TECO Energy Inc.
) unit Tampa Electric Company has received approval from the
Florida Public Service Commission to increase the monthly rates
of the residential electricity customers. The company filed its
rate-hike request to the commission on Apr 5. The revised rate
will be applicable from Nov 2013.
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Currently, the residential customers, consuming electricity of
1,000 kilowatt-hours (kwh) per month, pay a monthly bill of
$102.58. As per the commission's approval, the new rate will be
$108.25, up 5.5% from the previous rate.
The adjustments of fuel and other related clauses are not
reflected in the current rate revision. Considering these
factors, the average residential bill will be a total of $109.52,
which is expected to be applicable from Jan 2014.
As a result of the electricity rate hike, revenues will initially
increase by $57.5 million effective Nov 1, 2013. Subsequently,
revenues will increase by an additional $7.5 million and $5
million on Nov 1, 2014 and 2015, respectively, on Nov 1, 2013
revenues. The revenues will further increase by $110 million on
completion of the Polk Power Station expansion.
Tampa Electric aims to provide uninterrupted utility services to
its customers at lesser prices than its peers. Despite increasing
the electricity rates, the residential bills will remain the
lowest in the state. According to the Energy Information
Administration, the average cost of electricity in the U.S. was
$119.50 per month in Jun 2013. The new monthly rate of $108.25
will be approximately 9.4% lower than the national average.
The regulated utility providers recover their investments from
the customers through the filing of rate-hike to the commission.
Previously, Tampa Electric has requested for a rate increase in
2008. The reason for the filling was to recoup its spending for
the improvement of delivery reliability.
In the last few years, TECO Energy invested substantial amounts
for upgrading the infrastructure at Polk Power Station and in Big
Bend solid-fuel handling equipments, while expanding as well as
improving transmission assets.
During 2013-2017, TECO Energy plans to invest $2.98 billion to
expand and modernize its utility generation and transmission
infrastructure. We appreciate the initiatives taken by the
company to provide uninterrupted reliable utility to its
customers at a lower price.
TECO Energy currently has a Zacks Rank #3 (Hold). However, other
stocks that are worth considering include
Huaneng Power International, Inc.
) with a Zacks Rank #1 (Strong Buy) and
Brookfield Infrastructure Partners L.P.
), each carry a Zacks Rank #2 (Buy).
Tampa, Fla.-based TECO Energy is involved in the generation,
purchase, transmission, distribution, and sale of electricity and
gas in the state.