JEA Set to Raise Electric Rates

June 24, 2007 0 comments Open printer friendly version of this article Print Article

JEA Board Approves Electric Base Rate and Variable Fuel Rate Adjustments Jacksonville, FL - The JEA Board of Directors voted today in favor of a four-year phased-in Electric Base Rate adjustment. The JEA Board also approved a variable fuel rate adjustment, a new environmental charge and a residential conservation charge. The adjustments will be effective October 1, 2007. This is the first increase in JEA’s electric base rate since 1994. The new rates will offset the increased debt service costs JEA is experiencing due to the capital improvements JEA has made in the past 10 years. The increase also provides for future generation and capacity needs – JEA’s average electric demand has been growing by 100 megawatts (MW) a year.

The 4 percent variable fuel rate increase reflects rising fuel costs. The variable fuel rate is calculated annually during the budget cycle to incorporate changes in cost from one period to another. Last year, JEA customers experienced a 2 percent decrease in the fuel rate.

The new Environmental Charge charges customers in all rates classes 62 cents per 1,000 kilo-watt hours (kWh) and supports costs associated with increased environmental regulation and compliance.

Other information:
• JEA expects to continue to have among the lowest rates in the state even with the rate increase. JEA electric base rates have not changed since 1994.

• By utilizing a diverse mix of fuels including coal, pet coke, oil and gas, JEA has been able to hold down the extremely high fuel increases experienced by customers of utilities that rely heavily on natural gas. This fuel diversity will continue to benefit JEA customers well into the future.

• Process improvements in many areas of the company have led to more efficient operations and tremendous savings in actual hard dollar figures and in avoided costs. In fiscal year 2006 alone, JEA employees saved almost $20 million in operating expenses:
 -    $13 million savings from better operation of our power plants.
 -    $3 million in workers’ compensation savings from the improvement in our safety record.
 -    $3.3 million saved by keeping expenses under the Operations & Maintenance budget.

JEA is the eighth largest community-owned electric utility in the United States, providing electric, water and sewer service to more than 400,000 customers in northeast Florida.

Summary of Rate Hearing Actions

The JEA total electric charges will increase in a four-year, phased-in electric base revenue adjustment as follows:

Residential and Small Commercial Rate Classes
October 1, 2007        6.25%
October 1, 2008        5.5%
October 1, 2009        5.25%
October 1, 2010        3.00%

Large Commercial/Industrial Rate Classes
October 1, 2007        7.25%
October 1, 2008        7.00%
October 1, 2009        6.75%
October 1, 2010        3.00%

• An Environmental Charge of $.62 per 1000kWh will be applied to all electric accounts.

• The Variable Fuel Rate will increase by $1.46 per 1000kWh.

• A Conservation Charge will be applied to residential electric accounts in the amount of $.01 per kWh for usage above 2750kWh in a single month.

• The rate hearing also addressed several administrative change to the electric system tariff.
A Summary of JEA Electric Rate Changes:

April 2005    
Variable Fuel Rate. This rate maintains a balanced fuel rate that is adjusted annually.

Nov 2005
Pricing Philosophy approved by the JEA Board. The pricing philosophy defines how to operate the business, including acceptable levels of debt service coverage, operating capital and reserves. The pricing philosophy set the parameters for financial decisions made by the Executive Management Team and the Board.

Oct 2006
Variable Fuel Rate. The variable fuel rate decreased 2 percent.