Electric Prices Vary in Region Utilities' Rates, Taxes Figure In

By Bauerlein, David | The Florida Times Union, April 22, 2002 | Go to article overview

Electric Prices Vary in Region Utilities' Rates, Taxes Figure In


Bauerlein, David, The Florida Times Union


Byline: David Bauerlein, Times-Union staff writer

Flip on the light switch in Green Cove Springs and you pay the highest electric bill in Northeast Florida, topping $100 per 1,000 kilowatt-hours for residential customers.

If you live on Amelia Island, the bill for the same amount of electricity is just $60.

Northeast Florida as a region enjoys low electric rates compared with the rest of the state, but like other areas, electric rates vary widely from one utility to the other. In some cases, people living on opposite sides of a waterway, street or even a fence will pay sharply contrasting bills because they are served by different utilities.

As the weather heats up and air conditioners rev up, electric rates in Northeast Florida have faced review lately on three fronts:

-- In the biggest potential transaction, Green Cove Springs will seek to sell the city's electric system this year. City officials hope a larger utility can come in with significantly lower rates, providing relief to consumers whose bills are among the highest anywhere in the state.

-- Neptune Beach, which is served by the Jacksonville Beach Electric Department, has begun a study of its contractual relationship with Jacksonville Beach. It charges the second-highest rate in Northeast Florida.

-- A rate cut took effect last Monday for Florida Power and Light Co., which is the state's biggest utility and includes tens of thousands of customers in Northeast Florida. The residential bill for 1,000 kilowatt-hours dropped from about $81 to $75.45.

Analysts say it's not unusual for neighboring utilities to charge different electric rates. The age of generating plants, the price of fuel used in the plants, interest rates on debt, and makeup of the customer base all play a role.

"There are lot of factors, and some of the contracting decisions are long-term," said Richard Tudor, spokesman for the state Public Services Commission. "You might not know for five years whether you've made a good decision because things can be very volatile for fuel prices."

The rates are set to generate profits for investor-owned utilities, which are regulated by the Public Service Commission.

City-owned utilities can adjust bills higher or lower depending on how much revenue cities want to generate for their budgets. Owning an electric system can be a "cash cow" for a city, generating enough income so officials can lower property taxes and fund amenities the city otherwise couldn't afford, said Sanford Berg, director of the Public Utility Research Center at the University of Florida. The state doesn't regulate rates for city-owned utilities.

The Jacksonville-owned JEA has not raised its rates in more than 12 years. It charges $68.15 for 1,000 kilowatt-hours, which ranked it as the sixth-lowest in the state in a recent comparison of 55 utilities. At the same time, JEA electric sales generated $62.6 million for City Hall in the 2001 fiscal year, making it a major source of revenue for the city's budget.

But Northeast Florida's two other city-owned utilities, Green Cove Springs and Jacksonville Beach, have the region's highest electric rates.

Green Cove Springs City Manager Don Bowles said the City Council will request proposals in the summer from other utilities interested in buying the city's system, which serves about 3,100 customers.

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Electric Prices Vary in Region Utilities' Rates, Taxes Figure In
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