Florida regulators hold final public hearing on Peoples Gas rate hike proposal

The Florida Public Service Commission held the final of two public hearings on Thursday concerning a request by the state's largest natural gas company to increase its rates for customers.

In both hearings, there was no feedback from ratepayers, but emails opposing the rate hike continue to populate the rate case docket.

For a Peoples Gas System residential customer using up to 99 therms (a heat energy measure equivalent to 100,000 British Thermal Units) per month, their bill would increase from $19.10 to $26.50 (38.5%) if the commission approves the increase. For those using 100 to 1,999 therms, their cost would increase from $24.44 to $35.50 per month (45%).

The rate hike would go into effect on Jan. 1. The commission last approved a rate hike for the utility in 2023.

Peoples Gas System wants a nearly $103.6 million rate hike, justifying the increase because "existing base rates would not be sufficient to cover the company’s costs of service and provide an adequate return on invested capital."

As with other regulated monopolies, Peoples Gas is guaranteed a rate of return for its investors on its capital investments.

Peoples said in its filing that it needed a rate of return of 11.1% and, without a rate hike, it would receive 9.15% this year and 5.7% in 2026. It also said it will spend $800 million on improving its infrastructure as its customer base continues to grow.

Despite a lack of customers providing input at the hearings in Hollywood and Orlando, ratepayers aren't happy about the proposed rate hike.

"I believe Teco's proposed rate change for their RS-2 rate class is an outrageous request that would result in a 45% increase in their fee," Richard Veraszto told the commission in an email. "I understand they are subjected to inflationary costs but to ask for that amount of an increase is not reasonable and should be denied."

A Fort Myers customer also shared his concerns via email.

"They just raised their Customer Charge (base rates) significantly in the last couple of years to where a residential base rate is now more than 50% of the total bill," Andy Koebel wrote in an email to the commission. "Now they want to increase it by almost another 25%. One of the reasons they state the need for this increase is that they have expanded their network by adding 1,260 miles of mains and service lines to service demand. I also work in the utility industry and expansion of service is not to be borne by the existing ratepayers.

"That cost should be covered by connection fees/impact fees paid by developers or new connections if they want service. For this reason, the proposed increase in the Customer Charge to help with expansion associated costs should be denied by the PSC or significantly reduced."

Koebel also took objection to the proposal by Peoples to combine two of the four rate classes, which he said would adversely affect customers using around 25 to 50 therms per month.

Peoples Gas System is a subsidiary of Tampa Electric and serves 470,000 residential, commercial, industrial and power generation customers across 39 of Florida's 67 counties, including five metropolitan areas.