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Peoples Gas Rate Jump Hits Hurdle

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By RUSSELL RAY

rray@tampatrib.com

Published: January 15, 2009

TAMPA - A proposal to raise rates for customers of Peoples Gas is about $21 million too high, according to the Office of Public Counsel, which represents Florida consumers.

Florida's largest natural gas utility wants to raise rates by $26.5 million a year. The bill for an average residential customer would rise by $3.90, or 8.8 percent, to $48.09 a month under the utility's proposal.

But Charles Rehwinkel, associate counsel with the public counsel's office, said Wednesday the utility's projected costs are inflated and that its request is far too high.

"Our experts say an increase of no more than $5.6 million is warranted," Rehwinkel told members of the Public Service Commission during a hearing in Tampa.

Peoples Gas, a subsidiary of Tampa-based TECO Energy Corp., is Florida's largest natural gas utility, serving 334,000 customers in more than 20 counties.

Lewis Binswanger, director of regulatory affairs for Peoples Gas, told commissioners that higher rates are needed to cover the cost of meeting increased demand and to pay for the replacement of more than 1,500 miles of pipe.

The last time Peoples Gas raised base service rates was in January 2003. Since then, the utility has added nearly 100,000 customers, Binswanger said.
Binswanger also pointed to the utility's energy-conservation programs, which assist customers with the installation of energy-efficient appliances.

As a result, residential customers "are consuming about 10 percent less natural gas today than they consumed six years ago," he said. "That's about the equivalent of one month's worth of natural gas saved per residential customer per year."

The commission is expected to vote on the utility's proposal in May. The new rate would be enacted in June.

Reporter Russell Ray can be reached at (813) 259-7870.

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