Peoples Gas files for new natural gas base rates
Proposed rate, the first base rate increase for the company in six years, reflects increased costs of providing gas service
TAMPA, August 11, 2008
As announced in June, Peoples Gas System today filed with the Florida Public Service Commission (FPSC) for an increase to its base rates. The request reflects ongoing investment in the company’s natural gas distribution system, as well as significant increases to the cost of doing business. This is the first time the company has made such a request since 2002.
Since its last base rate increase, Peoples Gas has added approximately 100,000 new customers. To serve that new demand and address new federal requirements, the company has installed or replaced more than 1,500 miles of gas main in the more than 200 communities it serves throughout Florida.
President Bill Cantrell said, “Our team has done everything possible to delay the need to request an increase to our base rates. Unfortunately, with continued increases in the cost of providing high-quality natural gas service, we can’t put it off any longer.”
Since the last base rate increase for Peoples Gas, the costs of doing business have increased significantly, including labor (22 percent) and steel pipe (more than 100 percent). To address these cost increases and the investments the company has made to serve customers, Peoples Gas is requesting a base rate increase of $26.5 million. If today’s request is approved by the FPSC, the average residential Peoples Gas bill is expected to increase by around 10 percent, starting in summer 2009.
Base rate charges, addressed during a rate case, are used to cover the utility’s cost of building, operating and maintaining the infrastructure it uses to serve customers.
The fuel charge component of the bill, which is typically the largest component, is what is known as a “pass-through” cost and is not part of a base rate case. The fuel charge component is the cost, without any markup or profit, paid by Peoples Gas to its fuel suppliers. The fuel charge, which can be adjusted monthly to reflect actual and projected costs, is monitored and approved by the FPSC.
Continued expansion of natural gas service in Florida can provide many environmental benefits to the state. Typical residential customers replacing four less-efficient electric appliances with today’s highly-efficient natural gas appliances can reduce their home’s carbon footprint by as much as 4,000 pounds each year.
Peoples Gas makes it easy for homeowners and businesses to use energy-efficient, domestically produced natural gas by offering energy conservation programs. These programs offer valuable cash rebates to customers who install high-efficiency natural gas appliances.
Rebates for replacing electric appliances with highly efficient natural gas appliances can total as much as $1,350 for an individual residence. For more information on the company’s energy efficiency programs, visit online: www.peoplesgas.com.
Documents relating to the Peoples Gas base rate case will be available on the FPSC Web site at www.psc.state.fl.us and through a link on the Investors section of the TECO Energy Web site at www.tecoenergy.com.
Peoples Gas System, Florida's largest natural gas distribution company, is one of the four core businesses of TECO Energy, Inc. (NYSE: TE), an energy-related holding company with regulated utility operations in Florida, including both Tampa Electric and Peoples Gas System. Peoples Gas serves approximately 334,000 customers in most of Florida’s major metropolitan areas and beyond. Other subsidiaries include TECO Coal, which owns and operates coal production facilities in Kentucky and Virginia, and TECO Guatemala, which is engaged in electric power generation and distribution and energy-related businesses in Guatemala.
Note: This press release contains forward-looking statements, which are subject to the inherent uncertainties in predicting future results and conditions. Actual results may differ materially from those forecasted. The forecasted results are based on the company’s current expectations and assumptions, and the company does not undertake to update that information or any other information contained in this report, except as may be required by law. Additional information is contained under “Risk Factors” in TECO Energy, Inc.’s and Tampa Electric Company’s combined Annual Report on Form 10-K for the period ended Dec. 31, 2007.