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Gulf Power gets OK to start recovering Hurricane Sally cost, bills won’t increase

Jim Little
 
| Pensacola News Journal

Gulf Power customers will see a slight decrease in their monthly power bills after the Florida Public Service Commission approved changes to the power company’s rates in response to Hurricane Sally and the end of coal use at Plant Crist.

The Public Service Commission, which regulates the rates utilities can charge, approved two measures Tuesday that will decrease the cost by $0.73 for each 1,000 kilowatt-hour of electricity. 

Gulf Power sought to recover the $206 million it paid to restore power following Hurricane Sally in 2020. The commission approved that measure, which would add $3 per 1,000 kilowatt-hour of electricity for Gulf Power customers. 

However, that increase was offset by another measure to reduce Gulf Power’s Environmental Cost Recovery Clause because the former Plant Crist, which Gulf Power has renamed the Gulf Clean Energy Center, switched from using coal as a fuel source to natural gas.

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The reduction to its environmental recovery cost amounts to a $3.71 reduction for every 1,000 kilowatt-hour of electricity for Gulf Power customers. With the change, another $0.02 is taken off in taxes, leading to a total net decrease of $0.73 for a 1,000 kilowatt-hour bill.

Gulf Power was scheduled to covert Plant Crist to natural gas, but its timeline for making the change was sped up after Hurricane Sally damaged the plant’s coal handling equipment.

“Instead of retiring the Crist Units at the end of this year as planned, Gulf decided to accelerate the plants’ retirement to October 2020 following damage from Hurricane Sally,” PSC Chairman Gary Clark said in a press release. “As a result, customers will benefit from the reduced ECRC charge that more than offsets Gulf’s Hurricane Sally interim restoration charge.”

The net decrease from the two changes will go into effect this month. 

While Gulf Power won the approval to start recovering its costs from Hurricane Sally, it still will have to show in a future hearing that those costs are “reasonable and prudent,” according to the PSC.

The PSC allows utilities to add extra charges to bills to recover costs related to restoring power after storms. 

“Hurricane Sally’s slow movement and strong winds caused significant damage to the energy grid and other critical infrastructure in our area. Along with our Gulf Power team, we are thankful to those who came to support us as we worked around the clock to get the lights back on safely and as quickly as possible for our customers and our communities,” Gulf Power Vice President Mike Spoor said in a company press release.

Gulf Power said it brought in 7,000 workers to restore power following Hurricane Sally. The September hurricane hit the westernmost part of the Panhandle while Gulf Power customers were still paying for the damage from the Category 5 Hurricane Michael in 2018 that depleted Gulf Power’s storm reserve fund. 

Gulf Power also filed its annual reliability report this week with the Public Service Commission for 2020 that showed Gulf Power customers experienced the fewest power outages in its history. However, under the PSC’s rules, extreme weather events such as hurricanes are not included in some of the metrics used in the report.

“Our customers are experiencing fewer outages than ever before and that’s a testament to our dedicated employees and our effort to improve our grid,” Spoor said. “We have a robust plan in place to continue to improve reliability, lowering the number and the length of outages.”

Jim Little can be reached at jwlittle@pnj.com and 850-208-9827.

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