Florida May Allow Discounts For Larger Utility Customers
April 26, 2011
Florida may become the latest Southeastern state to allow electric utilities the right to offer discounts to large customers. The Florida Public Service Commission is considering a request by Pensacola-based Gulf Power Co. for more flexibility on its industrial rates. The utility, a unit of Southern Co., an Atlanta holding company, insists that it needs the discounting authority to compete with out-of-state utilities that are offering breaks on electric bills to lure big companies away from Florida. Gulf Power fears that if too many big customers leave the state, its profits could suffer: Industrial users make up less than 1% of Gulf Power's customer base, but they accounted for 14% of the company's $619 million in revenue last year. Florida regulators have rejected individual discounts in the past, fearing that if utilities gave breaks to big customers, the utilities could then shift costs to smaller users. But the commissioners don't want to sit idly by as utilities in other Southeastern states receive greater flexibility in dealing with their large industrial customers. In Alabama, the Public Service Commission in April backed Alabama Power Co.'s request for accelerated approvals of special rates or other services to large industrial users. North Carolina regulators have endorsed utilities' price breaks to three large manufacturers that threatened to build their own generation plants. The industry ``is trying to move the balance away from heavy regulation to the flexibility required to be competitive,'' says Davida Rikki, spokesman for Alabama Power, also part of Southern Co.. But large industrial users also have been losing some battles as utilities prepare for deregulation of the electric-power industry. Despite intense opposition from the state's industrial titans, Alabama lawmakers earlier this year approved an Alabama Power proposal that could force some companies to pay a fee before leaving the utility's system.
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