South Florida Sun-Sentinel (Sunday)
Spike in electric bills not done yet, raised three times
It’s been a brutal year for skyrocketing power bills in Florida because of soaring costs for natural gas used as fuel to generate electricity.
Orlando’s utility already has raised rates three times this year and will meet in December to consider another hike.
The municipally owned Orlando Utilities Commission, or OUC, and public utilities elsewhere in the state have implemented large increases this year, resulting in higher rates on average than those of corporately owned power providers.
Public utilities are not regulated by the Florida Public Service Commission and have the flexibility to raise rates quickly to cover rising costs. As private utilities follow regulatory schedules set by the commission, their rates won’t go up until next year.
“The state of Florida has the highest percentage of gas generation to meet its electric needs of any meaningful state in the country,” said Jacob Williams, general manager and chief executive officer of the Florida Municipal Power Agency, a wholesale power provider for 31 public utilities in the state.
“Nearly 75 percent of our electricity comes from gas generation,” Williams said. “It doesn’t matter if you are Duke, FPL, FMPA, Orlando, Seminole. Take your pick, we are all in the same boat.”
Natural gas had a long run of more affordable pricing until the start of this year when OUC was charging $109.50 for 1,000 kilowatt-hours of electricity.
That amount of 1,000 kilowatt-hours is nearly the average monthly residential usage and benchmark figure that utilities rely on for comparisons and analysis. A single kilowatt-hour is enough to run, for example, a 1,000-watt microwave oven for an hour.
OUC’s rate is now $137, reflecting the utility’s largest increase within a year, and is poised to rise to $147 on Jan. 1. The utility does not expect increases later in 2023.
All of that increase is to cover hikes in natural gas fuel costs or to rebound from budgetary deficits brought on by the spike in natural gas costs. The prospects for a reduction in OUC rates are uncertain.
“It really is all about fuel,” said OUC’s chief financial officer, Mindy Brenay. “If fuel prices stabilize, then we will be taking swift action.”
According to the Florida Municipal Power Agency, the average bill among Florida’s public utilities for
1,000-kilowatt hours rose from $111 in September last year to $147 in September this year.
Of the $147 average, municipal utilities of New Smyrna Beach, Tallahassee, St. Cloud and Orlando were at the low end of rates and Gainesville, Mount Dora and Leesburg were among the highest, according to figures provided by the municipal power agency.
Leesburg’s city manager, Al Miner, said the big rise in natural gas costs forced the utility to burn through reserve funds and then to raise rates from $112 per 1,000 kilowatt-hours in October last year to a current $178. “It’s a horrible increase,” he said.
Leesburg’s utility is projecting a drop in rates next year to about $153 and to $133 in 2024.
“That’s based on a lot of
assumptions,” Miner said.
Among private utilities, FPL did not respond to questions about its expected rates next year.
Duke Energy, which is Central Florida’s largest power provider, was charging $132 for 1,000 kilowatt-hours in September last year. This September, the charge was $147.
“Due to significant fuel price volatility, it is too soon to say with much certainty what the residential rate will be in September 2023,” said Duke spokesperson Ana Gibbs.
Duke currently proposes that rates climb to $166 into 2023. But the utility expects to soon file an updated proposal for rate increases with the Florida Public Service Commission.