{"id":26903,"date":"2022-11-07T14:23:16","date_gmt":"2022-11-07T19:23:16","guid":{"rendered":"https:\/\/lakelandgazette.info\/news\/?p=26903"},"modified":"2022-11-07T14:23:23","modified_gmt":"2022-11-07T19:23:23","slug":"here-we-go-again-lakeland-electric-looks-to-increase-its-rate-this-spring-facing-a-7-million-shortfall","status":"publish","type":"post","link":"https:\/\/lakelandgazette.info\/news\/2022\/11\/07\/here-we-go-again-lakeland-electric-looks-to-increase-its-rate-this-spring-facing-a-7-million-shortfall\/","title":{"rendered":"Here we go again – Lakeland Electric looks to increase its rate this spring facing a $7 million shortfall"},"content":{"rendered":"\n

Lakeland Electric faces a $7 million budgetary shortfall this fiscal year and has received preliminary approval to increase customers’ base electric rates this coming spring. <\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

At the utility committee meeting, Gina Jacobi, LE’s assistant general manager of fiscal operations, laid out how the municipal-owned utility will need to spend about $214.2 million to service its electrical customers this year. Jacobi estimates revenue from customer rates will bring in $176.1 million and around $31 million from other sources like investments and cell tower fees. <\/p>\n\n\n\n

“If we don’t do a rate increase, this isn’t viable,” she said. “I expect other [municipalities] will follow soon and we won’t be the only ones looking to raise our rates due to inflationary pressures.”<\/p>\n\n\n\n

Lakeland hired an outside consultant 1898 & Co. to conduct a study of the utility’s base rate to see if what is being charged per kilowatt hour covers the expenses. The base rate typically makes up about 45% of the average homeowner’s monthly bill\u00a0if they use 1,200\u00a0kilowatts per hour.\u00a0<\/p>\n\n\n\n

The total cost of service, or required revenue,\u00a0covers\u00a0all the utility’s non-fuel operating expenses, capital improvements, debt service on bonds, and dividends to the city\u00a0\u2014 or the roughly\u00a0$33.5 million a year it pays to the city in lieu of property taxes on its land and assets, according to Jacobi.\u00a0<\/p>\n\n\n\n

“The revenue requirement is what we need to break even on our operations,” she said. <\/p>\n\n\n

\n
\"\"<\/figure>\n<\/div>\n\n\n

Jacobi presented utility committee members and city commissioners with three potential options to balance out Lakeland Electric’s finances: <\/p>\n\n\n\n

    \n
  • Recoup the utility’s shortfall in six months by hiking the base rate by 7.5%<\/li>\n\n\n\n
  • Recover the shortfall over a year by increasing\u00a0the base rate by 3.75%<\/li>\n\n\n\n
  • Spread the impact\u00a0out by raising the base rate by 2.25% annually for three years<\/li>\n<\/ul>\n\n\n\n

    These rate changes would increase the average homeowner’s bill ranging from $1.65 to $5.51 per month depending on the option chosen. <\/p>\n\n\n\n

    Jacobi recommended the third option as it gradually reduces the budgetary shortfall with the lowest financial impact to customers, without significantly dropping the utility’s reserve cash on hand to less-than-ideal levels. <\/p>\n\n\n\n

    “The commission would also be able to tweak those numbers,” she said. <\/p>\n\n\n\n

    It was suggested Lakeland commissioners could review the proposed Lakeland Electric base rate when calculating their annual budget, rather than every four years. The city’s last rate study was in 2018. This would be similar to how the city’s water, wastewater and sewer rates are set. <\/p>\n\n\n\n

    LE customers won’t see an immediate impact on their bills. Jacobi said this is the first phase of a three-part base rate study. Next, the consultant will evaluate the costs of providing electricity to residential, commercial, and industrial customers. This will help determine how the rate increase is split among the different types of customers, in addition to city residents versus those outside city limits.\u00a0<\/p>\n\n\n\n

    The utility committee’s goal is to have a new base rate determined by April. <\/p>\n","protected":false},"excerpt":{"rendered":"

    Lakeland Electric faces a $7 million budgetary shortfall this fiscal year and has received preliminary approval to increase customers’ base electric rates this coming spring.  At the utility committee meeting, Gina… <\/p>\n","protected":false},"author":1,"featured_media":26904,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"_uf_show_specific_survey":0,"_uf_disable_surveys":false,"wpai_generated_summary":"","footnotes":"","jetpack_publicize_message":"{title}\n\n{excerpt}\n\n{url}","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"dois","default_image_id":71799,"font":"","enabled":false},"version":2},"_wpas_customize_per_network":false},"categories":[12,14],"tags":[3833],"class_list":["post-26903","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-local","category-news","tag-lakeland-electric-looks-to-increase-its-rate-this-spring"],"jetpack_publicize_connections":[],"_links":{"self":[{"href":"https:\/\/lakelandgazette.info\/news\/wp-json\/wp\/v2\/posts\/26903","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lakelandgazette.info\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/lakelandgazette.info\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/lakelandgazette.info\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/lakelandgazette.info\/news\/wp-json\/wp\/v2\/comments?post=26903"}],"version-history":[{"count":0,"href":"https:\/\/lakelandgazette.info\/news\/wp-json\/wp\/v2\/posts\/26903\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/lakelandgazette.info\/news\/wp-json\/wp\/v2\/media\/26904"}],"wp:attachment":[{"href":"https:\/\/lakelandgazette.info\/news\/wp-json\/wp\/v2\/media?parent=26903"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lakelandgazette.info\/news\/wp-json\/wp\/v2\/categories?post=26903"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lakelandgazette.info\/news\/wp-json\/wp\/v2\/tags?post=26903"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}