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Drop In Electricity Consumption Fuels Rate Debate

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By Carl  Orth | The Suncoast News

Published: January 3, 2009

NEW PORT RICHEY - With the demand for electricity declining in recent months, some state lawmakers want to short-circuit part of a rate increase of nearly 25 percent for Progress Energy Florida.

But utility executives are projecting that the demand for electricity in Florida will soon rebound. Progress Energy needs the full rate increase to make preparations to meet that demand, they argue.

The two sides are at odds over the part of the rate hike to help kick-start nuclear power projects that could take the better part of a decade to finish.

More than 11 percent of the Progress Energy rate increase will go toward the cost of the nuclear plant the utility wants to build in Levy County. The rest of the rate hike will pay for higher fuel costs.

Under Progress Energy rates that went into effect Jan. 1, the cost of 1,000 kilowatt hours has gone up by $27.28 to $137.87.

State Sen. Mike Fasano, R-New Port Richey, has promised to introduce a rate rollback bill to suspend the nuclear power advance recovery fee. If the bill passes, Progress Energy Florida would have to refund money to customers.

Utilities across the country have seen sharp drops in electricity usage, Fasano pointed out.

"This definitely gives credence to the argument of delaying putting the cost of building nuclear plants on the backs of the consumers," Fasano said. Fasano is a member of the Florida Senate Utility, Telecommunications and Energy Committee.

Progress Energy Florida saw a net decrease of 2,000 customers during the last 12 months, corporate spokeswoman Suzanne Grant acknowledged. Milder weather probably had an impact on usage, she noted.

"We believe that by 2010 and beyond, we'll again see growth," Grant said, "more along the lines of 2-3 percent per year as opposed to the larger growth we've experienced in the past."

Fasano expressed irritation that estimated costs for Progress Energy Florida nuclear power plants have soared since state lawmakers authorized the nuclear power-related advance recovery fee two years ago.

"It is my opinion Progress Energy is not concerned about the cost of the plants since they won't be paying for the building of them," Fasano commented. "However, it would be interesting to see what direction they would take if they had to use the company and stockholders' dollars instead of raising rates for consumers."

Floridians rank third nationally in per-capita energy consumption and the state has the fourth largest population, Grant countered.

"Over the last three decades, the size of the average home has grown by 50 percent and uses 30 percent more electricity," Grant observed.

The strategy of Progress Energy Florida involves not only reliable, affordable power, but also less dependence on foreign fuel and a cleaner environment, Grant remarked.

The company's long-term approach includes energy efficiency programs and investments in renewable energy technology, along with upgrades to power plants, Grant explained.

The utility's arguments might be a hard sell, though, if other lawmakers share Fasano's attitudes.

"Given the fact that people are conserving and using less energy," Fasano said, "I believe Progress Energy would slow down the pace of building the nuclear plants if they were footing the bill instead of the consumer."

"As the use of electronics has expanded in support of modern lifestyles and businesses, the system of electricity production and delivery must keep pace with these changes," Grant said.

Carl Orth can be reached at 727-815-1068 or corth@suncoastnews.com.

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