Case Background
On April 2,
2024, Tampa Electric Company (TECO or Company) filed its Petition for Rate
Increase, minimum filing requirements (MFRs), and testimony. TECO provides service to approximately
844,000 customers in a 2,000 square mile service territory in Hillsborough and
portions of Polk, Pasco, and Pinellas counties, Florida.
TECO initially
requested an increase of approximately $296.6 million in base rates and charges
effective January 1, 2025. In addition, the Company requested incremental rate
increases of approximately $100 million, effective January 1, 2026, and $72
million, effective January 1, 2027. On August 22, 2024, the Company reduced its
initial request for rates in 2025 to $287.9 million, with the incremental rate
increases also reduced to $92.4 million and $65.5 million, for 2026 and 2027,
respectively.
The Office of
Public Counsel’s (OPC) intervention was acknowledged by Order No. PSC-2024-0048-PCO-EI,
issued February 26, 2024. On April 23, 2024, intervention was granted to Federal Executive Agencies
(FEA); Sierra Club; Florida Rising, Inc. (FL Rising); League of United Latin
American Citizens of Florida (LULAC); Florida Retail Federation (FRF); and
Florida Industrial Power Users Group (FIPUG). On June 3, 2024, intervention was granted
to Americans for Affordable Clean Energy, Inc.; Circle K Stores, Inc.; RaceTrac
Inc.; and Wawa, Inc. (Fuel Retailers). Intervention was granted to Walmart, Inc.
(Walmart) on August 8, 2024, by Order No. PSC-2024-0317-PCO-EI.
An
administrative evidentiary hearing was held August 26–30, 2024. At the December
3, 2024 Special Agenda Conference, the Commission approved an incremental revenue
requirement increase of $184.9 million effective January 1, 2025. The
Commission further approved subsequent year adjustments of $86.6 million,
effective January 1, 2026, and $9.1 million, effective January 1, 2027. The
staff-calculated final 2025 revenue requirement calculation, which reflects the
Commission-approved increase to operating revenues, is contained in Attachment
A to the recommendation.
The 2026 and
2027 subsequent year adjustment calculations are provided in Attachment B to
the recommendation. As approved by the Commission at the December 3, 2024
Special Agenda Conference in Issue 108, TECO will file a petition in September
2025 for proposed rates for January 2026 and another petition in September 2026
for proposed rates for January 2027.
On December 9,
2024, TECO filed revised MFR Schedules A-2, A-3, and the cost of service E
schedules to reflect the Commission vote on the 2025 incremental revenue
requirement increase and cost of service issues. In addition, TECO filed
revised clean and legislative tariffs. The clean tariffs are attached as
Attachment C to the recommendation. MFR Schedule A-2 provides monthly bill
calculations for all major rate classes under current and 2025 approves rates;
MFR Schedule A-3 provides a summary of all current and proposed rates.
The Commission’s
vote on return of equity and cost of service at the December 3, 2024 Special
Agenda Conference also impacts TECO’s 2025 cost recovery clauses. On December 11, 2024, TECO filed revised
MFR Schedule A-2 to reflect the updated 2025 cost recovery clause factors.
TECO’s proposed tariffs also include recalculated Clean Energy Transition Mechanism
(CETM) factors to reflect the Commission’s vote on return on equity and cost of
service.
The monthly base
rate portion of a residential customer using a 1,000 kilowatt hours (kWh) would
increase from the current $87.80 to $97.47, effective with the first billing
cycle in January 2025, an increase of $9.67. The total monthly residential
bill, which includes all cost recovery clauses, including fuel and Gross
Receipts Tax, for 1,000 kWh would increase from $136.44 to $145.58, an increase
of $9.14. TECO’s MFR A-2 schedules, filed on December 11, 2024, also includes
bill comparisons for various usage levels for commercial and industrial customers.
This recommendation
addresses the issues that were not addressed at the December 3, 2024 Special
Agenda Conference: Issue 78 (basic service charges), Issue 79 (demand charges),
Issue 80 (energy charges), Issue 81 (lighting charges), Issue 82 (standby
service), Issue 93 (approval of tariffs), Issue 117 (effective date), and Issue
121 (close docket).
The Commission
has jurisdiction over this matter pursuant to Chapter 366, including Sections
366.06 and 366.076, Florida Statutes (F.S.).
Discussion
of Issues
Issue 78:
What are the appropriate basic service charges?
Recommendation:
The proposed basic service charges as provided in
the tariffs in Attachment C to the recommendation should be approved.
(McClelland, Vogel)
Position of the Parties:
TECO:
The appropriate basic service charges
are shown in MFR Schedule E-13c.
OPC:
The basic service charges
should reflect all the adjustments recommended by OPC.
FL
RISING/
LULAC:
TECO’s basic service charge for
residential customers should be no more than $0.43 per customer per day or no
more than $13.08 per customer per month for residential customers.
FIPUG:
The adjustments recommended by OPC
should be adopted.
FEA:
The GSLDPR demand charges
should be increased, and the energy charges reduced.
SIERRA
CLUB:
Sierra Club has no position on this
issue.
