Never-before-seen generation costs cause electric bills to climb further
Facing a nearly $20 million budget shortfall for the fourth quarter due to a volatile natural gas market, Clay Electric has to impose a substantial rate increase.
Beginning with October billing cycles, the Power Cost Adjustment (PCA) is increasing $19.60 per 1,000 kWh of energy a member consumes. Members who use the industry standard household average of 1,000 kWh of power will now pay $159.50.
The PCA increases or decreases each month depending on the costs to generate power. Current and forecast natural gas prices are quadruple what they were in 2020, and roughly triple from 2021 due to domestic conditions and international events. Overall demand for natural gas this year has exceeded supply, in part due to low coal inventories, extreme summer weather and low storage inventories.
“Clay Electric has never seen increases in power costs of this magnitude,” said General Manager/CEO Ricky Davis. “These increases have put our energy costs $65 million over budget this year. The most recent increase was $19.8 million, which is why we must take the extraordinary action of raising our PCA $19.60 per 1,000 kWh. Even with this rate increase, we project to end the year with a $4.6 million budget deficit.”
Davis said about 70 percent of the fuel used to generate power in Florida is natural gas, and all utilities are struggling with soaring fuel costs. The co-op’s October PCA increase is the sixth in the last year. Florida Power and Light, Duke Energy, Gainesville Regional Utilities and others have also raised its rates this year due to natural gas prices, and plan to again in 2023.
“Our staff and the Board do not take these increases lightly,” Davis said. “We will continue to look for ways to lessen the impact on our members. As soon as natural gas prices go down, we will lower our rates.”
The co-op understands its members are suffering from higher electric bills and increasing financial demands in all parts of their lives. Clay Electric offers free energy surveys to help members find ways to lower their usage and bills, and provides several energy tips, tools and programs at ClayElectric.com. The co-op also works with many organizations in North Florida who provide utility bill payment assistance to members. A list by county of organizations are available here.
Clay Electric has a new PrePaid billing program to help members who are often behind on their payments or do not want a set due date. PrePaid gives members the power to pay for electricity on their own schedule – daily, weekly, monthly, or whenever is right for them. It allows members to purchase electricity on a pay-as-you-go basis (similar to buying fuel for a vehicle) without deposits, late fees or reconnection fees. Members with existing deposits on their account will have it applied toward any outstanding balance owed, with the remaining credit (if applicable) applied to the PrePaid account at sign-up.
More information on the PrePaid program is available here.