After adopting a rate increase that began April 1, the JEA board approved a fiscal year operating budget June 24 that includes a nearly $250 million increase in revenues and outlays over the current budget while providing a record contribution to the city of Jacksonville.
Also included in the board vote was a capital budget of $1.017 billion with a projection of $1.434 billion in spending in two years, a 40.9% increase, as JEA expands its capacity to serve a growing number of ratepayers and repairs or replaces aging infrastructure and equipment.
On a 7-0 vote, the board of the city-owned utility approved a $2.37 billion electric and water system operating budget, up from $2.121 billion in the 2024-25 fiscal year. The budget provides $179 million to the city, including a one-time $40 million contribution that the city requested this year. Including public service tax and city franchise fees, JEA will deliver a total of $348 million to the city.
The capital budget is up from $892 million in the current fiscal year. As for the projected increase in two years, most of that is driven by a near doubling of expenditures on electric transmission lines and generation. Spending on those capital projects is projected to go from $349 million this year to $711 million in the 2028 fiscal year.
The board adopted the budget with little discussion, having already examined it during committee meetings.
The operating budget reflects the midyear rate adjustment that increased the monthly utility bill of average JEA rate-paying households by 3.7%. Rates for commercial ratepayers vary by the size of the business and its usage of electricity and water, with a small number paying less and some paying up to 6.9% more.
Under Jacksonville’s city charter, JEA is required to make an annual contribution of funding to the city. The utility is a not-for-profit organization.
The JEA budget is subject to City Council approval to be adopted before the Oct. 1 start of the fiscal year for the city and governmental agencies such as the utility.
The coming year’s budget includes a $117 million increase in expenditures for fuel that JEA burns to generate electricity and for power that the utility purchases from other providers and passes along to local customers.
There is also a $39 million increase in operation and management costs.
Ted Phillips, JEA chief financial officer, said that increase is due partly to costs of operating JEA’s Greenland Water Reclamation Facility, which came online in February, and the Southwest Water Reclamation Facility, which is scheduled to be completed in fall 2025.
Phillips said labor costs also contributed to the increase, due to increases in wages and benefits. The upcoming budget does not include staffing additions, he said.
Phillips said the one-time contribution to the city came largely from turning some of JEA’s variable-rate debt into fixed-rate, which generated $38 million in savings. Through that approach, Phillips said, the utility was able to satisfy the city’s request for extra funding without drawing the funding from customers.
Regarding the capital budget, Phillips said JEA was planning several projects to expand power generation and transmission to meet demand of an increasing number of households and businesses in Northeast Florida.
“Think of the wires as a highway,” he said. “You get more and more cars, and at a certain point it’s just not big enough anymore. So we’re having to make improvements to have those lines be able to carry more power from Point A to Point B due to more usage and more customers.”
In adopting the rate increase, JEA said water and sewer rates had not been adjusted in 12 years despite millions of dollars in capital expenditures to modernize JEA’s infrastructure and rising costs of providing the services.
Among other factors, JEA said inflation and ongoing supply chain issues also have driven up operational costs.
In addition, JEA’s long-term agreement to purchase power generated by the Plant Vogtle nuclear facility in Georgia played a role in the rate increase. That agreement, which JEA entered into in 2008, obligates JEA to pay about $250 million annually over the next 20 years, and reflects delays and cost overruns in the construction of the $35 billion plant.
JEA sued to get out of the deal as costs increased, but ended up settling.