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Fuel Costs Force FMPA to Raise Wholesale Energy Rates
ORLANDO,
Fla., Nov. 1, 2004 – Persistently high natural gas prices,
unusually high coal prices and disrupted deliveries of coal
into Florida have forced the Florida Municipal Power Agency
(FMPA) to raise its wholesale energy rate effective Nov. 1
for 15 Florida cities.
FMPA is
a nonprofit organization that supplies the wholesale power
needs of 15 municipal electric utilities in Florida. The cities
are Bushnell, Clewiston, Fort Meade, Fort Pierce, Green Cove
Springs, Havana, Jacksonville Beach, Key West, Kissimmee,
Lake Worth, Leesburg, Newberry, Ocala, Starke and Vero Beach.
Owned by the municipal utilities it serves, FMPA provides
economies of scale in power generation and related services
to support community-owned electric utilities.
While
FMPA has an active program for managing natural gas prices,
continued high prices for natural gas and oil have pushed
FMPA’s expected costs above its current budget forecast.
Industry experts predict that oil and natural gas prices will
remain high for the foreseeable future. Without FMPA’s
fuel price risk management program—known as hedging—a
higher percentage increase would have been necessary. Other
electric utilities are experiencing similar cost increases
that are likely to result in rate increases.
Damage
to railroad lines from recent hurricanes, which hit Florida
and moved into the Northeast coal production areas, has strained
an already overburdened coal delivery system. This has depleted
coal inventories following the summer peak electric use season.
Low coal inventory levels have caused curtailment of some
coal-based generation throughout Florida, forcing FMPA to
rely more heavily than expected on more costly natural gas-fired
generation.
Because
of this situation, the members of FMPA voted to increase the
rate charged to recover fuel costs. Fuel costs are passed
along at cost and represent one portion of FMPA’s total
wholesale electric bill. As a result of the rate change, FMPA’s
cost to its wholesale customers is projected to rise approximately
2.9 percent. Actual costs for individual cities may vary from
the overall average depending on a city’s electric use
characteristics and rate structure. FMPA does not earn a profit
from its electric sales because the Agency is a nonprofit,
member-owned organization.
In
most of FMPA’s member cities, the wholesale rate increase
is likely to result in increased retail costs. How much and
when this might impact the bills of retail customers is determined
by each individual city.
BACKGROUNDER:
Energy Rate Increase 11-1-04
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Florida
Municipal Power Agency (FMPA) is a wholesale power company
owned by 29 municipal electric utilities. FMPA provides economies
of scale in power generation and related services to support
community-owned electric utilities. The members of FMPA serve
approximately 1.8 million Floridians. FMPA’s members
include Alachua, Bartow, Bushnell, Chattahoochee, Clewiston,
Fort Meade, Fort Pierce, Gainesville, Green Cove Springs,
Havana, Homestead, Jacksonville Beach, Key West, Kissimmee,
Lake Worth, Lakeland, Leesburg, Moore Haven, Mount Dora, New
Smyrna Beach, Newberry, Ocala, Orlando, Quincy, St. Cloud,
Starke, Vero Beach, Wauchula and Williston. Additional information
is available on the Internet at www.fmpa.com.
FMPA
Contact:
Mark McCain
Public Relations/Public Affairs Manager
407 355-7767
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