Page 28 - CFANOct13

BRINGING TO LIGHT THE

RIPPLE EFFECTS OF A UTILITY

BASE RATE INCREASE

IN ITS ATTEMPT this year to raise its base utility rate by a

whopping 10 percent, Tampa Electric Co. (TECO) technically lost the

fight but in the end really won. TECO customers just plain lost.

Back in May, TECO petitioned the Florida Public Service Commission
(PSC) for the rate increase— totaling about $135 million annually—

because, company officials claimed, the utility wasn’t making enough

money.

The rate petition triggered a series of public hearings and meetings in

Tallahassee and throughout the TECO service area, and one was hard

pressed to find anyone not associated with the utility in support of the

rate increase. On the contrary, the increase was heavily criticized— by

retail and industrial businesses, by hospital companies, by public school

districts, by utility watchdog groups, by consumer organizations, and

by rank-and-file TECO customers.

The PSC schedule to receive public it’s clear that the electricity rate terms are a trickle down to food purchasers— the folks

comment about and consider the rate boost for TECO. The company will gain— who shop at the local supermarket.

increase was supposed to run well into at customer expense— an extra $57.5 Beyond the food-supply chain, this
December, with PSC watchers expecting an million per year starting this November, scenario applies to any business with a

up-or-down vote on the matter. Imagine, $7.5 million per year on top of that starting great demand for electricity. And consider

then, the surprise of rate-increase opponents in November 2014 and another $5 million the effect on— and tax ramifications for—

when TECO last month suddenly dropped per year on top of that starting in November government services, such as your local

its request for a one-shot 10 percent rate 2015.
school district. With utility rate increases,

hike. Instead, the company agreed on or As noted in last month’s column, rising everyone pays. The inflationary effect on

about September 6 to a plan that will phase utility costs can have a huge ripple effect on goods and services can’t be denied.

in rate increases over three years at a level the public and the overall economy.
Former President Ronald Reagan once

totaling between 5 and 10 percent, and It’s no news that the food-supply chain called inflation the cruelest tax of all. “The

within a week (September 11), the plan had requires a reliable supply of electricity to Gipper” was right.

official blessings from the PSC.
keep products from spoiling. Refrigeration
The phased-in rate plan was negotiated units at warehousing operations like

by the Florida Office of Public Counsel Adams Cold Storage run constantly

(a public advocacy agency), the Florida and have electricity among their major

Industrial Power Users Group, other expenses. A utility rate increase like the

watchdog groups and, of course, by lawyers one just approved for TECO usually can’t

for TECO.
be absorbed and often are passed along to

According to a PSC news release, PSC customers (local, regional, and national)

“commissioners agreed that the agreement through higher service fees. Those then

terms, set through 2017, were in the best by BEN ADAMS, JR.

interest of TECO customers.” While that’s a

matter of great debate— (When, really, are This column is sponsored by Adams Cold Storage.
higher prices for goods and services in the
BIO: Ben Adams, Jr. is an owner and president of Adams Cold Storage LLC in Auburndale. He has been directly involved in citrus
“best interest” of anyone’s customers?)—
production, warehousing and distribution, as well as state and community support, since 1980. His facility incorporates 200,000
square feet of multi-temperature warehousing, with an extensive expansion plan on the horizon.

28 | CFAN
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