Higher fuel prices spur request for fuel adjustment increase
TAMPA, February 9, 2001
Significantly higher fuel prices have led Tampa Electric Co. to file a request today with the Florida Public Service Commission for an increase in its fuel adjustment charge.
Tampa Electric is asking the PSC to approve an increase in the company's fuel adjustment charge that would raise residential bills by 3.9 percent beginning in April.
Tampa Electric is seeking the increase due to sharply higher costs for oil, natural gas and purchased power, as well as smaller increases for coal, the company's primary fuel source. The PSC allows Tampa Electric to pass through increased fuel costs directly to consumers, and the company does not make a profit from the fuel-charge increase.
Tampa Electric proposes to spread the fuel adjustment increase over 20 months, and recover half its increased fuel costs in 2001 and the other 50 percent in 2002. By applying the increase over a longer period, as the commission has done previously, customers will see less of an impact on their monthly bills.
"Higher prices for fuel are very frustrating for many, but especially our customers," said Tampa Electric President John Ramil. "This increase will not position us to provide better service or facilitate growth. We will merely collect dollars from our customers and hand them over to our suppliers."
Under Tampa Electric's proposal, a typical 1,000 kilowatt-hour monthly residential bill would rise $3.29, from $84.47 to $87.76, beginning in April. Even with the proposed fuel adjustment hike, Tampa Electric would have the lowest residential rates of Florida's three largest investor-owned electric utilities.
Tampa Electric's last mid-course fuel charge correction occurred in June of last year, when the PSC granted the company a 3.3 percent increase to cover rising fuel costs.
Each year, Tampa Electric and Florida's other utilities file fuel-cost projections with the PSC, estimating what they anticipate their fuel expenses will be for the coming year.
At the same time, the companies also review what their actual costs for fuel and purchased power were for the prior year, and then based on how their fuel-cost projections match up with their actual expenses, file to recover or refund the difference.
The PSC is expected to consider Tampa Electric's fuel-adjustment request within the next month.
Tampa Electric is the principal subsidiary of TECO Energy, Inc. (NYSE: TE), a diversified energy-related holding company headquartered in Tampa. Its other principal businesses are Peoples Gas, TECO Power Services, TECO Transport, TECO Coal, TECO Coalbed Methane and TECO Solutions.
MEDIA CONTACT: Laura Plumb Duda – Tampa Electric 813/ 228-1572