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Public Hearing Held On Proposed Gulf Power Rate Hike

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Gulf Power Company
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Florida’s Public Service Commission received input from a number of angles, during a public hearing on Gulf Power Company’s proposed rate increase Thursday night.

The vast majority of the nearly 60 speakers at Pensacola State College were against the $107 million increase in base rates. Among them was Steve Smith, the Executive Director of the Southern Alliance for Clean Energy.

“Right now, Gulf Power has the highest monthly fixed rate of any large utility in the state of Florida, at $18 per month,” said Smith. “[Gulf Power] is proposing taking that to $48 a month, and that is unprecedented; not only in Florida but across the country.”

That’s a 155% increase on the fixed rate, which is the part of the monthly Gulf Power bill that that customers must pay, regardless of how much electricity they use. Smith also considers such a rate increase a “regressive tax.”

“It’s customers who are on fixed incomes, or use less power because they’re more energy-efficient or thrifty,” Smith said. “They’re going to have to pay this penalty; it’s like a tax. And we think it’s regressive because if hurts low-income, people on fixed income, and seniors.”

“It’s never a good time to ask for an increase in prices, but it’s one of those things that we need to continue to invest in the long-term reliability of our energy infrastructure,” said Gulf Power spokesman Rick De La Haya. He says they map out energy needs of their service area, from the Alabama state line east to the Big Bend, 30-40 years into the future.

If approved, De La Haya says the $107 million would go towards upgrading the energy grid.

“Power, power lines, poles, infrastructure, smart meters, things like that,” said De La Haya. “That’s really going to keep up with technology, then continue to improve our customers’ reliability.”

Under the hike, Gulf Power’s residential customers would pay an extra $14, from an average of $144 to $158. That’s about ten percent more.

If the PSC gives the green light, Steve Smith with the Southern Alliance for Clean Energy contends the hike could have a negative impact on the development of solar power by individuals and other entities not named Gulf Power.

Smith also has some thoughts on how the utility could possibly raise the needed funds without a rate hike.

“Do what they’ve done for the past 90 years: if they need to increase the rates a little bit, they can do it,” Smith said. “And customers who then need to manage by becoming more energy efficient or more thrifty [sic], will have the option to do that. But if you remove that option, that ties the hands of customers and it’s unfair to ratepayers.”

Lost in the debate over the higher rate, says Gulf Power’s Rick De La Haya, is another request before the PSC that’s aimed at restructuring rates.

“We’re proposing a new residential pricing package, that will really better align our costs, and offer our customers better monthly bill stability, and more pricing options.”

De La Haya also notes that the restructuring would not generate any extra revenue for the utility.

Next up for Gulf Power’s rate request is a hearing before the PSC in March in Tallahassee. De La Haya says a decision is expected sometime in May. If it’s “yes,” the higher rates would take effect July 1.