Gainesville Regional Utilities plans to increase fuel costs

Gainesville Regional Utilities Customers May Soon See Their Electricity Bills Rise Even More than the 7% rate hike which debuted last week.

The company, like others across the state, plans to increase its portion of the fuel adjustment fee of the bill due to sharp increases in the cost of natural gas.

But the exact dollar amount of the increase, and when it will go into effect, is still being assessed, GRU spokesman Dave Warm said on Wednesday.

“GRU is currently evaluating the amount and timing of increases to recover costs,” he said in a text message.

In a follow-up emailed statement, Warm said the fuel portion of GRU’s customer invoices includes the pass-on costs that GRU pays for the fuel the company needs to generate electricity or supply gas. .

“As a transfer, GRU does not add to the costs, but simply passes them on to electricity or gas customers,” he said. “The GRU manages these costs and closely assesses the financing to determine whether to increase or decrease the fuel portion of a customer’s bill.

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Over the past year, the global energy market has dramatically increased prices for natural gas and other fossil fuels, forcing utilities to raise fuel costs for their customers, Warm said in its statement.

He added that several large Florida utilities have already raised their tariffs to make up for the deficit, while GRU has not increased its fuel tariffs since May 2020.

“Recently, natural gas prices have risen further, leaving the utility with little choice but to increase its fuel costs for the customer,” Warm said.

For a residential GRU customer using 1,000 kilowatt hours, the fuel adjustment charge is currently around $ 30.

In August, the Florida Public Service Commission approved an increase in fuel charges for customers of Tampa Electric Company and Duke Energy Florida due to soaring natural gas costs.

TECO’s monthly 1,000 kilowatt-hour bill for residential customers for the period September to December 2021 rose to $ 118.07, an increase of $ 12.82 from the previous bill, the PSC ruled.

The monthly 1,000 kilowatt-hour bill for Duke residential customers for the period September to December 2021 has increased to $ 132.24, an increase of $ 4.28 from the previous bill.

In an email to city commissioners last week, GRU Director General Ed Bielarski explained that the utility had no choice but to increase fuel costs on the basis of a city ​​ordinance.

He explained that if the GRU’s fuel stabilization fund drops by more than 5%, it needs to be replenished, according to city law, and that’s what happened.

Mayor Lauren Poe said on Wednesday that the stabilization fund prevents the constant fluctuations in fuel adjustment charges on customers’ electricity bills.

The fuel charge can always be reduced in the future, Poe said.

“If (natural) gas prices come down, we can also lower the fuel adjustment – as long as this fund is made whole,” he said.

The increase in the price of fuel will add even more to GRU’s tariffs, which rank near the top of city-run utilities in the state.

The residential bill for a GRU customer who uses 1,000 kilowatt-hours of electricity is $ 123.13, which is the third highest in the state compared to 33 other municipal utilities in the state, according to the latest. August figures released by the Florida Municipal. Electric Association Inc. in Tallahassee.

The only other cities with higher electricity bills than Gainesville were Fort Meade and Key West.

And the association’s comparison predated the GRU’s 7% rate hike that began last week.

However, GRU’s rates for residential customers are lower than those charged by utilities owned by investors Gulf Power and Duke Energy, according to figures from the association.

GRU wastewater rates also increased by 5% on October 1.

The GRU recently published a statement on its website to customers explaining the reasons for the tariff increases in this fiscal year.

The company’s statement says that over 30% of the electricity produced by the GRU comes from renewable resources, 70% of the water the GRU draws from the Florida aquifer is returned to the aquifer, and 100% of the water that the GRU draws from the Florida aquifer is returned to the aquifer. wastewater collected by the company is “usefully reused”. . ”

The press release also indicates that this is the first time since 2019 that the GRU has increased its tariffs “despite the increase in expenses and relatively stable income”.

“The GRU felt it was inappropriate to request rate increases last year due to COVID-19,” the company statement said.

The end result of the 7% rate hike is a monthly increase of $ 6.46 for a residential customer using the industry standard of 1,000 kilowatt hours and an increase of $ 9.40 for a customer using electricity. , gas, water and wastewater.

However, this is probably not the end of the GRU’s regular tariff increases.

The Municipal Commission voted in favor of a plan to gradually increase electricity tariffs by 3% and wastewater tariffs by 5% each year between fiscal years 2023 and 2027. But future commissions are not blocked. in this vote.

“The city commission has displayed a forward-thinking approach to the budget, which will provide long-term security to our community,” Bielarski said in a prepared statement. “This measured approach stabilizes GRU’s financial health today and into the future, while supporting renewable energy goals.

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