Duke To Use Tax Savings To Cover Hurricane Tab
Duke Energy Florida customers will be spared paying more than $500 million in costs related to Hurricane Irma because of the utility’s savings under the new federal tax overhaul, Duke said Wednesday.
Duke, the state’s second-largest electric utility, announced the decision slightly more than a week after Florida Power & Light said its customers would avoid $1.3 billion in Irma costs because of the tax law approved in December by Congress and President Donald Trump.
"We are pleased that this solution will prevent a rate increase for our customers," Harry Sideris, Duke Energy Florida state president, said in a prepared statement. "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."
Duke filed a petition last month with the Florida Public Service Commission seeking to recoup $513 million in Irma-related costs over a three-year period. That included money to cover restoration costs and the replenishment of a $132 million storm reserve.
In its announcement Wednesday, Duke said using the tax savings to cover the costs will save average residential customers $187 over the three years. It had projected that residential customers who use 1,000 kilowatt hours of electricity a month would see a $5.20 increase in their bills.
Tampa Electric Co. also filed a petition last month with the Public Service Commission to recover about $87.4 million in restoration costs and to replenish a storm reserve. Most of that money is related to Hurricane Irma, but Tampa Electric also included small amounts related to tropical storms and hurricanes dating back to 2015. When asked Wednesday about whether Tampa Electric would use tax savings to cover storm costs, a spokeswoman said in an email the company is "evaluating that option."
Utilities are typically allowed to recoup storm costs from customers, with the issue addressed in FPL, Duke Energy Florida and Tampa Electric rate agreements that were approved in 2016 and 2017 by the Public Service Commission.
Duke’s 2017 rate agreement also included a section addressing the potential that changes in federal corporate-income taxes could lead to adjustments in the amounts customers pay for electricity. That agreement was approved by the Public Service Commission before Congress and Trump passed the tax overhaul.
The announcement Wednesday from Duke did not specify how the savings from the wide-ranging tax law would flow through to customers. It said the Public Service Commission will review the utility’s storm costs and the tax benefits.
The utility, which has about 1.8 million customers in Florida, said it brought in crews from other parts of the country to help restore power after Irma made landfall Sept. 10 and barreled up the state.