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AARP Florida: Fighting Electric Rate Hikes

AARP Florida will oppose a proposed a 23-percent base rate increase for Gulf Power Co., which provides electric power to more than 428,000 Florida customers in the Florida Panhandle, Florida state AARP leaders announced.

And if you live in South Florida, don’t heave a sigh of relief that you don’t live in the Panhandle. AARP Florida expects a later round of rate increases that could hit consumers’ pocketbooks statewide for billions later this year.

“This rate increase request comes at a bad time for older Floridians, who don’t need any more financial pain right now,” said Jeff Johnson, AARP Florida interim state director. “Many already struggle with higher food, fuel and prescription-drug costs, while market turmoil has made many people fearful about their savings and retirement security.”

Johnson said two other large Florida utility companies, Florida Power & Light (FPL) and Progress Energy (PE), may submit rate-increases requests to the Florida Public Service Commission (PSC) in coming months.

In recent years, consumers had been winning such fights. AARP members from South and Central Florida vocally and successfully opposed $1.7 billion in electric-rate increase requests by FPL and PE in early 2009. The commission ultimately rejected nearly all of the rate increases asked for by the two companies.

However, after what were widely regarded as pro-consumer decisions in 2009, Florida lawmakers in 2010 forced a shakeup of the commission, declining to confirm nominations to the commission by former Gov. Charlie Crist and forcing two sitting commissioners out.

The Legislature’s actions opened the way for Gov. Rick Scott to appoint four new commissioners. AARP Florida staff have received reports that several of the state’s investor-owned utilities will try again for base-rate increases in 2011 and 2012.

Johnson noted that, as a regulated industry, Gulf Power is already assured of a strong rate of return on its investment in its electrical power system under the state’s Public Service Commission rules. The company posted a 6.3-percent return to its stockholders in May 2011, at a time when Florida Social Security recipients have gone two years with no cost-of-living adjustment and many Florida workers have seen pay cuts, steep losses to their nest eggs or both. “Those Panhandle residents 50+ who are worried about their retirement investments probably wish that they could get a similar deal,” he said.

The PSC will conduct its review of the rate increase in two stages. In the first stage, the PSC will consider whether to allow the utility to begin charging what is called an “interim” rate. The PSC scheduled public hearings for Sept. 15 on the rate requests in Pensacola and Panama City. By March 2012, the PSC will issue a final ruling on the rate request, but Gulf Power could begin charging “interim” rates based on its request as soon as this fall.

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