State Signs Off on Tampa Electric Hikes

Article reposted with permission from The News Service of Florida.

State regulators Thursday signed off on a plan that will lead to a $184.9 million increase next year in base electric rates for customers of Tampa Electric Co.

The Florida Public Service Commission, with little discussion, approved rate hikes that will take effect in January. The commission made a series of underlying decisions about the rates on Dec. 3, with Chairman Mike La Rosa describing Thursday’s vote as “largely a fallout” of those earlier decisions.

The plan also is expected to lead to increases of $86.6 million in 2026 and $9.1 million in 2027. Tampa Electric has about 844,000 customers in Hillsborough, Polk, Pasco and Pinellas counties.

In discussing rates, utilities typically point to a benchmark of residential customers who use 1,000 kilowatt hours of electricity a month, though actual use varies widely.

A commission staff report issued last week said that, under the plan, such residential customers would see their overall monthly electric bills increase from $136.44 to $145.58 in January.

Meanwhile, Tampa Electric said in a news release last week that rates for small commercial customers would decrease by 3 percent, while medium and large commercial and industrial customers would see increases of 9 to 14 percent.

Base rates make up a major part of customers’ monthly electric bills, and rate cases play out over months and involve voluminous amounts of information. Other parts of customers’ bills include such expenses as power-plant fuel and costs of complying with environmental regulations.

Tampa Electric requested that the Public Service Commission approve a $287.9 million increase in 2025, followed by increases of about $92.4 million in 2026 and $65.5 million in 2027. Those amounts were reduced in the commission’s decisions.

The rate increases were controversial, with the state Office of Public Counsel, which represents consumers, saying in an October brief that Tampa Electric “presented a vastly overstated request for rate relief.”

As an example of the disputed issues, the Office of Public Counsel and other representatives of customers fought a request by Tampa Electric for approval of a targeted return on equity of 11.5 percent. Return on equity is a closely watched measure of profitability.

The Office of Public Counsel argued that the targeted return on equity should be 9.5 percent. On Dec. 3, the Public Service Commission approved 10.5 percent.

The commission in August also approved a settlement that will increase base rates next year for customers of Duke Energy Florida. That settlement will increase base rates by $203 million in 2025 and $59 million in 2026. It includes Duke using about $50 million in anticipated federal tax credits to offset the need for a base-rate increase in 2027.

In addition, Florida Power & Light is expected in early 2025 to file a proposal that would lead to base-rate changes in 2026. A current FPL rate settlement will expire at the end of 2025.

Also, the commission is considering a rate proposal by Florida Public Utilities Co., a relatively small electric utility, with 33,090 customers in Jackson, Calhoun, Liberty and Nassau counties.