Slight increase proposed; rates would remain 8 percent less than at the start of the decade
Rates to stay below current state and national averages for electric utilities
ST. PETERSBURG, Fla. – Duke Energy Florida (DEF) today filed its annual request to set electric rates with the Florida Public Service Commission (FPSC).
If the proposed changes are approved, residential customer rates for 2017 will be 8 percent less than at the start of the decade.
DEF estimates that 2017 residential customers’ rates will increase by about 4 percent (increase of $4.39) for a total cost of $116.15 per 1,000 kilowatt-hours (kWh) as compared to $111.76, as of November 2016.
Commercial and industrial customers would see similar rate changes resulting in a 4 to 10 percent increase.
The 2017 rate change is due mainly to natural gas prices and the completion of the 2013 settlement refunds to customers. There are slight decreases in all other clauses that make up the total rate.
“We know safe, reliable, clean energy at a fair price is important to all of our customers. It is important to us too,” said Alex Glenn, Duke Energy state president – Florida. “Through cost management and careful planning, Duke Energy Florida has made thoughtful investments to significantly enhance service reliability and reduce emissions while keeping rates lower than the current state and national averages. We will continue to work hard to provide the best possible price for our customers.”
Each year, Duke Energy Florida files estimates for the following year, as well as any adjustments needed for the current year, to recover costs for fuel and purchased power, energy-efficiency programs, environmental improvements and nuclear cost recovery.
From 2013 through 2016, Duke Energy Florida’s rates were lowered by a $388 million settlement refund that was passed through the fuel clause. The final settlement refund was provided to customers in 2016 through lower fuel rates.
In addition, in April 2016, Duke Energy slashed fuel costs charged to customers when natural gas prices, at that time, were significantly lower than projected. Rather than continuing to over-collect for the remainder of 2016 and true-up in 2017, the company provided customers with a timely and more immediate rate reduction and dropped rates at that time. It amounted to a $13 per 1,000-kWh (11 percent) decrease for residential customers and 12 to 16 percent for commercial and industrial customers, depending on their rate class.
Power plant upgrades and acquisition
Duke Energy has also started the review process related to the cost for purchasing the Osprey Energy Complex and the final upgrades to the Hines Power Plant. If approved, the efficiency upgrades and power plant purchase would increase the base rate by an additional $1.50 per 1,000 kWh (residential rate) starting in February. Commercial and industrial customers would see an estimated 1 percent increase.
The addition of the clean natural gas Osprey plant and efficiency upgrades to the company’s existing Hines power plant will help support long-term growth in the region and future energy needs in a cost-effective manner.
The FPSC previously approved a 49-cent increase to the current base rate. It will go into rates starting with November 2016 billing, when the first phase of efficiency upgrades to the Hines Energy Complex go on line.
The company is installing inlet air chilling units at the power plant. Chillers act like air conditioning units and cool the outside air the turbines take in during the hot summer months. These upgrades improve the plant’s efficiency and add to its output to help meet growing demand for energy.
About Duke Energy Florida
Duke Energy Florida owns and operates a diverse generation mix, including renewables, providing about 9,100 megawatts of owned electric capacity to approximately 1.7 million customers in a 13,000-square-mile service area.
With its Florida regional headquarters located in St. Petersburg, Fla., Duke Energy is one of the largest electric power holding companies in the United States. Its regulated utility operations serve approximately 7.4 million electric customers located in six states in the Southeast and Midwest, representing a population of approximately 24 million people. Its Commercial Portfolio and International business segments own and operate diverse power generation assets in North America and Latin America, including a growing portfolio of renewable energy assets in the United States.
Headquartered in Charlotte, N.C., Duke Energy is an S&P 100 Stock Index company traded on the New York Stock Exchange under the symbol DUK. More information about the company is available at duke-energy.com.
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Media contact: Suzanne Grant