Electricity bills in Florida are rising (again!) – mainly due to high fossil gas prices. The state’s reliance on fossil gas is hitting hard-working families and businesses. It’s time for state regulators to help get customers off the high-bill treadmill.
George Cavros | September 8, 2022
| Energetic efficiency, Florida, fossil gas
If you are an electricity customer in Florida, be prepared, your electric bill is about to skyrocket again. The culprit is the Florida utilities’ reliance on fossil gas (also known as natural gas) and the high market price fuel, and there is no end in sight in the short term. In a blog published last year, we pointed out the financial risk of strong dependence of the state on fossil gas. Since then, the price of fossil gas has continued to climb, as have electricity bills. It’s time for the state to prioritize low-cost, risk-loss resources, like smarter energy use.
Requested bill increases for next year
A few days ago, Florida’s three largest investor-owned utilities (Florida Power and Light, Duke Energy Florida and Tampa Electric Company) filed their fuel cost forecasts for next year. The filings are part of an annual fuel clause filing with the Florida Public Service Commission (PSC) — the agency that regulates the largest power companies. A hearing is scheduled for November 1 to consider the requested fuel charges and, if approved, they will come into effect in January 2023.
Utilities use a customer usage baseline of 1,000 kWh per month to project bill impacts. See the impact of the requested fuel increases below based on this baseline. Utilities charge a higher fuel rate for customers who use more than 1,000 kWh of electricity per month. So, if you consume more, you will pay a higher fuel rate and a higher bill.
The table only captures the impacts of projected higher fuel costs. Utilities are also running multi-year plans, approved in 2021, that include increasing base electricity rates and include other charges on bills, such as higher storm protection plan costs. According to utility filings (Appendix E-10), total projected bills for 2023 are as follows:
- Florida Power and Light says its customers historically served by FPL will pay $130.23compared to $120.67 this year.
- In areas of Northwest Florida formerly served by Gulf Power, customers will pay $160.43 in 2023, from $155.61.
- Duke Energy Florida says its customers will pay $170.68 in 2023, compared to $148.23 this year.
- Tampa Electric says its customers would pay $146.86 in 2023, compared to $132.66 this year.
But wait, unfortunately there is more
Over the past few years, utility fuel price forecasts have become too low. This leaves them paying more for fuel than they get back from customers. Therefore, in 2021, and earlier this year, they came to the Commission for “mid-term” corrections which allow them to adjust the fuel portion of your bill to recover their additional fuel costs before the end of the year. Utilities may also add the under-recovery to the fuel portion of your bill for the following year.
Those same utilities also under-recovered fuel costs for the latter part of this year; but they choose do not transmit these additional fuel costs on customers, instead of waiting until later this year or early next year to file these bill increases. The result is that customers will receive a double whammy in 2023 – the biggest fuel blow likely coming later in the year.
Presumably, companies are trying to soften the price shock for customers, as the latest under-recovery for 2022 is massive and will significantly increase bills. (Note: this bill is likely underestimated as fossil gas prices have continued to climb). For those of you who weren’t able to keep up with the last two approved mid-fixes, or the soon-to-be-dropped one, we’ve provided a table below.
The previously approved mid-course fixes, as well as those soon to be filed, will have cost Florida families and businesses cumulatively over $5 billion since 2021. By any measure, this is a huge transfer of wealth from the wallets of Floridians to out-of-state fossil fuel interests.
Although state regulators and utilities cannot control the price of fossil gas, they can ensure that investments in low-cost, low-risk renewable energy and energy efficiency are prioritized. To their credit, Florida utilities have been accelerate solar development reduce their dependence on fossil fuels, but more needs to be done to manage electricity demand by helping customers reduce their energy consumption and save on their bills.
Getting customers off the high-billed conveyor belt
Floridians pay part of the highest electricity bills in the country. This is partly due to the fact that Florida is one of the worst states across the country by achieving energy savings for customers through utility-led energy efficiency programs. Utility investment in energy efficiency can help customers get off the high-bill treadmill in two ways. First, energy efficiency helps reduce customer demand for electricity, which reduces fossil gas consumption to generate electricity, which lowers all customers’ bills. Second, energy efficiency programs help customers reduce their energy consumption and save money on their bills, which is especially important for energy-intensive customers.
So what’s holding us back?
Florida uses practices from the early 90s set its energy savings goals for the state’s largest utilities. The outdated practices do not value energy efficiency as a resource and eliminate the least expensive and most effective measures from energy efficiency programs. They led a number of public services to propose “zero” objectives to capture energy savings in the last PSC target setting process in 2019. These practices are so dysfunctional that no other state in the country uses them for target setting.
Energy efficiency is a resource. Let’s use it.
Fortunately, the PSC is reviewing its goal-setting rules and practices at this time. The need to modernize Florida’s approach to energy efficiency has never been greater in light of escalating bills due to the state’s heavy reliance on fossil fuels. If you think Florida should use energy smarter, please visit EnergySmartFL and make your voice heard now that the PSC is revising its rule for setting energy efficiency targets. A lower cost, lower risk and cleaner energy future in Florida depends on it.