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News
Releases
Rising Fuel Costs Force FMPA to Raise Wholesale Energy
Rates
ORLANDO,
Fla., June 24, 2008 — A significant increase in fuel
costs forced the Florida Municipal Power Agency (FMPA) to
raise its wholesale costs for electricity by approximately
7.5 percent. Actual costs for individual cities served by
FMPA may vary from this overall average depending on a city’s
electric use characteristics.
In
May, FMPA’s cost of natural gas rose from $10.38 per
million BTU to $11.71, a 13 percent increase. Fuel is the
largest variable operating expense for electric utilities,
and natural gas fueled 68 percent of FMPA’s energy sources
in May. FMPA’s energy rate—which is only one portion
its total wholesale cost—increased 11 percent for May
compared to the previous month. Upward pressure on fuel costs
also has increased the Agency’s 60-day working capital
requirements, a Board-approved rate-setting criteria.
FMPA
does not earn a profit from its electric sales because the
Agency is a nonprofit, member-owned organization. Under utility
rate regulation, fuel costs are passed along to electric customers
at cost.
“We
know that higher electric bills will not be welcome news for
customers,” said FMPA’s General Manager and CEO
Roger Fontes. “This comes at a difficult economic time
when increasing gasoline prices are also raising the costs
of many goods and services. We are doing all we can to modernize
our power plants so we use fuel more efficiently and better
control our costs. Moreover, we are hedging a significant
portion of our fuel to minimize fuel price spikes, but we
cannot completely insulate ourselves from such a dramatic
increase in energy costs, as has been experienced worldwide.”
FMPA
serves the wholesale power needs of 15 municipal electric
utilities, including Bushnell, Clewiston, Fort Meade, Fort
Pierce, Green Cove Springs, Havana, Jacksonville Beach, Key
West, Kissimmee, Lake Worth, Leesburg, Newberry, Ocala, Starke
and Vero Beach.
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 electric bills of retail customers
is determined by each individual city. Rising natural gas
prices is an industry-wide trend forcing many utilities in
Florida to increase rates.
Minimize
the Increase by Reducing Electricity Usage
A retail customer’s monthly electric bill is determined
by two factors: 1) their local utility’s rate per kilowatt
hour, and 2) the customer’s usage. A customer has control
over how much electricity they use. To reduce usage, consider
these measures:
• In Florida, air conditioning is usually the largest
user of electricity in homes. To conserve energy and save
money, raise your air conditioning thermostat to 78 degrees
or warmer during summer. Raise your thermostat to 82 degrees
or warmer when you are away from home for extended hours.
Save yourself effort and make daily temperature adjustments
more dependable by installing a programmable thermostat. Every
month, clean or replace the unit’s air filter. Once
a year, inspect duct work and repair leaking ducts. Always
keep windows and doors closed when the air conditioning is
on. Use ceiling fans to aid room comfort, but turn funs off
when rooms are not occupied. Close curtains or blinds on east-
and west-facing windows during the day to reduce heat from
the sun.
•
Water heating is generally the second largest energy user.
To save energy, reduce the temperature setting on the water
heater to 120 degrees or lower if you do not use a dishwasher
or if your dishwasher has a heating element. Install a timer
that can automatically turn the water heater off at night
and on in the morning. Consider using only cold water for
clothes washing.
•
Replace your most frequently used lights with compact fluorescent
light bulbs. Compact fluorescents last longer than incandescent
bulbs and produce the same amount of light using significantly
less electricity. Always turn off lights in any room that
is not occupied.
•
Limit the number of household refrigerators.
•
Turn personal computers off when not in use.
•
Limit the time a pool pump runs to six hours per day in summer.
More importantly, if you avoid running the pool pump in the
late afternoon, you will reduce the utility’s peak demand,
which reduces costs for the utility and utility customers
alike.
•
Limit pre-rinsing of dishes before putting them in the dishwasher.
If you avoid running the dishwasher in the late afternoon,
you will reduce the utility’s peak demand, which reduces
costs for the utility and utility customers alike.
FMPA
Improves Power Plant Fuel Economy
Like cars, some power plants use fuel more efficiently than
others. FMPA is modernizing its energy sources to improve
its power plant fuel economy.
On
May 31, FMPA began operation of a new power plant that is
one of the highest efficiency plants in Florida. This plant
located in St. Lucie County generates electricity 40 percent
more efficiently than the generation it replaces. This means
the new plant uses less fuel, creates fewer emissions per
kilowatt hour and generates more power than older, less efficient
units.
FMPA
Hedges Fuel Costs
For several years FMPA has hedged the price of natural gas
used for fuel in its power plants. Hedging is a strategy to
offset risk. For example, through a combination of techniques—such
as buying physical gas in advance or using financial instruments
like options and futures—it is possible to offset, in
varying degrees, exposure to price variations in commodities
like natural gas. The goal of FMPA’s fuel hedging program
is to remove sharp spikes in fuel prices to protect its customers
from price volatility.
This
program is reducing the impact of rising natural gas prices
on FMPA’s member utilities, but recent fuel price increases
have been so dramatic that rates will still go up, just not
as much as if FMPA did not hedge fuel costs.
FMPA
Offers Energy Conservation Programs
Customers are encouraged to use electricity as efficiently
as possible to minimize their electric bill. FMPA offers services
to its members to help retail customers conserve electricity.
1.
ENERGY STAR®: FMPA has a partnership agreement with ENERGY
STAR, a government program helping businesses and individuals
protect the environment through superior energy efficiency.
Partnering with ENERGY STAR and working together through FMPA
makes it convenient and cost effective for FMPA’s members
to offer energy efficiency programs. For more information
about ENERGY STAR, visit the ENERGY STAR website at www.energystar.gov.
2.
Energy Depot: FMPA has an agreement with Enercom to provide
FMPA members with “Energy Depot for Homes,” an
online energy audit for retail customers. The Web-based software
offers a do-it-yourself home energy audit, energy calculator
to enable customers to estimate energy use, an energy library
on a wide range of home energy systems and efficiency opportunities,
and an energy advisor e-mail question and answer tool that
allows customers to receive answers to energy questions.
3.
Energy Services: FMPA offers access to a key accounts program
for FMPA members to provide energy conservation programs for
large customers. FMPA coordinates the relationship between
participating members and contractors to provide services,
such as lighting retrofits, HVAC upgrades, and energy management
system services.
4.
Energy Auditor Program: FMPA coordinates training and roundtable
meetings for Energy Auditors from member utilities. The program
provides a forum for energy auditors to exchange information
and ideas. In addition, FMPA coordinates training sessions
and presentations as part of the roundtable.
5.
Conservation Program: FMPA established a task force in May
to investigate a conservation program. The purpose of the
program is to reduce electricity use by promoting energy efficiency
and conservation concepts to customers. The task force expects
to make a final recommendation in July.
# # #
Florida
Municipal Power Agency (FMPA) is a wholesale power company
owned by 30 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 2 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:
Bree Balchunas
Public Relations Specialist
bree.balchunas@fmpa.com
(407) 355-7767
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