As natural gas prices rise, Gainesville Regional Utilities (GRU) has raised its fuel adjustment charges to keep up, and customers noticed the impacts.
A home using 1,000 kilowatts per hour (kWh) in October 2021 spent $30 on their fuel adjustment. In August, that number has increased to $80.
The fuel adjustment cost passes through GRU from its natural gas suppliers, meaning GRU breaks even from the rate. With a tripling of natural gas in the last year, that pass-through rate for fuel has nearly tripled as well from $0.03 kWh to $0.08 kWh.
“[Fuel adjustment] costs have truly skyrocketed in the last year, almost triple since last summer, and that’s across the globe but also affects our customers here locally as well,” GRU General Manager Tony Cunningham said in a phone interview.
GRU uses natural gas for around 66% of its electricity production, but with high prices, Cunningham said the utility is running its biomass plant at full capacity because of the cheaper cost.
According to the Florida Municipal Electric Association, GRU has the second highest bills for June 2022. Key West took the lead at $210 for 1,000 kWh with GRU at $170. Fort Meade and Green Cove Springs came in close behind with $168 and $164.
GRU has a fuel levelization fund, used to offset steep increases in fuel prices. But the fund, supplied by surpluses from the fuel rate, isn’t designed to handle the type of volatility seen in the past 12 months, Cunningham said.
GRU deployed the fund during the pandemic, drawing it below zero. The utility started to raise the fuel adjustment to keep up with natural gas and begin to level out the fund, but Cunningham said the price of natural gas never stabilized and forced GRU to continue hiking its fuel rate as well.
The utility’s base electricity rate also increased from last year: up by $0.0052 for Tier 1 customers and up $0.0069 for Tier 2 customers. Tier 1 rates apply for customers who use 850 kWh per bill; Tier 2 rates apply for customers who use more than 850 kWh per bill.
However, that increase would only raise bills from October 2021 to August 2022 by $4.42 and $6.90 respectively for a 850-kWh customer and a 1,000-kWh customer. GRU’s customer service charge also increased from $15 to $16 per bill.
Another factor in higher bills, Cunningham said, has been an unusually hot summer. People use more electricity in August versus October as air conditioning units battle the elements.
GRU also has suffered from a lack of workers to read the meters every month. That shortage forced the utility to lengthen some bill periods to 34 or 35 days, causing a higher monthly bill.
New infrastructure coming this fall would eliminate the need for GRU to physically check meters. The advanced metering infrastructure (AMI) sends the usage to both GRU and the customer and allows regular-length billing periods.
During a town hall meeting earlier in August, Gainesville Commissioner Cynthia Chestnut mentioned finding a way relieve the burden by pulling from GRU’s rate stabilization fund, stocked at $34 million for the electricity portion.
Cunningham said the two funds, fuel levelization and rate stabilization, serve two different purposes. The first is to offset natural gas volatility, and the second is to keep utilities running for thousands of customers in case of an emergency.
“The rate stabilization fund is really this emergency fund,” Cunningham said. “If something bad happens, we have cash on hand to be able to continue to provide our service.”
On social media, customers have pointed to bills topping $700. Even Chestnut told the audience at the town hall that her bill hit that mark.
The utility announced in early August a couple measures designed to help. GRU decided to return utility deposits 12 months early for customers in good standing. Summer late fees have also been waived.
GRU also has the Leep Plus program designed to upgrade energy efficiency in homes and apartments. Through the American Rescue Plan Act (ARPA), GRU will put $1.9 million toward the program during the next three years.
Cunningham said the utility plans to assist 150 customers a year with those funds. Customers can apply to the program online, and eligibility includes the age of the home or apartment along with household income.
But the most effective way to reduce bills, Cunningham said, is to reduce usage. He said GRU has tried to educate the community on ways to conserve water and electricity over the years. GRU’s customer average sits at 850 kWh, lower than the Florida average, and Cunningham traces some of that to the educational component.