In an effort to mitigate the impact on Tampa Electric Co. customers, state regulators on Tuesday approved plans for Tampa Electric and Duke Energy Florida to recover more than $1.55 billion for hurricane-related expenses and to refill storm reserves.

Starting in March, customers of both utilities will face higher bills as Tampa Electric and Duke seek to recover costs associated with assembling crews and restoring power after three hurricanes struck Florida in 2024.

Tampa Electric had proposed to collect $463.6 million over 12 months, but the Florida Public Service Commission opted for a 18-month recovery period to lessen the immediate financial burden, although bills will still increase significantly.

For residential customers using 1,000 kilowatt hours monthly, the 18-month plan adds $19.95 to their monthly bill, compared to an additional $30.04 under the 12-month proposal.

The commission’s decision was not straightforward; extending the recovery period increases interest costs passed onto customers, with the added risk of further hurricanes causing a “pancaking” effect of costs.

Chairman Mike La Rosa acknowledged the complexity, emphasizing the decision was made considering what’s best for customers despite the reluctance to delay cost recovery.

Duke Energy’s plan to recover $1.09 billion over 12 months was also approved, with different considerations due to Duke’s recent rate adjustments. For Duke customers using 1,000 kilowatt hours, this means an increase of $32.40 per month, though net increases might be lower due to other billing changes.

Both utilities aim to recover expenses from preparing for and responding to Hurricanes Debby, Helene, and Milton from the previous year, replenish storm reserves, cover interest, and for Tampa Electric, also recover costs from Hurricane Idalia in 2023.

Historically, the commission has approved such recovery requests, similar to a recent decision allowing Florida Power & Light to recover $1.2 billion for similar reasons.

During discussions, various recovery periods were considered, from 12 to 22 months, with no clear consensus on the optimal duration. Bradley Marshall, representing advocacy groups, argued for a longer 22-month period to ease financial strain, while Tampa Electric’s attorney supported the 12-month proposal suggested by commission staff. Ultimately, an 18-month period was deemed the most “manageable impact” for customers by Commissioner Andrew Fay.

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(Image credit: The Capitolist)