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TECO, Progress Energy Expect Lower Fuel Costs

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By RUSSELL RAY | The Tampa Tribune

Published: October 13, 2008

TAMPA - Customers of Tampa Electric Co. and Progress Energy Florida, the biggest power providers in the Bay area, have been given a slight reprieve from rising electric bills next year.

Citing sharp declines in oil and natural gas prices, both utilities on Monday lowered their fuel cost projections for next year by millions of dollars.

Under a revised plan, TECO customers using 1,000 kilowatt-hours a month would pay $128.44 a month beginning in January, up 12 percent from $114.38 now. The utility's original plan called for a 22 percent increase to $139.25 a month.

The revision stems from the lower price of natural gas, which is used to generate 43 percent of TECO's electricity. The utility now estimates that its 2009 gas costs will be 19 percent lower than its original estimate.

In August, TECO said it would also seek also is seeking a 9 percent increase in its base electric rate, which would add another $10 to a resident's monthly bill in May. If the rate-hike plan and the fuel recovery plan are approved, TECO's residential customers will be paying 21 percent more for electricity by next summer.

TECO serves 667,000 customers in Hillsborough County and portions of Pinellas, Polk and Pasco counties.

Under Progress Energy's revised fuel recovery plan, residents using 1,000 kilowatt-hours a month would pay $137.88 a month beginning in January, down from $145.09 under its original proposal.

The utility pointed to lower prices for oil and natural gas. Oil accounts for 7 percent of Progress
Energy's electric generation and natural gas is used to make 43 percent.

State regulators are expected issue final rulings on the utilities' revised requests in November.

Electric bills consist of have two major components: a base rate from which utilities earn a certain rate of return and a fuel charge that reflects the utility's cost for fuel coal, natural gas and other fuels used to generate electricity. Fuel The utilities do not make a profit on fuel. The costs are passed on to customers with no markup.

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