Gulf Power seeks increase for largest-ever construction program

Jul 12, 2013

Gulf Power Company is asking the Florida Public Service Commission to approve a two-step price increase to help pay for the largest power grid construction program in the history of the company.

Over the next three years, the company is building and replacing power lines and infrastructure — some more than 70 years old — to keep electricity flowing to its 430,000 customers. In addition, new lines and equipment are needed to comply with new mandatory federal environmental regulations.

The first increase would not take effect until April 2014, and it would increase the total bill for a residential customer buying 1,000-kilowatt hours by $8.94 per month or 7.5 percent — from the current price of $118.88 to $127.82.

The second step of the increase — related to the new environmental requirements — would not occur until 2015 and would raise the monthly bill an additional $1.99.

“This is a challenging time for utilities as we continue to provide reliable service to our customers and keep costs down,” said Stan Connally, Gulf Power President & CEO. “There are no easy answers, but we’ve worked hard to control costs and our residential rates are currently lower than they were in 2009.”

Connally cited aged, obsolete equipment and facilities that are at or beyond life cycle that must be upgraded and replaced.

“For example, one section of our transmission lines — 70 miles of it — is more than 70 years old,” Connally said. “We have transformers and other equipment operating well beyond their operational expectancy. We must rebuild parts of our system so we can continue to provide reliable service.”

Part of the new transmission line construction is to help the company comply with new federal environmental regulations that will change the way the company operates its plants and will require plants to be shut down at regular intervals. The new lines and equipment will be used to ensure voltage stability and reliable power flow while the plants are offline.

“Our obligation is to have the electricity available when and where our customers demand it,” Connally said. “This investment is necessary to meet our customers’ expectations, as well as the new federal environmental regulations.”

Examples of Gulf Power Infrastructure Investment:

1. Substations are being added and improved to continue to provide reliable service to our customers. In Pensacola, a substation on Devilliers Street has been rebuilt. On Allison Avenue in Panama City, a new substation has been built.

2. Seventy miles of a 70-year-old transmission line is being rebuilt from Panama City to Holmes County.

3. An existing transmission line between Highland City and Holmes Creek substations in the Panama City area is being upgraded to maintain reliability for our customers.

4. A new 38-mile transmission line is being added that begins in the Pensacola area and goes to the Florida-Alabama state line. This project is necessary for mandatory federal environmental compliance.

Gulf Power residential price changes

January 2009

$124.10

 

January 2010

$126.18

 

January 2011

$122.67

 

September 2011

$127.16

Interim base rate increase

January 2012

$125.80

Clause decrease

March 2012

$122.46

Fuel clause decrease

April 2012

$126.53

Permanent base rate increase

July 2012

$116.61

Fuel clause decrease - largest decrease in company history

January 2013

$118.88

Clause and base rate increase

Gulf Power Company is an investor-owned electric utility with all of its common stock owned by Atlanta-based Southern Company. Gulf Power serves more than 430,000 customers in eight counties throughout Northwest Florida. The company’s mission is to safely provide exceptional customer value by delivering reliable, affordable and environmentally responsible electricity while strengthening our communities. Visit online at GulfPower.com or on the company’s Facebook page, “Gulf Power Company.”

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