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Florida regulators hold hearing on Dukes request for storm recovery costs

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(The Center Square) — The Florida Public Service Commission held a hearing this week to oversee Duke Energy Florida’s storm recovery costs but didn’t issue an order.

Docket intervenor Walmart opted out of closing arguments on Tuesday and will instead submit a brief due June 14.

Duke Energy Florida serves approximately 2 million customers across the state of Florida and sought cost recovery related to Hurricanes Elsa, Eta, Isaias, Ian, Nicole and Tropical Storm Fred.

In September 2023, Duke Energy filed its petition to approve the actual storm-related costs, totaling $431.4 million. Then, in October 2023, the company filed another petition to implement an interim storm restoration recovery surcharge to recover $166.1 million in incremental storm restoration costs.

Approximately $73.9 million is related to uncollected restoration costs from the storms, and $91.9 million is related to Hurricane Idalia which hit in late August 2023. Duke Energy requested that these costs be recovered over a 12-month period beginning January 2024.

Walmart submitted comments in response to Duke’s petition for recovery of storm restorations costs. While Walmart did not take a stance on other issues, Walmart objected to DEF’s recovery of storm costs through the energy charge for its demand-metered customers.

Instead, Walmart argued that this should be recovered through the demand-charge, because this approach would better align cost recovery with cost causation, since distribution costs are typically classified as demand-related because they do not vary with the amount of electricity provided.

Walmart had previously raised concerns about shifting cost responsibility from lower to higher load-factor customers.

The Office of the Public Counsel stated during the hearing that Duke had complied with all stipulations and added that it supports the company’s commitment to an ongoing continuous storm restoration process improvement plan to ensure customers are only paying for cost-effective storm restoration costs that have been incurred.

PCS staff questioned Christopher Menendez, Director of Rates and Regulatory Planning at Duke Energy Florida, about the surcharges. Menendez stated that switching to a demand-based charge during a recovery cycle would likely lead to customer confusion and frustration.

“Customers who have been incurring the storm surcharge up to this point on an energy basis could be surprised, confused, and frustrated if this were to switch towards the end of the recovery cycle,” Menendez told PSC staff.