For decades, JEA has been the local supplier of electricity, water and sewer service.
Now the utility is getting into the natural gas business.
Not just using it — the utility is the largest consumer of natural gas in North Florida to fuel some of its generators — but selling it.
Adding a new energy product to the mix will “enhance revenue ability and opportunity,” said Mike Brost, JEA vice president and general manager of electric systems.
Net revenue through 2019 is projected at more than $5 million.
The utility purchases millions of cubic feet of natural gas through The Energy Authority, the wholesale energy trading firm JEA helped establish in 1997.
“We’re a large player in the industry,” Brost said. “We’ll leverage our excess capacity.”
The revenue source from the sale of natural gas will partially offset the decline in electricity sales and allow JEA to be a complete energy provider for commercial and industrial consumers.
Brost said JEA will purchase more natural gas than it needs to generate electricity and then sell the excess to large commercial and industrial users like Anheuser-Busch, Coca-Cola and Bacardi, as well as smaller-scale non-residential consumers, including hotels, restaurants and laundries.
Natural gas will be transported to JEA through the interstate pipeline system owned and maintained by Tampa-based TECO/Peoples Gas System.
The product will be delivered to customers through the local pipeline infrastructure, also owned and maintained by TECO/PGS.
With about 3,500 potential natural gas customers in JEA’s North Florida service area, Brost said the goal is to have more than 120 accounts established within five years.
The potential market includes businesses already using natural gas and businesses that might convert all or part of their operations from electricity to natural gas.
State Rep. Lake Ray is sponsoring a bill in the Legislature to create a “heavy transportation industry natural gas rebate program” to encourage owners to convert locomotives and ships to natural gas power by offering a $500,000 rebate per conversion.
Already on the books is a program that offers a rebate to fleet operators to convert vehicles from gasoline and diesel fuel to natural gas.
He said the industry’s move to use the more economical and less environmentally-impactful natural gas is growing. JEA’s entry into the market should enhance the growth, he said.
Ray said JEA expanding the commercial natural gas user market is supported by First Coast Manufacturers Association, of which he is president. “It will help promote manufacturing by offering alternative opportunities for companies to get the energy they need,” he said.
Energy accounts for about 35 percent of the cost of manufactured goods, so having lower energy costs improves profit margins, Ray said.
A business manager has been hired for the marketing program, Brost said.
The Key Account Group, which already works with the utility’s largest electric customers, will sell the new product and service customers.
Brost said he expects JEA’s first natural gas contracts could be in place as soon as April.
“We’re ready to go,” he said. “We’ll be knocking on doors.”
@DRMaxDowntown
(904) 356-2466