Duke Energy cuts Florida rate hike request by hundreds of millions

Duke Energy more than halved the increase it’s seeking to customers’ base rates under a milestone agreement with energy consumer advocates, dramatically reducing the proposed hikes to the electricity bills of nearly 2 million Floridians.

The settlement agreement, which was announced this week, is the latest development in the company’s months-long rate case, which proceed similarly to court cases but are decided by regulators on the Florida Public Service Commission. This agreement must be approved by the commission to take effect. But it includes several changes from Duke Energy’s initial request that advocacy groups called a win for customers.

The most obvious of those changes was the topline number. Originally, Duke had asked for an increase of about $820 million over the next three years. Now, the company is requesting an increase of about $262 million instead, plus charges for solar energy plants that will only be added once the projects are completed. The costs of those solar projects would total about $141 million if all are finished on schedule, the company said.

Residential consumers will also pay a smaller increase than other types of customers, like large companies and industrial plants.

Duke also agreed to add language to its electricity shutoff policy so that none of its customers will have their power disconnected if temperatures rise to at least 95 degrees. Previously, it stopped shutoffs when the heat index was at least 105 degrees, which is the “feels like” temperature when considering humidity.

“That will save lives,” said Bradley Marshall, a lawyer for the environmental firm Earthjustice that represents advocacy groups challenging the rate hikes.

Those groups, Florida Rising and the League of United Latin American Citizens, did not sign on in support of the settlement agreement, in part because they want to see Duke suspend all power disconnections during summer months — similar to how some utilities in northern states stop shutoffs in the winter. But they are not opposing the agreement.

Temperatures in St. Petersburg rose to 95 or higher on five days last year, according to weather station data from the National Oceanic and Atmospheric Administration.

Consumer advocates previously panned Duke’s requested profits as excessively high. As part of the agreement, Duke’s rate of return for shareholders would have a midpoint of 10.3% — still higher than the national average, but lower than its initial request.

Walt Trierweiler, who represents Florida energy customers as the state public counsel, signed on to the settlement. In an email, he called it “the best possible outcome.”

Duke also pledged to stop charging reconnection fees for customers whose power was shut off for not paying their bills, and allow lower-income customers to pay less than the minimum required bill amount if they request a credit. The company also agreed to boost funding and participation in energy efficiency programs, including by installing smart thermostats in more homes. Its number of proposed solar projects went down slightly, from 14 to 12.

“This agreement delivers the smarter, cleaner energy future customers deserve while prioritizing reliability and price stability,” Melissa Seixas, Duke Energy Florida president, said in a statement. Because of charges expiring from customers’ bills next year, the utility still projects that consumers will pay less in January 2025 than in December of this year.

State regulators could approve the agreement as soon as next month. In their filing, the signatories ask the Public Service Commission to take it up for consideration in mid-August.

In addition to the public counsel and Duke, groups representing retail businesses and industrial power users also signed on in support, as did two individual steel and phosphate companies. Environmental groups like the Sierra Club and the Southern Alliance for Clean Energy didn’t agree to the settlement but said they would not oppose it, according to the case documents.