FMPA Board Approves Rate Decrease
ORLANDO, Fla., Dec. 14, 2001 – The Florida Municipal Power Agency (FMPA) approved rate decreases Dec. 14 that will reduce the fuel portion of customer bills for electric customers in 13 Florida cities. The communities affected are Bushnell, Clewiston, Fort Meade, Fort Pierce, Green Cove Springs, Havana, Jacksonville Beach, Key West, Leesburg, Newberry, Ocala, Starke and Vero Beach.
“After experiencing more than a year of dramatically increasing natural gas prices, we are pleased to see that fuel costs are coming down,” said General Manager and CEO Roger Fontes. “Since FMPA is a nonprofit organization, we are happy to pass along the reduced fuel costs to our customers.”
FMPA is a power company owned by 29 Florida municipal utilities. FMPA supplies all the wholesale power needs of 13 Florida communities that will benefit from the rate decrease.
The members of FMPA voted Dec. 14 to decrease the wholesale rate they charge for fuel (the energy rate) from 3.85 cents per kilowatt-hour to 3.65 cents effective Feb. 1, 2002. For the average city that purchases 45 million kilowatt-hours per month, the total price of wholesale power for a typical month will decrease from approximately $2.4 million to $2.3 million. A second rate decrease effective June 1, 2002, will reduce the energy rate further from 3.65 cents per kilowatt-hour to 3.45, which will drop the typical monthly cost to $2.2 million.
The wholesale price decreases may result in reduced costs to retail customers. Each city will determine how much and when this might impact the electric bills of its retail customers.
“Fuel costs are FMPA’s largest operating expense, so it’s critical that we manage this risk. We are putting measures in place to better protect our cities, and ultimately their retail electric customers, from highly volatile fuel prices.” Fontes said. “FMPA is employing price-hedging techniques for fuel and has added staff expertise in purchasing and hedging energy products. We also plan to expand our risk management practices.”