TECO customers plead with Public Service Commission to reject rate hike

05/30/13 Janelle Irwin
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Tampa Electric Company wants to raise its rates by 10% in order to meet rising costs and cover capital investments. During a meeting with the Public Service Commission in Tampa Wednesday night, people from several different groups lashed out at the proposal calling it a lavish and unnecessary pay raise for shareholders.

The rate increase would cost customers using 1000 kilowatt hours about $10 more on their monthly bill. People with large homes or higher energy needs would see a bigger increase. TECO customer service director Karen Lewis said the rate proposal submitted to the Public Service Commission in April is in response to a billion dollars in unfunded capital improvements.

“These costs are not being covered in our current rates. The $1.1 billion of investment covers things like power lines, power plant improvements …”

The TECO employee acknowledged that a rate increase won’t be popular.

“Because we all know the cost of running our households and running a business has increased, that is no different for Tampa Electric. It’s never a good time to raise rates, but even with the proposed increase, Tampa Electric will remain among the lowest in the state of Florida in terms of its rates.”

But not everyone agrees. Hillsborough County Schools Superintendent MaryEllen Elia told PSC officials who will decide whether to approve TECO’s rate proposal that some Florida Power and Light customers in Pinellas County are paying less for their electricity. She said the increase TECO is asking for would cost the Hillsborough School district more than $2 million.

“Hillsborough County is the 8th largest school district in the country – we have over 250 facilities and as you can imagine, our utility bill is large.”

Another school official reeled off a list of reasons why TECO doesn’t need more money including that they are already turning a competitive profit. P.J. Crespo is in charge of the Hillsborough school district’s energy department. He said the agency already spends nearly $40 million on energy costs.

“Again, the $2.3 million of this rate case to this district means an entire elementary school renovation that is very much needed in this district. So you can basically kiss one elementary school renovation goodbye by approving this rate case.”

Three homeowners from the Avila neighborhood in New Tampa blasted TECO for providing shoddy service. The group, including Bob Joyce, submitted into record pages upon pages of power outage records and correspondence with TECO asking them to fix the problem.

“There are different circuits – I think that’s the term – circuits cover different streets and our street happens to go out with unbelievable repetitiveness. Someone sneezes across the fence and the electricity goes out.”

About a dozen people who were retired or disabled lashed out at the rate proposal claiming that people on fixed incomes can’t afford even a small jump in their electric costs. Some claimed it would mean the difference between putting food on the table and buying needed prescription medication. Michele Cyr is a Tampa Bay field coordinator for the American Association for Retired People, or AARP.

“Some people are relying entirely on Social Security to make ends meet and we’re looking at shareholders, TECO shareholders who are looking to make 11.25% on return on equity and after doing a little bit of research I found that other utility shareholders around the country are lucky to make 10%. What makes them think that 11.25% is reasonable? I didn’t make 11.25% on any of my investments this year or any of the past five years due to the recession and I know that our members and those seniors who are on fixed incomes, they didn’t see an increase either.”

All of the 18 people who spoke at the public forum were opposed to any rate hike. Most criticized TECO’s request to raise their return on investment for capital projects. That part is being challenged by the Office of Public Council representing ratepayers. J.R. Kelly is an attorney working on the case. He said there are some other parts of the proposal on his radar like whether or not TECO is providing adequate service for the cost. The exact list of challenges hasn’t been finalized yet, but TECO’s request to raise the revenue limit on their storm damage reserve will likely be scrutinized.

“Now, historical storm damage costs have been minimal and TECO is approaching its current storm damage reserve limit. Within this matter they get to raise that limit. They’re currently collecting $8 million a year and they want to collect more. We’re not sure that that is a reasonable limit.”

A representative from the Florida Retail Federation also spoke against the rate hike as well as a handful of low income Tampa residents who already struggle to pay their electric bills each month. TECO provides electric service to nearly 700,000 residents in Hillsborough and parts of Polk, Pasco and Pinellas counties.

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