FRF:
The FRF does not oppose
TECO’s proposed cost of service study or its proposed revenue allocation
methodology.
FUEL
RETAILERS:
No Position.
WALMART:
[. . .] Walmart
adopts and incorporates herein FRF's positions and incorporates herein FRF's
arguments and references to record evidence as to the following Issues: 1, 3,
68-74, 78-83, 107-110, 116, 117, 119, 120, 121.
Staff Analysis:
ANALYSIS
The basic service charges, in combination with the demand
charges and the energy charges, are designed to allow TECO to recover the total
Commission-approved revenue requirement. The proposed basic service charges
reflect the approved revenue requirement and cost of service methodology;
therefore, the proposed charges provided in the tariffs in Attachment C to the
recommendation should be approved.
Issue 79:
What are the appropriate demand charges?
Recommendation:
The proposed demand charges as provided in the
tariffs in Attachment C to the recommendation should be approved. (McClelland,
Vogel)
Position of the Parties:
TECO:
The
appropriate demand charges are shown in MFR Schedule E-13c.
OPC:
The
demand charges should reflect all the adjustments recommended by OPC as approved
by the Commission.
FL RISING/
LULAC:
The
appropriate residential energy and demand charge should be no more than 8.59
cents/kWh for the first 1,000 kWh and no more than 9.52 cents/kWh for all
additional kWh of usage and reduced to reflect the reduced rate base from the
disallowance of TECO’s proposed investments as reflected in other issues.
FIPUG:
The
adjustments recommended by OPC should be adopted.
FEA:
See
Issue 78 concerning demand charge for GSLDPR rate class.
SIERRA
CLUB:
Sierra
Club has no position on this issue.
FRF:
The
FRF does not oppose TECO’s proposed cost of service study or its proposed revenue
allocation methodology.
FUEL
RETAILERS:
No Position.
WALMART:
[. . .] Walmart adopts and incorporates herein
FRF's positions and incorporates herein FRF's arguments and references to
record evidence as to the following Issues: 1, 3, 68-74, 78-83, 107-110, 116,
117, 119, 120, 121.
Staff Analysis:
ANALYSIS
The demand charges, in combination with the basic service
charges and the energy charges, are designed to allow TECO to recover the total
Commission-approved revenue requirement. The proposed demand charges reflect
the approved revenue requirement and cost of service methodology; therefore,
the proposed charges provided in the tariffs in Attachment C to the
recommendation should be approved.
Issue 80:
What are the appropriate energy charges?
Recommendation:
The proposed energy charges as provided in the
tariffs in Attachment C to the recommendation should be approved. (McClelland,
Vogel)
Position of the Parties:
TECO:
The
appropriate energy charges are shown in MFR Schedule E-13c.
OPC:
The
energy charges should reflect all the adjustments recommended by OPC as approved
by the Commission.
FL RISING/
LULAC:
The
appropriate residential energy and demand charge should be no more than 8.59
cents/kWh for the first 1,000 kWh and no more than 9.52 cents/kWh for all
additional kWh of usage and reduced to reflect the reduced rate base from the
disallowance of TECO’s proposed investments as reflected in other issues.
FIPUG:
The
adjustments recommended by OPC should be adopted.
FEA:
See Issue 78 concerning energy charge
for GSLDPR rate class.
SIERRA
CLUB:
Sierra
Club has no position on this issue.
FRF:
The
FRF does not oppose TECO’s proposed cost of service study or its proposed revenue
allocation methodology.
FUEL
RETAILERS:
No Position.
WALMART:
[. . .] Walmart adopts and incorporates herein
FRF's positions and incorporates herein FRF's arguments and references to
record evidence as to the following Issues: 1, 3, 68-74, 78-83, 107-110, 116,
117, 119, 120, 121.
Staff Analysis:
ANALYSIS
The energy charges, in combination with the basic service
charges and the demand charges, are designed to allow TECO to recover the total
Commission-approved revenue requirement. The proposed energy charges reflect
the approved revenue requirement and cost of service methodology; therefore,
the proposed charges provided in the tariffs in Attachment C to the
recommendation should be approved.
Issue 81:
What are the appropriate Lighting Service rate schedule
charges?
Recommendation:
The proposed Lighting Service charges as provided in
the tariffs in Attachment C to the recommendation should be approved.
(McClelland, Vogel)
Position of the Parties:
TECO:
The
appropriate Lighting Service charges are shown in MFR Schedule E-13c and E-13d.
OPC:
No
position.
FL RISING/
LULAC:
No
position.
FIPUG:
No
position at this time.
FEA:
No
position. Sierra Club has no position on this issue.
SIERRA
CLUB:
Sierra
Club has no position on this issue.
FRF:
The
FRF does not oppose TECO’s proposed cost of service study or its proposed
revenue allocation methodology.
FUEL
RETAILERS:
No Position.
WALMART:
[. . .] Walmart adopts and incorporates herein
FRF's positions and incorporates herein FRF's arguments and references to
record evidence as to the following Issues: 1, 3, 68-74, 78-83, 107-110, 116,
117, 119, 120, 121.
