(The Center Square) — Florida regulators hosted a public meeting the week of June 10 about a proposed rate increase by one of the Sunshine State’s largest electricity providers.
Duke Energy Florida filed a petition in April, requesting that the Florida Public Service Commission approve a rate increase for its residential and industrial customers. Duke Energy Florida delivers service over 13,000 square miles and serves approximately 2 million customers.
According to the petition, the company wants to make the base rate increases permanent. However, the commission hearing on Tuesday saw a huge amount of pushback from customers and another hearing on the proposed rate increases is scheduled for August.
Austin Watrous, an attorney with the Office of the Public Counsel, said that Duke Energy’s base rate increases will occur every year until at least 2027.
“If their original proposal is accepted, on Jan. 1, 2025, Duke’s base rates would be increased by $593 million, $98 million more on Jan. 1 of 2026, and then another $129 million on Jan. 1 of 2027,” Watrous said.
Watrous noted that Duke Energy is entitled to a reasonable return on equity but said that Duke has requested an excessive return of around 11%.
“Our research indicates that Duke only requires a return on equity of just under 9.5%, which is consistent with the current market for electric utility operations and has been more than adequate for Duke to maintain its financial integrity and creditworthiness,” Watrous said.
A representative for Florida Rising and the League of United Latin American Citizens (LULAC) agreed that Duke’s proposed return on equity of 11% is excessive and noted that the real cost of new grid infrastructure is the same regardless of Duke’s return.
LULAC and Florida Rising said that returns on investment for other utilities in other states are trending downwards because commissions recognize that there is not much risk in investing in a monopoly utility with guaranteed profits.
Duke Energy customer Lillian Alvarez spoke to the commission about why she opposes the rate hike and said it often comes down to choosing between gas, food or electricity.
“As a Duke Energy customer, I’ve seen my light bill go up tremendously. This has also impacted me because I have to make life decisions on whether I keep my A/C on,” Alvarez said, noting that Florida’s summer heat makes this choice impossible.
Published June 26, 2024
