The board of directors of JEA approved Tuesday a $60 million fuel charge credit to be applied on October or November bills that will reduce by $57.65 the average residential electric charge.
It is the fourth consecutive budget year JEA has delivered the credit.
The community-owned public utility estimates its cost of natural gas and solid fuel when planning the budget for the year that begins Oct. 1. When fuel costs are lower than anticipated, a credit may be issued to customers.
JEA Chief Financial Officer Melissa Dykes said due to the volatility of fuel costs, the utility maintains a fuel stabilization fund that ensures the integrity of the budget.
More money is collected through the fuel charge than is needed to cover the projected costs. When the actual cost is lower, the board may either issue a credit or adjust the fuel charge.
The stabilization fund has a balance of $117 million with a target of $95 million.
Dykes said if, for example, a reduction in the fuel charge from $43 per month to $41 per month was implemented, the fund would dwindle to about $25 million by the end of the 2018-19 budget year, based on cost estimates and assuming no future fuel charge credits.
Board member Peter Bower supported the credit rather than lowering the fuel charge.
He said he prefers to reserve a possible rate change only after a “comprehensive review” of JEA’s rate structure. He recommended the utility’s Finance Committee, of which he is chair, conduct a review before January to “study reconfiguring how we charge for electricity.”
Bower said JEA has lost 25 percent of its potential revenue over the past eight years because the rate structure is “misaligned.”
Board member John Hirabayashi agreed. He said the study should look at how fixed costs and variable costs, such as fuel, work together in the operation of a public utility.
Bower said other factors that should be more clear by the end of the year are the impending EPA Clean Power carbon reduction regulations, which are anticipated to increase JEA’s cost of generating electricity, and the proposed $120 million one-time payment to the city to help reduce the $1.6 billion unfunded liability in the Police and Fire Pension Fund.
The board also heard a presentation from John Hazen, senior director for J.D. Power and Associates.
He said in 2012 when JEA began subscribing to the J.D. Power Customer Satisfaction Survey, the utility ranked 116th among 126 utilities in the nation that participate in the survey.
The latest results show JEA is No. 30 out of 140 participating utilities.
Over the past five years, JEA is the most improved utility in the country, with an overall customer service score increase of 89 points.
@DRMaxDowntown
(904) 356-2466