FLORIDA’S TALLAHASSEE – In 2023, Florida consumers and businesses may expect higher energy bills as utilities continue to contend with rising natural gas prices. At the state Public Service Commission, applications from Florida Power & Light, Duke Energy Florida, and Tampa Electric Co. on Friday included information on anticipated expenses in 2023. Each utility proposal will result in higher monthly bills starting in 2023 if the panel adopts them. Additionally, though they are delaying making such demands, the utilities may attempt to pass along higher-than-anticipated fuel costs from this year.
While utility bills are made up of a combination of charges, a primary driver in the petitions is the high cost of natural gas, which Florida utilities rely on extensively to generate energy. Early this year, the three major privately owned utilities also raised customers’ bills due to the price of gas. According to Duke’s petition, “both domestic circumstances and international events have greatly altered the natural gas market.”
Natural gas prices have quadrupled since the beginning of the year due to rising local demand, stable natural gas production, robust LNG (liquefied natural gas) exports abroad, and low natural gas storage inventories. The market for natural gas has not settled and remains very erratic. Tampa Electric’s director of origination and trading, John Heisey, stated in written testimony submitted with Tampa Electric’s petition that the company anticipates using natural gas to generate 84 percent of its electricity in 2023, with solar power accounting for 11 percent and coal for 5 percent. This is an example of the industry’s heavy reliance on natural gas.
Meanwhile, he claimed that in 2022, demand for natural gas would outpace supply. Heisey testified that “higher gas demand is caused by LNG exports, low coal stockpiles, harsh summer weather, and low storage inventories.” “Despite rising gas prices, production growth has been sluggish as producers practice capital restraint. Additionally, the invasion of Ukraine is still affecting the energy markets through higher volatility and uncertainty, which is anticipated to last through 2023.
In November, the Public Service Commission is anticipated to consider the petitions. Utility companies sometimes use bills for residential customers that consume 1,000-kilowatt hours of electricity each month as a baseline. According to Duke’s petition, 1,000-kilowatt hours will cost Duke consumers on average $170.68 in 2023 instead of $148.23 this year. Such Tampa Electric customers will pay $146.86 in 2023, up from $132.66 this year, according to a news release from Tampa Electric.
FPL has two different tariffs due to a merger with the former Gulf Power. Customers who use 1,000-kilowatt hours per month in traditionally FPL-served areas will pay $130.23 in 2023, up from $120.67 this year, according to the petition. Customers in the former Gulf Power service areas in Northwest Florida would pay $160.43 in 2023 instead of $155.61 in 2022.
Not all factors, including natural gas, are anticipated to cause more significant costs. Additionally, the utilities are working out multi-year plans that gradually raise the base tariffs for electricity. Generally speaking, utilities are permitted to pass on fuel costs to customers and are not allowed to profit from those prices. They submit petitions every year with estimated costs for the following year. The decision to include such anticipated expenditures in customers’ bills is then made by the commission.
In addition, the utilities in 2023 can try to recover more extraordinary fuel expenses in 2022. Each has seen higher costs but stated in their papers that they wish to postpone addressing the problem until this year’s end or the beginning of 2023.
“FPL believes it is appropriate to continue monitoring the market to evaluate if the conditions and worldwide events that have sharply influenced the natural gas market will ease,” the company wrote in its plea on Friday. “FPL will keep adding new information that reflects current gas prices, sales, and revenues to its fuel cost computation. FPL will submit a request for recovery based on an updated accounting at the appropriate time toward the end of 2022 or the beginning of 2023. The commission will review the proposal in early 2023 for implementation after the customer notice period.
According to Tampa Electric President and CEO Archie Collins, the “specific economic issues our consumers and communities are facing” were acknowledged in news announcements from Duke and Tampa Electric. They also cited initiatives to assist clients who were having financial difficulties.
In a statement, Duke’s state president Melissa Seixas stated, “We understand our customers continue to face significant financial challenges in all aspects of their life.” “To help consumers manage their costs and decrease the impact, we provide energy-saving technologies and initiatives. We also connect them to accessible support. Please get in touch with us. We are here to assist.