Florida Power & Electric service work truck on the side of the road – Courtesy: Shutterstock – Image by YES Market Media
Florida businesses and residents will likely get hit with higher electric bills in 2023 as utilities continue to deal with the increased costs of natural gas.
Florida Power & Light (FPL), Duke Energy Florida, and Tampa Electric Co. filed petitions on Friday at the state Public Service Commission that explained expected costs in 2023. If the panel adopts them, each of the utility proposals would result in higher monthly bills starting in 2023.
Additionally, though they are delaying making such demands, the utilities may attempt to pass along higher-than-anticipated fuel costs from the current year.
Although there are many different expenditures that go into creating a utility bill, a major motivator in the petitions is the high price of natural gas, which Florida utilities mainly rely on to produce energy. The three privately owned utilities also raised customer bills earlier this year due to increasing gas prices.
“Both domestic conditions and international events have significantly impacted the natural gas market,” Duke’s petition said. “Since early this year, natural gas prices have more than doubled due to increased domestic demand, flat natural gas production, strong LNG (liquefied natural gas) overseas exports, and low natural gas storage inventories. The natural gas market has not stabilized and continues to be extremely volatile.”
Tampa Electric’s director of origination and trading, John Heisey, stated in written testimony submitted with Tampa Electric’s petition that the company anticipates using natural gas to generate 84 percent of its electricity in 2023, with solar power accounting for 11 percent and coal for 5 percent. This is an example of the industry’s heavy reliance on natural gas.
In the meantime, he claimed that in 2022, the demand for natural gas would surpass the supply.
“Higher gas demand is driven by LNG exports, low coal inventories, extreme summer weather, and low storage inventories,” Heisey said in the testimony. “Production growth has been very slow as producers exercise capital discipline despite rising gas prices. In addition, the Ukraine invasion continues to impact the energy markets through increased volatility and uncertainty, which is expected to continue into 2023.”
In November, the Public Service Commission is expected to consider the petitions. Utility companies are known to sometimes use bills for residential customers that consume 1,000-kilowatt hours of electricity each month as a baseline number.
According to Duke’s petition, 1,000-kilowatt hours will cost Duke consumers on average $170.68 in 2023 as opposed to $148.23 on average this year. Such Tampa Electric customers will pay $146.86 in 2023, up from $132.66 this year, according to a news release from Tampa Electric.
“FPL believes it is appropriate to continue to monitor the market to determine whether the conditions and international events that have sharply impacted the natural gas market will moderate, such that a future fuel forecast may mitigate the projected fuel costs to be recovered,” FPL said in its petition Friday. “FPL will continue to update its fuel cost calculation with additional data reflecting actual gas prices, actual sales and actual revenues. At the appropriate time toward the end of 2022 or beginning of 2023, FPL will file a request for recovery based on an updated calculation, to be considered by the commission in early 2023 for implementation following the customer notice period.”
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