Electric bills will climb due to higher oil prices

By JO BECKER

© St. Petersburg Times, published May 17, 2000

TALLAHASSEE -- Millions of Floridians are about to see their electric bills go up a few dollars a month starting in July as a result of higher oil prices.

State regulators on Tuesday approved a surcharge for customers of Florida's three largest electric companies: St. Petersburg-based Florida Power Corp., Tampa Electric Co. and Miami's Florida Power & Light.

The new, higher rates will start on June 15, and customers will see the difference in their July bills.

The average Tampa Electric Co. customer's bill will increase $2.67 a month to $84.12. The average Florida Power Corp. customer's bill will increase $2.96 a month to $86.72. The average Florida Power & Light Co. customer's bill will increase by $4.39 to $74.12.

Those numbers are based on a typical household's use of 1,110 kilowatt-hours per month.

The companies asked the Public Service Commission to grant the mid-year rate increase because of the sharp rise in oil prices since January. To varying degrees, each utility relies on oil to help run power plants that produce electricity.

The commission decided to put off the increase until June 15 to allow customers time to change their energy consumption habits, said PSC spokesman Kevin Bloom.

In November, the Public Service Commission will review each companies' books to determine that the rate increase was justified. If the price of oil drops between now and the end of the year, customers could get a refund or rates could be lowered.

Conversely, if oil prices continue to rise, customers could be hit with another increase.

Together, the companies serve about 5-million customers in Florida, according to the Public Service Commission.

Pat McCreary is one of them. The 57-year-old Clearwater widow can't work because of her poor health, and her daughter's job at Publix brings in barely enough for them both to scrape by. Extras aren't an option: McCreary said she can't even afford to buy her daughter a small gift for her birthday later this month.

So when McCreary heard her electric bill might go up, she called the Public Service Commission to express her concern.

"I gave them my opinion, but I guess it didn't matter," McCreary said Tuesday. "It won't break me, because I'm waiting to get disability payments, but the fact is they keep adding these rate increases and fees and it goes up and up and it becomes less and less of me being able to pay it."

But in Florida, investor-owned utilities are guaranteed a certain rate of return and are allowed to pass certain costs on to their customers.

The three electric companies told regulators that when doing their calculations last fall, they had underestimated the cost of oil.

As a result, Florida Power, which of the state's big utilities already charges the highest rates for electricity, says it needs to recover $62.1-million in higher fuel costs. Tampa Electric says it needs to recover $28.9-million, and the larger Florida Power & Light needs to recover $230.6-million.

Public Counsel Jack Shreve, who represents consumers before the Public Service Commission, said his office will study the numbers before the November hearing to check if the increase was justified.

"You have to admit that oil prices have gone up, but we'll sure be taking a look it," Shreve said. "I don't like it, but at this point there really wasn't enough information for me to challenge it."

The mid-year rate increase was made possible by a mechanism put in place during the oil crisis of the 1970s that allows utilities to petition for an increase any time there are extraordinary increases in fuel costs.

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