After rebating $170 million in excess fuel charges paid by customers over the past three years, JEA will on Feb. 1 lower the monthly fuel charge for residential and commercial accounts.
The charge will be reduced from $43.60 per megawatt-hour to $36.75.
That will mean about $7 a month savings for the average residential customer and a 5 to 9 percent reduction in the monthly bill for a business, said Chief Financial Officer Melissa Dykes.
“Residential bills will be lower than in July 2008,” she said, based on consumption of an equal amount of electricity.
Dykes said unlike 40 years ago, when JEA relied on fuel oil to generate all of its electricity, the utility now uses a 50-50 mix of solid fuel, such as coal, and natural gas.
The diversified fuel source creates a “built-in hedge” and helps provide lower cost and stable prices for consumers, she said.
The fuel charge reduction is based on a three-year projection of coal and natural gas costs. Both are on a downward trend that’s predicted to continue.
Dykes said fuel charge revenue may be used only for fuel purchase. The $95 million fuel cost reserve fund will be maintained to protect JEA from unanticipated increases.
Board member Delores Kessler pointed out customers need to be aware the lower bills after Feb. 1 are due to an adjustment of the fuel charge, not a rate reduction.
That’s planned for this year, said Paul McElroy, JEA CEO.
He said the utility’s rate structure hasn’t changed in 20 years. New rate options are being evaluated and a pilot program for a demand-rate price structure is planned to begin by year-end.
If implemented, a demand-rate structure could allow customers to use electricity when demand is lower than average and pay less per kilowatt-hour than if they use electricity when JEA is close to its maximum generating capacity.
McElroy also reported that in the J.D. Power 2016 Electric Utility Business Customer Satisfaction Study results released Jan. 12, JEA scored 754 points — the highest score achieved by any U.S utility.
When JEA joined the J.D. Power survey in 2012, the utility scored “at the bottom of the bottom” among mid-size utilities in the South.
In 2012, JEA ranked 95th out of 99 surveyed; in the latest survey, JEA is No. 1 among 86 utilities. The service improvements that led to the improved survey score were the result of feedback from customers, McElroy said.
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