Florida regulators on Monday began examining a proposal that would result in Tampa Electric Co. increasing base electric rates. Representatives from both consumer and business groups argued that the proposed increase should be reduced.
Tampa Electric is requesting the Florida Public Service Commission’s approval for a $287.98 million rate hike in 2025, followed by further increases of $92.37 million in 2026 and $65.47 million in 2027.
Jeff Wahlen, a lawyer for the utility, explained to the commissioners that the proposal seeks to balance various factors, including ensuring Tampa Electric provides dependable service to its customers.
“Tampa Electric is responsible and accountable for keeping the lights on,” Wahlen said. “Balancing the factors needed for safe, reliable, and cost-effective electric service is not easy.”
However, Patricia Christensen, an attorney from the state’s Office of Public Counsel, which represents consumers in utility cases, contended that the 2025 increase should be capped at $73 million. She also suggested that the proposed amounts could be further reduced in the following years.
“TECO’s list of proposed projects provides platinum solutions to normal stainless steel customer concerns,” noted Christensen, an associate public counsel.
Base rates constitute a substantial portion of customers’ monthly electric bills, and rate cases often unfold over several months, involving extensive documentation and debate. The Public Service Commission’s hearing on the Tampa Electric proposal is anticipated to continue throughout the week, according to Chairman Mike La Rosa.
The Tampa Electric hearing commenced shortly after the commission approved a settlement in a Duke Energy Florida case last week. The Duke settlement, which received unanimous approval, will raise base rates by $203 million in 2025 and $59 million in 2026.
Highlighting the significance of the Tampa Electric case, several organizations and even Walmart are participating. The groups involved include the Florida Retail Federation, the Florida Industrial Power Users Group, the Sierra Club, the federal government, fuel retailers, Florida Rising, and the League of United Latin American Citizens of Florida.
The proposal includes funding for a range of projects, such as upgrading existing power plants and adding solar-energy facilities. Similar to Wahlen, Tampa Electric President and CEO Archie Collins emphasized the utility’s need to balance numerous priorities, calling it a “juggling act.”
“We need the rate increases we have requested so that we can continue to perform well today and to ensure that the company is taking the steps to insulate our customers from higher costs tomorrow,” Collins stated.
It quickly became clear that a major point of contention in the hearing would be the utility’s return on equity, a critical measure of profitability. Tampa Electric is seeking approval for a targeted return on equity of 11.5%.
Utilities frequently argue that a sufficient return on equity is necessary to attract investment. However, some parties’ attorneys argued Monday that Tampa Electric’s proposed rate is too high and that reducing it would result in savings for customers.
Robert Scheffel Wright, a lawyer for the Florida Retail Federation, asserted that Tampa Electric’s target should not exceed 10.3%—the rate approved in last week’s Duke Energy Florida settlement.
“Tampa Electric is in the same exact business as Duke Energy Florida,” Wright commented.
Collins, however, disagreed, stating that the Duke return on equity was not pertinent because it was the outcome of a settlement involving “a series of gives and takes.”
Tampa Electric serves approximately 840,000 customers in west-central Florida, making it the state’s third-largest utility after Florida Power & Light and Duke Energy. Before the hearing began, the senior advocacy group AARP Florida submitted petitions opposing the Tampa Electric proposal to the commission.
“That’s a lot of money for people on a fixed income,” said Kathleen Mayorga, an AARP Florida volunteer. “That makes a difference in whether or not you can afford your prescriptions, whether or not you can feed your family.”
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