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Updated: 04/09/2014 08:00:02AM

City increases electric surcharge

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Fort Meade’s expensive electricity is getting a little more expensive.

The city is raising its so-called “power cost adjustment” from 3.5 to 4.5 cents per kilowatt hour on its bills, according to City Manager Fred Hilliard.

The move did not require approval of the city commission, but commissioners who were briefed on the matter during a special meeting March 11 agreed with the increase, he said.

The power cost adjustment is essentially the customer charge the city levies to operate its own municipal system.

In a February survey of 33 Florida municipalities that operate their own electric system, Fort Meade had the fifth most expensive total rate, at $136.36. Neighbors to the north, however, in Bartow, actually were second on the list, paying $140.50 per 1,000 kilowatt hours. Key West is the highest at $144.66.

The municipal average is $121.32 according to the Florida Municipal Electric Association which conducts the monthly survey. Lakeland has the cheapest electric at $100.49, while Wauchula checked in at $107.94.

Florida Power and Light offers its customers the cheapest electricity, according to the report, at $97.45.

Joseph Welch, a certified public accountant from Purvis Gray and Company, told commissioners there were three options in figuring what the monthly power cost adjustment can be. The PCA can fluctuate from month to month based on the cost of power.

None of the options are particularly good, Welch indicated. Using actual numbers based on a previous month’s cost is too variable, while using a historic average produces inaccurate accounting. The third option, of estimating the monthly charge which the city does now, has historically come up with a figure lower than actual costs, he said.

Welch indicated the city had two options, to either raise the PCA or forgive a portion of the shortage.

At the same time, city leaders are wrestling with a plan from the Florida Municipal Power Agency, which will eventually stop Fort Meade and other cities from using alternative means to help lower electric costs.

Several members of FMPA, including Fort Meade, Leesburg and Jacksonville Beach, use generators to create their own electricity to help avoid paying higher rates for so-called demand or peak power, which is electricity needed to be purchased above the city’s base contract. Fort Pierce also does the same thing, but uses line voltage control to reduce its peak power cost

Several of FMPA’s larger members, including Kissimmee and Ocala, are pushing to end that practice since those savings costs are absorbed by other members.

“There remains strong support for ending demand cost shifting due to peak shaving by individual participants using either their utility’s assets or customer generation,” according to a March 20 memo authored by FMPA’s Mark Larson and Jim Arntz. “After discussion of the various activities, some participants indicated that they are unwilling to have costs shifted to them due to the peak shaving activities of other participants, and asked staff to come up with a way to stop the cost shifting that is occurring due to the peak shaving activities.”

The latest proposal calls for the practice to end no later than Sept. 30, 2015.

“To be clear, all demand cost shifting caused by peak shaving of any kind would cease by no later than Sept. 30, 2015,” the memo noted.

In a note to Fort Meade commissioners, Hilliard said the plan would allow the city to maintain its peak shaving through September of this year, and then phase the operation out through September 2015.

Hilliard said the matter is expected to be finalized at a FMPA meeting April 17.

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