After string of hurricanes, Duke seeks to bill Florida customers $1.1 billion for recovery

Duke Energy is asking Florida regulators to authorize ratepayer recovery for almost $1.1 billion in costs associated with storm cleanup from three major hurricanes that ravaged the state between September and October.

The utility's Dec. 27 filing with the Florida Public Service Commission greatly exceeds similar recovery requests in recent years. By comparison, in 2023 Duke requested recovery for $166 million in costs related to that year's Hurricane Idalia plus some additional costs from 2022's Hurricane Ian. In 2022, Duke requested $442 million in ratepayer recovery for costs both from Ian as well as other, smaller storms that hit Florida. In both years, the PSC approved the full recovery amounts that Duke requested.

In a news release, Melissa Seixas, the president of Duke subsidiary Duke Energy Florida, said the utility's recovery request was reasonable given the storms' severity.

"Quickly and safely getting the lights back on for our customers was our highest priority after each of these brutal storms," Seixas said. "While today's filing reflects the costs of those efforts, we want to assure our customers that, as part of our overall commitment to affordability, we strived to minimize the impact on their bills as much as possible."

Duke's Florida service area includes the cities of Orlando and St. Petersburg and covers over 2 million customers. The utility's request at the PSC covers Hurricane Debby, which hit the state as a Category 1 storm in August; September's Hurricane Helene, which made landfall as a Category 4 storm; and Hurricane Milton, which hit in October as a Category 3 storm.

Recovery costs

In its news release, Duke said the recovery request covers the repair and replacement of damaged equipment as well as numerous other costs. Those costs include deploying service crews from other Duke utilities to Florida, acquiring additional assistance from elsewhere in the US and Canada, setting up staging sites, and providing meals and lodging to workers.

Duke's requested recovery amount is similar to the $1.2 billion storm restoration charge that the PSC approved Dec. 3 for another big utility, NextEra Energy-owned Florida Power & Light Co (FPL). While FPL has a bigger presence in the state, serving about 5.8 million customers, its service territory is concentrated in south Florida and along the state's eastern coast, which were not as heavily affected by the 2024 storms.

If the PSC grants Duke's request, the utility's Florida customers would see a temporary bill increase for 12 months beginning in March 2025. For residential customers, Duke said, that increase would be about $31 per kilowatt-hour of power used.

Duke estimated in its PSC filing that, as of Nov. 30, total restoration costs associated with the three storms stood at $1.203 billion. Hurricane Milton accounted for more than half that amount, at $769.7 million, while Helene-related costs stood at $372.5 million and the figure for Debby was $61 million. However, after adjusting for various factors, Duke calculated restoration costs for its retail customers at $938.6 million. The utility requested recovery of that amount as well as $131.9 million to replenish its storm reserve and another $19.1 million for interest expense.

Room for negotiation

In a Dec. 30 email, Florida Public Counsel Walt Trierweiler, the state's utility ratepayer advocate, said he would seek to lower the final costs for Duke's customers but suggested that Duke's numbers are likely to be reasonably representative of the utility's actual costs incurred.

"There are so many moving parts and wide variety of costs to be captured and evaluated that we always discover costs to challenge," Trierweiler said. "What many outsiders may find surprising is the fact that Florida's utilities frequently acknowledge the amounts that we question and voluntarily reduce their asks."

Moreover, Trierweiler praised the state's investor-owned utilities, saying they "have significantly improved the accuracy, detail, and transparency of their support for storm recovery amounts over the past 10 years."

This year's storm season was particularly disastrous for Duke because Hurricane Helene also led to devastating flooding in the utility's western North Carolina service territory. In a Dec. 13 recovery assessment, the office of North Carolina Gov. Roy Cooper (D) estimated that the storm caused $1 billion in damage to electricity infrastructure in the state.

Duke said in its third-quarter earnings call Nov. 7 that the total estimated cost to restore service and rebuild its infrastructure systemwide from this year's storms would be between $2.4 billion and $2.9 billion.