Case Background
On September 4,
2025, Tampa Electric Company (TECO) filed a petition seeking approval to implement
its 2026 subsequent year adjustment (SYA). The Florida Public Service
Commission (Commission) approved the 2026 SYA in its final order addressing
TECO’s request for base rate increase, Order No. PSC-2025-0038-FOF-EI (Rate
Case Order). Pages 151–169 of the Rate Case Order
discuss the 2026 SYA, including the specific projects and their associated
incremental operating and maintenance (O&M) expense, depreciation expense,
and investment tax credit amortization. Based on Commission-approved adjustments
to each of the projects, the total approved 2026 SYA revenue requirement was
$86,627,795.
The Rate Case
Order further required TECO to file its proposed 2026 SYA rates for approval in
September 2025, with rates effective the first billing cycle of January 2026.
In addition, the Rate Case Order required TECO to verify the in-service dates
of all projects and use the then-current billing determinates.
On June 11,
2025, the Commission granted in part and denied in part the Office of Public
Counsel’s Motions for Reconsideration and Clarification of the Rate Case Order
by Order No. PSC-2025-0203-FOF-EI (Reconsideration Order). There the Commission agreed that
inadvertent errors in the underlying calculations of the revenue requirement
should be corrected, resulting in a revenue requirement increase of $1.1
million. After accounting for the original balance
from the Rate Case Order, this meant that the total 2026 SYA revenue
requirement was now $87,727,795.
Pursuant to
Section 366.06(3), Florida Statutes (F.S.), the Commission may withhold consent
to any portion of new rate schedules for good cause shown provided such notice
is given within 60 days. On September 15, 2025, TECO waived the 60-day
suspension deadline until the November 4, 2025 Agenda Conference. Staff issued
one data request during the evaluation of the petition, with responses filed by
TECO on October 3, 2025. Attachment A to the recommendation contains the
proposed legislative tariff sheets that would implement the 2026 SYA. The
Commission has jurisdiction over this matter pursuant to Sections 366.05(1)(e),
366.06 and 366.076, F.S.
Discussion
of Issues
Issue 1:
Should the Commission approve TECO’s proposed rates
and associated tariffs to implement its 2026 subsequent year adjustment?
Recommendation:
Yes. The Commission should approve TECO’s proposed
rates and associated tariffs to implement its 2026 SYA, because the project
timelines, rates, and associated tariffs are consistent with the Commission’s
prior decision in the Rate Case Order. The rates have been calculated to
recover a total 2026 SYA revenue requirement of $87,727,795 as previously
approved by the Commission and as presented in Exhibit 1 of TECO’s petition.
Consistent with the Rate Case Order, the associated tariffs, included as
Attachment A to this recommendation, should become effective with the first billing
cycle of January 2026. (P. Kelley)
Staff Analysis:
The Polk 1 Flexibility, Energy Storage, Corporate
Headquarters, Bearss Operations Center, South Tampa Resilience, GRR (PLTE
Spectrum), and Cottonmouth and Long Branch Solar Projects went into service in
2025 or are expected to be in-service by the end of 2025. Two Polk Fuel
Diversity Project unit upgrades are expected to be in-service in 2026. TECO
submitted sworn affidavits in support thereof. Additionally, staff conducted
discovery on the in-service dates estimated for the projects. TECO provided
additional detail regarding the original in-service dates, the
Commission-ordered in-service dates, most recent anticipated in-service dates,
clarification, and an explanation for any adjustments to the projects. All
relevant projects appear on track to meet the timeframes contained in the Rate
Case Order.
TECO’s petition included 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. Staff conducted discovery on the underlying
rate calculations. Consistent with the Rate Case Order and the Reconsideration
Order, the total amount to be collected through the 2026 SYA is $87,727,795.
Exhibit 1 of TECO’s petition presents a calculation of this amount. Also,
consistent with the Rate Case Order, TECO used the most recent billing
determinants, which were also used for TECO’s cost recovery clause projection
filings, to calculate the 2026 SYA base rates.
The base rate portion of a monthly residential electric
bill for 1,000 kilowatt-hours would increase from the current $97.47 to
$102.98, which is an increase of $5.51. TECO stated it would provide notice of
the proposed rate increase with its December bills.
Conclusion
The Commission
should approve TECO’s proposed rates and associated tariffs to implement the
2026 SYA because the project timelines, rates, and associated tariffs are
consistent the Commission’s prior decision in the Rate Case Order. The rates
have been calculated to recover a total 2026 SYA revenue requirement of
$87,727,795 as previously approved by the Commission and as presented in
Exhibit 1 of TECO’s petition. Consistent with the Rate Case Order, the
associated tariffs, included as Attachment A to this recommendation, should
become effective with the first billing cycle of January 2026.
Issue 2:
Should this docket be closed?
Recommendation:
If Issue 1 is approved and a protest is filed within
21 days of the issuance of the Order by a person whose substantial interests
are affected, the tariff should remain in effect, with any incremental 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. (Marquez, Stiller)
Staff Analysis:
If Issue 1 is approved and a protest is filed within
21 days of the issuance of the Order by a person whose substantial interests
are affected, the tariff should remain in effect, with any incremental 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.
