March 29, 2024
Along with the price of natural gas, Floridian's electric bills are climbing sky-high

Photo: FMPA

Jacob Williams, general manager and CEO of the Florida Municipal Power Agency, says federal policies that have limited the issuance of new leases to drill for oil and gas on federal lands and held up development of new pipelines are also driving up prices.

Economic Backbone: Energy

Along with the price of natural gas, Floridian's electric bills are climbing sky-high

Utilities — and their customers — are facing substantially higher bills as natural gas prices skyrocket.

Amy Keller | 9/7/2022

The price of natural gas — which generates roughly 75% of Florida’s electricity — more than doubled over the summer and is driving increases in electric bills at utilities around the state.

Clay Electric Cooperative, which serves more than180,000 customers in 14 North Florida counties, increased its rates two times in May because of climbing natural gas prices. Ocala Electric Utility increased its rates by 20% to 23% in June, bumping up the average customer’s monthly bill $28. Beaches Energy Services, which serves residents in Jacksonville Beach, hiked its rates in July by an average of $20 a month for a home that uses 1,000 kilowatt-hours.

The spike in natural gas prices is being driven by a supply and demand imbalance. While natural gas inventories are below the five-year average, worldwide demand for U.S. liquefied natural gas exports is steady, and the U.S. electric power sector is more dependent on natural gas than ever before, with “limited opportunities” to switch to coal, according to the U.S. Energy Information Administration. The war in Ukraine has accelerated the price surge — as has warmer-than-normal weather in the U.S. According to the American Gas Association, demand for natural gas reached a record high in June as Americans cranked up their air conditioners.

Jacob Williams, general manager and CEO of the Florida Municipal Power Agency, a wholesale power agency owned by municipal electric utilities in the state, says federal policies that have limited the issuance of new leases to drill for oil and gas on federal lands and held up development of new pipelines are also driving up prices.

“Fracking, which created 40% of our supply that didn’t exist back in 2010, now comes out of an area of West Virginia, Pennsylvania and Ohio. And those areas are prolific, but they don’t have enough pipes to get the gas from those areas to the demand regions along the entire Eastern seaboard, including Florida,” Williams says.

Williams says volatility in the natural gas market has driven Florida Municipal Power Agency costs up by $200 million in 2022 but that the wholesale power agency has taken steps to mitigate the impact for its 31 member cities. He says the agency has cut $30 million in costs by “optimizing sales” of extra power it generates from its power plants to create larger profit margins.

The Florida Municipal Power Agency is hoping to saving another $7 million to $10 million by running its combine-cycle power units more often. At the end of the day, however, he says, “It’s not going to offset $200 million.”

Tags: Energy & Utilities

Florida Business News

Florida News Releases

Florida Trend Video Pick

Facial recognition cameras in Florida city spark privacy concerns
Facial recognition cameras in Florida city spark privacy concerns

New security cameras in downtown Lakeland are raising concerns about privacy. The Lakeland Downtown Development Authority has begun installing 13 new security cameras on streets, sidewalks, and alleyways, and there are mixed feelings about them.

Video Picks | Viewpoints@FloridaTrend

Ballot Box

Should Congress ban the popular social media app TikTok in the U.S.?

  • Yes
  • No
  • Need more details
  • What is TikTok?
  • Other (Comment below)

See Results

Florida Trend Media Company
490 1st Ave S
St Petersburg, FL 33701
727.821.5800

© Copyright 2024 Trend Magazines Inc. All rights reserved.