PENSACOLA — Gulf Power, which serves nearly 500,000 customers in eight Northwest Florida counties, has filed a plan with the Florida Public Service Commission to add a storm restoration surcharge to electricity bills to recover $342 million in costs associated with power restoration following Hurricane Michael.
In the aftermath of the storm, Gulf Power was faced with restoring power to 136,000 customers and rebuilding its electrical grid, according to a Wednesday news release from the company.
According to the release, Gulf Power is proposing an $8 per month surcharge (actually $8.21, according to the utility's figures) for residential customers using 1,000 kilowatt-hours of electricity per month. According to the federal Energy Information Administration, average monthly household electrical consumption in Florida is 1,123 kilowatt-hours.
For residential customers, the surcharge would "keep Gulf Power customer bills lower than January 2018," according to the news release. At that time, the monthly Gulf Power bill for 1,000 kilowatt-hours of residential electricity was $144, including the state's 2.5 percent utility tax. Monthly bills dropped to $131.28 in April 2018 as the result of federal corporate tax reform. Bills also dropped by more than $2 to $128.86 in January of this year because of continuing tax reform savings and other factors.
If the PSC approves Gulf Power's request, the bill for 1,000 kilowatt-hours of residential electricity will rise to $137.07 in April, according to the Gulf Power news release.
In addition to the residential surcharge, Gulf Power's proposal would boost bills for commercial and industrial customers by 3 percent to 8 percent each month.
According to the news release, Gulf Power "proposes to spread the storm restoration surcharges over five years," contending that doing so will ensure that customers "will continue to experience a significant portion of the savings delivered over the last year." Thus, the surcharge would appear on Gulf Power customer's bills for five years, utility spokesman Rick Delahaya confirmed Wednesday.
“We know that many of our customers continue to face challenges due to the aftermath of Hurricane Michael," Gulf Power President Marlene Santos said in the news release, "and we have worked hard to propose a plan to the Florida Public Service Commission that takes this into account and supports our ability to continue to serve them with reliable service now and into the future.”
Gulf Power maintains a storm-recovery reserve, but for any expenses not covered by those funds, the company must request a surcharge through the PSC. Gulf Power depleted what had been a $48 million storm reserve in responding to Hurricane Michael, according to Delahaya.
"Michael was an unprecedented storm," Delahaya wrote in an email, "and the magnitude of the recovery effort depleted our entire storm reserve."
Making its case for the surcharge, Gulf Power noted in its news release that during recovery efforts from a massive storm like Michael, electric utilities incur "all the upfront costs of power restoration and rebuilding, including out-of-town crews, plus their housing, meals and transportation, security and more. Costs also include fuel for trucks, tree trimming, poles, transformers and power lines and many other materials."
Nearly four months after the storm, Gulf Power crews continue to re-connect customers to the power grid as they have their homes and businesses repaired, according to the news release.