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The Pensacola-based utility has settled on a new rate plan in a settlement that’s being hailed as a win for consumers.

A settlement between Pensacola-based utility Gulf Power and the state’s Office of Public Counsel should mean less-than-expected rate increases for Northwest Florida consumers.

The utility announced Monday that it would agree to a $62 million per year rate increase for consumers across Northwest Florida, rather than the $106.8 million proposed by Gulf Power last year. The proposed settlement must still be approved by the Florida Public Service Commission.

In October, the utility had proposed a major rate increase that critics said would have added $50 to the average residential customer’s bill. Gulf Power said the proposed rate increase was needed to upgrade and maintain power for customers.

“This compromise is good for all involved, including Gulf Power’s customers,” said Stan Connally, Gulf Power Chairman, President & CEO. “Most importantly, it supports our current infrastructure investment — which ultimately helps us continue to provide our customers with long-term, reliable service with a balanced energy mix across Northwest Florida.”

According to Gulf Power, the average Floridian’s bill is currently $144 and will rise to $151 if the settlement is approved. Originally, the energy provider filed a request that, if approved, would have increased the cost for an average residential customer to $158 per month on July 1.

Connally cited the need to continue to invest in the reliability of the grid to ensure a secure energy future.

“Our obligation is to have the electricity available when and where our customers need it,” Connally said. “This investment is necessary to meet the expectations of our customers now, and for future generations.”

The compromise comes after concerns were raised by customers and consumer advocacy groups.

“Gulf Power’s decision to rescind their rate hike proposal is the right decision for their customers,” said Shannon Baker-Branstetter, policy counsel for Consumers Union, a consumer’s advocacy group. “The proposal would have taken away control from customers trying to save money by conserving energy. It would have required them to pay nearly $50 upfront every month, even before they turned on a light switch.”

In January, Consumers Union, the policy and mobilization division of Consumer Reports, joined a coalition of stakeholders to call on the Florida Public Service Commission to reject Gulf Power’s proposal.

“The proposal was unfair and would have had a disproportionately negative impact on low-income families, seniors and others who strive to lower their energy bill,” said the group in a statement. “It would have punished customers who conserve energy and discouraged energy efficiency, which help to lower demand and further lower bills.”

(Gulf Power/Special to The Pulse)

Solar advocacy organization Floridians for Solar Choice called the settlement a victory for solar energy customers.

“We are glad that the fixed charge increase has been removed from Gulf Power’s rate restructuring,” said Tory Perfetti, chairman of FSC and Florida director of Conservatives for Energy Freedom. “This removal is a common-sense decision. Consumer choice is a staple of Florida’s economy, and this fixed charge hike would have been a step in the wrong direction.”

More than 1,000 customers commented on the proposed rate hikes during public meetings in Pensacola and online, with the majority of consumers alleging that raising the fixed charge would have created an unfair burden to Northwest Florida consumers, especially families on low and fixed incomes.

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