ST. PETERSBURG, Fla., Sept. 14, 2001 – Florida Power Corporation today submitted an extensive rate filing to the Florida Public Service Commission (FPSC) which, if approved, would lower customers’ rates while increasing the company’s generation capacity, enhancing reliability and providing superior customer service.
Florida Power customers will receive a $5 million annual rate credit for a period of 15 years, for a total of $75 million.
This price reduction is directly attributable to the net savings available to customers as a result of the merger of Florida Power with CP&L.
By the end of 2003, Florida Power’s rate plan will provide for the full amortization of the regulatory asset related to the purchase of the Tiger Bay cogeneration facility in 1997.
This will complete an ambitious project for the company that will save in excess of $2 billion for customers by terminating a high cost federally mandated PURPA contract. Beginning in 2004, customer will receive an additional reduction of $37 million in lower rates as a result of this commitment.
Florida Power will file separate plans next week with the FPSC that calls for the lowering of its annual fuel costs and related charges by approximately $65 million beginning in 2002.
Additional rate reductions through additional efficiencies – Additional price reductions are possible through an innovative incentive regulatory plan, which the company included in the documents submitted today. This plan would provide for additional rate reductions through efficiencies derived as a result of the company’s ability to lower the future costs of its utility operations.
This proposal represents the first base rate change the company has proposed since 1993, a period during which the company has held its base rates constant. During that time, Florida Power has added more than 200,000 new customers and has made additional investments in its electric system totaling more than $2 billion.
The cumulative effect of these price reductions, when completed will lower the monthly bill of the typical residential customer who uses 1000-kilowatt hours by approximately $3.25, or 3.5 percent.
“We share a common goal with the FPSC, to lower rates for our customers,” said CEO H. William Habermeyer Jr., adding that Florida Power’s integration into the Progress Energy family is a primary reason for the proposed reduction in rates and service improvements. “This is the beginning of our plans designed to lower prices for our customers while ensuring that they continue to have adequate generation supply coupled with a superior level of customer service,” Habermeyer said. Additional highlights of the company’s plan include:
Increased Generating Capacity
* Florida Power is increasing generation capacity reserve margin from 15 percent to 20 percent by December 2003 – seven months ahead of schedule.
*The company invested $80 million in 286MW of new peaking capacity at its Intercession City plant that began operation earlier this year and will invest an additional $200 million in a new 56MW combined cycle power plant at the Hines Energy Complex that will begin commercial operation in late 2003, resulting in annual fuel savings of $35 million to customers.
Improved System Reliability
* The company’s plan will also strengthen the electric grid system through additional investment in excess of $100 million over the next three years.
* Enhanced reliability will be the result of the implementation of new service technologies such as real time information exchange between line dispatchers and field crews. Florida Power also plans to build several new operating centers across its 20,000-square-mile service territory, placing line, service, engineering and management resources closer to customers, resulting in improved response time and quicker service restoration.
Customer Service Enhancements
* The company is continuing the addition of 150 new pay locations to provide greater customer access around the state offering expanded hours and some around-the-clock bill payment services.
* The company also has expanded its communications system so customers can conduct most business transactions via telephone 24 hours a day. Other service enhancements enable customers to view and pay their power bills online.
* A toll-free outage number and 1,000 additional phone lines ensure that customers who lose power during a storm can get quick response.
Additional components of this filing will be submitted to the FPSC as scheduled over the next sixty (60) days, with hearings scheduled for March 2002.
Florida Power, a subsidiary of Progress Energy (NYSE: PGN – news), serves more than 1.4 million customers in Florida. The company is headquartered in St. Petersburg, Fla., and serves a territory encompassing over 20,000 square miles including the cities of St. Petersburg, Clearwater, as well as the central Florida area surrounding Orlando. For more information about Florida Power, visit the company’s Web site at: http://www.fpc.com.
SOURCE: Progress Energy, Inc.