State regulators

reject a request by Duke Energy Florida to increase customers’ bills this summer to cover higher-than-expected fuel costs.

TALLAHASSEE — Raising questions about the company’s forecasts, state regulators Monday rejected a request by Duke Energy Florida to increase customers’ bills this summer to cover higher than-expected fuel costs.

Fuel, such as natural gas and coal, makes up a large portion of electric bills, with utilities typically going before the Public Service Commission each fall to get approval for fuel costs, which are passed through to customers. After receiving approval of projected fuel costs in late 2016, Duke returned to the commission in April with a mid-year increase request.

For a residential customer who uses 1,000 kilowatt hours of electricity a month, for example, the proposal would have increased the fuel portion of the monthly bill from $33.77 to $38.47 starting July.

Duke attorney Matthew Bernier told the Public Service Commission that the company has seen increases in fuel prices and decreases in projected sales, prompting the request. In its proposal, Duke pointed to what is known as an “under-recovery” of $182 million in fuel-related costs.

But commission members questioned the changing forecasts and denied Duke’s request for the mid-year increase. The panel will consider the costs during the regular process this fall, with potential increases passed on to customers in 2018. Commission staff members had recommended approval of the utility’s request.

“How can you make the sales forecast more accurate?” commission chairwoman Julie Brown said to Bernier. “Customers want levelized rates, they want predictability.”

Bernier said the utility uses “the best available information that we have at the time.”

“I’m not aware of anything that we can do to make it more accurate,” Bernier said. “If there is anything, we would be certainly more than willing to look into it and to apply those lessons.”

Duke pointed to the possibility that customers could see larger increases in their bills in 2018 because company needs to make up for the higher-than-projected fuel costs in 2017. Through a process known as “true-up,” utilities can recoup money spent on fuel.

“Duke Energy Florida works to actively manage its fuel contracts and keep costs as low as possible for customers,” spokeswoman Ana Gibbs said in a prepared statement after the commission vote. “Fuel costs for 2016 and 2017 were higher than projected. Rather than continuing to undercollect for the remainder of 2017 and accumulate a larger true-up in 2018, the company believed it was ultimately in the best interest of our customers to file a timely and more immediate rate correction. The company makes no profit from the fuel component of rates.”

But commission member Ronald Brise asked during the meeting about the possibility that a mid-year increase could lead to the company later needing to refund money to customers because of collecting too much. Brise said refunds could result if “we’re looking at forecasts that may not be totally accurate and sort of getting ahead of ourselves with an opportunity to address this a little bit later.”

Though regulators turned down the mid-year increase related to fuel costs, Duke customers will see a slight uptick in their bills. That increase is related to financing of bonds — through a process known as securitization — involved in the closure of a Crystal River nuclear plant.