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TECO To Make Case For Increase

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By RUSSELL RAY

rray@tampatrib.com

Published: January 20, 2009

TAMPA - Tampa Electric Co. will spend the next several days trying to persuade state regulators to approve a $228 million-a-year increase in TECO's base service rates.

Today marks the beginning of a six-day hearing before the Florida Public Service Commission in Tallahassee, where utility officials and consumer advocates will debate the merits of TECO's rate increase proposal.

If TECO's request is approved, electric bills for residential customers would rise about 8 percent in May. The change would add about $10 to the cost of 1,000 kilowatt hours.

That would be on top of a 12 percent increase imposed this month to cover higher fuel costs.

The Florida Office of Public Counsel, which represents Florida's ratepayers, contends TECO has "significantly overstated" the revenue it needs to earn a fair return and that its request should be slashed to $38 million a year.

The $228 million-a-year rate increase would give TECO a 12 percent return on its investments. In papers filed with the commission, the public counsel's office said a 9.75 percent return would be fair and reasonable in these tough economic times.
TECO hasn't raised base service rates since 1992. Since then, TECO says it has added 200,000 customers, invested $3.4 billion in new projects and seen its costs for labor and materials soar.

The commission is expected to issue a decision in March, and the new base rate would become effective in May.
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.

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

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