Utility companies denied rate increases, threaten project cuts
Over the past month, the Public Service Commission (PSC) has rejected rate hikes for both Progress Energy and Florida Power and Light. In response, both utility companies say they will cut or delay future projects.
The PSC is in charge of regulating utility companies. On January 12, the PSC denied Florida Power and Light (FPL) a $1.3 billion annual increase. FPL was not happy with the decision and announced in a press release the next day that it would “suspend” several projects, including two proposed nuclear plants in South Florida. Today WMNF asked FPL to clarify their intentions; they declined. Progress Energy faces similar issues. One day before denying FPL, the commission also rejected Progress Energy’s request for a $500 million base rate increase for 2010. Progress Energy’s Suzanne Grant said without the rate increase, future utility projects may be cut or delayed, but she emphasized it is too soon to tell exactly what will happen.
On January 20, the Tampa Tribune published an article about Progress Energy’s response to the PSC’s decision that has since been retracted. It stated that Progress Energy would be cutting future projects, including a $17 billion power plant in Levy County. The Tribune article drew a harsh reaction from State Senator Mike Fasano, who wrote a letter to the utility company, referencing the article. Grant said it was a misunderstanding.
In the letter, Senator Fasano argued that Progress Energy raised rates last year to fund future projects, like the Levy power plant. And it is only fair that if the projects are cut or delayed, customers should receive a refund. Grant disagreed and said the $500 million was not earmarked for any particular projects. It is hard to tell where funding will be cut.
Though it is difficult to tell which specific projects are going to be affected right now, Grant said, overall the denied $500 million increase will impair the service Progress Energy provides to customers.
Grant said PSC’s failure to invest more money into Progress Energy can scare off potential investors. Utility companies rely on private investors as a main source of funding.
Grant said Progress Energy will know more about which projects will be affected toward the middle of February.comments powered by Disqus