Lakeland Electric gets city approval to raise rates
LAKELAND — Lakeland Electric has received the city's approval to raise its base rate for electricity this spring, but most customers will have lower monthly bills.
Lakeland Electric will raise the base cost of electrically by 2.25% across the board for customers starting April 1. The utility's base rate is the portion of the bill covering labor, equipment, operations and profit. It's typically adjusted every four years.
Shooting update: After a week, no arrests in Lakeland mass shooting. Police decline to name suspects
Growth: Tampa developer aims to break ground on Oak Street apartments this summer
A standard residential customer who has the average monthly consumption of 1,157 kilowatt-hours should expect to pay $1.60 more a month for energy. That's about 87% of all LE customers. There's an additional $1 raise to the customer service charge from $11 to $12 a month going forward.
Most of Lakeland Electric's commercial customers would have faced an increase ranging from $2 to $39 a month, depending on their service plan and overall energy use. This category covers nearly 14,000 of the city's businesses. These company's customer service charge will increase variably depending on what their service plan is. These base rate increase are the first in a series of three the municipal-owned utility has proposed. Lakeland Electric plans to seek an additional 2.25% in October 2023 and October 2024. In approved, it will equal about a 7% increase in the city's electricity rates.
Customers, however, should expect to see a decrease in their monthly bill. That's due to some "fortunate" timing as Gina Jacobi, LE's assistant general manager of financial operations, called it. The utility will lower its fuel rate from a record-high of $70 to $55 per 1,000 kilowatt-hours starting March 1.
"We were lucky the two worked hand-in-hand," Jacobi said.
Tory Bombard, LE's Fuel manager, explained to the utility's advisory board on Friday that the price of liquid natural gas is projected to drop 53% in February, then down another 48% in March. As the utility's fuel rate is a 'pass-through' where customers pay the direct cost, this allows Lakeland Electric to lower its rates.
"We had the warmest January in 15 years," Bombard said. "If you are not consuming as much energy you don’t need as much fuel. You have more supply than you have demand."
The $55 fuel rate is still higher than the $40 it was last spring, but Jacobi said customers can expect to feel some relief.
Polk restaurant inspections: 3 restaurants closed for a day for rodent activity
Overall, a standard residential customer's monthly bill should decrease by about $21. Most commercial customers should see their monthly electric bill reduced by about $30 to $722 a month, according to Jacobi's calculations.
Bombard said she expects to be requesting a reduction in the fuel rate again in October based on market trends. If so, Jacobi said this would most than offset LE's next wave of 2.25% base rate increase.
The one difference is the utility's base rate is evaluated once every four years, typically increasing to account for increased operational costs and inflation. The fuel rate is much more volatile and may change monthly, depending what events impact the available supply.
Sara-Megan Walsh can be reached at swalsh@theledger.com or 863-802-7545. Follow on Twitter @SaraWalshFl.
This article originally appeared on The Ledger: Lakeland Electric raises its base rate, but lower monthly bills expected
