This month’s focus is on economics, specifically the realities of rate increases imposed by a utility monopoly like Tampa Electric Co. (TECO).[emember_protected custom_msg=”Click here and register now to read the rest of the article!”]
Utility rate increases don’t happen in a vacuum. They have a far-reaching effect, impacting first the utility’s customer base, but also people and entities well outside the base.
TECO has requested Florida Public Service Commission approval for what it says is a 10 percent increase in the electricity base rate for residential customers and a six percent increase for businesses. (Digging into the numbers, the rate increases appear to be much higher, up to 18.6 percent for some residents.) We testified before the PSC in May and requested no increase.
If approved, the rate increases would take effect in January 2014 and would generate at least $134.8 million more in revenue for TECO each year. The company says the rate increases are “needed to offset rising costs and sluggish growth.” (It’s interesting to note that TECO is purchasing New Mexico Gas for nearly $1 billion after writing off more than $33 million in 2012 for discontinued operations in Guatemala.) I’m sure the 2012 compensation of $14.2 million (vs $8.7 million in 2010) for their top five executives didn’t have anything to do with their “rising costs.”
In my next column, we’ll dive into just how big of a ripple effect this kind of rising utility cost can have on the public (even if on paper it’s deemed a “small” increase).
CREDITS
column by BEN ADAMS, JR.
BIO: Ben Adams, Jr. is an owner and president of Adams Cold Storage, LLC. He has been directly involved in citrus production, warehousing and distribution, as well as state and community support since 1980. His current facility incorporates 200,000 square feet of multi-temperature warehousing, with an extensive expansion plan on the horizon. [/emember_protected]
