Duke Energy is backing down on a previously announced customer rate hike and will instead seek tax relief for Hurricane Irma costs.
Duke Energy Florida reported that customers will directly benefit from the new federal tax law and avoid a rate increase for power restoration costs associated with the company’s response to the hurricane this past September that left much of the state in the dark.
In December, the energy company had filed for recovery of $513 million — $281 million for power restoration costs and another $132 million to replenish the storm reserve fund. Residential customers would have seen an increase of $5.20 per 1,000 kWh of electricity on a typical monthly bill over a three-year recovery period — an average of $187.20. Commercial and industrial customers were expected to see an increase of approximately 2.5 to 6.6 percent, though bills would have varied.
Instead of increasing customer rates, the company says it plans to apply federal tax reform savings towards those storm costs.
In a news release, Duke Energy said it has been working to analyze the benefits of tax reform.
“We are pleased that this solution will prevent a rate increase for our customers,” said Harry Sideris, Duke Energy Florida state president. “Hurricane Irma was the worst storm to ever hit Duke Energy Florida and impacted many lives. Redirecting the tax reform savings against the storm costs ensures that our customers will reap the benefits of this new law.”
The change is supported by the Office of Public Counsel and consumer advocate groups. The Florida Public Service Commission will review the costs to be recovered and the level of the tax benefit and approve the change by year-end.
