Florida regulators on June 5 postponed a rate increase sought by Duke Energy Florida LLC for what the utility said would be a midcourse correction to its fuel cost recovery factor.
The utility requested the hike, which would have gone into effect in July, in response to a decrease in projected sales, coupled with an increase in fuel prices, Duke Florida lawyer Matthew Bernier said before the state Public Service Commission. Customer conservation efforts and a warm winter were also factors.
Commissioners will now review the rate increase during the PSC's annual fuel cost recovery hearing in late October.
Bernier said the increase, meant to make up for a $182 million under-recovery, was scheduled to be implemented a year before Duke Florida's Citrus County combined-cycle plant goes online in July 2018. And once that happened, he said, the midcourse correction would be swapped with Citrus' unit 1 being placed in rates.
Now, Bernier said, whatever that under-recovery amount ends up being, along with 2018 factors, will go into ratepayers' bills. There would also be an increase in interest and carrying charges.
Commissioners asked questions of Duke Florida's forecast, with Chairman Julie Brown observing that other investor-owned utilities over the years had deviations of more than 10% from their original forecasts but did not come to the PSC for a midcourse correction.
"Hard to tell whether you actually have best available information," Commissioner Donald Polmann said.
Bernier said he was "not aware of anything that we can do to make [the forecast] more accurate. If there is, we'd certainly be more willing to look into it and to apply those lessons."
"Customers want levelized rates. They want predictability," Brown said. "Having fluctuations, I don't think folks understand that this is a pass-through fuel cost."
Duke Florida is a subsidiary of Duke Energy Corp. It is also seeking a $132 million recovery in 2018 for two nuclear projects.