Tampa Electric customer bills to drop in January to reflect reduced fuel costs
Residential bills will remain among Florida's lowest and 19 percent below the national average
TAMPA, September 1, 2016
Thanks to lower natural gas prices, Tampa Electric customers could pay $1.54 less a month for electricity in January – even as a new, efficient power plant begins serving customers.
The company today filed projected costs for fuel and other clauses with the Florida Public Service Commission (PSC). If the PSC approves the requests as filed, a residential customer's monthly bill would drop by $1.54, to $104.68 for 1,000 kilowatt-hours (kWh), about a 1.45 percent decrease from the current $106.22 a month. Commercial and industrial customers would see bills decrease by 5 percent and nearly 12 percent, respectively.
"Tampa Electric is proud to provide outstanding value to our customers every day with rates that are 19 percent lower than the national average – and we're doing this while expanding our Polk Power Station," said Gordon Gillette, president of Tampa Electric. "Many times when a utility adds a large new asset like a power plant, bills go up – but in this case, they're going down. We're very proud of that and are very pleased for our customers."
The bill reduction comes from this: In January, the average Tampa Electric residential customer bill will increase by $6.68, when the Polk Power Station's efficient combined-cycle natural gas unit becomes operational. However, the Jan. 1 reduction for fuel and other clauses – of $8.18 – would more than offset that increase, ending with a net reduction of $1.54 a month for the average residential customer.
Low natural gas prices are driving the offset. The company estimates that by the end of 2016 it will spend $98 million less on fuel than originally projected. The fuel portion of the bill is based on costs for natural gas and coal during the first six months of 2016, projections for the remainder of 2016 and expected fuel prices in 2017.
The PSC is expected to vote on the fuel and other clauses after a hearing scheduled to begin Nov. 1. If the fuel request is approved as filed, Tampa Electric residential customers' bills would remain 19 percent below the national average for 1,000 kWh usage – which is $129.20 per month, according to June 2016 data from the Energy Information Administration.
Tampa Electric's fuel mix is predominantly comprised of natural gas and coal. The cost of fuel is a substantial portion of an electric bill, currently about one-third of a residential customer's bill. Fuel costs are passed through from fuel suppliers to customers with no markup or profit to Tampa Electric. Tampa Electric maximizes the use of existing low-cost, well-performing plants and power purchased from other companies to mitigate costs and pass the savings to customers.
Tampa Electric, one of Florida's largest investor-owned electric utilities, serves about 730,000 customers in West Central Florida. Tampa Electric is a subsidiary of Emera Inc., a geographically diverse energy and services company headquartered in Halifax, Nova Scotia, Canada.
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 PSC. Additional information is contained under "Risk Factors" in TECO Energy, Inc.'s and Tampa Electric Company's combined Annual Report on Form 10-K, as updated by subsequent SEC filings.