Volatile natural gas prices prompt Duke Energy Florida to seek fuel adjustment

Rhea-AI Summary

Duke Energy Florida has proposed a fuel adjustment to manage the impact of rising natural gas prices on customer bills. The adjustment will take effect in March 2022, spreading recovery of $247 million in fuel costs over two years, which is expected to increase residential bills by an average of $6.62 per month. Commercial customers may see increases between 4% and 10%. The company aims to minimize financial strain on consumers and maintain cost-effective energy management amidst a 45% rise in natural gas prices since January 2021.

Positive

• Rate Mitigation Plan approved, spreading $247 million fuel cost recovery over two years.
• Average increase for residential customers limited to $6.62 monthly.
• Removal of credit card fees for bill payments starting in 2022.
• Programs to assist customers with energy management and budgeting.

Negative

• Residential bills to increase despite efforts to minimize impact.
• Natural gas prices have increased by nearly 45%, causing uncertainty.

ST. PETERSBURG, Fla., Dec. 17, 2021 /PRNewswire/ -- Duke Energy Florida today proposed a fuel adjustment in a way that would limit the impact of volatile natural gas prices on customer bills.

Duke Energy Florida uses natural gas as its main fuel source to generate electricity at most of its power plants.

The change would take effect in March 2022. The company does not earn any profit from fluctuating fuel costs. 

Since January 2021, natural gas prices have increased almost 45% and remain volatile due to a number of unique events that drove up prices and caused supply uncertainty. This is impacting not only utility companies but also a variety of other industries that rely on natural gas, as well.

Rather than recover the increased fuel costs over a shortened 10-month period in 2022, Duke Energy Florida has chosen to spread the recovery over a longer period, beginning in March 2022 and ending no earlier than February 2023.

By recovering over a longer period, the monthly bill impact to a typical residential customer using 1,000 kWh is reduced by about 1%. A typical residential customer using 1,000 kilowatt-hours (kWh) will see an increase of $6.62 in the customer's monthly bill, on average, for 2022.

Commercial and industrial customers will see bill impacts ranging from a 4% to 10% increase.

"We want to help our customers who may already be struggling to pay their current energy bills," said Melissa Seixas, Duke Energy Florida state president. "We are working hard to minimize the impact and provide customers the opportunity to better manage their energy usage and reduce their bills. In addition, we are managing our fuel and generation resources in the most cost-effective manner for our customers, and our rate mitigation plan will continue to reduce some of the price pressure on customers."

Duke Energy Florida's innovative Rate Mitigation Plan, approved by the Florida Public Service Commission on Nov. 2, 2021, will remain in place and continue to benefit customers by spreading the recovery of approximately $247 million of unrecovered fuel costs over two years (2022 and 2023), and foregoing immediate recovery of costs related to recent storms, among other actions. Customers will continue to benefit from the savings, estimated to reduce a residential 1,000-kWh customer bill by up to $4.67 monthly on average. The specific bill impact will vary depending on several factors.

Residential customers will also benefit from the removal of credit card fees for bill payments beginning in 2022.

Manage energy usage, billing

Budget Billing

Duke Energy's Budget Billing option lets customers pay one predictable amount every month to better manage their budget. The amount is periodically reviewed and adjusted. Learn more about Budget Billing here.

Pick Your Due Date

With Pick Your Due Date, customers can choose the date they want their Duke Energy bill to be due each month. Pick Your Due Date can give customers even more control over their energy bills. Learn more.

Track, manage energy usage

Energy use can spike during the winter since heating is one of the biggest energy users in your home. Customers can easily track and adjust their usage when temperatures are highest.

• Smart meters provide customers with daily and hourly usage information to help them better understand their energy use and take steps to save energy and money. Video here.
• Duke Energy customers with smart meters also receive usage alerts through email and/or text halfway through their billing cycle, well before their bill arrives, with their current usage amount and a projection of what their final monthly bill could be.
• Customers can also set budget alerts, so they know when their bill reaches a specific dollar amount of their choosing, allowing them to adjust their usage and help save money on their bill.

Other energy-saving programs, tips and guidance to help you manage higher energy bills that can result from increased energy are available at Duke-Energy.com/Winter.

