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Regulators hold first hearing on storm preparation charges for utilities

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(The Center Square) – The Florida Public Service Commission held the first of a series of hearings Thursday into how much utilities can potentially charge their customers to repair storm-damaged electrical infrastructure.

Thursday’s hearing was an organizational one to set the stage for the main hearings Sept. 14-17. Each utility and the commission’s staff can call witnesses and offer testimony during the hearings.

Under the regulated monopoly model, the commission makes a judgment on whether the costs of a utility are prudent, be it capital expenses such as a new power plant or transmission infrastructure, storm repairs or other other costs. If the commission approves them, the utility can then increase customers’ bills to pay for them.

In 2019, legislation was passed requiring each of the state’s utilities to file a 10-year Storm Protection Plan detailing plans to harden infrastructure against damage from extreme weather events such as hurricanes to decrease restoration costs and outage times. Under the law, the utilities are required to file a new plan every three years. These storm protection charges are required to be separate on a customer’s bill, according to state law.

Florida Power & Light Company, which serves 12 million customers in northwest and peninsular Florida, is asking to have ratepayers pay $5.17 million in increased costs for its storm infrastructure program in 2022, $14.86 million for this year, with an estimate of $513.8 million for 2024. That represents a total $533.9 million that could be paid by ratepayers if regulators approve.

The company says its efforts are focused on replacing wooden poles with more durable steel and concrete structures (primarily located in the old Gulf Power service area which was acquired from Georgia-based Southern Company in 2019), inspecting and hardening distribution infrastructure against wind damage.

Tampa Electric, which serves 800,000 customers in Hillsborough County and parts of Polk, Pasco and Pinellas counties, seeks $68 million from its customers for anticipated work on its storm infrastructure program this year and more than $92 million for its 2024 plan. That would add up to about $6.58 per month for a 1,000 kilowatts per hour residential customer.

Duke Energy, whose Florida subsidiary serves 1.9 million customers in 35 of the state’s 67 counties, including Pinellas and Pasco counties and the greater Orlando area with Orange, Osceola and Seminole counties, is asking the commission for $172.9 million in storm hardening-related expenses for 2023 and estimates those costs to be $126.2 million for 2024.

The Florida Public Utilities Company, which serves about 120,000 customers with natural gas, electricity and propane, anticipates in its filing that it will incur $10.32 million of Storm Protection Plan related expenses this year and $13.62 million in 2024. According to their filing, this would add about $4.32 per month per bill for a 1,000 kilowatts per hour residential customer.

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