Case Background
On December 27,
2024, Duke Energy Florida, LLC (DEF or Company) filed a petition to recover
estimated preparation and damage restoration costs associated with Hurricanes
Debby, Helene, and Milton. The resulting storm cost recovery charge
was implemented beginning with the March 2025 billing cycle and was intended to
remain in effect through February 2026. On January 5, 2026, DEF notified the
Florida Public Service Commission (Commission) that it anticipated recovery of
the approved storm costs earlier than expected and would terminate the
associated charge at the end of January 2026.
On February 27,
2026, DEF filed a petition in Docket No. 20240173-EI seeking approval of its
known actual incremental storm restoration costs totaling approximately $915,308,000. Based on a comparison of actual costs to
applicable revenue, an over-recovery of $90,515,614 was identified.
On March 20,
2026, DEF filed the instant petition requesting Commission approval to refund
the over-recovered amount to customers through the fuel cost recovery clause
(Petition). Specifically, DEF proposes to implement a
temporary reduction to its current fuel cost recovery factors for a four-month
period beginning with the first billing cycle in June 2026 and ending with the
last billing cycle in September 2026. DEF’s current 2026 fuel cost recovery
factors were approved on November 4, 2025, during the Commission’s annual
clause proceeding.
This
recommendation addresses DEF’s request for approval of the proposed refund,
associated tariff revisions, and treatment of any subsequent storm cost
recovery true-up through the fuel clause.
The Commission
is vested with jurisdiction over the subject matter of this proceeding by the
provisions of Chapter 366, Florida Statutes (F.S.), including Sections 366.04,
366.05, and 366.06, F.S.
Discussion
of Issues
Issue 1:
Should the Commission approve DEF’s request to
refund $90,515,614 of over-recovered storm costs through the fuel cost recovery
clause?
Recommendation:
Yes. The Commission should approve DEF’s request to
refund $90,515,614 of over-recovered storm costs through reductions to its fuel
cost recovery factors applicable for June 2026 through September 2026. The
Commission should also approve DEF’s request to true-up any remaining storm
cost recovery balance through the fuel clause when those amounts become final.
(Higgins, G. Kelley, Zaslow)
Staff Analysis:
DEF requests that the Commission approve a temporary
reduction to its fuel cost recovery factors for June 2026 through September
2026. On February 27, 2026, DEF filed testimony and supporting documentation
establishing total actual incremental storm restoration costs of approximately $915,308,000
with total revenue collected of approximately $1,005,824,000.
The resulting over-recovery identified in the filing is $90,515,614. This
amount is subject to future Commission approval in Docket No. 20240173-EI.
Should this amount change, the Company requests that any remaining balance,
including associated interest, be collected from or refunded to customers
through the normal fuel clause process. Staff notes that the storm cost
over-recovery, or proposed refund amount, will accrue interest in the fuel
clause for the period from February through May 2026, which will be reflected
in DEF’s actual/estimated fuel cost filing.
Fuel Factor
DEF’s
currently approved jurisdictional levelized fuel factor, which began with the first
January 2026 billing cycle, is 4.414 cents per kilowatt-hour (kWh).
The Company is requesting to decrease its currently approved 2026 jurisdictional
levelized fuel factor to 3.852 cents per kWh beginning in June 2026, a decrease
of approximately 12.7 percent.
The
proposed fuel factor, beginning June 2026, is expected to remain in effect for
four months, ending with the last billing cycle in September 2026. Following
this refund period, DEF’s fuel cost recovery factors will revert to those
approved in Order No. PSC-2025-0436-FOF-EI.
Bill Impacts
In Table
1-1, the bill impact associated with the Petition on a residential customer
using 1,000 kWh of electricity a month is shown. Following Table 1-1, staff
discusses the impacts of the Petition on non-residential customers.
|
Table 1-1
|
|
Duke Energy Florida,
LLC
|
|
Monthly Residential
Billing Detail for the First 1,000 kWh
|
|
Invoice Component
|
Currently Approved Charges
May 2026
($)
|
Proposed
Charges
Beginning
June 2026
($)
|
Difference
($)
|
Difference
(%)
|
|
Base Charge
|
$90.73
|
$91.21
|
$0.48
|
0.5%
|
|
Fuel Charge
|
41.27
|
34.65
|
(6.62)
|
(16.0%)
|
|
Capacity Charge
|
1.33
|
1.33
|
-
|
-
|
|
Conservation
Charge
|
3.86
|
3.86
|
-
|
-
|
|
Environmental
Charge
|
0.40
|
0.40
|
-
|
-
|
|
Storm
Protection Plan Charge
|
9.36
|
9.36
|
-
|
-
|
|
Asset
Securitization Charge
|
2.28
|
2.28
|
-
|
-
|
|
Gross Receipts
Tax
|
3.96
|
3.80
|
(0.16)
|
(4.0%)
|
|
Total
|
$153.19
|
$146.89
|
($6.30)
|
(4.1%)
|
Source: Document No. 02179-2026
DEF’s currently approved total residential charge for the
first 1,000 kWh of usage for May 2026 is $153.19. If the Petition is approved,
the total residential charge for the first 1,000 kWh of usage beginning in June
will be $146.89, a decrease of 4.1 percent.
For non-residential customers, DEF reported that bill
decreases, based on average levels of usage, would be approximately 3.3 percent
for small commercial customers, 4.4 percent for medium commercial customers,
4.8 percent for large commercial customers, and 7.4 percent for industrial
customers.
Staff has
reviewed DEF’s calculations and supporting schedules and believes the proposed
refund methodology is reasonable. Further, effectuating the refund of
over-recovered storm costs through the fuel clause is consistent with Order No.
PSC-2024-0377-FOF-EI. Staff believes the proposed time period for the reduced
fuel factors is optimal for customers, as it occurs during the summer, which
typically has higher demand. Staff also recommends that DEF’s request to true
up any remaining balance, once storm costs and revenues become final, through
the normal fuel clause process be approved.
Conclusion
Staff
recommends that the Commission approve DEF’s Petition to refund $90,515,614
through temporary reductions in
applicable fuel cost recovery factors for June through September 2026, approve
the associated tariff revisions, and authorize any remaining true-up balance be
addressed through the fuel clause.
Issue 2:
If approved by the Commission, what is the
appropriate effective date for DEF’s revised fuel cost recovery factors?
Recommendation:
The fuel cost recovery factors, as shown on Appendix
A, should become effective with the first billing cycle of June 2026 and
continue through the last billing cycle of September 2026. (Hampson)
Staff Analysis:
Over
the last 20 years in the Fuel Clause docket, the Commission has considered the
effective date of rates and charges of revised fuel cost factors on a
case-by-case basis. The Commission has approved rate decreases to be effective
less than 30 days after the date of the Commission vote because the rate decrease
was in the customers’ best interest to be implemented as soon as possible. In its Petition, DEF proposes to decrease its
2026 fuel factors beginning with the first billing cycle of June 2026 and
continue through the last billing cycle of September 2026.
In response
to staff’s data request, DEF provided sample billing notices informing
customers of the forthcoming rate changes. Pending
Commission approval, these notices will accompany May 2026 bills. DEF also
plans to issue a press release and social media communications informing
customers of the potential rate adjustments.
Conclusion
Staff
recommends that the fuel cost recovery factors, as shown on Appendix A, become
effective with the first billing cycle of June 2026 and continue through the
last billing cycle of September 2026.
Issue 3:
Should this docket be closed?
Recommendation:
No. The 20260001-EI docket is an on-going proceeding
and should remain open. (M. Thompson)
Staff Analysis:
The fuel docket is an on-going proceeding and should
remain open.
