Gulf Power Presents Rate Hike Request To Public Service Commission

Mar 16, 2017

Gulf Power Company goes before the Florida Public Service Commission in Tallahassee on Monday, seeking a $107 million increase in base rates.

If the PSC approves the hike, residential customers would pay an extra 10%, or about $14 per month. Average power bills would go from $144-$158.

“It’s never a good time to ask for an increase in prices, but it’s one of those things that we need to continue to invest in the long-term reliability of our energy infrastructure,” said Gulf Power spokesman Rick De La Haya.

De La Haya adds that Gulf Power maps out the energy needs of their service area, from the Alabama state line east to the Big Bend, as far as 30-40 years into the future. This increase would go towards upgrading the energy grid.

“Power, power lines, poles, infrastructure, smart meters, things like that,” said De La Haya. “That’s really going to keep up with technology, then continue to improve our customers’ reliability.”

According to the Southern Alliance for Clean Energy, Gulf Power currently has, at $18 per month, the highest monthly fixed rate of any large utility in the state of Florida. The utility is asking to raise that to $48 per month.

When the PSC held a public hearing on the proposal in Pensacola in January, most of the speakers were against it. Among them Christian Wagley, Executive Director of the group 350 Pensacola.

Credit 350 Pensacola

“We work on issues related to clean energy and climate change,” said Wagley. “What we see in this proposed rate increase is it would really set us backwards on all the progress we’ve made in recent decades.”

Wagley argues that the rate structure containing the increase would actually encourage customers to use more energy, by discounting them and putting a higher base rate charge on those who use less. The hardest hit, Wagley contends, would be low-income residents.

Another area of concern for 350 Pensacola is the environmental impact of producing and using more electricity.

“Most of our electricity, over 90% here locally, is being produced from fossil fuels; coal and natural gas,” Wagley said. “Our nation is undergoing this really incredible transformation right now to mainly clean sources of energy, mainly wind and sun. This rate increase proposal would actually slow that progress.”

Steve Smith with the Southern Alliance for Clean Energy told the PSC in Pensacola two months ago that Gulf Power could raise the needed funds without a rate hike.

“Do what they’ve done for the past 90 years: if they need to increase the rates a little bit, they can do it,” Smith said. “And customers who then need to manage by becoming more energy efficient or more thrifty (sic), will have the option to do that. But if you remove that option, that ties the hands of customers and it’s unfair to ratepayers.”

Besides the $107 million rate hike, Gulf Power’s Rick De La Haya says they’re also seeking permission from the Public Service Commission to restructure their rate schedule.

We’re proposing a new residential pricing package,” said De La Haya, “which will really better align our costs, and offer our customers better monthly bill stability, and more pricing options.”

De La Haya also notes that the restructuring, if approved, would not generate any extra revenue.

After Monday’s hearing, Gulf Power is expecting to hear the PSC’s decision on the rate hike in May. If that’s approved, it would take effect July 1.