TALLAHASSEE — A rate hike on the horizon for hundreds of thousands of Gulf Power customers might not be as big as initially proposed.
The Northwest Florida utility agreed Monday to a settlement with the state Office of Public Counsel, which objected to an original proposal to raise base rates by $106.8 million. An announcement of the settlement came just prior to the start of a hearing before the Florida Public Service Commission.
The settlement proposal, which the commission agreed to consider April 4, would add about $7 to the monthly bills of typical residential customers who use 1,000 kilowatt hours of electricity a month, according to Gulf Power.
"Energy providers can't just sit and coast," Gulf Power spokesman Jeff Rogers said. "We have to continue to invest in infrastructure, transmission lines, substations. We're a 90-year-old company. We've got equipment constantly aging and that constantly has to be invested in to ensure the reliability our customers expect."
If the request is approved, the company projects that starting July 1, the monthly bill for typical residential customers will grow from $144 to $151.
The initial request sought to boost the typical monthly bill to $158.
The state Office of Public Counsel, which represents customers in utility cases, initially argued that base rates should decrease by about $2 million. No objection was raised to the settlement proposal on Monday by other parties involved in the case, which range from Walmart to the Sierra Club.
In the agreement, Gulf Power's original request for a $106.8 million base-rate increase would fall to $62 million through the end of 2019. However, the company projects the net impact to customers would come to $54.3 million.
The filing before the PSC now says Gulf would seek a "return on equity," a measure of profitability, of 10.25 percent, down from the original proposal of 11 percent. Gulf Power also is also now seeking to take a one-time $32.5 million write down on costs related to a Georgia power plant, known as Plant Scherer.
Gulf Power in the past has sold electricity from the plant on the wholesale market but now uses power from the plant for its retail customers.
The Pensacola-based Gulf is one of four major investor-owned utilities in Florida. It serves about 450,000 customers in eight Northwest Florida counties.