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Gulf Power Requests Customer Surcharge To Pay For Hurricane Michael Recovery
February 7, 2019
Pointing to an “unprecedented event” that knocked out power to 136,000 customers and caused massive damage to its distribution system, Gulf Power on Wednesday asked state regulators to approve a plan to collect an estimated $342 million from customers to cover costs related to Hurricane Michael.
Gulf Power, the largest electric utility in Northwest Florida, filed a petition at the state Public Service Commission as it seeks authorization to start recovering the money in April. Customers would pay the storm costs over a five-year period, according to the filing.
“Hurricane Michael was the most destructive hurricane to ever hit Northwest Florida, with Panama City and the surrounding areas of Bay County nearly destroyed, including critical infrastructure and the energy grid that serves our customers,” Gulf Power President Marlene Santos said in a prepared statement. “We know that many of our customers continue to face challenges due to the aftermath of Hurricane Michael and we have worked hard to propose a plan to the Florida Public Service Commission that takes this into account and supports our ability to continue to serve them with reliable service now and into the future.”
The Public Service Commission has signed off on such proposals from utilities after past storms. Also, Gulf Power operates under a 2017 rate settlement that anticipated the utility would be allowed to recover such costs if a major storm occurred.
The proposed increase would translate to about $8 a month for a residential customer who uses 1,000 kilowatt hours a month of electricity, a common benchmark in the utility industry, according to the filing and a company news release. Commercial and industrial customers, which are billed differently than residential customers, would see increases of 3 percent to 8 percent.
If the Public Service Commission authorizes the storm-related increases, Gulf Power said monthly customer bills would remain lower than they were in January 2018. During the past year, the company has trimmed bills, in part by passing along savings to customers from a federal tax overhaul that lowered corporate-income tax rates.
Hurricane Michael made landfall Oct. 10 in Mexico Beach as a Category 4 storm and caused widespread damage as it roared north into Georgia. The damage came in the eastern parts of the utility’s service territory, particularly in Bay County. Western parts of the territory, in areas such as Pensacola, Cantonment and Molino, were largely unscathed.
The filing at the Public Service Commission said Gulf Power had 136,000 customer outages and that 120,452 customers lacked power late in the afternoon of Oct. 10. In all, 96 percent of customers in the utility’s eastern area lost power, with more than 99,000 outages in Bay County.
The utility had $48 million in a storm reserve, but that was dwarfed by $350 million in restoration costs that the utility says it is eligible to recover from customers. Also as part of the filing, the company is seeking to collect about $41 million to replenish the storm reserve. The total sought comes to about $342 million after some accounting adjustments.
The Pensacola-based utility has more than 460,000 customers in eight counties. The filing said Gulf Power workers and outside crews replaced about 7,000 poles, 200 miles of line and 4,000 transformers after the storm.
“For areas that experienced the most significant impact of Michael’s eye wall, Gulf Power’s restoration efforts required a complete rebuild of the electric system,” the filing said.
by Jim Saunders, The News Service of Florida
Comments
31 Responses to “Gulf Power Requests Customer Surcharge To Pay For Hurricane Michael Recovery”
How can you live in Florida and be against this? It could be us next time. It was us in 2004 when Ivan rolled through. Do you all not remember? Or did you live somewhere else then?
@Line Wife. You are correct, linemen work their tail off, but I guarantee you the 342 million is not going to them. GP has made billions since Ivan, and got millions in surcharges then. Why are utilities not responsible for carrying insurance to cover damages like this? Small businesses and corporations must carry the loss and insurance costs. We pay VERY high rates for utilities in this area. We have no competition, they keep jacking the rates to pay for upgrades to their equipment. That is the cost of doing business, that should be their burden, not an added surcharge to consumers bills. They expect us to budget for their shortfall, but they don’t plan for this situation. If they only saved 40 million out of the 50 million they collected in 2004, and now they say it is 342 million??? There is something majorly wrong with this picture. The surcharge is so their shareholders don’t take a hit for damages that consumers are required to carry insurance for. Why are they different? Why is the utility company not responsible for their loss and piss poor planning?
Did I read, when Gov. Scott left office, he had 300 million in cash out or stock in the Next step, (gulf power) ? I could be wrong .
told you when they supposedly gave us a rate cut to watch out, they would get us back in short order. they always do. if they had to compete they would be out of business/
I keep reading a lot of complaints and whining over this in the comments. It’s $8 per 1000 kilowatt hours a month, “The proposed increase would translate to about $8 a month for a residential customer who uses 1,000 kilowatt hours a month of electricity”. How about let’s be a little more efficient, turn off stuff not being used and set HVAC at reasonable, recommended settings by GP to save costs. Just a few degrees difference will greatly affect ones usage. Many want to dislike, trash talk, and hate on GP when the power systems are up and running; then on the other hand when one is without power and they get one going again then GP is the “hero” and being thanked. If that approximate $8 per 1000 kilowatt hours is going to break you; how about eat out less by 1 time a month. I’m not saying I’m excited about the fee but it is what it is and complaining isn’t going to fix the problem.
