Tampa Electric CEO pressed for answers on utility’s rate hike request

For more than eight hours over two days, Tampa Electric president and CEO Archie Collins was questioned by lawyers in Tallahassee as the utility’s quest to raise its customers’ rates was essentially put on trial.

In hearings over the utility’s base rate hike request held by state regulators, Collins discussed internal company documents that showed Tampa Electric executives knew its customers were increasingly struggling to pay their utility bills last summer. The price of fuel burned in power plants skyrocketed, while record-hot temperatures caused sweltering residents to crank their air conditionings. As bills spiked, the volume of calls to Tampa Electric’s help line exploded, and customer satisfaction, as measured by data firm J.D. Power, sank.

Bradley Marshall, a lawyer representing groups advocating for affordability, asked Collins about whether the company’s requested $445 million in hikes over the next three years would raise rates back to levels that caused that crisis. Bradley focused on a cost-structuring plan submitted by Tampa Electric that would shift millions in costs from large industrial and retail companies onto the bills of regular residents, and whether that would prompt residential bills to approach levels similar to 2023 if it were approved.

Collins said they would get close.

The opening two days of these hearings at the Florida Public Service Commission featured many moments like this, revealing new information about Tampa Electric’s rate hikes packaged in highly technical utility jargon. Hundreds of documents were included as exhibits in the case, so many that lawyers sat buried by multiple binders and accordion folders on their desks.

The hearings themselves are a rare occurrence, since utility companies often settle rate cases by reaching agreements with regulators and the other lawyers involved, before the point where the CEO is grilled on the witness stand. Duke Energy Florida, for example, settled its case last week after the company agreed to slash its hikes by hundreds of millions of dollars.

But Tampa Electric stood firm Monday and Tuesday. Collins said the company is doing the right thing by requesting these base rate hikes. Base rates are a major component of electricity bills, which also include charges for other things like fuel or post-hurricane repairs.

“We need the rate increases we have requested so we can continue to perform well today, and to ensure the company is taking the steps to insulate our customers from higher costs tomorrow,” Collins said. “I acknowledge there is never a good time for a rate case, but they are necessary so the company can continue providing the kind of electric service that our customers expect.”

He sat stiffly with folded hands as he responded to likely hundreds of questions, including about his roughly $2 million annual compensation. Tampa Electric is also seeking a rate of return for its shareholders with a midpoint of 11.5%, which is well above the national average and above what other utilities under Tampa Electric’s parent company, Emera, make.

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“We will challenge TECO’s excessive, platinum-plated demands,” said Patricia Christensen of the Office of Public Counsel, which advocates for utility customers. “TECO seeks to impose ruinous costs upon customers in order to achieve negligible improvements.”

When asked about an internal company presentation that featured statistics on how many people were experiencing “energy poverty” in the Tampa area — spending more than a certain portion of their household income on their utility bills — Collins said that presentation was “wrong,” and that the document was “intended to be directional, not accurate.”

“Affordability … is such a subjective term,” he said. “It means something different to everyone. What you consider affordable is different from what I might consider affordable.”

Collins said the company tries to help any customer struggling to afford their bills, though the drying up of federal money, much of which was leftover from the pandemic, has shrunk the number of resources available.

Some of the lawyers, including Marshall and the Office of the Public Counsel, are building a case that Emera wants to extract as much cash as possible from Tampa Electric customers in order to help bolster its coffers as it struggles financially. Emera has had cash flow problems and is at risk of having its bond rating downgraded, according to questions asked during cross-examination.

Tampa Electric makes up about a third of Emera’s total customer base, the testimony revealed, but its customers generated more than half of Emera’s revenue in 2023.

Collins said there was “no correlation” between Tampa Electric’s rate hike request and Emera’s financial situation.