The agreement will take effect after the PSC issues its final order, which is expected in about two weeks.
Vincent Dolan, president and CEO of Progress Energy Florida, said: “This agreement is in the best interest of our customers, the state, the company and the communities we serve. This is a constructive settlement that provides our customers economic relief during these challenging times.”
As per the provisions of the settlement, Progress Energy will withdraw pending motion for reconsideration and accounting order petitions related to the 2010 base rate decision.
The company’s midpoint for return on equity (ROE) will remain at 10.5%. If its ROE falls below 9.5% at any time before December 31, 2012, it can seek a rate adjustment. Progress Energy may reduce its depreciation reserve by up to $150m in 2010, up to $250m in 2011 and up to the remaining balance in 2012.
According to Progress Energy, residential customers who use 1,000kWh a month pay $48.58 in base rates now. While the settlement will keep base rates stable, customer bills may fluctuate as certain charges, such as fuel, which includes the cost of coal and natural gas used to generate electricity, or environmental improvements, are filed and reviewed annually with the PSC.
