Dive Brief:

• In a closely-watched Florida case, utility regulators have allowed power providers to continue the practice of hedging the price of natural gas volumes despite $6 billion in losses to consumers since 2002, the Tampa Bay Times reports. 
• The program is not designed to lower power prices but to keep them stable. The Public Service Commission directed its staff to work with stakeholders developing changes that will benefit customers next year.
• In approving the fuel cost recovery proposals for five utilities in the state, regulators also approved lower monthly bills. Commissioners plan to revist the hedging practice next year to see if other options exist to limit losses, which could include a cap on hedging. 

Dive Insight:

Natural gas prices are trending lower, and that has caused a debate in Florida over utility hedging practices. By locking in gas supplies in advance, electric companies can keep gas prices stable. But as commodity prices have remained low, the result has meant customers spent an extra $6 billion over the last 13 years.

But the loss doesn't mean the programs don't work, according to the PSC.

"Commissioners agreed that while natural gas prices have recently trended downward, the volatility of those prices can vary considerably," PSC said in a statement. "The commission directed staff to work with stakeholders on a collaborative process to bring hedging program changes that benefit customers for commissioners to consider next year."

In the 13 years examined in the proceeding, Duke Energy Florida lost almost $1.5 billion as a result of hedging; Tampa Electric lost $421 million; FPL lost $4 billion; and Gulf Power lost about $170 million.

"We'd probably be critical of [the utilities] if they weren't at least considering it," PSC Commissioner Lisa Edgar told the Tampa Bay Times.

However, the decision triggered disappointment among some.

"We can count on the sun coming up and the PSC doing favors for the utility industry," said State Rep. Dwight Dudley (D), a ranking member of the Florida House's energy and utilities subcommittee. "It's all about giving the industry whatever it wants even if it's a dead dog loser. How much more proof do you need that something doesn't work when you have $6 billion in losses? How is that beneficial to consumers?"

In spite of the worries, regulators approved the fuel cost recovery proposals for five utilities in the state.