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The rapid rise in the cost of oil has dominated headlines for several months, and the impact is being felt in many areas of our daily lives, most notably at the fuel pump. The majority of businesses, from grocery stores to offices to landscapers, are also faced with these rising prices, and are forced to pass higher costs along to their customers as well.
The increase in gasoline price is only part of the story. Coal, an abundant fuel source in our country and a fuel for which cost has been low and stable for decades, has doubled in price just this past year. Half of our nation’s electricity is produced from coal, and in Jacksonville, it’s closer to 70 percent. Since 1999, the cost of natural gas has also skyrocketed, by more than 400 percent. Consider that most of Florida’s utilities use natural gas for a significant part of their generation, and you can see how rising fuel costs impact your electricity bill. To make matters worse, the Federal Energy Regulatory Commission is predicting that summer power prices may increase even further, as high as 50 percent or more.
Florida’s electric utilities work constantly to minimize the effect rising costs have on customers’ bills. But despite everyone’s best efforts, no utility – large or small, public or private – can absorb the kind of skyrocketing costs we have seen in recent years.
The causes of these increases are many, but for the most part fuel prices have increased due to limited energy supplies in the United States along with increased demand worldwide for all fuels, primarily from the growing economies of China and India.
It is important for you to know that electric utilities do not make any profit on the cost of fuel. Rather, the price a utility pays for fuel is passed through to customers at cost. The local utility doesn’t keep a dime.
While utilities can’t control the price of fuel, most utilities work to temper the cost to customers. We use a portfolio of strategies and methods for containing costs so that customers do not bear the full brunt of rapid price increases. Some are negotiating fuel price hedging contracts and others are developing ways to generate electricity more efficiently, all in an effort to protect customers from the volatility of rising fuel costs. Many utilities are also increasing their use of renewable fuels, although they cost even more than oil, coal and natural gas.
You can help too. I encourage you to contact JEA to learn more about energy conservation programs and how you can control the costs of your monthly electricity bill. Check out www.publicpower.com/save_energy.shtml for energy conservation tips you can implement immediately.
No one is happy about these rising prices. Please be assured that public power providers like JEA are doing everything in their power to minimize the impact of higher fuel costs and are taking every necessary action to continue providing you with the best service possible.
Barry Moline is executive director of the Florida Municipal Electric Association (FMEA). Based in Tallahassee, FMEA represents the unified interests of 34 public power communities across the state, which provide electricity to more than three million of Florida’s residential and business consumers.
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