Bill: “When you calculate what we pay the union employees to do about a hour of work in a 12 hour work day.”
Let me share something with you. My husband was there for 2 weeks working 16+ hrs a day. There was no ‘lunch breaks’ he had a sandwich and bag of chips and kept on working. He would get off about 8 at night, eat another small unfilling meal, go shower in their shower trailer shower (very unclean), then go to their bunk trailer. (It looks like a semi trailer with fold down bunk beds.) He was absolutely exhausted, and hungry. So ya know what he worked his butt off for 2 straight weeks away from his family and a 2 yr old son who didnt understand why daddy wasn’t home and when he would be back. Some men were out there way more than 2 weeks or made several trips down there to help. Yeah the lineman made some money working down there but it was hard, hot, nasty, and sometimes unsafe work. They earned every penny of it! So if your gonna complain about a rate hike to cover a necessary fix/replacement of poles/upgrade to the system, then you need to get your butt out there and fix it yourself (let me know how that works out), use solar panels, or do without. The linemen work hard every single day keeping our power on and try to give us the best quality and fast response during storms as possible. I can PROMISE you that they dont do 1 hr of work in a 12 hr ‘union’ day. They are the unrecognized first responders and most people don’t see all the hard work they put in or how much they are away from their family. So, until you know for a fact what your talking about it’s best you don’t say anything.
Surfing has found the following:
“After Hurricane Ivan, the huge contingent of linemen working on behalf of Gulf Power installed or replaced more than 22,000 miles of wire, 5,000 poles, 3,000 transformers and 48,000 fuses. “
https://www.wuwf.org/post/gulf-power-more-storm-ready-10-years-after-ivan
Paraphrased:
Gulf Power residential customers in northwest Florida are going to have to pay a little more each month over the next two years to pay for hurricane damage.
The company will increase monthly bills by an average of about $2.70 a month.
The state’s Public Service Commission approved the residential rate increase Tuesday.
The approval allows Gulf Power to recover $50 million in damages caused by Hurricane Ivan.
https://www.wjhg.com/home/headlines/1320177.html
So yeah, 7,000 poles, 200 miles of line and 4,000 transformers for 342 million sounds about right, not!
NO WAY JOSE!! I freeze during the winter and sweat during the summer EVEN ON THE Energy Select Program of theirs and being retired (or if you are raising a family) the bills are TOO HIGH AS IT IS! Get it from your HUGE bank account or Trump cause I will go to every public meeting to say NO NO NO I am trying to lower my bill not increase it – you add taxes and the rest of the BS that they put on your bill-it will be $20 @ month. they are worth a FORTUNE – the only kid on the block and NO
When you calculate what we pay the union employees to do about a hour of work in a 12 hour work day then yes I can see it costing the company that much to fix the power lines in the system. Instede of getting mad at Gulf Power get mad at the unions
Since Ivan, which GP got to recover all they spent there too…GP has has generated nearly $20,000,000,000 that’s 20 BILLION dollars (13 years times $1.5 billion average rev per uear) yet only had $50,000,000 set aside in their storm fund? HUH? This company sticks it to us at every turn. its time we DEMAND some alternatives….
So if we apply this logic that gulf power should charge customers for their losses, then taxes should increase for police and emergency services, healthcare prices should go up to repair the hospital damages, cable and internet prices should increase to cover the cost of the repairs to their cabling and the department of roads services should get a new tax to cover repair and repaving. Citizens are burdened with a little thing called insurance. Catastrophes occur and we weed through the red tape of filing an insurance claim that we’ve paid into for years and still have to fork out money for a deductible. Your losses should not be our issue. Plan for a rainy day!
These pay Hikes are killing me My ECUA bill is as much as my house insurance a year, Im so Exhausted fighting with these Utility company’s and there rate Hikes, It’s nice that we can help our Neighbors but these company’s are taking advantage Stealing from the poor so the rich can get richer !!!!!
That sounds like a cost that should be covered by FEMA.
I think you better call FEMA or Trump to get your money. Just because you’re a newbie flocking in here, doesn’t mean you need to raise electric rates for repairs due to a hurricane. Suck it up and continue with your daily chores.
