Florida Consumers facing higher utility bills

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Published Thursday, January 25, 2001, in the Miami Herald

Consumers facing higher utility bills BY JAMES McNAIR jmcnair@herald.com

Unless Floridians resort to wood-burning stoves and solar-heated water, they should expect to keep seeing eye-popping bills for electricity and natural gas.

This month, consumers of both forms of energy began paying more to heat their homes, cook their food and use their hot tubs.

Florida Power & Light, the state's biggest electric utility, raised prices 9 percent this month to recover higher-than-expected fuel costs incurred in 2000. And TECO Peoples Gas, the state's biggest retailer of natural gas, raised prices to nearly double what they were at the start of 1999.

Ed Wolfer, who owns a three-bedroom, all-electric house in Hollywood, just opened his January bill from FPL.

``My electric bill is the highest I've ever had,'' he said.

``I don't like it going up, but we've got to understand that as fuel goes up, they've got to pass that along,'' Wolfer added. ``At least we're not paying what they're paying in California.''

For FPL customers, price increases have become more common than in the past. The company recently received state approval to drop a $222.5 million legal tab on customers, raising average monthly bills by $2.76. In November, the PSC granted a $518 million fuel-cost increase that raised the average price of powering a home from $74.12 to $80.55 a month.

FPL relies on oil and natural gas for about half of its power plant needs. Lately, with spot oil prices making oil a better buy than gas, FPL has been weaning its ``dual-fuel'' plants of gas.

``Oil prices have remained relatively high, but we continue to see increased prices in the gas market,'' said FPL spokesman Bill Swank.

Crude oil prices are up 6 percent from a year ago -- now selling at $29.72 a barrel on the New York Mercantile Exchange. This month, oil prices soared 20 percent after OPEC announced production cuts. Still, prices are well below October's peak of $35 a barrel.

Oil companies are thriving amid the inventory shortages and higher prices. ExxonMobil, the world's biggest oil company, reported an 89 percent increase in fourth-quarter earnings Wednesday. Texaco's net income more than doubled, while Chevron's nearly did so.

Consumers felt the oil-price squeeze immediately last year when gasoline prices topped the $2-a-gallon mark. The effect on electricity prices was delayed because utilities, at least in Florida, had to obtain state approval to pass on higher fuel costs to customers.

Natural gas increases also require Florida Public Service Commission approval and last September, Peoples requested -- and got -- an increase to 71 cents per therm, up from 55 cents in January. Average home consumption is 25 therms a month, so customers saw their rates jump from $13.75 to $17.75.

That kicked in Jan. 1, and Peoples wants to raise prices again.

``Gas prices have risen dramatically since September,'' said Brent Caldwell, director of gas supply and transportation. ``For December and January, the wholesale market price of gas was at the dollar range, excluding the cost of transportation from Texas to Florida, which pushes it up to $1.15. Our cap is at 71 cents.''

The company, whose 405,000 customers make it the biggest natural gas utility in Florida, asked the PSC on Jan. 8 to let it increase the cap to $1.16 per therm for 2001.

TECO Peoples Gas, which has customers in Miami-Dade, Broward and Palm Beach counties, said it chose to ask the PSC for a price increase now, rather than later.

``It's not something we enjoy or intended to do,'' Caldwell said, ``but if we don't do that, you build up a huge amount of dollars that have to be recovered in the future, which could have a big impact on consumers' bills.''

FPL, too, might be seeking further compensation for under-forecast fuel costs. While it was given permission to pass along $518 million in higher fuel costs, the company said Monday that the amount appears to have been $70 million to $80 million too low.

http://www.herald.com/content/today/news/dade/digdocs/098428.htm



-- Martin Thompson (mthom1927@aol.com), January 25, 2001


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