Tampa Electric takes steps to pass lower fuel costs to customers
Reduced fuel costs to help offset impacts from requested base rate increase
TAMPA, February 27, 2009
Tampa Electric announced today that it plans to take immediate action to reduce rates in response to declining natural gas prices. The company will file a petition with the Florida Public Service Commission (FPSC) within a week that, if approved, will decrease the fuel cost portion of customers’ bills. The requested lower fuel charge would be effective in May and would offset, for most residential customers, all of the base rate increase requested by the company in August 2008, which is also scheduled to take effect in May. Commercial and industrial customers will also receive the benefits of lower fuel charges.
President Chuck Black said, “We think this action is particularly important in a time of economic challenges facing many of our customers. As we approach the end of winter, fuel prices have not spiked as they normally do and our team has done a good job of lining up fuel supplies for the balance of 2009 allowing us to capture these benefits for our customers.”
If approved by the FPSC, Tampa Electric expects to reduce its overall fuel costs for the remainder of 2009 by almost $200 million. For a residential customer using 1,000 kilowatt-hours of electricity, Tampa Electric’s request would result in a total bill decrease of about $13. If the company’s base rate petition is approved as requested, a 1,000 kilowatt-hour residential bill would increase by about $10 at the same time.
Since Tampa Electric’s last base rate request in 1992, the company has added 200,000 new customers to its system and realized an increase in peak demand of nearly 50 percent. The company has also invested more than $3.4 billion in infrastructure including 1,700 megawatts of environmentally responsible power generation as well as significant transmission and distribution facilities. The primary purpose of base rates is to cover a regulated utility’s costs of producing and delivering electricity to customers.
Tampa Electric’s generating fuel mix is composed principally of coal and natural gas. In addition to benefiting from lower natural gas costs, Tampa Electric hedges fuel purchases, and maximizes the environmentally responsible use of coal. Tampa Electric’s coal-fired generating units are equipped with state-of-the-art environmental technology.
Under Florida law, fuel costs are collected from customers by Tampa Electric at cost and used to pay fuel suppliers, usually large oil and coal companies, without any profit to Tampa Electric.
To help its customers manage their energy costs, Tampa Electric has a comprehensive offering of energy-efficiency programs for both residential and commercial customers. The company introduced energy-efficiency programs in 1979, well ahead of any state or federal requirements and has expanded its offerings over the years. Since that time, customer use of the programs has helped offset the need to generate power sufficient to serve 630,000 homes for one year.
One of Tampa Electric’s newest programs, residential Energy Planner™ enables customers to maximize energy use decisions with near real-time prices by using a programmable thermostat provided by the company at no charge. Customers participating in the pilot study saved an average of one month’s worth of electricity over the course of a year. Under the company’s Low Income Weatherization program, qualified customers can also receive items designed to enhance their home’s energy efficiency.
Among the company’s commercial customer energy-efficiency offerings is Networked Demand Response. Under this program, incentives are paid to participating commercial customers when they conserve energy at times of peak demand.
For more information on the company’s energy efficiency programs, visit online: www.tampaelectric.com.
Tampa Electric Company is the principal subsidiary of TECO Energy, Inc. (NYSE: TE), an energy-related holding company with regulated utility operations in Florida including both Tampa Electric and Peoples Gas System. Other subsidiaries include TECO Coal, which owns and operates coal production facilities in Kentucky and Virginia, and TECO Guatemala, which is engaged in electric power generation and distribution and energy-related businesses in Guatemala.
Note: This release contains forward-looking statements, which are subject to the inherent uncertainties in predicting future results and conditions. Actual results or outcomes may differ materially from those forecasted. The forecasted information is based on the company’s current expectations and assumptions, and the company does not undertake to update that information or any other information contained in this release, except as may be required by law. Fuel prices are dependent on market conditions, and customer rates are dependent on many factors, including actions by the FPSC. Additional information is contained under “Risk Factors” in TECO Energy, Inc.’s and Tampa Electric Company’s combined Annual Report on Form 10-K for the period ended Dec. 31, 2008.
Note to journalists: Tampa Electric’s Web site includes an interactive infographic describing the components of an electric bill, as well as comparative price data for consumer goods since 1992.