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Driven by an imperfect storm of hot weather, rising natural gas prices and transportation bottlenecks, Lakeland city commissioners today adopted a record fuel adjustment rate for Lakeland Electric customers of $75 per 1,000 kWh. The new rate, which was passed unanimously, takes effect Sept. 1.
Since 1973, commissioners have reviewed the fuel rate quarterly and adjusted it to reflect current prices. The cost is passed on to customers and Lakeland Electric “makes no profit from the fuel charge,” spokeswoman Cathryn Lacy said. Because of the volatility of natural gas markets, the commission and its Utility Committee is now assessing the charge monthly rather than quarterly, she said.
Until now, the utility’s highest fuel rate was $72.50 per 1,000 kWh in the spring of 2008. The upcoming $75 rate is nearly double the $40 that was charged from March 2021 to June 2022.
The current fuel rate through the end of August is $60 per 1,000 kWh. The fuel rate is combined with Lakeland Electric’s base rate on customer bills.
For a customer using 1,000 kWh a month — which the utility says is typical for many residential customers — the base rate of $64.87 a month, combined with the new fuel charge, will add up to an electric bill of $139.87 in September compared with $124.87 now and $104.87 in recent months.
Before approving the new rate, several commissioners cited a chart showing that Lakeland Electric would deplete its fuel reserve fund by September without a fuel adjustment. The utility targets a fuel reserve fund that represents 15% of its total fuel budget.
Currently that means a target fuel reserve fund of $29 million, Commissioner Stephanie Madden noted. She cited the reserve as a bulwark against natural disasters, and Lakeland Electric Fuel Manager Tory Bombard said the reserve is needed to maintain the utility’s AAA bond rating.
Bombard cited several reasons for rising prices for natural gas, the main fuel used by Lakeland Electric:
- Unnaturally high temperatures this summer leading to greater fuel consumption.
- Natural gas transportation issues exacerbated by outages in two of the three pipelines into Florida and the potential of a rail strike in September.
- A premium paid by all Florida electric utilities for natural gas because of the supply issues.
Several commissioners emphasized that rates at Lakeland’s municipally owned utility are still lower than many in the state.
A chart provided to the commission by Lakeland Electric compares the current local rate of $124.87 per 1,000 kWh with other utilities as being:
- A little higher than Orlando Utility Commission’s
- About the same as Tallahassee’s municipal utility and Florida Power & Light
- Lower than Jacksonville’s and Gainesville’s municipal utilities and the investor-owned TECO, Gulf Power and Duke Energy.
Once the September increase takes effect, only Gainesville, Gulf and Duke will be higher.
Commissioners also said the city utility’s practice of hedging fuel contracts has reduced local costs below actual prices.
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We live in an apartment in Lakeland & we struggling to pay our Electric Bills now. I need the air conditioning due to on going Medical Issues I have. I am juggling 3 Flex-Time Jobs and my husband has a Full-Time Job. Our Combined Income is Not Enough to Compensate for Our Rent Increase by $200.00 for September. As, well as a Large Increase in a Utility Bill.
Government and utilities and corporations just keep raising prices as if people actually have the money to pay for luxuries. Yes electric and ac along with quality food are quickly becoming luxuries for the average family. Government officials from local to Washington are clueless to what is happening. Hey let’s take a vote and increase our incomes. Oh that only works for government entities.
Rent is up food is up now electric is going up how are we suppose to live especially those on fixed income.
La Niña is the culprite heading into a possible 3rd year
So, the Commissioners approve more affordable housing but making utilities unaffordable?! What federal agency governs municipal gas & electric rates? Isn’t Lakeland Electric a monopoly because of the nature of its product/service? Isn’t it about time consumers have the power to remove that mantle of protection by some good old ‘blue sky’ competition??
Perhaps we could use the money wasted on Florida Ave. and not have a fuel surcharge.
“The cost is passed on to customers and Lakeland Electric “makes no profit from the fuel charge,” spokeswoman Cathryn Lacy said.”
This statement is absolutely correct, Lakeland Electric “makes no profit from the fuel charge,” however, the City of Lakeland gets to skim 10% from the huge fuel charge, so they are happy. It is one big circle, since Lakeland Electric is owned by The City of Lakeland. And the customers are paying the high price for the decisions by Joel Ivy, who is now long gone, and Lakeland Electric, and Lakeland City Commissioners, all anti-solar for all these years. They just scuttled a utility scale PV project, where you have zero fuel charges, as they end up with less if they make prudent choices. Ironic in my opinion, but none of the customers except me bother to go to any meetings.
As long as they will adjust the amount on a month by month basis
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