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TECO rate increase approved

By Jim Turner
Published  December 4, 2024 7:00am EST
TECO
The News Service of Florida

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    TALLAHASSEE, Fla. - State utility regulators on Tuesday approved a new three-year base rate for Tampa Electric Co. that is set to increase residential customer bills starting in January.

    Changes to the base rate initially sought by the company would have amounted to roughly a $5 monthly increase for residential customers who consume 1,000 kilowatt hours of electricity a month, a benchmark used in the utility industry.

    However, a spokeswoman for Tampa Electric said after the meeting that the company was "still calculating the impact" of changes adopted by the Public Service Commission Tuesday.

    Brooke Ward, senior Florida organizer of Food & Water Watch, called the increase "a gut punch to struggling community members, still reeling from the unexpected costs of back to back hurricanes and record inflation."

    READ: Citing storms, FPL looks to increase customers monthly bill

    "One in five Tampa households — almost 250,000 — are energy burdened, meaning they spend more than six percent of their income on energy bills, cutting into costs for other necessities," Ward said after Tuesday’s meeting.

    Tampa Electric, also known as TECO, serves about 844,000 customers in Hillsborough County and portions of Polk, Pasco, and Pinellas counties.

    TECO in April initially requested an increase of approximately $296.6 million for 2025, with an increase of approximately $100 million in 2026 and $72 million in 2027.

    In August, TECO revised its proposal, seeking a 2025 base rate increase of $287.9 million, followed by incremental increases of $92.4 million in 2026 and $65.5 million in 2027.

    PREVIOUS: TECO's proposed price hike faces backlash

    Commission staff called for an incremental revenue increase of $153.4 million in 2025, with an incremental increase in 2026 of $74.7 million and no increase in 2027.

    "Evidence in the record shows that since 2022, interest rates have increased and that TECO has been able to provide reliable service and make all necessary investments with an authorized ROE (return on equity) of 10.2 percent," a Nov. 22 commission memo on the proposal said. "On balance, staff is recommending that an ROE of 10.3 percent would continue to enable TECO to generate the cash flow to meet its near term financial obligations, make the capital investments needed to maintain and expand its system, and maintain sufficient levels of liquidity to fund unexpected events."

    The rate approved Tuesday gives the company an expected return on equity of 10.5 percent, up from a current 10.2 percent return on equity under a base rate last changed in 2021. The company requested an 11.5 percent return on equity.

    Crews worked to restore power to hundreds of thousands of TECO customers in the aftermath of Hurricane Milton.

    Crews worked to restore power to hundreds of thousands of TECO customers in the aftermath of Hurricane Milton.

    TECO’s rate-increase proposal sought money for a series of projects, including upgrading existing power plants and adding solar-energy facilities. But the state Office of Public Counsel, which represents consumers, and other parties argued that the proposal should be scaled back.

    Tampa Electric also is expected to seek to recover $45 million to $55 million related to power-restoration costs from Hurricane Helene and $320 million to $370 million related to Hurricane Milton, according to a quarterly financial report filed last month at the U.S. Securities and Exchange Commission.

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