Assistance programs

Duke Energy is reaching out to customers who are past due through email and/or text with information about utility assistance administered by agencies in their local communities.  

LIHEAP

This income-based program allows those earning below certain thresholds to qualify for federal energy bill assistance money through the Low Income Home Energy Assistance Program (LIHEAP). The qualifying income thresholds are based on factors that include household income and the number of people living in a home. To learn how to qualify and apply for LIHEAP funds, visit: Low-Income Home Energy Assistance Program (LIHEAP).

Homeowner Assistance Fund

The Homeowner Assistance Fund is a new federal program established for homeowners experiencing a financial hardship after Jan. 21, 2020, as a result of COVID-19. Funds will help prevent homeowner mortgage delinquencies, defaults, foreclosures and loss of utility service. Homeowners with an income equal to or less than 150% of the area median (average) income may be eligible. Learn more: Homeowner Assistance Fund.

Assistance agency funds

Some customers may also qualify for assistance from various government and nonprofit programs for utility bills and other household expenses. 211.org is a free service to help customers find local community agencies that can help meet a wide range of needs, including utility bills, housing, food and other essentials, child and elder care, medical expenses and health counseling. To learn about agencies that serve your area, dial 211, visit 211.org online or text your ZIP code to 898211 for information on where to get help.

In addition, Duke Energy Florida customers can learn more about how community agencies can help by visiting our website. Resources are also available here for small business customers, from financial assistance to billing and payment options to professional guidance to manage their energy usage. 

Installment plans

Installment plans give customers more flexibility to pay a past-due balance over a longer period. Customers can request a few extra days or restructure the past-due balance into a monthly payment plan. Customers should contact Duke Energy to discuss options available to them: 800.700.8744.

Duke Energy Florida

Duke Energy Florida, a subsidiary of Duke Energy, owns a diverse generation mix of natural gas, coal and renewables, providing about 10,200 megawatts of owned electric capacity to approximately 1.9 million customers in a 13,000-square-mile service area.

Duke Energy (NYSE: DUK), a Fortune 150 company headquartered in Charlotte, N.C., is one of America's largest energy holding companies. Its electric utilities serve 7.9 million customers in North Carolina, South Carolina, Florida, Indiana, Ohio and Kentucky, and collectively own 51,000 megawatts of energy capacity. Its natural gas unit serves 1.6 million customers in North Carolina, South Carolina, Tennessee, Ohio and Kentucky. The company employs 27,500 people.

Duke Energy is executing an aggressive clean energy strategy to create a smarter energy future for its customers and communities – with goals of at least a 50 percent carbon reduction by 2030 and net-zero carbon emissions by 2050. The company is a top U.S. renewable energy provider, on track to own or purchase 16,000 megawatts of renewable energy capacity by 2025. The company also is investing in major electric grid upgrades and expanded battery storage, and exploring zero-emitting power generation technologies such as hydrogen and advanced nuclear.

Duke Energy was named to Fortune's 2021 "World's Most Admired Companies" list and Forbes' "America's Best Employers" list. More information is available at duke-energy.com. The Duke Energy News Center contains news releases, fact sheets, photos and videos. Duke Energy's illumination features stories about people, innovations, community topics and environmental issues. Follow Duke Energy on Twitter, LinkedIn, Instagram and Facebook.

Media contact: Ana Gibbs
Cell: 813.928.7263
Media line: 800.559.3853

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SOURCE Duke Energy

FAQ

What is the proposed fuel adjustment by Duke Energy Florida for 2022?

Duke Energy Florida proposed a fuel adjustment to spread the recovery of $247 million in increased fuel costs over two years, beginning in March 2022.

How will Duke Energy Florida's fuel adjustment affect customer bills?

Typical residential customers will see an average increase of $6.62 per month, while commercial customers may experience increases of 4% to 10%.

Why is Duke Energy Florida spreading the fuel cost recovery over two years?

To limit the impact of volatile natural gas prices on customer bills and ease financial strain during a period of rising energy costs.

When will the fuel adjustment take effect?

The fuel adjustment will take effect in March 2022.

What relief measures is Duke Energy Florida providing to customers?

The company is removing credit card fees for bill payments and offering energy management programs to help customers adjust their usage.