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Gulf Power gets OK to collect storm costs

Utility consumers will be paying more post-Hurricane Michael.

Seven months after Hurricane Michael knocked out electricity for tens of thousands of Panhandle residents, the Florida Public Service Commission on Tuesday approved allowing Gulf Power to recoup an estimated $342 million in storm-related costs.

The Pensacola-based utility will collect the money from customers over five years. As an example, residential customers who use 1,000 kilowatt hours of electricity a month will see their bills go up $8, though electricity usage varies widely.

Public Service Commission member Gary Clark, a resident of Washington County, which got hit by the storm, praised Gulf for restoring electricity quickly. He called the request to recoup the money a “justifiable charge” but acknowledged it will hit the pocketbooks of consumers.

“It’s going to hurt, obviously,” Clark said.

The Public Service Commission has approved such proposals from utilities after past hurricanes. In addition, Gulf operates under a 2017 rate settlement that anticipated the utility would be allowed to recover such costs if a major storm occurred. The increase will take effect in July.

Hurricane Michael made landfall Oct. 10 in Mexico Beach as a Category 5 storm and caused widespread damage as it roared north into Georgia. The damage came in the eastern parts of Gulf’s service territory, particularly in Bay County. Western parts of Gulf’s territory, in areas such as Pensacola, were largely unscathed.

In a February filing seeking to recoup the money, Gulf said it had 136,000 customer outages and that 120,452 customers lacked power late in the afternoon of Oct. 10. In all, 96 percent of customers in the utility’s eastern area lost power, with more than 99,000 outages in Bay County.

Gulf had $48 million in a storm reserve, but that was dwarfed by $350 million in restoration costs. Also as part of the filing, Gulf sought to collect about $41 million to replenish the storm reserve. The total sought came to about $342 million after some accounting adjustments.

“For areas that experienced the most significant impact of Michael’s eye wall, Gulf Power’s restoration efforts required a complete rebuild of the electric system,” the February filing said.

During Tuesday’s Public Service Commission meeting, Gulf got backing from the chief of emergency services in Bay County and economic-development officials in Bay and Washington counties.

Ted Everett, executive director of the Washington County Chamber of Commerce, said Gulf quickly restored power to businesses and residents in his community.

“They were there, and they were picking up the pieces,” Everett said.

Gulf Power is the largest utility in Northwest Florida. Another major utility in the eastern Panhandle, Duke Energy Florida, also has filed a proposal at the Public Service Commission about storm-restoration costs.

Under that proposal, Duke would use savings from a 2017 federal tax overhaul to cover restoration costs instead of tacking on extra charges to customers’ bills. Ordinarily, however, those tax savings would be passed along to customers.

The News Service of Florida provides journalists, lobbyists, government officials and other civic leaders with comprehensive, objective information about the activities of state government year-round.

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