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[UPDATE] Cost of Living Special Report

By: Deneige Broom Email
By: Deneige Broom Email

When you flip a switch, you expect light.
When you turn on the faucet, you expect water.

Just like everything else in our lives, those essentials come at a price.
For Tallahassee resident, Yamada Bell, that price is about $1,200 for a few months of city services.

"I almost fell out, I honestly did. But I've got four kids so I have to keep the lights on," said Bell.

Others like Kimberly Williams have expressed similar experiences.

"The information that I did find out, it was the type of unit that I had. That's why my bill was $600 and then my February bill was $587 and the bill that I just paid in March was $297," said Williams. "It's a strain and any little bit would help.

We all get a bill every month, buy many people don't understand how utility providers set their rates, and what variables come into play.

You can't just go down the list and compare providers because they aren't all created equal.

In the utilities world there are three categories, municipal, electric cooperatives and investor-owned providers.

Municipal providers like the City of Tallahassee or Gainesville Regional are governed by a city commission, or utility board.

Municipals are not-for-profit and capital is through operating revenue or bond sales.

Then you have electric cooperatives like Talquin Electric Cooperative.

Cooperatives are run by an elected board of directors. These boards set their own rates.

Talquin's current Energy Charge of $ 0.0999 per KWH with a PCA of 15 mills or $0.015 per kWh. Adding those together, brings it to about 11.5 cents per kWh for billing.

Lastly are the privately owned or investor-owned utilities like Progress Energy or Florida Power and Light.

These are state-regulated monopolies run by a board of directors elected by stockholders. Their purpose is to make a profit for the stockholders.

Here's a comparison of municipal utilities in Florida that generate their own power. This is March 2011 data from the Florida Municipal Electric Association based on 1000 kWh usage.

Tallahassee: $127.97
Gainesville: $127.95
St. Cloud: $124.61
Jacksonville: $120.10
Orlando: $119.82
Homestead: $119.02
New Smyrna Beach: $113.51
Lakeland: $112.02

The following municipals have higher prices, and they don't generate their own power:

Bushnell: $137.05
Mount Dora: $135.24
Leesburg: $129.00

Reese Goad heads up the city of Tallahassee Utilities business. He says the much of the price comes from the cost of doing business.

"A large part of that, is the cost of fuel that we use to generate electricity as well deliver directly to customers, our natural gas service," said Goad. "That price increases or drops. We adjust our rates periodically. It's kind of like the gasoline in your car. If the price at the pump falls then the cost of driving is reduced and we'll pass that on to the customer."

The city of Tallahassee provides its customers power, through two exclusively natural gas plants.

Other power sources like coal could result in cheaper operation costs and ultimately lower bills, but Goad says residents wanted to go green.

"Back in the early 90's there was a lengthy discussion of using coal in Tallahassee," said Goad. "Our citizens rejected that idea."

Natural gas prices fluctuate based on market supply and demand.

The U.S. Department of Energy says natural gas prices have been dropping and the City of Tallahassee says that's part of why its rates have dropped an average of almost 22 percent for gas and electric customers.
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Here's how your bill adds up

A customer charge of $6.39 covers some administration costs and account maintenance.

Your non-fuel Energy Rate of about $0.059 per kWh helps cover operation and maintenance of the distribution.

Lastly is your Fuel and Purchase Power Charge Rate (ECRC) of $0.05803 per kWh. This number is adjusted bi-annually to recover fuel costs if necessary.

Based on the Energy Cost Recovery Clause, the price of natural gas to produce power is passed along to the customer dollar for dollar.

That adds up to your Billing Rate of $0.11715 per kWh.

Those using gas pay about $1.35 per CCF.

While the electric bill could seem high, other things like water, city property taxes and fire services all play a role in how your bottom line looks at the end of the month.
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Tallahassee has one of the lowest millage and property tax rates for comparable cities.

Tallahassee's millage rate for FY2011 is 3.7 and the property tax bill is about $550 annually.

Clearwater's millage rate for the same time period is 5.155 and the property tax bill for the year is about $773.25

Although Clearwater residents pay about $100 less for utilities, once franchise fees and other expenses are added up, they shell out more than the average Tallahassee resident.

Franchise fees and fire fees also come into play. Tallahassee doesn't have a franchise fee but does have a fire services fee of $178.92. Some cities have one, both or neither.

Sewer fees can also swing your bill.

Tallahassee's sewer rates are higher than many Florida municipals.

Talquin Electric is a non profit electric cooperative. The nine-member Board of Trustees sets the rates. Those rates are based on two things, a base rate and facility charge, and a wholesale power cost adjustment.

The majority of operating expense are covered by the base rate.

Talquin’s energy supply comes predominately from Seminole Electric Cooperative Inc.

Seminole supplies energy with 57% coal, 36% natural gas, 1% nuclear, 1% from oil purchased power, 5% from renewable sources.

Comparisons of municipal services in Florida can be found at the links below.


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