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Duke seeks Irma recovery, Florida Power & Light to review tax plan

Houston (Platts)--29 Dec 2017 627 pm EST/2327 GMT


Duke Energy Florida filed a petition Thursday with the Florida Public Service Commission requesting authorization to recover from customers $531 million in storm restoration costs related to Hurricanes Irma and Nate and the replenishment of its retail storm reserve.

Hurricane Irma made landfall September 10 as a Category 4 hurricane. DEF called it the most devastating storm to impact its Florida service territory. At the storm's height nearly three-quarters of DEF's customers, or 1.3 million, were without power.

DEF, which has approximately 1.8 million customers in 35 counties in the northern and central parts of Florida, told the Florida PUC in its petition that it expects to charge its residential customers $5.20 per 1,000 kWh on their monthly bill over a three-year period starting in March, while its commercial and industrial customers will see an increase of approximately 2.5% to 6.6% on their monthly bills.

"Although the 2017 settlement provides for a 12-month recovery period and does not impose a cap on the level of charges on a customer's bill, DEF recognizes the impact of the full storm recovery amount over 12 months to our customers," Marcia Oliver, Duke Energy Florida's director of rates and regulatory planning said in the filing. "To mitigate a large rate increase, DEF proposes to spread the storm recovery amount over 36 months."

Oliver also told the commission that "due to the magnitude" of the recoverable costs and to the extended recovery period, DEF issued in December two-year senior unsecured amortizing bonds in the amount of $400 million at an interest rate of 2.1% to finance the recoverable costs.

DEF reminded the commission it was able to restore power to 1 million customers in three days, and restored power to essentially all customers by September 20.

"Restoration work was very labor intensive," it said in its filing.

DEF said it would expect to include its storm recovery charge beginning with the first billing cycle of March and ending with the last billing cycle of February 2021.

FLORIDA POWER & LIGHT DELAYS FILING FOR RECOVERY

In an abrupt change of plans, the state's largest utility, Florida Power & Light, said Friday that it would not be filing a Hurricane Irma cost recovery plan with the Florida PUC by December 31, as previously expected.

"We are conducting a broad review of the new federal tax reform law and its implications for FPL operations and Hurricane Irma cost recovery," spokesman David McDermitt said.

"As a result, FPL customer bills will decrease beginning March 1, 2018, with the expiration of the current surcharge for Hurricane Matthew recovery -- $3.36 per 1,000 kWh of electricity," McDermitt said.

"The tax reform package is complicated and voluminous. We will provide more information in the coming weeks about our plans for Hurricane Irma cost recovery," he said.

FPL executives had said in November that they expected to seek $1.3 billion in restoration costs.

TAMPA ELECTRIC FILES FOR $88 MILLION IN IRMA RECOVERY

Tampa Electric filed Thursday with the Florida PUC seeking $88 million of recovery costs to restore power after Hurricane Irma "and several previous storms."

The utility, which has 460,000 customer accounts, asked for authorization to add $4 to the monthly bill of average customers who use 1,000 kWh/month.

"The temporary 'storm surcharge' would take effect in March and continue throughout 2018, when it would likely be reduced," the Tampa utility said in a statement Thursday. "It would cover the company's storm expenses for the past three years and replenish the storm reserve for future events."

--Jeffrey Ryser, jeffrey.ryser@spglobal.com --Edited by Jason Lindquist, jason.lindquist@spglobal.com




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