JEA rate hikes continue, but Jacksonville residents may see bills level off starting next month

JEA customers facing rising bills could see some reprieve in the coming months, utility officials announced Tuesday, but not before experiencing one more hike. After a summer of unprecedented rates, customers will face another 20% fuel charge increase in September before a much awaited, though slight, decrease.

The utility discussed the fuel rate charges during its monthly board meeting and predicted a decrease in rates in October, followed by stagnation and hopefully a further, more significant drop next April.

The decrease comes as customers continue struggling to pay high utility bills – to the point that the utility’s union donated $10,000 to the Neighbor to Neighbor program and City Council contemplates utilizing COVID-19 relief funds to help residents behind on utility payments.

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For a household using 1,000 kilowatt hours, the September fuel charge is $83.46 – increased from $69.55 in August. In October, JEA expected the estimated fuel charge to be $79.03.

This is “some positive news,” Nancy Reinker, the utility’s fuels management service manager, told the board because the previously projected fuel rate for October was $100.15 – another 20% increase.

The rapid rise in the fuel charge has caused a dramatic spike in the cost for JEA customers. This month, a typical residential customer using 1,000 kilowatt hours of electricity will pay $161.29 before taxes and fees, compared to $108.33 a year ago.

The big jump in the cost stems from the portion of the bill that pays for JEA's cost of buying fuel, such as natural gas and coal, for its power plants. The other part of the bill, called the base rate, has remained the same.

The announcement arrived the day an estimated 2,900 households faced disconnection at the end of the utility’s six week “grace period” – a moratorium temporarily suspending utility disconnection with the goal of allowing customers to catch up on payments. In a normal month, JEA officials told reporters there are around 12,000 disconnections per 20-day period.

The utility’s call center fielded 7,300 calls during the first hour of operation Monday, JEA CEO Jay Stowe said. The center normally receives that many calls in a single day, causing long wait times for frustrated customers.

Some of the calls included customers reporting concerns of “scammers” calling their homes saying they faced disconnection when they did not, Stowe said. Still, officials encouraged customers to contact the utility to arrange a payment plan to avoid disconnection.

The fuel charges on utility bills are in line with an ever-changing market, meaning the estimations are subject to change depending on outside factors.

Fuel rates still subject to change

The fuel charge on utility bills fluctuates with the market on natural gas – JEA’s primary fuel source. When combining the impact of economic and political pressures on the supply of fuel, plus rising temperatures, rates throughout the country have continued to increase.

“That’s the most surprising piece of this,” Stowe said at the meeting. “I don’t like to say there are things outside of our control. I don’t like to use that as the reason for things happening, but the war in Ukraine is out of our control, these things have an impact. We have a really good team trying to manage things the best way we can.”

Rates decreasing is a “combination of a lot of moving parts,” Stowe told reporters, including the estimated national market rate and the amount of fuel JEA will need to buy each month.

The estimated rates will change, Stowe said, but the utility plans to continue reporting monthly estimations in an effort of improving transparency.

“It went in the right direction [for October],” Stowe said. “It’s still going to remain high, and I don’t think we should become numb to the idea that it remains high the entire time. For 10 years, it’s been at $32, so this entire time it’s going to be significantly higher, but we’re managing it and keeping it down.”

Upcoming changes at JEA

The board also approved two separate raises – one impacting unions and the other affecting bonuses during fiscal year 2023.

JEA and the utility’s five collective bargaining units successfully negotiated new three-year contracts to be approved by City Council. Some of the biggest changes include an 8% wage increase for three of the unions and a 9% increase for the fourth to go into effect Oct. 1.

The four unions will all receive 4.5% increases year two and 3.5% year three. The fifth union operates on a performance scale following minimum and maximum guidelines.

JEA will now also cover 60% of an employee’s dependent health coverage instead of the former 50%.

The board approved the overview of the contracts, as well as the next year’s Pay for Performance Program – informally recognized as the utility’s financial bonus program. The board approved a budget of no more than $9.7 million to be used based on the accomplishment of various performance benchmarks.

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The program’s budget is based on money saved by JEA and is not impacted by rising fuel rates in customer bills.

The utility has not yet announced how the money will be distributed.

This article originally appeared on Florida Times-Union: JEA customers face another fuel rate increase as disconnections resume