Duke Energy Florida (DEF), consumer representatives, and business groups have reached a sweeping agreement that will advance the clean energy vision for the state, introduce new programs for customers, retire coal plants faster, and bring additional certainty to rates through 2024.

The agreement, filed on Jan. 14, 2021, is subject to approval by the Florida Public Service Commission (FPSC). It includes investments to modernize the electric grid and improve reliability, offers new electric vehicle (EV) charging station programs, and supports pilot programs for innovative technology such as microgrids and floating solar pilot projects.

The agreement also provides a new optional residential time-of-use rate, reduces hurricane cost recovery impacts to customers, removes residential credit card fees for bill payments, and includes accelerated retirement dates for the DEF's last two coal units eight years ahead of schedule, from 2042 to 2034, in support of the company's carbon reduction goals.

After five months of negotiation, the agreement was developed with customer representatives of several consumer groups, including the state's Office of Public Counsel, the Florida Industrial Power Users Group, Nucor Steel Florida, Inc., and White Springs Agricultural Chemicals, Inc. d/b/a PCS Phosphate.

"This agreement provides a path to minimize bill increases while continuing to make smart investments that will offer customers greater reliability, cleaner energy alternatives, and innovative technology," said Catherine Stempien, Duke Energy Florida state president. "During these challenging times, it also provides rate certainty and clarity for Florida customers and communities regarding future adjustments."

The agreement will take effect in January 2022 and will include base rate investments of approximately US$5 billion over the next three years while minimizing the impact on customer bills.

If approved, the DEF's base rates will increase by US$67.2 million in 2022, and by another US$48.9 million in 2023 and another US$79.2 million in 2024, for a cumulative rate increase of US$195.4 million. As a result, the DEF's average residential customers will see a bill increase of 3% to 4% in 2022. Nonresidential customer bill increases will vary based on consumption patterns, but most will see increases of 1% to 6.5% in 2022. All customer classes will see an annual bill increase of approximately 1% to 2% in 2023 and 2024.

The DEF has requested the FPSC to hold a hearing and hopes to have a decision by second quarter 2021.