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Fasano Seeks Review Of Electric Hike

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By CARL ORTH

The Suncoast News

Published: November 22, 2008

NEW PORT RICHEY - An electric rate increase of nearly 25 percent by January recently shocked many Pasco customers of Progress Energy Florida. So one lawmaker intends to meet with utility executives and state regulators about possible changes.

State Sen. Mike Fasano, R-New Port Richey, hopes to set up meetings in the near future, said Greg Giordano, Fasano's chief legislative assistant.

After Fasano spoke out about the rate increase, approved by the Florida Public Service Commission, PSC member Nancy Argenziano, a former legislative colleague of Fasano, complained the PSC's hands were tied on the rate increase for Progress Energy and other electric utilities by legislation in the past few years.

The commission gave its approval Nov. 12 to rate increases for fuel costs and preconstruction costs for nuclear power expansion. In January, the cost of 1,000 kilowatt hours will increase by $27.28 to $137.87.

The commission also asked to meet again in March with Progress Energy officials to review the situation.

Fasano decided to set up meetings after Argenziano sent him and state Rep. John Legg, R-Port Richey, a letter reacting to criticism of the rate increase from the lawmakers.

"You and the legislature left us no choice," Argenziano wrote, referring to laws passed in recent years.

Argenziano voted for one of the bills while she was a state senator, Fasano aide Giordano said in response to the letter from Argenziano, a Republican from Crystal River.

Argenziano insisted the laws were written in such a way to let power utilities recoup costs for fuel adjustment, storm hardening, environmental compliance and nuclear plant construction, "including the recovery of preconstruction costs even if the nuclear plant is never built." Ordinarily the PSC would examine how reasonable the costs are, Argenziano said.

Fasano particularly wants to ask why the rate increase was approved for higher fuel costs at a time when crude oil prices have plunged more than 60 percent from their mid-July high of $147 a barrel.

In response to questions about falling crude prices, Progress Energy officials say most of its electricity is generated in plants burning coal and natural gas. Coal prices have soared since the beginning of the year and remain high and natural gas is down only about 15 percent so far this year.

Oil is used to generate only 10 percent of power from Progress Energy and nuclear accounts for about 14 percent, according to utility officials.

"I have voiced my concerns repeatedly at PSC hearings over the legislative mandates which leave the Commission very little discretion in regulating cost recoveries," Argenziano wrote.

"Many seniors as well as hard working couples have testified to the great hardship and financial strain they are suffering," Argenziano continued. "Inasmuch as you have indicated a wish to remedy the hardship to consumers, I would be most happy to work with you to achieve this. In your new leadership role, perhaps you will arrange for the relief so many consumers need."

"The senator is always open" to talk with PSC on any legislative fixes they might think is necessary, Giordano said about Fasano.

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