Discussion
of Issues
Issue 1:
Should the Commission approve the updated GBRA
amount of $91,011,994?
Recommendation:
Yes, the updated 2023 GBRA amount of $91,011,994
should be approved. (Gatlin, Norris)
Staff Analysis:
As discussed in the Case Background, subparagraphs 4(a)
and (b) of the 2021 settlement agreement provide that TECO’s base rates will
increase by $89,754,622 effective with the first billing cycle in January 2023.
The calculation of this GBRA amount was based on the authorized return on
equity (ROE) mid-point of 9.95 percent as specified in subparagraph 2(a).
However, subparagraph 4(d) states that if the Company’s authorized ROE
mid-point changes by operation of subparagraph 2(b) prior to the effective date
of the rate adjustment specified in subparagraph 4(b), the calculation of the
2023 GBRA amount shall be updated to reflect the new authorized ROE.
As memorialized in Order No. PSC-2022-0322-FOF-EI, the
Commission approved TECO’s petition to implement the ROE trigger provisions of
subparagraph 2(b) of the 2021 settlement agreement following an evidentiary
hearing on August 16, 2022. As
a result, the Company’s authorized ROE midpoint was increased by 25 basis
points from 9.95 percent to 10.20 percent, effective as of July 1, 2022, for
all regulatory purposes. In its petition to implement the 2023 GBRA, TECO
provided a calculation updating the GBRA amount to $91,011,994 to reflect the
Company’s 10.20 percent authorized ROE mid-point. Staff reviewed the Company’s
calculation and recommends the updated amount be approved.
Issue 2:
Should the Commission approve TECO’s revised tariffs
to implement the GBRA increase effective January 2023?
Recommendation:
Yes, the Commission should approve TECO’s revised
tariffs to implement the GBRA increase effective with the first billing cycle
of January 2023 as approved in the settlement order. (Forrest, Draper)
Staff Analysis:
TECO’s petition includes the proposed tariff
sheets, the allocation of the revenue increase to the various rate classes and
calculations showing the revenue from the sale of electricity by rate schedule
under current and proposed rates. A residential customer who uses 1,000
kilowatt-hours (kWh) per month will see an increase of $6.76 on the base rate portion of their monthly bill as a
result of the GBRA increase.
Subparagraph 4(e) of the settlement agreement, which addresses
the GBRA increase and was approved by Order No. PSC-2021-0423-S-EI, states:
… the GBRAs shall be reflected on customer bills by
allocating each GBRA revenue requirement to rate classes as shown in Exhibit K
and demand and energy base rate charges shall be increased on an equal
percentage basis (to the extent practicable) within each class to recover the
allocated revenue requirement increase for each class, and shall be calculated
based upon the billing determinants used in the company’s
then-most-current-ECCR filing with the Commission for the twelve months
following the effective date of any respective GBRA. For GSD, GSLDPR, and
GSLDSU rate classes, the increase will be recovered exclusively based on demand
charges.
TECO’s most current Energy Conservation Cost Recovery
Clause (ECCR) filing in Docket No. 20220002-EI was filed on August 5, 2022.
Staff has confirmed that the billing determinants used in calculating the
proposed GBRA base rate charges are consistent with the billing determinants in
TECO’s most recent ECCR filing, and in compliance with the language of the settlement
agreement.
Staff has also reviewed TECO’s proposed 2023 GBRA tariff
sheets and supporting documentation. The calculations are accurate and reflect
the language of the approved settlement agreement. The Commission should
approve TECO’s tariff rate changes to implement the updated GBRA increase of
$91,011,994, due to the ROE trigger provision in the settlement agreement.
Pursuant to the settlement order, the rate changes should become effective with
the first billing cycle of January 2023. TECO should notify its customers of
the approved new rates, by way of bill notification, in the December 2022
billing cycle.
Issue 3:
Should this docket be closed?
Recommendation:
If Issues 1 and 2 are
approved and a protest is filed within 21 days of the issuance of the order,
the tariffs should remain in effect, with any revenues held subject to refund,
pending resolution of the protest. If no timely protest is filed, this docket
should be closed upon the issuance of a consummating order. (Stiller)
Staff Analysis:
If Issues 1 and 2 are
approved and a protest is filed within 21 days of the issuance of the order,
the tariffs should remain in effect, with any revenues held subject to refund,
pending resolution of the protest. If no timely protest is filed, this docket
should be closed upon the issuance of a consummating order.
