Duke Energy expects its electricity charge for residential customers to ease somewhat, although exactly how much and what to expect for the following two years remain to be determined, the utility informed state regulators on Wednesday.
There are many moving parts to Duke’s preparation for setting rates for the next three years, including declines in fuel and other costs and expected investments ahead to harden electricity distribution systems and bring on more solar energy.
“This proposal offers what our customers want – a more reliable energy system using cleaner energy,” said Melissa Seixas, Duke Energy Florida state president.
Duke currently has 23 solar plants in Central and North Florida and plans to build 14 more from 2025 to 2027.
Many details for Duke’s proposed rates from next year through 2027 will emerge as part of preparing a formal application that will be filed by the utility with the Florida Public Service Commission in April.
Such applications are typically challenged by various consumer groups, leaving the commission to determine final figures for rate changes. Duke is closely watched as the state’s second largest electric utility behind Florida Power & Light Co.
Duke Energy also is by far Central Florida’s largest provider of electricity. It has 424,500 customers in Orange County, 165,260 in Seminole, 98,500 in Lake, 63,300 in Osceola and 89,900 in Volusia.
Its current residential monthly charge for a customer using 1,000 kilowatt-hours of electricity, which is approximately the average consumption figure, is nearly $129. That amount breaks down to $79.19 for the base rate and $49.47 for fuel costs.
In its heads-up to the PSC, Duke said that several costs that have been propping up electricity rates will expire by the end of this year: debt from a previous spike in the cost of natural gas fuel used to run power plants, expenses arising from storm damages and purchases of power from other utilities.
In the past few years, nearly all electric utilities in Florida were hard hit by spikes in the price of natural gas, causing them to implement rate hikes. But during the past year, after natural gas prices dropped, most power providers have been lowering rates.
Duke notified the Public Service Commission that it will seek annual increases of up to 4 percent for its base charge beginning next year and running through 2027. The total base hike that Duke hopes for during that period would be as much as 13 percent.
The increase would generate at least $800 million for investments to boost efficiency of power plants, reduce outages and expand generation of solar energy, according to Duke.
But for next year at least, Duke anticipates that the expiring costs will exceed the rise in costs from new investments, resulting in rates lower than they are this year.
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