Tampa Electric and Peoples Gas to raise rates

TAMPA — As if the rising price of gas and food wasn't enough, Tampa Electric and Peoples Gas customers could soon face much higher monthly bills.

Both utilities plan increases of as much as 10 percent, they announced Thursday afternoon. Tampa Electric's average residential customer could be facing a monthly increase of $14 or more. Peoples Gas bills could rise more than $4 a month.

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The increase has nothing to do with soaring fuel costs. Tampa Electric and Peoples Gas want to raise "base rates." If you look closely at your utility bill, you'll see that it is divided into two main pieces: base rates and fuel rates. Fuel pays for the natural gas, coal, oil and uranium that runs the power plants. The utilities aren’t allowed to profit from fuel, not that it's much comfort to customers who are increasingly strapped for cash.  Fuel is a “pass through.”

The other part of your bill is base rates. Base rates pay for construction, operation and management of things like power plants and transmission lines. Base rates also include a reasonable rate of return -- the utility’s profit.

Tampa Electric’s base rates are currently $43.42 for 1,000 kilowatt hours, and would rise to as much as $54.86. Since its last base rate increase in 1992, the utility has added more than 200,000 customers, and now serves nearly 670,000 in Hillsborough County as well as parts of Pasco including Dade City, a portion of Polk County, and Oldsmar in Pinellas County, said spokesman Rick Morera.

Peoples Gas base rates are now $7.53 for 20 therms, and could rise to mas much as $11.82. Peoples Gas last requested a base rate increase in 2002. The utility has added more than 100,000 customers since then, and now has about 320,000 customers statewide, Morera said.

Tampa Electric pointed out that the costs of labor, steel and concrete have risen more than 70 percent since 1992. The cost of steel pipe has increased 90 percent since 2002, according to Peoples Gas.

The two utilities, both owned by Tampa's TECO Energy, have 60 days to provide details on the rate increases to the Florida Public Service Commission. Morera said the commission process could take eight months. If the commission approves the increases, customers could see the higher bills starting in May 2009.

Not to make bad news worse, but this might not be the only increase from Tampa Electric this year. Every September, the state’s utilities review their annual fuel cost predictions with the commission, and set the fuel rates for the following year. The cost of natural gas and coal -- Tampa Electric’s two main energy sources -- have risen dramatically this year. Fuel costs at Progress Energy and Florida Power & Light increased so much that the St. Petersburg utility has asked the commission for a mid-year increase.

Morera said the utility didn’t know yet if it would need to increase fuel charges, which would go into effect January 1. “At this point, we’re not sure."

How will this affect your bill? The estimates below are based on residential rates and average residential use. The average residential Tampa Electric customer uses 1,250 kilowatt hours per month, and the average residential Peoples Gas customer uses about 20 therms of natural gas per month, according to spokesman Rick Morera.

Tampa Electric: Average monthly residential bills could go from $142.98 to as much as $157.27.

Peoples Gas: Average monthly residential bills could go from $42.90 to $47.19.

-Asjylyn Loder, Times Staff Writer