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Suncoast Pasco News

Consumers face triple whammy of higher prices in 2010, lawmakers fear

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BY CARL ORTH

SUNCOAST NEWS ASSISTANT EDITOR

Published: October 28, 2009

NEW PORT RICHEY - Pasco residents already are facing a possible economic double whammy by early 2010 that could turn into a triple blow without action, state lawmakers say.

The triple threat, the legislators say, are higher premiums for customers of the state-backed Citizens Property Insurance, a possible rate increase for Progress Energy Florida and a possible spike in gasoline prices.

With the area still in the grips of the recession, unemployment and foreclosures, state Sen. Mike Fasano, state Rep. John Legg and state Rep. Peter Nehr are considering options to ease the impact on constituents.

Electric rates

Nehr said he will "continue to fight the unreasonable rate increases sought by Progress Energy in their base rates and also the additional charges for advance fees for the new nuclear plants that may never be built."

Lawmakers have urged a delay in Progress Energy Florida's base rate increase until Gov. Charlie Crist's two new PSC appointments can be seated and acquaint themselves with the rate case.

At press time, the PSC was scheduled to vote Tuesday about delaying the rate increase.

"These potential rate increases have a significant impact on the lives of many Floridians and must be taken slowly and must be transparent," Legg, R-Port Richey, said. "I hope not only for the delay of the hearing, but when they do have the hearing, they reject the rate increase."

"It is my belief that it is the Commission's responsibility to the consumer to delay the utility rate hearing until which time all new appointees to the Commission have been assigned and a full investigation of ex parte communication between the Commission, its staff and the utilities has concluded," Legg added.

Nehr and Fasano are coordinating efforts to bring back a bill in 2010 to repeal or delay the advance nuclear power fee. The proposal didn't get far when it was introduced this spring.

"Sen. Fasano is not going to let this issue drop," Greg Giordano, Fasano's chief legislative assistant, said Friday. "He's even more passionate about this issue" after allegations about cozy arrangements between Public Service Commission staff members and Florida Power and Light officials seeking a rate increase.

Homeowner premiums

Premium increases averaging 10 percent on Citizens Property policies are a done deal, starting with renewals in 2010. Citizens, the state's insurer of last resort, dominates the West Pasco market as a safety net when private insurance policies aren't available.

It could have been worse.

"There were proposals to increase these rates by upward of 40 (percent)," Nehr, R-Tarpon Springs, recalled, "but both Senator Fasano and I fought for our constituents and kept those increases to a maximum of 10 percent.

"Many homeowners will see an increase of less than that amount and there are also some homeowners who may actually see a decrease in their policies," Nehr said about Citizens spreading out the pain.

Fasano, R-New Port Richey, had argued for a cap of 5 percent hikes in premiums annually before lawmakers compromised on a 10 percent cap.

Barney Bishop III, president of Associated Industries of Florida, still insists Citizens should raise premiums 10 percent across the board on all policies. He and others fear Citizens could not handle all the claims if a major hurricane struck the state.

Oil prices and drilling

Prices at the pump have spurted up by 34 cents a gallon of unleaded regular at some West Pasco stations during the past few weeks. Oil futures this week were holding at slightly above $80 per barrel.

Some experts predict those oil futures prices could rise above $100 for a barrel of oil, leading to more spikes in gasoline prices. Others, however, say oil selling above $85 a barrel will make increased production more economical, raising the supply and moderating price increases.

"Washington is so out of touch with the everyday person that they are going to deny (cost of living increases) for seniors on Social Security at the same time oil prices are once again climbing rapidly," Fasano commented.

Drilling for oil off Florida's coasts once again could become a big issue for state lawmakers.

Some proposals could allow oil rigs as close as three miles off Florida shores, but Fasano is much more comfortable with a 50-mile limit, Giordano said. Any damage to the state's environment or tourism industry would be intolerable.

Fasano would insist some of the revenue from offshore drilling would benefit Florida's struggling economy. The state senator likes how Alaska gets a fee for offshore drilling.

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