Florida Public Service Commission votes on Tampa Electric base rates and fuel charges that result in lower bills
Residential 1,000 kilowatt-hour bill to decrease over 11 percent
TAMPA, April 7, 2009
Today, the Florida Public Service Commission (FPSC) approved Tampa Electric’s new 2009 base rates and the company’s request to lower fuel charges to its customers. The decisions will reduce total bills for all customer classes effective May 7.
President Chuck Black said, “As a company, we have worked very hard for sixteen years to delay requesting an increase to our base rates. Our work has resulted in a moderate increase, which will be more than offset by the benefit of lower fuel prices we are currently seeing. We are pleased that our customers will experience lower bills during these difficult economic times.”
The base rate for a residential customer using 1,000 kilowatt-hours per month will increase $2.60, while the fuel charge will significantly decrease $16.17. As a result, the overall bill will decrease $14.38, or 11.20 percent, to $114.06 from $128.44, excluding franchise fees and local taxes. The residential base rate reflects Tampa Electric’s new two-tier or inverted base rate structure, as approved by the FPSC on March 17, which is designed to encourage the efficient use of energy by charging a higher rate for usage over 1,000 kilowatt-hours.
Based on the new rates and the benefit of the substantially lower fuel charges, commercial customers will see a decrease of about 5 percent to 14 percent, and industrial customers will realize a reduction of 11 percent to 20 percent in their monthly bills excluding franchise fees and local taxes.
On March 17, the FPSC approved an increase to Tampa Electric’s 2009 base rates of approximately $104.3 million, which was less than requested by Tampa Electric. The FPSC also approved an additional increase, effective January 1, 2010, of about $33.6 million to recover the cost of five small generating units to serve peak load requirements and solid fuel rail unloading facilities at its Big Bend Power Station, subject to conditions set forth by the FPSC. These approvals come after more than an eight-month detailed regulatory review of the company’s books and records.
On March 5, Tampa Electric requested Commission approval to reduce its fuel charge based on lower forecasted fuel prices, primarily natural gas, for the remainder of 2009. Today’s FPSC decision reflects a reduction of approximately $226.2 million in Tampa Electric’s projected fuel costs of $190.8 million in 2009 and an actual $35.4 million over-recovery of costs in 2008.
Under Florida law, a utility’s base rate includes the costs to build, maintain and operate the electrical system. The base rate includes the cost of generating plants, transmission and distribution lines and facilities necessary to serve customers and the opportunity to provide investors a reasonable return. The fuel charge primarily reflects the cost of fuel to produce electricity and is passed through to customers by Tampa Electric without mark-up or profit.
Tampa Electric recognizes that its customers want to use energy wisely and the company offers residential and commercial customers many comprehensive energy-efficiency programs. Customer participation in the company’s energy-efficiency programs – established in 1979, prior to any state or federal requirements – has helped offset the need to generate enough power to serve 630,000 homes for one year.
The company’s residential energy-efficiency programs include Energy Planner™, which enables residential participants to take advantage of near real-time prices for electricity through the use of a programmable thermostat, installed by Tampa Electric at no cost to the customer. During the program’s three-year pilot period, Energy Planner helped participating customers save an average of one month’s electricity consumption annually on their electricity costs. With Tampa Electric’s Low-Income Weatherization Program, households that qualify receive free energy-saving items and upgrades to their homes.
Among energy-efficiency programs available to commercial customers, Tampa Electric’s Networked Demand Response option makes incentives available to businesses for reducing their energy usage during peak-demand times.
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 could be deemed to contain 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. The ability to realize the projected fuel savings are dependent on fuel prices, which are subject to market conditions. Tampa Electric’s ability to realize the benefit of base rate increases is dependent upon many factors, including customer usage. 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.