Tampa Electric files for base rate increase, first since 1992
Utility's filing reflects increased costs of doing business, including for environmentally friendly power generation and increasing reliability standards
TAMPA, August 11, 2008
Tampa Electric today formally filed its request for a base rate increase with the Florida Public Service Commission (FPSC). The last time the company made such a request was 16 years ago. Since Tampa Electric’s last base rate adjustment went into effect, the company serves 200,000 additional customers, with a peak demand increase of nearly 50 percent.
To serve its customers in an environmentally responsible and reliable way, from its last rate case through 2009, Tampa Electric will have made a total infrastructure investment of $3.4 billion in its system. That includes $1.7 billion to add or repower 1,700 megawatts of power generation and $1.5 billion to make significant transmission and distribution investments, in addition to other investments in the system.
President Chuck Black said, "It’s truly unfortunate that such an action is needed during a challenging economy, but despite our team’s continual efforts – which have delayed increasing our base rates for 16 years – we can’t put a rate request off any longer. We have no choice but to seek rates that reflect the investments we’ve made to serve our growing area, to enhance our reliability and to improve our environmental performance."
Base rates apply to the costs of building, maintaining and operating the electrical system, including power plants, transmission and distribution lines and facilities to serve customers. Since 1992 business costs have increased dramatically, notably for essential commodities like labor, steel and concrete, which have gone up by more than 70 percent each. To address these cost increases and the investments the company has made to serve customers, Tampa Electric is requesting a base rate increase of $228.2 million.
The impact of the requested base rate increase on a residential bill for a customer using 1,000 kilowatt-hours (kWh) of electricity per month would be about 7.5 percent starting in May 2009 if this request is approved. For typical commercial and industrial customers, the requested base rate increase will range from 7.5 to 11 percent.
To encourage energy efficiency and benefit lower-income customers, Tampa Electric is proposing a residential rate structure for both base rates and fuel that would include a lower rate for the first 1,000 kWh of usage. This “inverted” structure is reflected in the residential increase listed elsewhere in this release.
Beyond the base rate, components of customer bills include fuel, purchased power, certain environmental initiatives and energy conservation programs. The cost of fuel – the single largest bill component, making up more than half of a typical electric bill – is adjusted annually, and is passed through from customers to fuel suppliers with no markup or profit to the utility.
Separately, the company notified the FPSC in July that based on actual and projected 2008 fuel costs, it is estimating an under-recovery by year-end of $209 million, combined with current projections for continued high fuel costs in 2009.
Based on this projection, a residential customer bill with usage of 1,000 kWh of electricity per month, currently $114.38, would be approximately:
- January 2009 (includes fuel cost increase) - $140
- May 2009 (includes base rate increase) - $150
Customers have a wide variety of energy efficiency programs available through Tampa Electric to help them mitigate increased energy costs and protect the environment.
Tampa Electric recently added 12 new energy efficiency programs to its roster; the company also made improvements to several longtime programs. The company received approval from the FPSC to expand its innovative Energy Planner pilot program to all new qualified customers.
For more information on the company’s energy efficiency programs, visit online: www.tampaelectric.com .
Documents relating to Tampa Electric’s base rate case will be available on the FPSC Web site at www.psc.state.fl.us and through a link on the Investors section of the TECO Energy Web site at www.tecoenergy.com.
About Tampa Electric
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 . Tampa Electric serves almost 667,000 customers in West Central Florida. 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 press release contains forward-looking statements, which are subject to the inherent uncertainties in predicting future results and conditions. Actual results may differ materially from those forecasted. The forecasted results are 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 report, except as may be required by law. 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, 2007.
The proposed percentage impacts mentioned in this press release apply to the overall customer bill, not solely to the base rate portion. For the most current information regarding Tampa Electric's proposed rates and recent fuel filing, please refer to more recent press releases or the proposed changes to your electric base rate page.