Dive Brief:

• Two Florida utilities have reached settlements with the state's consumer advocate, agreeing to set aside savings from the 2017 federal tax cut in order to pay for costs associated with Hurricane Irma in 2017.
• Duke Energy Florida's settlement with the Office of Public Counsel includes $484 million in costs, while Tampa Electric Co.'s settlement includes $91 million.
• Further north, the New York Public Service Commission said April 18 it could fine five utilities for failing to comply with their state-approved emergency plans regarding their preparation and responses to storms last year.

Dive Insight:

As storms become more frequent and damaging, states are working on how to allocate related costs. Regulators in New York and Florida are looking at a mix of hurricane and winter storm damages, while in California, devastating wildfires have forced Pacific Gas & Electric to file for bankruptcy.

In Florida, utilities previously pledged that customers would not pick up costs related to Hurricane Irma. Instead, the utilities promised to use savings from the lower corporate tax rate to repair their systems. 

The cases with TECO and Duke were settled earlier in April, Florida Office of Public Counsel attorney Charles Rehwinkel told Utility Dive. A May 21 hearing is the first chance they could be approved by the Florida Public Service Commission.

TECO customers could actually see a small credit, due to the utility's tax savings. Duke customers will save on storm costs, but Duke is recovering some amount from customers through 2021.

In New York, the Public Service Commission announced the completion of an investigation into the preparation and response of the state's major utilities to five major 2018 storms. Each of the storms left more than 100,000 customers without power.

"As a result of the investigation, utilities' shareholders could face potential storm-related financial penalties for failing to comply with their state-approved emergency plans," the PSC said.

The commission also approved a settlement that resolves 2017 storm response failures by New York State Electric & Gas (NYSEG) and Rochester Gas & Electric (RG&E), and moved for an enforcement proceeding in State Supreme Court to address recurring violations.

"In recent years, the state has faced an increased frequency of severe weather events that have impacted utility infrastructure," PSC Chair John Rhodes said in a statement. "It is mission-critical that our utilities are adequately prepared to meet and address these new realities and respond appropriately."

"When a utility fails to meet its responsibilities and commitments, they must and will be held accountable," said Rhodes.

The PSC issued an order to show cause directing the companies to respond to the staff investigation, and explain "why they should not be found to have violated the emergency response plans, regulations, and orders."

Consolidated Edison, NYSEG, RG&E, Orange & Rockland, Central Hudson Gas & Electric and National Grid could all face penalties.