FPUA Revenue Comes from the Ratepayers

http://www.tcpalm.com/news/2011/sep/12/fort-pierce-considers-ways-to-collect-more-fpua/

Fort Pierce considers ways to collect more FPUA revenue without rate increases

By Eric Pfahler

Monday, September 12, 2011

FORT PIERCE — Fort Pierce Utilities Authority Director Bill Thiess' plan to put $1.5 million into city coffers wouldn't require a rate increase, but residents would not receive a decrease planned for April either.

Thiess presented options to city commissioners on how the authority could send more money to the city, but he's looking for more time to delve into details.

Commissioners are expected to discuss the potential transfer further at their meeting Oct. 17, while FPUA board members could discuss the issue Sept. 20.

At issue is the transfer fee the city collects annually from the FPUA.

In 2010-11, the city collected $5 million from the FPUA. The city is supposed to collect 6 percent from FPUA revenues, but the two sides disagree on what is considered revenue. Historically, the city has not collected money brought in from the power cost adjustment, which gets flipped straight to Florida Municipal Power Agency, Thiess said.

The power cost adjustment is part of the bill and covers the fluctuating price of fuel. The adjustment makes up $34 of the bill for a ratepayer using 1,000 kilowatt hours, which is roughly the average monthly residential electric use.

City officials are considering clarifying the definition of "gross revenue" in the city charter to include the power cost adjustment. The money could help offset future city deficits and lower the property tax rate.

But commissioners plan to take more time to go through the options presented by Thiess and consider others. Thiess said the $1.5 million would affect the base rate — now $42.32 per 1,000 kilowatt hours — by $2.80. That would eliminate the planned decrease in April, Thiess said.

Two City Commissioners — Eddie Becht and Tom Perona — said they hope to take some of the politics out of future rate increases. The two discussed the idea of using a state index to help determine future rates. The Florida Public Service Commission creates a "deflator index," which serves as a way to measure inflation in the energy world. If the two commissioners' proposal is approved, the FPUA could raise rates by a percentage or all of the index without needing city approval.

Details on the proposal have not been finalized, but the index is expected to rise no more than 1.5 percent per year during the next five years.