60.

That's $1.63 higher than the increase the company had requested less than two months ago.

For the median Tampa Electric household using 1,300 kilowatt hours of electricity per month, a customer would pay $139.38 under Friday's proposed rate hike.

Ross Bannister, Tampa Electric spokesman, said the mood at the utility is one of "frustration and disappointment" caused by spiraling national fuel costs the company cannot control. The utility has sharply increased its reliance on natural gas to power its generators, but that fuel has been especially vulnerable this fall to price hikes.

The new rate increases sought by Progress Energy and Tampa Electric will be reviewed by the Florida Public Service Commission at a meeting in early November.

Any approved rate increases will take effect in January.

[Last modified October 15, 2005, 01:15:22]