Expect GRU bills to grow by 9%


Published: Saturday, October 1, 2005 at 6:01 a.m.
Last Modified: Saturday, October 1, 2005 at 4:03 a.m.
The continuing rise of natural gas prices and a scheduled rate hike mean the average Gainesville Regional Utilities customers can expect a nearly 9 percent increase in their October bill.
The majority of the increase, which amounts to about $8.21 for a customer using 1,000 kilowatt-hours of electricity a month, is in the cost of fuel, which is passed directly from the municipal utility to its customers through a "fuel adjustment."
"We're encouraging people to conserve," said Heidi Lannon, a GRU strategic planner. "That's really the best thing to do."
Though already on the rise, natural gas prices jumped sharply in recent months as Hurricanes Katrina and Rita disrupted the fuel's production in the Gulf of Mexico. Speculators in the commodities market have driven the price of fuel up more in the hurricanes' aftermath, Lannon said.
GRU can make changes to its fuel adjustment on a month-by-month basis, but before September had not needed to for about a year, Lannon said.
The rise in the fuel adjustment, which comes on top of a $6 fuel adjustment increase last month, is also compounded by rate increases approved by the Gainesville City Commission last week.
"We really haven't been in a situation like this before," Lannon said.
To combat the rising natural gas prices, GRU has turned to using fuel oil, which has previously been seen as too expensive to use, in some of its natural gas generators, Lannon said. In addition, the utility will delay a plan to shut down its coal-fired Deerhaven II plant for maintenance until next spring, she said.
Gainesville customers are not unique in seeing higher bills. GRU estimates about 85 percent of the electrical customers in Florida will see some increase in their bills by the beginning of next year due to higher fuel costs. Florida Power and Light is expected to have the highest increase, raising the average bill by $16.44, according to GRU.
Due to the volatility of the fuel market, it is difficult to predict whether another fuel adjustment increase is imminent and, if so, how much it could rise, Lannon said. But it is unlikely that rates will go down in the short-term, she said.
"Our goal is to keep it where it is," Lannon said. "But that's always our goal and we haven't achieved it so far."
Jeff Adelson can be reached at (352) 374-5095 or adelsoj@ gvillesun.com.

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