The Public Service Commission bestowed its blessings Tuesday upon a rate settlement that will allow Gulf Power Co. to raise prices by nearly $62 million per year, but give the utility less of a return on investment than it wanted.
Gulf Power originally sought to charge its customers in Northwest Florida an additional $106.8 million.
“I do believe the settlement represents a very fair balance of interests,” Chairwoman Julie Imanuel Brown said.
“This settlement is rational and reasonable and, on balance, in the public interest,” Commissioner Donald Polmann agreed.
The vote was unanimous.
The deal guarantees the utility a return on investment to Gulf Power’s stockholders averaging 10.25 percent — more than the Office of Public Counsel, which represents consumers before the PSC, had argued was justified.
According to the company, the average monthly bill will climb from $144 to $151.
“This agreement is good for all involved, including Gulf Power’s customers,” Stan Connally, chairman, president and CEO of Gulf Power, said in a written statement.
“It supports our current infrastructure investment — which helps us continue to provide our customers in Northwest Florida with long-term, reliable power and a balanced energy mix,” he said.
Agreeing to the settlement were the Office of Public Counsel, which represents consumers in utilities rate cases, and the Florida Industrial Power Users Group, representing large consumers.
Other parties, including the Sierra Club, the League of Women Voters, the Southern Alliance for Clean Energy, and federal agencies did not sign on, but also didn’t oppose the agreement.
A representative of Wal-Mart Stores Inc. said the sticking point for his company was that the return on investment allowed was too high.
Critics had contended the original base-rate hike sought was an attempt to shift onto Florida ratepayers costs associated with two coal-burning plants in Georgia, where long-term customer agreements were winding down.
It would have undermined Florida customer’s efforts to control their own costs through adoption of alternative energy sources including roof-top solar, they said.
Deputy Public Counsel Charles Rehwinkle said the deal allows Gulf Power to sell that power to its customers.
“Part of the compromise is that Gulf has to write down $32.5 million of their gross investment in those plants, which will be of benefit to customers over the next 30 years,” Rehwinkle said.