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Base rate increase

Power companies do an appallingly poor job of educating the public.  Part of that isn’t their fault because they are publicly regulated and have to observe a lot of scruples about conflicts of interest.

But part of it is their fault, and words like “base rate increase” are a perfect example.  They need to stop using language like this.  They need to tell the public there are two pieces to your power bill.  One part is like the car payment and the other part is like your gasoline bill.  Everyone in the general public understands that buying a car does not put gas in the tank.  They are two separate things, and you have to explain it like that so busy people get the idea from something familiar.  Very few people will take the time to wade through the gobbledygook of a utility press release about the base rate increase of blah blah blah.  It doesn’t compute.

Here’s the gasoline bill part:  In Florida, the power company is forbidden by law to make a profit on fuel.  Whatever they pay for coal, natural gas,  oil, uranium, or other raw energy sources is passed straight through to the customer with no additions.  If FP&L buys a ton of coal for $50, then the customers get a bill for their share of the $50.  If coal goes to $75, then your power bill goes up because the fuel portion went up.

The other part of the bill, the so-called base rate, is like your car payment.  The base rate pays for the hardware of the power plants, construction, wires, people, land, repairs, bucket trucks, all the ever-rising costs of regulatory compliance, and so on.  The public needs to be reminded in sensible terms that the car payment and the gasoline bill are two different things.  When the company has to replace a coal-fired power plant with a natural gas plant, the car payment has to go up a bit, and it doesn’t matter if the price of the fuel just went up too.  Life is tough all over, even for the utility.  That’s just a matter of educating your customers so they understand what they’re paying for and don’t feel ripped off.  No, not everyone will be convinced.  But the reasonable people will be.

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