Staff Analysis:
ANALYSIS
The proposed Lighting Service rate schedule charges
reflect the approved revenue requirements and cost of service methodology;
therefore, the proposed charges provided in the tariffs in Attachment C to the
recommendation should be approved.
Issue 82:
What are the appropriate Standby Services (SS-1,
SS-2, SS-3) rate schedule charges?
Recommendation:
The proposed Standby Services charges as provided in
the tariffs in Attachment C to the recommendation should be approved. (McClelland,
Vogel)
Position of the Parties:
TECO:
The
appropriate Standby Services rate schedule charges are shown in MFR Schedule
E-13c.
OPC:
No
position.
FL RISING/
LULAC:
Even
though the rate increase should be denied, these rates should be increased to reflect
a 12CP and 50% AD cost of service.
FIPUG:
No
position at this time.
FEA:
No
position.
SIERRA
CLUB:
Sierra
Club has no position on this issue.
FRF:
The
FRF does not oppose TECO’s proposed cost of service study or its proposed
revenue allocation methodology.
FUEL
RETAILERS:
No Position.
WALMART:
[. . .] Walmart adopts and incorporates herein
FRF's positions and incorporates herein FRF's arguments and references to
record evidence as to the following Issues: 1, 3, 68-74, 78-83, 107-110, 116,
117, 119, 120, 121.
Staff Analysis:
ANALYSIS
The proposed Standby Services charges reflect the approved
revenue requirements and cost of service methodology; therefore, the proposed
charges provided in the tariffs in Attachment C to the recommendation should be
approved.
Issue 93:
Should the Commission give staff administrative
authority to approve tariffs reflecting Commission approved rates and charges?
Recommendation:
Yes. The Commission should approve the tariffs as
shown in Attachment C to the recommendation. (Guffey)
Position of the Parties:
TECO:
Yes.
OPC:
No
position.
FL RISING/
LULAC:
No.
FIPUG:
Yes.
FEA:
No
position.
SIERRA
CLUB:
Sierra
Club has no position on this issue.
FRF:
Yes.
FUEL
RETAILERS:
Yes.
WALMART:
Walmart takes no position on the following
Issues in this Docket: 13, 14, 21, 23, 24, 28, 46-51, 53-57, 61, 75-77, 84-86,
88-93, 115, 118.
Staff Analysis:
ANALYSIS
Staff has reviewed the revised cost of service study and
associated tariffs, which were revised to reflect the final Commission-approved
revenue requirement. The documentation provided by TECO is in accordance with
the Commission vote from the December 3, 2024 Special Agenda Conference. The
Commission should approve the proposed tariffs as provided in Attachment C to
the recommendation.
Issue 117:
What is the appropriate effective date for TECO’s
revised 2025 rates and charges?
Recommendation:
Staff recommends that the rates and charges should
be effective with the first billing cycle in January 2025. (Guffey)
Position of the Parties:
TECO:
The
company’s revised 2025 rates and charges should be approved to be effective with
the first billing cycle in January 2025.
OPC:
The
2025 rates and charges should not become effective any sooner than the first
billing cycle in 2026.
FL RISING/
LULAC:
No
effective date should be applicable because the Commission should deny TECO’s
petition for rate increase. If the
Commission does not outright deny the petition, then January 1, 2025.
FIPUG:
Adopt
position of OPC.
FEA:
No
position.
SIERRA
CLUB:
Sierra
Club has no position on this issue.
FRF:
Any
change in rates for the 2025 test year should be effective for service rendered
on the first day of the first billing cycle of January 2025.
FUEL
RETAILERS:
No Position.
WALMART:
[. . .] Walmart adopts and incorporates herein
FRF's positions and incorporates herein FRF's arguments and references to
record evidence as to the following Issues: 1, 3, 68-74, 78-83, 107-110, 116,
117, 119, 120, 121.
Staff Analysis:
ANALYSIS
TECO provided notice of its proposed 2025 rates to
customers with the first billing cycle of December 2024. TECO will post the
Commission-approved rates on its website after the vote on December 19, 2024.
Staff recommends that the rates and charges approved by
the Commission should become effective the first billing cycle in January 2025.
Issue 121:
Should this docket be closed?
Recommendation:
After the final order is issued, this docket should
be closed. (Marquez, Sparks, Harper)
Position of the Parties:
TECO: Yes.
OPC: No
position.
FL RISING/
LULAC:
Yes, after the Commission
denies TECO’s petition for rate increase.
FIPUG: Yes,
after the Commission takes final agency action.
FEA: No
position.
SIERRA
CLUB:
Sierra Club has no position
on this issue.
FRF: When
a final Commission order has been issued and either (a) all appeals of such
order (or orders) have been finally resolved, or (b) the time for filing any
further appeal has passed, this docket should be closed.
FUEL
RETAILERS: Not until all actions are concluded,
including any appeals.
WALMART: [. . .] Walmart adopts and incorporates
herein FRF's positions and incorporates herein FRF's arguments and references
to record evidence as to the following Issues: 1, 3, 68-74, 78-83, 107-110,
116, 117, 119, 120, 121.
Staff Analysis:
ANALYSIS
After the final order is issued, this docket should be
closed.
