Don’t let Duke Energy and Tampa Electric prioritize profit over people

Floridians pay some of the highest electricity bills in the country. U.S. Energy Information Administration reports show that the average Florida household pays about $2,000 annually, but the average U.S. household spends under $1,500.

In Florida, investor-owned electric utilities are given “regulated monopolies.” This means they have a territory in which they are the exclusive provider, and the state guarantees them a certain return on their investment. In Florida, the Public Service Commission is responsible for setting that return on equity.

In the last few months, Duke Energy Florida and Tampa Electric Company, have filed for base rate hikes with the commission. Over the next three years, Duke and Tampa Electric are requesting $820 million more and $460-490 million more, respectively, from their customers.

Florida utilities have thwarted affordable adoption of solar through practices like these minimum bills, which require people to pay a certain amount monthly even if they don’t use any electricity. Minimum bills can unfairly penalize households using solar, low-income households and seniors on fixed incomes. The commission should not allow Duke’s minimum bill to continue.

But rather than eliminate unfair fees, both Duke and Tampa Electric are asking for an increase in the minimum fee a household must pay each month just to be connected to the grid. These bumps would mean that Duke customers’ minimum rates would go up a few dollars each month over the next three years to reach roughly $45, while Tampa Electric customers would see their minimums go up to about $33 next year.

Both Duke and Tampa Electric are asking for a return on equity (a measure of the company’s profitability) that prioritizes profits over people and is far above national averages. Duke is requesting a staggering return on equity of 11.15% and Tampa Electric is requesting an even higher 11.50%. However, the national average, in rate cases decided last year, is much lower at 9.60%.

In other states, Duke companies did not ask for such a high return on equity. Last year in South Carolina, Duke agreed to 9.6%, and in North Carolina, Duke received a 10.1% rise earlier this year.

Why should Floridians be forced to pay more? Among large electric utilities, Duke Florida bills are already the fifth highest in the nation and Tampa Electric bills are the third highest. Further, at least a dozen Florida municipal utilities have lower residential bills, proving it’s possible to provide electric service for less in Florida. Some charge about $60 less per month than what Duke’s customers pay for the same energy use.

While Duke and Tampa Electric pledge some investments in new infrastructure and clean energy, they continue to prioritize gas, which makes it harder to reliably budget. Solar energy is both cheaper and more reliably priced, plus it offers resiliency benefits during hurricanes and other times of outages. In fact, in Tampa Electric’s request to increase rates, it reported that its solar investments have saved customers more than $200 million since 2017 and that its solar projects have helped “moderate fuel price volatility.”

If Duke and Tampa Electric’s rate hike proposals are rubber-stamped, they will delay a transition to less expensive, cleaner options. We urge the commission to look closely at the filings and adjust the companies’ return on equity to be more reasonable and aligned with the rest of the country.

You can participate in the commission’s decision-making process and share your thoughts on the proposals at commission hearings and through public comment.

Allison Kvien is a southeast regulatory director for Vote Solar. Heaven Campbell is the Florida program director for Solar United Neighbors.