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TECO will seek state approval of rate increases

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Saying it is trying to meet the needs of a growing number of customers, Tampa Electric Co. will ask state regulators to approve a plan that would raise base electric rates over the next three years.

Saying it is trying to meet the needs of a growing number of customers, Tampa Electric Co. will ask state regulators to approve a plan that would raise base electric rates over the next three years.

Tampa Electric on Thursday filed a notice that is a first step in a months-long process of seeking approval from the Florida Public Service Commission to increase rates. Duke Energy Florida filed a similar notice Wednesday.

Tampa Electric, which has about 840,000 customers, wants to increase rates by $290 million to $320 million in 2025. It would increase the rates by an additional $100 million in 2026 and $70 million in 2027, according to Thursday’s filing.

“Tampa Electric understands that there is never a good time to request a rate increase and higher electric rates will impact our customers,” said the six-page notice, signed by company President and CEO Archie Collins. “However, the general base rate relief to be addressed in the company's upcoming petition will be critically important to enable Tampa Electric to maintain its financial integrity and support the growth of West Central Florida while continuing to meet the expectations of our customers for safe, reliable and resilient electric service.”

The utility is expected to file a detailed proposal with the utility-regulatory commission on April 2. The commission, the state Office of Public Counsel and other parties then will analyze myriad details and question company officials. The Office of Public Counsel represents consumers in utility issues. Parties such as business groups have formally intervened in past rate cases.

The commission would ultimately have to approve increases. Tampa Electric is currently operating under a 2021 settlement in a base-rate case.

Thursday’s filing said Tampa Electric expects customer growth of about 10 percent from 2024 to 2030. In addition to Hillsborough County, it has customers in Polk, Pinellas and Pasco counties.

Among other things, the filing said Tampa Electric expects to spend an average of $1.6 billion a year from 2025 through 2027 to “serve new customers; improve reliability, resilience, and efficiency; and ensure that our existing plant investments remain in sound working condition.”

Also, it cited inflation as a reason for the proposed rate hikes, saying inflation raises “both the price of equipment and services in capital projects and the company’s” operations and maintenance expenses.

A closely watched issue in base-rate cases is the return on equity — a measure of profitability — that utilities are allowed to earn. The commission approves return-on-equity ranges. The Tampa Electric filing does not detail a proposed range, but it indicates the utility will seek a range with a “midpoint” of about 11.5 percent.

The notice does not detail how the proposed rate increases would affect customers’ bills, which are made up of a variety of costs, such as base rates, power-plant fuel expenses, storm-related costs and environmental-project costs. In addressing customer bills, utilities rely on a benchmark of residential customers who use 1,000 kilowatt hours of electricity a month.

Tampa Electric customers who use 1,000 kilowatt hours began paying $143.48 in January, down from $161.13 in 2023. The reduction came after decreases in prices of natural gas, which is used to fuel many power plants in Florida..

Duke on Wednesday notified the commission that it will seek to increase base rates by $596 million in 2025. The Duke plan would increase the rates by an additional $95 million in 2026 and $127 million in 2027.

Jim Saunders is the Executive Editor of The News Service Of Florida.