JEA plans to increase electric rates for both its residential and commercial customers this spring.
Without the proposed 3.5% increase for all users, the utility projects a $14 million shortfall for the current fiscal year.
The higher rates, if approved, would go into effect on April 1, 2024. JEA’s Board of Directors expects to hold a public rate hearing and vote on the increase on Feb. 27.
Under the plan, a residential customer who uses 1,000 kilowatts would see the electric portion of the bill rise from $80.46 to $83.96. That does not include the fuel surcharge and taxes.
Fuel rates spiked immediately after Russia invaded Ukraine in February 2022 because Russia is a large exporter of natural gas. After rising as high a $79.03 in October 2022, JEA’s fuel surcharge was back down to $41.84 by September of 2023.
JEA Managing Director and CEO Jay Stowe says he expects the fuel surcharge to remain steady over the next 12 months.
When JEA’s Board of Directors discussed the rate hike in September, board members told JEA staff they would like to decrease the cost burden for residential customers.
On Tuesday, Stowe said the increase to residential customers is not as much as was being considered at September’s board meeting, following feedback from the community and a study of the utility’s cost of service.
“Rate making is an art and a science. We can work out a math problem, and then we have to understand the impact to the community and the customers,” Stowe said. “We weighed all of that and made the decision that we could lower the electric rates for our base rates for our residential customers compared to what we talked about in September.”
Victor Blackshear, JEA’s director of financial planning and rates, said most of the increased revenue from the proposed hike – $10.8 million – would come from residential consumers, and the remaining $3.2 million would come from small commercial customers ($1.3 million) and large commercial customers who use more than 1,000 kilowatts per month ($1.3 million).
Blackshear also told the board that JEA’s average combined electric, water and sewer rate of $209.24 for residential customers is below other major metropolitan areas in the state. Orlando is closest at $219.37, Miami’s is $226.77 and Tampa’s is $268.10.
“We still foresee our total utility costs for our customers will still be among the lowest in the major cities in Florida,” Blackshear says. “We see this as a positive, though we understand the impact it will have on our customers.”
JEA expects to see a steady growth in customers over the next decade, increasing 2% per year, but that is not believed to be enough to fill the financial needs of the utility.
In a report to the board, JEA staff indicated there may be a need for additional revenues in the years ahead. Stowe mentioned those can be achieved through rate increases, new types of revenues or cost savings.
Correction: A previous edition of this story included an inaccurate timeline for JEA’s proposed rate hearing. JEA plans to hold the hearing during its Feb. 27 meeting, not on Jan. 30, as previously reported.