Rising coal and natural gas prices are causing Gulf Power Company’s bills to go up five percent beginning Jan. 1, but the company continues to have the lowest electricity prices in the state among major utilities.

Each year the Florida Public Service Commission adjusts electricity prices up or down to reflect the fluctuating costs of the fuels used to make electricity and the costs to meet environmental regulations. Gulf Power’s price for 1,000 kilowatt hours will increase $4.57 from $87.91 to $92.48.

“The rising cost of fuel – particularly natural gas – is impacting Gulf Power just like every other company and resident,” said Gulf Power spokeswoman Lynn Erickson. “Fuel costs are a straight pass through to the customer and as those costs go up and down, our prices are adjusted.”

Of Gulf Power’s increase, $2.55 is for fuel and $1.29 is for environmental improvements. The other 73 cents is a combination of higher state gross receipt taxes and an increase in the cost of buying electricity from other utilities.

“These changes are simply a matter of rising costs that we incur, just like any other business,” Erickson said. “No one likes an increase, but as all energy prices are rising we can take some comfort in the fact that we’re seeing only a five percent increase while other areas are seeing much higher increases.”

The good news for Northwest Floridians is that Gulf Power’s five percent increase is much less than increases at the state’s other major utilities, primarily because Gulf Power burns low sulfur coal, one of the most cost-effective ways to make electricity. Increases at Tampa Electric and Progress Energy are more than double and Florida Power and Light’s increase of $13.83 is more than three times Gulf Power’s increase.

Florida Residential Rate Comparison (1,000 kilowatt-hours)