Joining Florida Power & Light and Duke Energy Florida, Tampa Electric Co. said Tuesday the new federal tax overhaul will allow it to avoid billing customers for costs of restoring power after Hurricane Irma.
The move will save Tampa Electric customers an estimated $102.5 million that they would have been required to pay primarily to cover Irma expenses and to replenish a storm reserve, according to filings with the state Public Service Commission.
FPL and Duke Energy also announced recently that savings from the federal tax law, which was approved last month, would allow them to forgo collecting a combined total of about $1.8 billion from customers after Irma.
“This is a great solution for our customers,” Tampa Electric President and Chief Executive Officer Nancy Tower said in a prepared statement Tuesday. “Hurricane Irma impacted almost 70 percent of our system. I’m proud to say that — -along with our employees — more than 3,000 additional workers from 64 companies assisted us to safely restore power efficiently and quickly. Redirecting our tax savings to cover these storm costs is an opportunity for our customers to benefit from the tax law immediately.”
Utilities are typically allowed to recoup storm costs from customers, with the issue addressed in FPL, Duke Energy and Tampa Electric rate agreements that were approved in 2016 and 2017 by the Public Service Commission.
Tampa Electric last month filed a petition with the Public Service Commission seeking to recoup about $88 million in storm costs, with small amounts going to expenses from prior tropical storms and hurricanes. The additional charges for customers were slated to begin in March.
The filing Tuesday with the Public Service Commission put the overall total at nearly $102.5 million, with the higher number based on updated cost information. Expenses related to Irma, which hit the state in September, accounted for $92.8 million of that total.
Congress and President Donald Trump approved the wide-ranging tax overhaul in December, with the package including a major cut in the corporate income tax rate. Tampa Electric, which has about 750,000 customers in the west-central part of the state, said its income-tax savings would be used to cover the storm costs.
The tax overhaul also could flow through to utility customers in other ways than covering storm costs.
The Public Service Commission on Feb. 6 is expected to discuss a request from the state Office of Public Counsel to start a process for analyzing and adjusting customer rates based on the utilities’ tax savings.
The Office of Public Counsel, which represents consumers in utility issues, said in a Jan. 9 filing that Tampa Electric, Duke Energy, Gulf Power Co. and Florida Public Utilities Co. have entered rate settlements in recent years that address how changes in tax laws will be handled.