Lower Gas Costs Trim Duke, TECO Bills

Article reposted with permission from The News Service of Florida.

State regulators Tuesday approved plans that will save money for customers of Duke Energy Florida and Tampa Electric Co. starting in June.

The plans, approved without discussion by the state Public Service Commission, will pass along savings to customers from lower-than-expected natural gas costs. The commission last month approved a similar plan for Florida Power & Light.

Florida utilities rely heavily on natural gas to fuel power plants, and gas prices have been volatile in recent years. When gas prices surge, increased costs are passed along to customers; when prices drop, customers get a break in their bills.

The plans approved Tuesday will lead to about $233.5 million in savings for Duke customers and $137.9 million for Tampa Electric customers, according to commission documents.

Utilities typically use a benchmark bill of residential customers who consume 1,000 kilowatt hours of electricity a month.

Duke residential customers who use 1,000 kilowatt hours will see their bills decrease from $160.58 in May to $154.68 in June, the commission said. Such Tampa Electric customers will see their bills go from $143.48 to $136.44.

The utilities also lowered bills at the beginning of 2024, in part because of reduced fuel costs.

"Today’s approvals are great news for Florida customers, especially as we get closer to our warmest months,” Melissa Seixas, Duke Energy Florida state president, said in a prepared statement after Tuesday's votes.

Customers’ monthly bills are made up of a combination of costs, such as base electric rates, fuel costs and expenses related to environmental projects. Fuel costs make up the second-largest amount, after base rates.

The Public Service Commission each fall sets projected fuel costs for the upcoming year. But if the actual costs turn out to differ greatly from the projections, utilities can seek what is known as a “mid-course correction” — the type of plans that Duke, Tampa Electric and FPL filed.

As an example of the other moving parts in customers’ monthly bills, Duke and Tampa Electric also recently filed proposals that would lead to increased base rates from 2025 to 2027. The commission will consider those proposals in the coming months.

Another wildcard is that utilities generally are allowed to pass along costs related to restoring power after hurricanes. If Florida gets hit with hurricanes this year, that could affect customer bills.

The Public Service Commission on April 2 approved FPL’s proposal to pass along fuel-cost savings starting this month. FPL has two sets of rates because of a merger with the former Gulf Power.

Customers in the former Gulf Power region in Northwest Florida who use 1,000 kilowatt hours in a month will pay $135.38 after the approval, down from $143.08 in April, according to the Public Service Commission. Such customers in other areas will pay $121.19, down from $128.88 in April.