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Higher TECO rates and lower bills likely in May

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By RUSSELL RAY

rray@tampatrib.com

Published: April 7, 2009

TAMPA - State regulators will meet today to set higher rates for customers of Tampa Electric Co.

Last month, the Florida Public Service Commission approved a $104 million-a-year increase in base service rates for TECO customers. Today, the commission will decide how the increase should be distributed among residential, commercial and industrial customers.
TECO estimates that residential customers will see bills rise less than $5 for 1,000 kilowatt hours. The new rates will take effect in May.

However, TECO customers will probably see bills fall - not rise - next month.

That's because the commission also will consider a proposal to reduce fuel charges for TECO customers by $13 for 1,000 kilowatt hours. If the plan is approved, the cost of 1,000 kilowatt hours could fall by about $8 beginning next month.
Electric bills have two major components: a base rate from which utilities earn an approved rate of return, and a fuel charge that reflects the utility's cost for coal, natural gas and other fuels used to generate electricity.

By law, utilities are not allowed to make a profit on fuel charges. Fuel costs are passed on to customers with no markup.

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