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Rising Electric Bills A Shock To Wallet

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By RUSSELL RAY

The Tampa Tribune

Published: July 29, 2008

Updated: 07/29/2008 06:26 pm

TAMPA - Margaret Alvarez didn't have enough money to pay last month's electric bill.

The Plant City resident turned to an energy-assistance program administered by the county and received $150.

It wasn't enough.

She borrowed another $100 from her ex-husband and paid the bill in full.

What worries her now is this month's electric bill. Paying it won't be easy for Alvarez, whose main source of income is a disability check of $639 a month.

Her anguish grew after learning her monthly bill, which averages $183, could jump 31 percent next year under plans unveiled recently by Tampa Electric Co., Hillsborough County's chief power provider. The utility is seeking higher rates and consumer fuel costs, which could boost the monthly electric bill for a customer using 1,000 kilowatt-hours a month from $114.38 to more than $150 by next summer.

"I don't know where they expect us to come up with all this extra money," Alvarez said. "They're forcing us to move out of Florida. We've been talking about it."

Alvarez has taken steps to lower her bill. She bought additional insulation, installed energy-efficient windows, sets the thermostat above 80 degrees and limits the use of appliances that require a lot of juice.

"I don't have anything on during the day," she said.

Her efforts, though, haven't generated the results she was hoping for. The electric bill for her 1,100-square-foot home is still too high, she said.

Florida Prices Exceed U.S. Average

The average cost of electricity for residential customers in Florida is 11.04 cents per kilowatt-hour, 8 percent higher than the national average, according to the Department of Energy. Only 13 states have higher residential costs than the Sunshine State. For all classes of customers, the average cost of electricity in Florida is 10.19 cents per kilowatt-hour, 14 percent above the national average.

The skyrocketing cost of coal, natural gas and oil has led Tampa Electric and other Florida utilities, including St. Petersburg-based Progress Energy Florida, to ask regulators for a substantial increase in electric bills.

Tampa Electric underestimated its fuel costs for this year by $209 million, or 20 percent. The utility will ask regulators in September for permission to recover those costs in 2009, in addition to the $1.4 billion the utility expects to spend on fuel next year.

If the fuel recovery plan is approved by the Florida Public Service Commission, it would add $25.62 to the $114.38 bill of a customer who uses 1,000 kilowatt-hours a month. Tampa Electric would begin collecting those fuel costs, which are passed on to customers with no markup, in January.

But that's not all.

In August, Tampa Electric will ask the PSC for a 9 percent increase in base electric rates. Under that plan, the bill for a residential customer using 1,000 kilowatt-hours a month would increase by another $10.62 in May.

So if Tampa Electric's proposals for higher rates and fuel costs are approved, the same residential customer would be paying more than $150 a month on electricity by next summer, a 31 percent increase.

The impact on commercial and industrial customers has not been disclosed by the utility.

Tampa Electric hasn't raised its base rates since 1992. Higher rates are needed, the utility said, because it has added 200,000 customers, invested $3.4 billion in new projects and seen its operating costs soar since its last rate increase.

What's more, the company's rate of return is expected to fall below the state-approved minimum of 10.75 percent by the end of the year.

"Because the return on equity is expected to fall below our allowed range, it impacts our ability to expand and maintain our system," said Tampa Electric spokesman Rick Morera.

Meanwhile, more of Tampa Electric's customers are looking for ways to keep their energy costs down and still stay cool during the summer.

Participation in the utility's energy-efficiency programs is up 31 percent, the company said.

"There seems to be more awareness and a desire by customers to take control of their energy costs," Morera said.

The company offers residents free energy audits, which identify leaks around windows and air ducts, a lack of insulation or a need to replace an old air-conditioning system. To reduce the cost of such improvements, Tampa Electric offers rebates and incentives ranging from $100 to $350.

The improvements can lead to a savings of 5 percent to 30 percent, depending on the improvements, the utility said.

Customers Try To Lower Electric Bills

Tampa Electric last week performed an energy audit for Danny Prendes, a homeowner in Brandon. Last month's electric bill for his 1,630-square-foot home was $245.

"I thought the electric bill was kind of high for the size of the house," he said. "My electric bill has been high for a few years now."

It was time to make some improvements, Prendes said.

"The house is 10 years old," he said. "Some of the duct work, I'm sure, is leaking."

He ended up spending $238 on additional insulation and repairs to the air duct system. The cost would have been more, but Tampa Electric gave him a $150 incentive payment for making the improvements.

The duct work alone could cut his electric bill by as much as 20 percent, the utility said.

"It's got to help," Prendes said. "To what extent, I'll find out."

To learn more about Tampa Electric's energy-saving programs, go to www.tampaelectric.com/ residential/saveenergy/.

Customers of Tampa Electric aren't the only ones facing a sharp increase in their monthly electric bills.

The state's two largest power providers, Florida Power & Light and Progress Energy Florida, recently sought and received approval for a midyear increase in fuel costs. In addition, Progress Energy is seeking permission to recover costs related to a nuclear power plant project in Levy County and an expansion of the nuclear plant in Crystal River. By January, Progress Energy customers who use 1,000 kilowatt-hours a month could be paying about $130 a month, up from $108.11 now.

Alvarez, the Plant City resident, is thinking of moving to Kentucky or North Carolina, where electricity and insurance costs are much lower.

"Everything in Florida seems to keep going up, and there's no relief," she said.

Reporter Russell Ray can be reached at (813) 259-7870 or rray@tampatrib.com.

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