Tuesday, February 7, 2017

Gulf Power in Florida is Leading the Way in New Electrical Pricing

And Leading in the Wrong Direction

People pay for electricity the way they pay for most things.  The more you use, the more you pay.  Don't use any, don't pay any.  Now Gulf Power in northwest Florida is wanting to change that.

"Gulf Power, the utility for Northwest Florida, is proposing a $107 million rate hike. As part of the rate hike request, it wants to increase its fixed charge on residential customers from $18 a month to $48 a month. That means that every month, customers will owe the utility a hefty sum before they even flip on a light switch. Less of the customer’s bill will be based on energy use. Normally, an electricity customer can control their bill by controlling how much power they use; less power use equals a lower bill. This new proposal throws that concept out the window with the huge increase in the fixed charge.
Gulf Power customers are already paying the highest fixed charge of any of the investor owned utilities in Florida. The attempt by Gulf to restructure rates and increase the fixed charge by 155% on families in its service territory is unprecedented in Florida."

What this means of course is that (1) if you don't use any electricity your bill (with tax) is still going to be over $50.00 a month and (2) electricity is going to be highly regressive. A low income person who uses very little power will pay a much higher cost per Kwh than a high income person who uses a lot, you know, to power the yacht for example. This is because the fixed cost will be a much higher proportion of the bill than the cost per Kwh.

So yes, the Trump voters who dominate northwest Florida are once again going to get screwed.  

Long term high fixed cost pricing is a national problem.  As more and more alternative energy and conservation measures come on line utilities will have to charge more for the fixed portion of the bill.  Utilities like Duke Power in North Carolina are already slowing down the connections of residential and commercial solar power to their network.  A balance will have to be struck, except that conservatives in charge of state regulators will not strike that balance.  The scales will be tilted, anybody want to guess which side?  

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