Proposed Gulf Power Rate Hike Will Fund Infrastructure Upgrades - WMBB News 13 - The Panhandle's News Leader

Proposed Gulf Power Rate Hike Will Fund Infrastructure Upgrades

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Gulf Power is in the midst of a $750 million construction program – the largest in the utility's 87 year history – and its 430,000 customers will be asked to pay for it.

The utility has applied to the Florida Public Service Commission (PSC) for a rate increase to fund its power grid construction program, an effort the company says will upgrade aging infrastructure and ensure reliability for decades to come.

"A lot of our materials across Northwest Florida have simply reached that point where they need to be replaced and they need to be upgraded in order to continue to supply reliable electricity to our customers," Natalie Smith, Communications Specialist, said.  "We want to make sure that they will continue to be able to go to that light switch and flip it on."

Over the next three years, Gulf Power is building and replacing power lines and constructing new substations.  It must also install equipment needed to comply with new mandatory federal environmental regulations.

"Utilities across the country right now are having a very difficult time trying to balance the cost to our customers and still being able to provide that reliable electricity," said Smith.

If the rate hike is approved by the PSC, residential customers will pay an extra $8.94 a month for 1,000 kilowatt hours beginning in April 2014.  An additional $1.99 will be tacked on in April 2015 to pay for the environmental requirements.

In March 2012, Gulf Power raised residential rates – the first increase in 10 years – to cover the costs of providing service.  Three months later, lower than anticipated natural gas prices were cited as the reason for a $58.5 million rate decrease, the largest in the company's history.  "Right now, [our prices] are lower than they were in 2009," Smith said.

Smith said the company has worked hard to keep costs down but realizes the rate hike won't be popular with customers who juggle bills and have to decide which ones take priority.  "There's never a good time to increase prices and we understand that and we certainly don't want or like our customers to have to make those choices," Smith said.  "We have lots of energy efficiency programs that could help offset some of these increases."

The PSC is expected to hold a final hearing and rule on the rate increase in December.

Click here to visit the Gulf Power website.