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In order to calculate fuel and energy conservation rates,
Florida Power must provide the FPSC and FERC with data that
estimate fuel costs, energy conservation costs, and projected
sales over a 6-month recovery period. Recovery periods run from
April through September and October through March. The agencies
calculate a fuel and energy conservation cost per kilowatt hour
of electricity consumed that remains level over the entire
period. The FPSC and FERC have determined that level pricing
over a 6-month period is beneficial to customers because it
reduces the volatility of customers’ monthly bills caused by
fluctuating fuel prices and random energy conservation
expenditures.
Because the rates approved by the regulatory agencies are
based on estimates, the amount billed by Florida Power for fuel
or energy conservation costs in a given month may be more or less
than the costs actually incurred in that month. However, an over
or underrecovery at the close of a given month may be increased
or decreased by over or underrecoveries occurring in a subsequent
month during the same recovery period. Therefore, any
overrecovery balance as of December 31 of any taxable year could
be reduced or eliminated as a result of underrecoveries occurring
during January, February, or March of the following year but same
rate period.
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Last modified: May 25, 2011