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Saturday, Sep 20, 2014

Editorial: Duke’s unseemly revenue grab


Duke Energy Florida seems to embody all of the reasons consumers become disgusted with utilities that are allowed to operate as monopolies in our communities.

No private company in a competitive environment would artificially inflate the cost of their product and expect to survive.

But that’s pretty much what Duke Energy Florida did to thousands of its Pinellas and Pasco customers as it adjusted the routes used by meter readers to record power usage. As part of that adjustment some customers have been billed for nearly six weeks of power instead of a month, pushing them over 1,000 kilowatts of usage and forcing them to pay $2.36 more for each 100 kilowatts over that threshold.

After a public outcry, and letters from state senators, the utility apologized this week and offered refunds. A spokesman said the company didn’t anticipate the higher rates from the route adjustments, and that the irregular cycle will happen just one time before customers return to the monthly cycle.

Still, the Public Service Commission (PSC), which allows the higher rates to be charged during the cycle adjustment, should put an end to the practice when it meets Sept. 4 to discuss complaints about the lengthened billing cycle.

The episode is another boondoggle for the utility, which already charges customers for a nuclear plant it never intends to build and engaged in a very public fight over its property taxes in Citrus County.

It also illustrates the state’s indulgent utility oversight. The PSC often seems more interested in protecting regulated industries than consumers.

According to the utility’s website, operating revenues for parent Duke Energy in North Carolina neared $25 billion last year to serve its 7.2 million customers in six states. About 1.7 million of those customers reside in Florida, mostly in West-Central Florida, the Panhandle and areas near Orlando.

The company said it embarked last year on a program to streamline its meter routes. Some customers living in the same subdivisions or neighborhoods are billed in the middle of the month and some at the beginning or end. The rerouting will bring customers near each other into the same billing cycle, reducing the time spent reading meters.

That’s a reasonable and cost-efficient adjustment, but not one for which customers should pay.

An estimated 267,000 customers had their billing cycle lengthened during the adjustment period. The refunds are expected to average about $5.50.

It seems inconceivable that Duke wouldn’t know some of its customers would be forced to pay the higher kilowatt rates, especially during the dead of summer in Florida. But that’s the company’s explanation.

In response to the letters from Sen. Jack Latvala, a Republican from Clearwater, and Sen. Jeff Brandes, a Republican from St. Petersburg, the PSC has asked Duke Energy Florida President Alex Glenn to appear at the Sept. 4 meeting.

“Although it might be legal for them to squeeze the additional money from customers in this manner,” Latvala wrote to the PSC, “it certainly isn’t moral.” If the PSC won’t change the rule, lawmakers should insist the practice be stopped before the next route adjustment cycle occurs and a monopolistic utility is unable to resist the urge to treat its customers like cash registers.

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