Tampa Electric asks FPSC to clarify and reconsider transportation ruling
TAMPA, October 27, 2004
Tampa Electric today asked the Florida Public Service Commission (FPSC) to reconsider and clarify its recent ruling to disallow approximately $15 million in costs annually related to the company’s contract for coal transportation.
TECO Energy President and COO John Ramil said, “This has been a long and grueling docket that has attracted intervenors with varying interests. The last thing we want to do is extend this proceeding for the Commission and staff, but the transportation rate in the order is significantly out of line when compared to historical and current approved rates, and what other utilities are recovering for similar services. It would not be right for us to walk by this order without question. As a result, Tampa Electric is asking the FPSC to reconsider its ruling, considering all of the relevant facts in this case.”
In its filing, the company stated that the FPSC had an obligation to use the best possible data in making its ruling, but analysis of the Commission’s methodology shows it clearly failed to take into account information it had that could have changed the outcome. Had the FPSC considered all relevant facts in the case, including the rates approved for Progress Energy, Tampa Electric believes the Commission would have arrived at a rate that is comparable to the company’s recently renewed contract rate, which is lower than the rate in the company’s previous five-year contract, which expired in December 2003.
“We want to assure our customers that Tampa Electric has done business according to the rules established by the FPSC governing fuel transportation. In each of the past 15 years, the market price for transportation services has increased in the face of changing economic conditions, and Tampa Electric’s contract rates have been at or below market rates. Our practices have always focused on providing the best overall solution for customers, including the reliable sourcing and cost of fuel and its transportation,” added Ramil.
The end result of the Commission’s decision and the wide disparity of treatment are so significant that the Commission’s decision denies Tampa Electric both procedural and substantive due process and equal protection of the law.
Tampa Electric also asked the FPSC for clarification on the ruling, specifically regarding the bidding guidelines provided in the document and the Commission process associated with rebidding.
“The ruling provided some important guidelines on how the FPSC believes the bidding process should work. Our coal transportation bidding process has been in place for many years, during which the transportation market has changed considerably. We agree that the bid process should reflect the guidelines described by the Commission, and that it makes sense for all parties to take a fresh look at it and make appropriate changes. We will work with the Commission in undertaking a review of these guidelines,” said Dee Brown, vice president of Regulatory Affairs.
In the meantime, the company plans to file revised rates tomorrow reflecting the FPSC’s decision. Rates for 2005 for the average residential customer will be $98.07, compared with the originally filed rate of $99.72. The year-to-date decrease in income has already been taken into account in the company’s third-quarter earnings, released on Oct. 22.
Tampa Electric Company is the principal subsidiary of TECO Energy, Inc. (NYSE: TE), an integrated energy-related holding company with core businesses in the utility sector, complemented by a family of unregulated businesses. Tampa Electric Company is a regulated utility with both electric and gas divisions (Tampa Electric and Peoples Gas System). Other subsidiaries are engaged in waterborne transportation, coal and synthetic fuel production and independent power.