Recent Examples of Rate Increases in Vertically Integrated States
THE SOUTH
In March 2010, consumers in the Tennessee Valley Authority’s seven-state service territory started paying between $2.50 and $5.50 more a month due to fuel cost adjustments. This increase is in addition to the 20 percent rate hike ($12 to $15 increase per 1,000 kilowatt-hours per month) that went into effect in October 2008. The rate hike was factored into TVA's 2009 budget, which included $12.6 billion to cover operating expenses and nearly $2.1 billion for new capital investments.
ALABAMA
A typical customer of Alabama Power Company will pay almost $200 a year more, or about $16 per month, for electricity under a rate hike of 14.6 percent, starting October 9th pending approval by the state Public Utility Commission. Electricity costs would also rise about 16 percent for commercial users and an average of 25 percent for industrial customers, if the entire request is approved.
COLORADO
For the average customer in Denver, Colorado, Xcel Energy’s electric bills have increased by nearly 28 percent since February, 2009. The rise was due to increases in what Xcel pays for materials, such as coal and gas.
FLORIDA
If approved by Florida regulators, Progress Energy Florida’s customers could face a stunning 31 percent increase in their electric bills next year. Progress is the state’s second largest power company. Meanwhile, Florida Power & Light customers are being hit with a 16 percent electricity rate hike. If approved, the increase will add close to $20 per month to the average residential customer’s bill.
Effective July 1, Lakeland Electric, the third largest muni in Florida, hiked its rates by 14 percent. The new rate will mean $11.57 added to the customer’s monthly bill. According to Lakeland Electric’s research, the Jacksonville utility has raised it fuel rate by 37 percent, the Orlando utility by 34 percent, Florida Light & Power by 31 percent, Progress Energy by 20 percent and the Gainesville utility by 10 percent. Of those increase, only Gainesville’s increased is effective in July, the others are staggered between July and October of this year.
GEORGIA
Georgia Power Co. is expected to seek a significant rate increase in July 2010, possibly as much as $800 million, a staff member said during an April 29 meeting of the Georgia PSC’s Energy Committee.
This comes on top of rate hikes in previous years: In May 2008, the Georgia PSC approved a $222 million rate hike for Georgia Power to pay for higher fuel costs. The increase follows $372 million and $323 million rate increases from February and December 2007, respectively.
KANSAS
Westar Energy is seeking a rate hike of 15 percent on residential customers in both its north and south regions. The average residential customer would see a monthly increase of $9.62 in Westar’s northern region and a $10.34 hike in its southern region. Westar filed with the Kansas Corporation Commission to request an increase in its rates to recover the cost of investments made in new natural gas plants and equipment to meet customers growing energy needs as well as recovering costs of restoring its system following last December’s ice storm.
MISSOURI
Consumers of Cuba, Missouri’s Sho-Me Power will pay almost 28 percent more this year for electricity. Sho-Me Power received an increase of 25.3 percent from its supplier, Associated Electric Cooperative, and passed the rate increase, with a little extra for good measure, on to its consumers.
NORTH CAROLINA
Dominion North Carolina Power plans to increase customer rates by an average of 17.7 percent, effective January 1, 2009 if approved. For a typical customer using 1,000 kilowatt-hours of electricity a month, the bill would increase $16.04 per month.
Residential customers of Progress Energy may see their bills jump from about $97 to nearly $113 per month – a 16 percent increase. If the North Carolina Utilities Commission approves the request, the rate increase will go into effect on December 1. Progress is seeking to cover the cost of fuel needed to run its plants saying that most of the increase is caused by rising coal prices. Progress uses coal to generate about half of its electricity in the Carolinas. The price of coal has risen 160 percent this year.
Duke Energy filed a rate increase request with state regulators. If approved by the North Carolina Utilities Commission, the average monthly bill of a North Carolina customer would increase $3.00. The Charlotte-based company also plans to ask for an increase in South Carolina of up to 10 percent, or about $8.00 per month. The North Carolina hike would take effect in September and the South Carolina in October.
OKLAHOMA
Base rates for state-owned Grand River Dam Authority will rise 11.95 percent on January 1, 2010 barring a sharp increase in economic activity. The rise is needed to service debt, officials of the utility say.
SOUTH CAROLINA
Progress Energy Carolinas asked the South Carolina Public Service Commission to increase rates paid by their customers by about 6 percent. The company is seeking recovery of the cost to reduce fossil-fueled plant emissions as well as the cost of emission allowances. For a residential customer using 1,000 kilowatt-hours of electricity a month, the total increase, if approved, would be about $6.00, rising to about $102.20 from the current $96.33. In addition, Progress is asking the S.C. PSC to approve a $39 million increase in the fuel component of its rates to recoup fuel costs and to meet future fuel costs. Increased fuel costs represent about $5.00 and the other $1.00 increase on a 1,000 kWh residential bill is to recover the cost of emission allowances. If approved by the Commission, the average increase would be about 7.2 percent for commercial customers and 9.4 percent for industrial customers, effective July 1.
Duke Energy filed a rate increase request with state regulators. The Charlotte-based company plans to ask for an increase in South Carolina of up to 10 percent, or about $8.00 per month. The hike would take effect in October.
WASHINGTON
On April 2, 2010, Puget Sound Energy increased its electricity rates by 2.8%, costing its customers about $2.80 a month. These are in addition to the $1.78 per month that went into effect on April 1.
The Bonneville Power Administration, which sells electricity to more than 140 regional utility companies in Montana, Idaho, Washington and Oregon, announced it will increase rates by 7 to 8 percent, beginning October 2009. The rate hike will cover increased operating costs and to protecting the region’s salmon. BPA cites the general economic downturn, which has hurt sales, and higher operating and maintenance costs of the hydro system as additional reasons for the hike.
