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Hurricane Michael Sparks Utility Rate Hikes

May 14th, 2019 by Jake Stofan

Panhandle residents will see their electric bills tick up by about $8.00 on average later this year to pay for hurricane damaged infrastructure, but legislation awaiting the Governor’s signature could raise rates statewide to harden the grid in preparation for future storms.

Gulf Power replaced 7,000 power poles following Hurricane Michael.

To help recoup $342 million the company spent, Gulf Power asked the Public Service Commission (PSC) for higher rates.

Some community leaders came to speak in support.

“600 hundred miles of dirt roads, trees everywhere,” said Ted Everette, Director of the Washington County Chamber of Commerce. “They were there and they were picking up the pieces.”

The PSC approved Gulf Power’s request Tuesday.

With the PSC’s blessing, Gulf Power customers will see a three to eight percent increase on their monthly bill for the next five years.

“We did that intentionally to make this less of a burden on our customers who may still be recovering from those financial impacts and those storm impacts of Hurricane Michael,” said Sandy Sims with Gulf Power.

A bill awaiting the Governor’s signature would allow utility companies to raise rates before a storm in order to harden the electrical grid by moving power lines under ground.

“The crazy thing is, why didn’t we do this 20 years ago,” said Senate sponsor Joe Gruters.

Sen. Gruters said the Gulf Power rate hike is a case example of why hardening is in the public interest.

“That’s what happens when you don’t prepare and hopefully what we’ll be able to do is have the infrastructure in place so that will never happen again,” said Gruters.

While Gulf Power said it continues to harden its grid, it pointed out there are some examples where underground lines aren’t ideal.

“This was a wind event, however I have worked storm surge events and under-grounding power in those instances weren’t necessarily an advantage,” said Sims.

The hardening plan would come with its own cost to customers, about $4.00 a month according to most estimates.

Gulf Power representatives said they expect panhandle customers to see rate increases starting in July, which is more than a month after Hurricane season begins.

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