Mark Crosswhite, President and CEO of Gulf Power, made the following comments to the state Public Services Commission today regarding the company's request for a base-rate increase.
Thank you, Commissioners, for the opportunity to speak on behalf of Gulf Power and its employees who live and work in this community.
The primary purpose of this meeting is to hear from our customers, so I will be brief and to the point.
Gulf Power has served Northwest Florida since 1926 and we understand that we can only be successful if the communities we serve are successful. We understand electricity prices have a direct impact on all of our customers, and that many of our customers are on a fixed income. We also understand that customers have seen electricity prices increase due to environmental requirements and escalating fuel costs. And we understand the region has been in an economic downturn.
So, we are sympathetic to our customers who say this is a bad time for us to seek an increase in our base rates. Let me be clear, Gulf Power has worked hard to delay this request as long as possible. In fact, we have not asked for a base rate increase in 10 years – since 2001. And, we would not be asking now if it were not necessary to continue providing reliable electric service going forward.
We take seriously our responsibility to keep the lights on. The electric utility business is a long-term business. We have an obligation to serve every new customer – an obligation to set the poles, string the wires, build the substations and maintain the power plants so everyone has electricity as soon and as often as they demand it.
We don’t have the option of delaying production or shutting down a portion of the business until things get better. We can’t delay expansion until construction prices come down. We can’t stop buying copper wire just because it has increased in price almost 300 percent since our last rate filing.
Since our last base rate filing, we have added hundreds of miles of new power lines and several new substations. We have strengthened our power lines in the wake of a number of major hurricanes and tropical storms. And we have constructed a 3.2 megawatt generating facility at the Perdido Landfill to convert land fill gases to energy.
And because this is a long-term business, we have to plan today and take steps today to make sure that when our customers flip a switch 5 to 10 years from now, that we have the infrastructure in place to make the lights go on.
Part of that long term planning process includes buying the land for new generators. In Escambia County, we are fulfilling that obligation by buying land in the northern end of the county for a future power plant site. Planning, building, licensing, and bringing a new power plant to life can take 10 years or longer. But buying the land is the first necessary step to ensure we have the power our customers will need in the future. You can’t plan a power plant unless you have the land to build it on.
So we have to meet our obligations today and we have to plan and prepare for the future.
And that’s why we are here now. It costs us much more to do business today than it did when our base rates were set in 2001. Simply put — the cost of making and delivering electricity has increased — our base prices have not.
So, while we are reluctant to ask for an increase, we must do so. We have to cover our rising expenses and continue to make investment in the electric system so that we can fulfill our obligation to provide reliable electric service to our customers.
Since 1926, Gulf Power has been an active part of the communities we serve. Our employees volunteer and get involved in local events because it is their community too. They want to see it grow – they want it to be a better place.
Today I speak on behalf of all those Gulf Power employees by saying that we remain committed to ensuring reliable electric service, providing outstanding customer service and being a good community citizen. We remain committed to helping this community grow.
As Mr. Stone (Gulf Power's lawyer) indicated, we have customer service representatives available to help customers with any questions.
For more on this story, see the September 22 issue of the Navarre Press or subscribe online.