Letter from City Manager Regarding Natural Gas Price Increase on Summer Utility Bills

Citizens of Green Cove Springs and Customers of the City Electric Utility: 


Recently there has been significant national discussion regarding cost of electricity and the Bulk Power Cost Adjustment (BPCA) that the City charges monthly. In this document, the mission is to explain and clarify some misinformation about the cost of electricity and the use of the BPCA. 


The City of Green Cove Springs receives our power through the Florida Municipal Power Agency (FMPA) which is a joint action agency that consolidates the electric requirements of 31 Municipal Power Systems throughout the entire state of Florida. FMPA secures the required load for all of the municipal members and then coordinates the delivery of that power through transmission arrangements. The makeup of the power generation facilities that FMPA owns is:  Natural Gas – 70%, Coal – 24%, Nuclear – 5% and Solar – 1%. 


With this mix of generation facilities, the recent spike in Natural Gas prices is going to result in higher cost of generation and ultimately higher monthly utility bills to our customers.  To manage these spikes in natural gas and other fuel costs, the City electric rates are set up to have a base amount of power costs in our base rate. These rates must be submitted for approval to the State of Florida Public Service Commission. These rates have not been changed since 2015. We are not able to change our approved rates without confirmation from the Florida Public Service Commission. With that in mind, the electric rate structure does provide for a variable portion which is to address the fluctuations in our power costs, such as we are currently seeing with natural gas prices. 


Each month the city will adjust the BPCA based on the actual power costs that we are provided through our agreement with FMPA. The actual BPCA is listed on your utility bill should you desire to track it. In a month where we have moderate to lower power costs the amount BPCA shown will be in the .01 to .025/kilowatt hour range. The current billing BPCA is .068/kilowatt hour.  This is indicative of an increase in natural gas prices from the $2/MMBtu range to over $9/MMBtu. The base rate does not change monthlyThe electric usage rate does not change monthly. Only the BPCA will vary monthly. The City can not simply add amounts to the electric bills without approval of the Florida Public Service Commission. The BPCA is a flow through cost from FMPA that MUST be billed, collected, and then paid to FMPA who in turn pays for the cost of power invoiced to them from the power generators.   


Finally, if any customer has the desire to discuss the BPCA impact on their monthly billing, please contact our Finance Department at 904-297-7500 to set up an appointment to discuss your bill. 


Sincerely, 

City Manager Steve Kennedy

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