TECO Peoples Gas North Bay Village Frenchise Agreement

…another issue addressed and approved at the commission meeting of 12/10/2013 was the renewal of TECO Peoples Gas System franchise agreement.  The 30 year franchise agreement that was up for renewal was discussed for what appeared to be an eternity. The new agreement will return 6% of the revenues produced by North Bay Village TECO gas company customers. If you are a customer of TECO gas, look at your bill and you will notice that the 6% is added to your bill. In reality it is like a hidden tax. One big difference between the new franchise agreement and the old is that now TECO gas needs to pay for work permits that were not required in the past. I wonder if this too will be passed on to the consumers. Another difference was that this franchise agreement is now for 15 years with an option to renew for another 15 years. It would be fair to point out that Commissioner Wendy Duvall did not vote because she was absent and Commissioner Chervony was the only no vote.  

There are properties in North Bay Village that TECO’s gas pipes do not reach.  TECO’s pricing formula to calculate the cost and allowances for those possible customers is complicated and difficult to understand. Let’s say you want to hook up and use gas appliances and happen to be one of those customers that TECO’s services do not reach. Imagine that the pipes have to be installed to service 20 homes in one area and you happen to be at the end of that area, however only 5 homes are thinking of converting to gas.  TECO needs to spend let’s say $ 25,000.00 to provide services to these five customers, they divvied the cost by the five customers at $ 5, 000.00 each.  These customers that are converting will spend, say $ 30.00 an month: $ 30.00 x 12 is $ 360.00 x 4 years $ 1, 440.00 that’s their credit allowance.  The difference $ 3, 560.00 would have to be paid by the new customer. The people that did not sign up after five years and a day can actually hook up without a charge because their properties fall between were the pipes were installed. This is basically why I think Commissioner Chervony voted no. He attempted to use the renewal as an opportunity to work up a better deal for the would-be customers. I can’t blame him but the franchise agreement has nothing to do with TECO’s cost recovery and pricing policies.  This price would not include the cost of installing the pipes inside your home to service the appliances. If you are already using propane gas appliances basically you are all set, if not then obviously is another cost to convert…you be the judge. Other topics to come, the count down has begun!

Honestly Opinionating

PUTTING NORTH BAY VILLAGE FIRST

Mario Garcia

December 15, 2013