Duke Energy Florida earlier this month proposed an electricity rate hike to mitigate the impact of volatile natural gas prices.
The “fuel adjustment” would be tacked onto residential, commercial and industrial power bills from March through at least February 2023, the Duke Energy Corp. subsidiary said. The measure would translate to a $6.62 increase in the monthly bill of a typical residential customer using 1,000 kWh. The impacts on commercial and industrial bills would range from a 4% to 10% increase.
By spreading the adjustment over at least 11 months, the company is aiming to minimize the impact on customers, according to Duke Energy Florida’s Melissa Seixas, who is president of the state’s operations.
“We want to help our customers who may already be struggling to pay their current energy bills,” said Seixas. “We are working hard to minimize the impact and provide customers the opportunity to better manage their energy usage and reduce their bills.
“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.”
Although its 10,200 MW portfolio of owned generating capacity also includes coal and renewables, natural gas is the primary fuel source used to generate power at most of Duke Energy Florida’s power plants. The company serves about 1.9 million customers in a 13,000 square-mile service area.
The firm cited that natural gas prices have risen almost 45% since January “and remain volatile due to a number of unique events that drove up prices and caused supply uncertainty. This is impacting not only utility companies but also a variety of other industries that rely on natural gas as well.”
Duke Energy Florida clarified that it “does not earn any profit from fluctuating fuel costs.”
The proposal follows a separate “rate mitigation” plan approved in early November by the Florida Public Service Commission for Duke Energy Florida to recover about $247 million of fuel costs during 2022 and 2023.
The mitigation plan is expected to lead to a $9.24 increase in the monthly bill of a typical residential customer, while commercial and industrial users will see impacts ranging from a 1% to 8% increase.
Natural gas fueled about 75% of Florida’s total electricity net generation in 2020, according to the Energy Information Administration.
