On August 6, Emera reported that its largest operating company, Tampa Electric, had filed a settlement agreement for its rate request with the Florida Public Service Commission. A ruling from the Florida PSC is expected later this year.
Tampa Electric filed its rate request in April 2021 originally requesting approximately $423M USD in additional base rate revenue over the three years plus a separate asset recovery of $29M USD. The settlement for $302M USD in revenue increases over three years was reached among Tampa Electric and all intervening consumer parties, including the Office of Public Counsel, which represents consumers in utility issues, the Florida Industrial Power Users Group, Federal Executive Agencies, Florida Retail Federation, Walmart and the West Central Florida Hospital Utility Alliance.
The proposed agreement will provide additional revenue increases over three years beginning January 1, 2022 with expected incremental increases in revenue of $191M USD in 2022, $90M USD in 2023 and $21M USD in 2024. The agreement includes a return on equity (ROE) range of 9 — 11% with 9.95% being used for rate making purposes.
Tampa Electric has been significantly reducing the carbon intensity of its generation mix with major investments in solar and the Big Bend Modernization project. This settlement agreement supports these efforts and the retirement of three coal units at Big Bend, the addition of new cleaner high efficiency natural gas generation and the second 600 MW of solar.
“This settlement further cements the transformation that is occurring at Tampa Electric and it represents a fair and amicable resolution to our request for increased rates,” said Archie Collins, President and CEO of Tampa Electric.
“At Tampa Electric we are focused on creating value for customers — adding more clean solar energy, reducing carbon emissions and fuel costs, modernizing our infrastructure for a smarter tomorrow, improving reliability, increasing resiliency in the face of climate change, and improving customer service. This settlement delivers on that value commitment.”
If approved, the typical residential customer who uses 1,000 kilowatt-hours will see their bill rise to $120.46 beginning Jan. 1. This is a 14 percent increase from the $105.25 customers pay today, or a 2 percent increase after the upcoming temporary fuel adjustment, which will begin in September. Despite this increase, bills will remain significantly below the national average and among the lowest in Florida, said Emera.
This settlement agreement is the latest of three rate case settlements at Emera’s US utilities. Peoples Gas and New Mexico Gas also concluded important rate cases over the past year.