Today, Gulf Power filed an agreement with the Florida Public Service Commission seeking approval to reduce rates for 2019 and beyond by approximately $9.6 million on an annual basis. This reduction reflects the remaining tax savings resulting from the Tax Cuts and Jobs Act.
The proposed decrease comes on the heels of the previous tax savings related rate decrease of $103 million for 2018. In addition, Gulf Power also recently filed a separate request with the FPSC to reduce prices based on reduced fuel, conservation and environmental costs. In total, if all of the proposed changes are approved by the FPSC, the average Gulf Power customer using 1,112 kilowatt-hours per month can expect to see a $2.70 drop on their monthly electricity bill for 2019.
The tax savings are the result of federal tax reductions under the new Tax Cuts and Jobs Act, which was signed into law on Dec. 22, 2017, and became effective on Jan. 1, 2018. The decrease in the corporate tax rate from 35 percent to 21 percent reduces the amount of federal income tax Gulf Power will have to pay and allows the energy provider to pass that savings along to customers.
“This is more great news for customers,” said Stan Connally, Gulf Power chairman, president and CEO. “Reduced taxes and reduced costs means reduced prices for Gulf Power customers — about $32 per year for the average customer. This will be the eighth time in 10 years we’ve been able to decrease prices. With approval by the Florida Public Service Commission, customers will see the decrease beginning in their January 2019 bills.”
On the tax-related decrease, Gulf Power worked together to reach an agreement with the Office of Public Counsel, the Florida Industrial Power Users Group, The Florida Retail Federation and the Southern Alliance for Clean Energy to agree on how to deliver these savings to customers.
“The Gulf Power team worked diligently with the Office of Public Counsel and other groups to reach an agreement that would bring the best short- and long-term value to our customers,” said Connally. “If approved, beginning in January 2019, Gulf Power customers will be seeing an additional $9.6 million in savings that will be reflected on their future energy bills. I’m excited that our prices are the lowest they’ve been in five years.”
While Gulf Power will pass along this additional tax savings to customers across Northwest Florida, the company continues to invest in the energy grid to maintain the safe, reliable and affordable service customers have come to expect.
“Our team will continue to make smart investments in our energy grid to continue the high reliability our customers have come to expect,” said Connally.
Gulf Power residential price changes (Average residential customer monthly bill)
|January 2010||$155.50||Increase for Scrubber|
|July 2012||$127.64||Second largest decrease in company history|
|January 2014||$149.59||Increase for largest power grid construction project in company history|
|July 2017||$150.80||Increase for infrastructure investments|
|January 2018||$157.90||Increase mainly for costs of fuel to generate energy|
|April 2018||$143.79||Decrease for Corporate Tax Reform (2018 only)|
Largest decrease in company history
|January 2019||$141.09||Decrease for additional Tax Reform savings and Clause savings if approved by FPSC|
(Prices for customers using 1,112 kilowatts of electricity per month.)
Cautionary Note Regarding Forward-Looking Statements
Certain information contained in this Current Report on Form 8-K is forward-looking information based on current expectations and plans that involve risks and uncertainties. Forward-looking information includes, among other things, statements concerning the proposed rate reduction. Gulf Power cautions that there are certain factors that could cause actual results to differ materially from the forward-looking information that has been provided. The reader is cautioned not to put undue reliance on this forward-looking information, which is not a guarantee of future performance and is subject to a number of uncertainties and other factors, many of which are outside the control of Gulf Power; accordingly, there can be no assurance that such suggested results will be realized. The following factors, in addition to those discussed in Gulf Power’s Annual Report on Form 10-K for the year ended December 31, 2017, and subsequent securities filings, could cause actual results to differ materially from management expectations as suggested by such forward-looking information: the uncertainty surrounding recently enacted tax reform legislation, including implementing regulations and Internal Revenue Service interpretations, and actions that may be taken in response by regulatory authorities; and the impact of pending and future rate proceedings, including those related to the proposed rate reduction. Gulf Power expressly disclaims any obligation to update any forward-looking information.