Tampa Electric proposes residents pay millions more so big companies can save

Tampa Electric’s offer to raise rates next year would place a greater burden on residents, lessening the impact on large companies, according to documents reviewed by the Tampa Bay Times.

If the proposed 2025 version of the rate structure is approved by state regulators, everyone’s costs will increase. But millions of dollars in bills could be shifted from some of Tampa Electric’s biggest customers — such as industrial factories, hospitals and large retailers — to residential consumers as well as small businesses. Under the plan, a typical family would be charged at least $200 more annually for base fees than what they are paying now, according to the documents.

The reason for this change dates back to 2021, the last time Tampa Electric raised customer rates. The case ended in a long and complex settlement agreement, part of which required the utility to change how it distributed costs in its next rate case. At the time, it attracted little attention.

Now, as the utility requests another increase, documents in its records reveal the potential impact a previous agreement could have on taxpayers. Tampa Electric submitted two cost structures for state regulators: one that meets the requirements of the 2021 agreement and an alternative. Under Under the first method, residents would be required to pay about $70 million more next year compared with the second plan, according to a Times analysis.

Meanwhile, Tampa Electric estimates that large industrial and commercial electricity users would see a smaller increase than in the first plan, according to the documents. This is in part due to the way the utility would allocate costs according to peak energy usage.

Residential energy consumption tends to increase in the warmer and colder months — January, June, July and August. By comparison, consumption among large corporate customers is more consistent, said Jordan Williams, director of pricing and financial analysis at Tampa Electric, in written testimony. Therefore, attributing more costs to residents and small businesses better matches the costs caused by spikes in demand, he said.

The $70 million figure is an early estimate, and in an email to the Times, Tampa Electric disputed the accuracy of that number. But Florida Public Service Commission Employees confirmed that residential customers are likely to pay more for the proposal compared to Tampa Electric’s other plan for cost distribution in 2025.

The request for a rate increase must be approved by the commission, which regulates utilities and decides how much they can charge customers. Tampa Electric is calling for an increase in base rates, which are an important component of electricity bills that also include other expenses such as fuel.

Duke Energy Florida, which is also asking for its customers’ base rates to increase next year, isn’t seeking that same type of cost structure.

In documentation filed with the commission, Tampa Electric says the plan is necessary because of the 2021 settlement agreement.

In addition to the Office of Public Counsel, which represents consumers, this agreement was signed by several corporate electricity users involved in the 2021 case, including the Florida Retail Federation, Walmart, the West Central Florida Hospital Utility Alliance and Florida Industrial Power Users. Group. Federal agencies, including representatives from MacDill Air Force Base, a major electricity user, also signed on.

Tampa Electric’s Williams said in his testimony that easing the burden of rate increases on large Tampa-area companies could help give them a competitive advantage, adding that it could be a “catalyst for economic development.”

“Plain and simple, TECO is asking for a rate increase and most of that increase is going to residential customers,” said Brooke Ward, Florida senior organizer for Food & Water Watch, an environmental group. “Industrial customers are getting a break while residential customers are carrying a heavier energy load, and a lot of this is happening because of a closed-door deal that was reached in 2021 with industrial customers.”

The hospital group did not respond to emailed questions. Walmart and the Florida Retail Federation declined to comment.

The Florida Industrial Power Users Group, which is made up of “companies whose operations depend on and use large amounts of electricity and/or natural gas,” said in a statement that this proposal takes into account the source of demand spikes, adding that this method “fair and recognized” has been approved by utility regulators in other states.

Late last year, Tampa Electric asked the Public Service Commission to allow it to skip submitting paperwork outlining the version most favorable to residential users. More than 100 Hillsborough County residents wrote letters to the commission, asking it to deny the request because they feared it could result in higher bills for their homes.

Tampa Electric withdrew the request and submitted documentation describing both methods.

In an email, Tampa Electric spokeswoman Cherie Jacobs said the proposed base rate increase will cause residential, commercial and industrial customers’ bills to rise a “similar” percentage compared to what they are paying. now.

“When the (commission) makes its decision, it will consider the fairest way to divide costs among all customers,” Jacobs said. “We are providing two ways to make this assessment as needed.”

In another recent document, Tampa Electric revealed details about how customer bills would be affected if its request to increase base rates is approved.

It showed that for for a typical residential family, base rates will jump from nearly $88 per month in 2024 to $107 in 2025. The monthly base rate will rise by about $7 more in 2026, and then by about $5 in 2027 .

Tampa Electric said lowering fuel prices could help offset requested increases, causing the average customer to pay $5 more in January 2025 than they paid in January 2024. On Tuesday, the Commission Public Service approved a fuel cost reduction for Tampa Electric and Duke customers that will take effect in June and is estimated to save residents about $7 on their monthly bills this year.

After public hearings scheduled for June in Tampa Bay, the commission will continue the case in Tallahassee. A final decision is expected by the end of the year.

Tampa Bay Highlight

Tampa Mayor Jane Castor, St. Petersburg Mayor Ken Welch and climate experts are among those taking the Palladium stage on Tuesday, May 21, to discuss how climate change will affect the Tampa area Bay at the Spotlight Tampa Bay forum. Tickets are $20 or $10 for students with ID. A limited number of $50 VIP tickets are available. Proceeds will support the Tampa Bay Times Journalism Fund. For more informations, Click here.