Summary The City of Alachua establishes electric rates to generate revenue sufficient to meet its operating expenses. These expenses include a monetary transfer to the City’s general fund. Similar to most other electric utilities, the City of Alachua establishes base rates and an adjustment factor for each customer class – residential, general service (non-residential) non demand, and general service (non-residential) demand and large demand. The City of Alachua’s electric rates were last modified in 2012. Staff now evaluates electric rates annually during the budget process and, if warranted, recommends that rates be adjusted. Staff maintains a computer model for developing its electric rates. The model forecasts bulk power costs, customers, and energy consumption to determine whether electric rates will produce revenues which are sufficient to meet the expenses associated with providing electric service to our residents. During the budget development process for the upcoming fiscal year, staff concluded that a slight increase in the energy charges is warranted for each customer class. Staff proposes a 1.5% increase for each rate class. The proposed, amended electric rates are identified in the attached ordinance.
An important part of rate making is ensuring that the City’s utility rates are competitive with those of our peer groups. The State of Florida is served by nearly 50 electric service providers making establishment of an appropriate peer group challenging. Staff has selected the three (3) electric service providers that provide energy to City residents in its best peer group. They are Clay Electric Cooperative, Gainesville Regional Utilities (GRU), and Duke Energy . The Florida Municipal Electric Association (FMEA) maintains a comparison of all the municipally owned electric service providers in Florida and transmits it on a monthly basis. A copy of the May 2015 monthly residential electric rate comparison is attached. Note that the rate comparison utilizes the City’s current electric rates.
On July 13, 2012 staff presented the proposed electric rate increases to the City Commission in a public workshop. The proposed FY 15-16 Electric System Budget reflects the projected revenues associated with the proposed rate increases. Additional background information related to the City of Alachua’s electric rates and charges is discussed in the Electric Rate presentation.
The City Commission approved Ordinance 15-10 on first reading on July 27, 2015.
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