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Under company proposal, residential bills remain relatively flat while the commission takes extra time to decide case
On Nov. 2, Progress Energy Florida filed a request with the Florida Public Service Commission (PSC) to temporarily defer a base rate increase. The request follows the PSC’s decision to delay a vote on the company’s base rate case. Under the normal process, the proposed new base rates for 2010 would go into effect on Jan. 1, subject to refund with interest, until the PSC makes a final decision on the case. If approved, the Nov. 2 filing would delay the proposed base rate increase until after the final PSC vote, currently scheduled for Jan. 28. If the PSC adheres to its Jan. 28 schedule, new base rates would take effect with customers’ March billing cycle.
“Since 1993, Progress Energy has invested $4.5 billion in Florida’s electricity infrastructure. During that time, base rates have remained relatively flat,” said Vincent Dolan, president and CEO of Progress Energy Florida. “We want to balance our real need for a base rate increase with the commission’s desire to take more time and to allow the new commissioners to vote on this case. We are therefore asking the commissioners to let us defer the base rate increase until after they make a final decision. If they approve this request, residential customers’ bills will remain relatively flat temporarily, giving our customers some short-term price relief during this down economy.”
For January 2010 rates, if the PSC grants the company’s request to delay the January base rate increase, and based on all the approved and pending clause filings, the average commercial customer bill would decrease 3-5 percent and the average industrial customer bill would decrease 3-7 percent starting with the January bill.
If the PSC denies the company’s request and the company follows the normal procedure, the average commercial customer bill would increase 4-7 percent and the average industrial customer bill would increase 7-10 percent starting with the January bill.
On Oct. 27, the PSC voted to delay ruling on Progress Energy’s base rate case until January. Today’s filing requests PSC permission to implement the base rate increase in March, instead of Jan. 1 if normal processes were followed. If approved, this action would allow the company to defer collection of the base rate increase required in January and February to subsequent months. Progress Energy has asked the PSC to expedite consideration of this filing and to make a decision by Nov. 19.
Progress Energy is committed to providing clean, reliable and affordable power today and in the future for our more than 1.6 million customers. The company is planning for customers’ energy needs using a balanced approach including energy-efficiency programs, investments in renewable energy technologies and a state-of-the-art electricity system.
Investing in the electric system must be a continuous process to ensure the system is reliable next year and in the next decade. The cost of providing the level of service customers expect and regulators require has risen significantly, and Progress Energy needs to adjust prices to continue to meet our customers’ needs safely and reliably in the future.
Progress Energy is seeking a 2010 base rate increase of $499 million to cover investments to support Florida public policy to reduce greenhouse gas and other emissions, to decrease dependence on fossil fuels, to expand existing nuclear power generation and to increase generation efficiency through repowering and other improvements. The company also is upgrading transmission and distribution systems to meet federal mandates and harden the systems against storm damage.
The base rate covers Progress Energy’s cost of producing and delivering electricity to customers’ homes and businesses, including maintaining and upgrading power plants, power lines and poles. Progress Energy employees have worked hard to hold the line on base rates. Since 1993 base rates have increased only 1 percent. During that time, the costs for labor, materials and other expenses, required to maintain the safe, reliable power customers need and deserve, have increased substantially.
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