City to consider new electric rates for customers starting in January

By Lisa ZahnerVERO BEACH — On Thursday the City of Vero Beach Utilities and Finance commissions will consider recommended alternatives for new electric rates to take effect on January 1 when the City switches to the Orlando Utilities Commission for electric power.City officials received a packet with three alternatives detailing the Base Case rates, which are being recommended by the consultant, Henry Thomas of Public Resources Management Group, who completed a rate study earlier this year.”There are a number of proposals and alternatives, in general there is a significant reduction in the cost from where we are today to January 2010,” said R.B. Sloan, director of the electric utility. “We’re looking at somewhere in the neighborhood of 15 to 20 percent reduction on a 1,000 kWh bill. The base charges will be going up, with the fuel costs going down about 30 percent, It will net out to a reduction of 15 to 20 percent, and even more of a reduction for customers outside the City.” The Base Case alternative, if accepted by the City Council, would increase base rates by 7.8 percent, but with the anticipated 30 percent fuel cost reduction expected to be realized, the typical bill for residential customers should decrease from 12 to 20 percent, depending on power usage, from June 2009 rates.Monthly bills for commercial non-demand users, which consitutue most small to medium-size businesses, would see about a 17 percent decrease and commercial demand customers which are large users of power (more than 10,000 kWh per month) would see about a 15 percent decrease in monthly bills.One big change in the proposed rate structure would be the institution of tiers for usage rates with customers using more electricity paying higher rates – about 2.4 cents more per kWh for City residents. Currently, an electric customer living in the City and using 1,000 kWh per month pays a base rate of $7.21 and a usage rate of .04585 for power, no matter how much power they use. A County resident pays a base rate of $7.93 and a usage rate of .05044 for the same power, amounting to a 10 percent surcharge on their bill for living outside the City. This 10 percent has historially generated between $3 and $3.5 million per year.Under the new rates, which would take effect on January 1, customers using about 1,000 kWh per month would pay a base rate of $7.95 and a usage rate of .044 per kWh, with no differential for living outside the City. The rate for usage above 1,000 kWh for a residential customer would go up to .069 per kWh, so residents who consume more power would get hit with a higher rate once they topped the 1,000 kWh tier.A residential customer using 1,000 kWh per month would see a 20.7 percent reduction from $158.82 to $125.95. This compares to a $105.78 bill under current Florida Power and Light rates, a difference of about $20 per month.A residential customer using 2,500 kWh per month would see a 11.9 percent reduction from $386.24 to $340.45. This compares to a $286.93 bill under current FPL rates.Extrapolating the information in the rate presentation, a residential customer using 5,000 kWh (for a typical beachside home) would add up to about $700 per month under the new rates. These high-use customers have been seeing bills teetering in the $1,000 range this summer.The joint meeting of the Utilities and Finance advisory commissions is scheduled for 10 a.m. Thursday in the Council Chambers at Vero Beach City Hall and it is open to the public. The matter will also be up for public discussion when it reaches the City Council for a vote in August.

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