Duke Energy to cut customers bills in May; TECO to spread savings out over the summer

Pointing to an “unprecedented national emergency” caused by COVID-19, Duke Energy Florida on Thursday proposed giving customers a break on their May electric bills.

Duke joined Florida Power & Light and Gulf Power Co. in announcing plans to use savings from lower-than-expected fuel costs to slash May utility bills. Tampa Electric Co. has proposed a similar plan, though it would be spread out over the summer rather than focused on one month.

The proposals remain subject to approval by the Florida Public Service Commission, with Duke asking regulators to sign off by April 24. Duke said in a filing at the commission that it is trying to “provide customers with immediate rate relief during this unprecedented national emergency.”

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“We understand that during the COVID-19 pandemic many of our residential and business customers are facing financial challenges,” Catherine Stempien, Duke Energy Florida state president, said in a prepared statement Thursday. “During these unprecedented times, we want to find creative solutions to provide relief and continue to work hard to deliver the best possible price for our customers.”

Utilities are required to pass along savings to customers when power-plant fuel costs drop, but the money typically goes to customers gradually. Duke, FPL and Gulf would lump together fuel savings this year into one-time bill reductions in May.

Duke’s filing at the Public Service Commission said it would pass along about $78 million to customers. For residential customers who use 1,000 kilowatt hours of electricity a month, their bills would drop from the current $129.32 to $102.48 in May before reverting to $129.32 in June, according to the filing.

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Utilities typically use 1,000-kilowatt hour residential bills as a benchmark, but electricity consumption varies widely. Duke said in a news release that business customers would see decreases of 20 percent to 45 percent in May.

Duke has about 1.8 million customers in 35 counties.

The plans by all four utilities stem, at least in part, from lower-than-expected natural gas prices. Each year, utilities project their fuel costs, with those projected expenses then billed to customers in the subsequent year. If fuel costs are lower --- or higher --- than expected, they are ultimately adjusted on customers’ bills. Utilities are not supposed to make profits on fuel costs.

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While the Duke, FPL and Gulf plans would give large one-time savings to customers in May, the Tampa Electric proposal is somewhat different. It would pass along chunks of the fuel-cost savings --- known as an “over-recovery” --- to customers from June through August and then smaller savings through the rest of the year.

That would be done by giving customers credits on their bills from June through August for over-recovered fuel amounts. The savings during the rest of the year would reflect the remaining projected lower fuel costs.

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