State utility regulators have approved a three-year base rate increase for Tampa Electric Co. (TECO), which will raise residential customer bills starting in January.

The initial proposal by TECO sought to increase monthly bills by approximately $5 for customers using 1,000 kilowatt-hours of electricity—a standard industry benchmark. However, TECO is recalculating the exact impact of the Public Service Commission’s final adjustments.

Brooke Ward, senior Florida organizer for Food & Water Watch, criticized the decision, calling it “a gut punch to struggling community members still grappling with hurricane recovery costs and record inflation.” Ward emphasized that nearly 20% of Tampa households—around 250,000—are considered “energy burdened,” spending over 6% of their income on energy bills.

TECO serves about 844,000 customers in Hillsborough County and parts of Polk, Pasco, and Pinellas counties. The approved rate includes incremental increases over three years, though smaller than TECO’s initial request:

• 2025: $287.9 million increase (revised from $296.6 million)
• 2026: $92.4 million increase
• 2027: $65.5 million increase

State Commission staff recommended further reductions, proposing a $153.4 million increase in 2025 and no increase in 2027.

The approved rate provides TECO with a return on equity (ROE) of 10.5%, up from the current 10.2% but lower than the 11.5% the company originally sought. Regulators justified the 10.5% ROE as sufficient to allow TECO to fund operations, expand its system, and prepare for unexpected events.

The rate hike will help fund projects such as solar-energy facilities and power plant upgrades. However, consumer advocates, including the state Office of Public Counsel, argued that the proposal should be scaled back to protect customers.

In addition to the base rate increases, TECO is expected to seek recovery of $45 million to $55 million for power restoration costs from Hurricane Helene and $320 million to $370 million for Hurricane Milton, as noted in a recent filing with the U.S. Securities and Exchange Commission.

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(Image credit: James Borchuck/Tampa Bay Times)