Are you going to need an increase to convert Plant Crist To a Natural Gas, pipeline through North Escambia??????? We will hear about this rate increase next.
NextEra you sure are attempting to make a lot of changes in such a short time here.
Why do they keep replacing poles? if you have to replace a grin you would think about putting underground so next time you wouldn’t replacing poles again
William, how much did Gp get to charge us to “rebuild the grid” over here in pcola after Ivan and then not 7 years later, right here in NE.com were articles about how GP needed a rate increase TO UPDATE THE OLD NETWORK…THey cant get their lies straight.
So, a new company takes over Gulf Power, forces over 400 current employees to retire or lose benefits, sub-contracts services to smaller companies, and then wants to increase our rates. Gulf Power lowered our rates, now new company using Michael as an excuse to increase rates. So, every year there’s a hurricane in NW FL, “oops there goes another power rate hike
another scam.
Gulf power knows the risk, but don’t apply the same method every other business and person does to protect or insure “property”? Just asking.
Here’s another hike that will just be parlayed into another hike in the near future, so they won’t take the loss, the customers will. How can they lose when the lobbyists have the politicians and regulating board in their pocket?
I don’t agree with the hike, they should just take the hit, grin and bear it.
If home depot burnt down, they would not raise their prices to cover the damage.
Maybe we should of brought in some offerent companies to rebuild the “grid” since “7,000 poles, 200 miles of line and 4,000 transformers” are going to cost us $350,000,000…I guess it was all made out of gold….
It’s the gulf coast, the power company must be prepared for this at all times, poor mouthing the PSC every time major weather events happen is no excuse. Breakdowns in infrastructure is not the responsibility of the consumer.
Poor planning by those in the business should be held responsible. Hard working consumers pay the price every month
So the storm affected 50,000 and cost $350,000,000 to repair…$7,000 per person in the area to put up new power lines they will make a profit off of. If we are paying for the lines, then we own them and we demand we get some compition in this market.
thought they just said a couple months ago they had a surplus of money??? what’d you do with that? I sure didn’t get a credit on my bill.
I’m tired of rate hikes and no pay hikes!!!!!!!!!!!!!!!!!!!
Businesses have expenses as well as consumers. IF they are being honest about their loses they need to be able to make enough to stay in business and provide services. And, maybe see about getting a policy from Llloyd’s of London for the next “event,” if Lloyd’s has such a policy. Sometimes a business will overcharge, and sometimes consumers will cheat. But I have observed that many small business people will complain that customers do not want to pay their necessary fees, and then complain when they feel they are overcharged by someone else. Human nature (the one with which we were born) is not basically good..
Why should consumers get stuck with paying for a utility’s failure to protect their business assets when they are fully aware that it is only a matter of time until a catastrophic storm rips through the area? Construction in the past, as well as future projects will be done using shortcuts and cost cutting measures that maximizes profits for the company and its’ shareholders, but does little to nothing to ensure the ability of the network to survive the next major storm that hits the panhandle. The sad thing is the Public Service Commission almost always will approve these requests for the consumer to carry the burden of reconstruction costs, so it is only a matter of time before Gulf Power will request another charge be added to our monthly utility bill to increase their profits.
Williewonka,
I think you have had one to many chocolate bars today.
WHAT ABOUT FEMA REPAYINGTHEM?
We regular citizens have to have insurance for everything. Car insurance, homeowners or renters insurance, health care, life insurance. Heck we even have to contribute to Citizens property insurance to support those folks that live on the coast. Shouldn’t companies like this be required to have insurance as well?
Gulf Power always does an awesome job. They should easily be approved for a rate increase. Thank you Gulf Power.
Well, here we go already. Gulf Power when owned by Southern Company utilizes tax breaks to lower customer service cost. 1 day later, they sell Gulf Power to NextGen. Now, Gulf Power wanting customers to pay a surcharge from the customers to cover the cost of a storm that occurred at a time they did not even own at the time? Just man up and say “we need the customers to pay for the ludicrous amount of money we paid to buy out Gulf Power from Southern Company.” I guess we all saw this coming. Here’s to many more rate hikes with the new company. Guess I’ll be shopping around for the best rates. Oh wait, can’t do that with monopoly companies.
its the same bull story they gave us about rebuilding the grid here after Ivan THEn 10 years later they needed to upgrae the system AGAIN…HUH? It never ends with this group. If we are paying for the lines then we OWN THEM and we deamd we get competition in here!!!
How about the stockholders take the hit this time, instead of the consumers. Just because you buy shares shouldn’t mean a guaranteed profit every year. Like gambling, you win sometimes & you lose sometimes.