TECO told to refund $13-million to customers

Regulators say the company made too much profit. An average refund will come in $2.30 per month credits.

By SHELBY OPPEL

© St. Petersburg Times, published August 2, 2000

Tampa Electric Co. customers will receive an average $9.20 refund between September and December because the company's earnings exceeded regulatory limits.

A typical residential customer who uses 1,000 kilowatt-hours of electricity per month will receive the rebate in $2.30 monthly installments, beginning in September, said Laura Plumb, a TECO spokeswoman.

In total, TECO will refund $13-million to its 550,000 customers, most of whom are in Hillsborough County.

The utility also serves customers in Oldsmar in Pinellas County, Dade City in Pasco County, and Bartow and Winter Haven in Polk County.

The refund will partly offset a rate jump of $2.67 per month that began appearing on the average TECO customer's bill in July.

The increase, which appears in the form of a surcharge, will reappear each month through November and possibly later.

TECO, along with St. Petersburg-based Florida Power Corp. and Miami's Florida Power & Light, imposed the surcharge on customers to keep up with the sharp increase in oil prices since January.

The $13-million refund approved Tuesday by the Public Service Commission is a consequence of a 1996 agreement between TECO, the Office of Public Counsel, which represents consumers, and the Florida Industrial Power Users Group, a coalition of big companies that are the heaviest users of power in the state.

The 1996 agreement produced a $50-million rate refund spread over two years.

The $13-million refund announced Tuesday is in addition to the earlier refund.

"So far, TECO customers have had $63-million returned from their basic electric bills since 1996, and we hope to be able to add to that total in the future," Jack Shreve, the Florida Public Counsel, said in a news release.

The Public Service Commission regulates the state's utilities. Because TECO has a state-granted monopoly in its service area, the commission regulates the rates it can charge for electricity.

Shreve, whose salary is paid by taxpayers, represents consumers before the commission.

In 1996, as TECO was preparing to start up a new power plant in southwestern Polk County, Shreve anticipated the company would seek a rate increase to produce a return on its investment.

He already disagreed with TECO about whether the company was earning too much from customers.

After negotiations with Shreve and the industrial consumers, TECO agreed to the $50-million refund. The company also agreed to give back even more money -- the $13-million announced Tuesday -- if its earnings exceeded certain limits in 1997 and 1998.

About $1.3-million of the $13-million refund will go to the industrial consumers, which include phosphate, cement and paper companies, said John McWhirter, an attorney for the Florida Industrial Power Users Group. The remaining $11.7-million will go to residential customers.

If TECO, Shreve and the industrial consumers agree that TECO exceeded earnings limits in 1999, Shreve said, another refund could be on its way.

- Information from Times files was used in this report.

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