Duke Energy Florida proposed a settlement to raise base electric rates by $203 million in 2025 and $59 million in 2026, less than initially requested, pending state approval.

Duke Energy Florida and consumer representatives Monday filed a proposed settlement that would increase base electric rates — but not as much as Duke originally sought.

The proposal, which needs approval from the state Public Service Commission, would increase base rates by $203 million in 2025 and $59 million in 2026 and includes increases over a three-year period for solar-energy projects, according to a filing at the commission and a Duke news release.

Duke reached the agreement with the state Office of Public Counsel, which represents consumers in utility issues, and other parties in the rate case — the Florida Retail Federation, the Florida Industrial Power Users Group, Nucor Steel Florida, Inc. and PCS Phosphate-White Springs.

“This agreement delivers the smarter, cleaner energy future customers deserve while prioritizing reliability and price stability,” Melissa Seixas, Duke Energy Florida state president, said in a prepared statement.

The parties said in a regulatory filing last week that they were close to reaching an agreement. They asked the commission Monday to consider the settlement in August, when regulators had been scheduled to hold a hearing on Duke’s original proposal.

That proposal, filed in April, called for increasing base rates by $593 million in 2025, $98 million in 2026 and $129 million in 2027. A U.S. Securities and Exchange Commission filing Monday indicated the $593 million proposal for 2025 had been decreased to $503 million after the original filing.

“Residential, commercial and industrial customers will see lower increases in their bills than they would have experienced under DEF’s (Duke Energy Florida’s) original proposed rate increase,” the proposed settlement said. “The 2024 settlement agreement provides DEF customers with stability and predictability with respect to their electricity rates, while allowing DEF to maintain the financial strength to make investments it believes are necessary to provide its customers with safe and reliable power.”

Base rates make up a major part of customers’ monthly bills, along with such expenses as fuel for power plants and environmental-compliance costs. Despite the proposed increase in base rates, Duke said Monday that residential customers’ bills are expected to decrease in January because other current costs, such as costs related to storm recovery, will drop off bills at the end of 2024.

Utilities use a benchmark of residential customers who consume 1,000 kilowatt hours of electricity a month. Under the settlement, such customers would see their bills go down from $165.76 in December to $157.50 in January. Spokeswoman Ana Gibbs said the company does not have projections of customer bills for 2026 and 2027.

The increases for 12 new solar facilities would total $12 million in 2025, $71 million in 2026 and $58 million in 2027, according to the utility.

A closely watched issue in rate cases is the amount of profits that utilities are allowed to earn as measured by a “return on equity.” The settlement would allow Duke to earn a return on equity ranging from 9.3 percent to 11.3 percent, with a “midpoint” of 10.3 percent. The original April proposal included a return-on-equity midpoint of 11.15 percent.

Settlements are relatively common in base-rate cases. For example, Duke, which is the state’s second-largest utility behind Florida Power & Light, is operating under a rate settlement that was reached in 2021 and will end this year.

Meanwhile, a proposal by Tampa Electric Co. to raise base rates also is pending at the Public Service Commission.