Fuel costs could drive up Duke Energy customers bills

Duke Energy Florida asked state regulators Friday to approve collecting an additional $314.2 million from customers because of higher-than-expected fuel costs for power plants.

The proposal, if approved by the Florida Public Service Commission, would lead to Duke customers starting to pay more on their monthly bills in March and continuing through February 2023.

For example, a residential customer who uses 1,000 kilowatt hours of electricity a month is currently slated to pay $141.49 a month in 2022. If the proposal is approved, that amount would increase to $148.11, according to the utility’s filing at the commission.

Commercial and industrial customers would see increases of 4 percent to 10 percent, Duke said in a news release.

Duke’s filing is similar to requests that Florida Power & Light and Tampa Electric Co. made recently because of volatile natural-gas prices. Utilities are supposed to pass through fuel costs to customers without profiting.

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"The main drivers of the increased natural gas prices are reduced storage, strong liquified natural gas export sales and producers focusing on low-cost maintenance drilling and exercising capital discipline," Duke said in the filing. "Recent storage levels are 9.2% less than this time last year and 2.5% below the five-year average."

The commission on Dec. 7 approved allowing FPL to collect an additional $810 million from customers in 2022 because of natural gas costs. Tampa Electric filed a proposal last month to collect about $273 million more starting in February. The commission has not made a decision on that proposal.

Utilities each year file projected fuel costs that regulators then use to determine how much will be charged to customers in the subsequent year. If fuel costs are substantially higher than expected, utilities can seek to collect more from customers, a process known as seeking a "mid-course correction."

Duke in August received a mid-course correction because of higher-than-expected fuel costs in 2021. It subsequently received approval to recoup those costs, which totaled $246.8 million, over two years to try to ease the monthly impact on customers’ bills — a strategy the utility described as a "mitigation" plan.

The new proposal comes on top of that. The filing said Duke needs to recoup another $168.6 million for 2021 and $145.6 million for higher-than-expected fuel costs in 2022. Duke is asking the commission to consider the proposal during a Feb. 1 meeting.

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Florida utilities have become heavily dependent on natural gas in recent years, as they have phased out dirtier-burning coal plants.

In a statement Friday, Duke Energy Florida State President Melissa Seixas said the utility, which has about 1.9 million customers, is taking steps to try to help customers struggling to pay their bills.

"We are working hard to minimize the impact and provide customers the opportunity to better manage their energy usage and reduce their bills," Seixas said. "In addition, we are managing our fuel and generation resources in the most cost-effective manner for our customers, and our rate mitigation plan will continue to reduce some of the price pressure on customers."