GRU rates rise again

Gainesville Regional Utilities General Manager Bob Hunzinger outside his office Friday, May 16, 2008.

DOUG FINGER/The Gainesville Sun
Published: Tuesday, July 1, 2008 at 6:18 a.m.
Last Modified: Tuesday, July 1, 2008 at 5:29 p.m.

For the third month in a row, electricity rates will increase in July in Gainesville as fuel costs continue to increase.

Local social service agencies say residents are feeling the sting.

Gainesville Regional Utilities announced that starting today bills will reflect an increase on the "Electric Charge" line item an increase due largely in part to rising fuel costs.

For the average GRU customer, who uses 1,000 kilowatts of energy a month, that is a $5 increase in their bills, said GRU General Manager Bob Hunzinger.

"We're concerned about the customers and the effect this is having on their budgets," Hunzinger said. "But a lot of that's out of our control."

GRU is required by its bonding agencies to increase the fuel adjustment rate to reflect the current cost of fuel. Hunzinger said they review and adjust the rate if needed every month based on the cost of fuel.

"It's getting a little scary," said Jean Gough, director of services for Gainesville Community Ministries, a program that offers utility assistance for those who cannot pay their bills. "We are getting calls from people going crazy their bills are getting so high."

The average utility bill in July will be $128.54 compared to last July, when the average bill was $104.52. That increase reflects a general rate increase in October as well as fuel adjustment increases.

Because GRU has a tiered rate structure, the increase will hit those who use more energy harder. Gough said that includes some lower-income residents who are in older homes or less-energy efficient apartments.

"They get rent that's pretty darn reasonable and then they get their first utility bill and it's pretty much their rent," Gough said.

Her program, which provides once-a-lifetime assistance of up to $150 on a utility bill, is funded through donations through the GRU Project SHARE. Community members donate money to the charity right on their energy bills.

Hunzinger said fuel prices will likely continue to increase in the coming months and rates will increase as a result.

The price of natural gas, which is burned only during peak energy hours or when Gainesville's coal power plant is offline, has nearly doubled in the past year, Hunzinger said. That plant provides about 25 percent of the energy for GRU customers, although the gas power plants owned by GRU represent about 60 percent of the city's energy producing capability.

Meanwhile, the price of coal, which is burned at Deerhaved Generating Station Unit Two, has jumped from $40 a ton to $110 a ton in the past year.

They city's long-term coal contracts have shielded customers from that increase, however, and Hunzinger extimated that only 20 percent of the coal purchased has been subject to that increase.

Those long-term contracts expire next year, which Hunzinger said could expose customers to even more market fluctuations. Coal accounts for about 70 percent of the GRU energy supply.

In May and June, the fuel adjustment rate was increase, also due to fuel increases. However, "forced outage hours" at the power plants also contributed to the higher rates, causing GRU to use the more expensive natural gas.

"Our plants ran fairly well throughout June," Hunzinger said. "The increase this month is guel cost as opposed to plant performance." Hunzinger encouraged customers to visit their Web site for energy conservation ideas that will lower monthly utility bills.

He also reminded people that energy use during peak hours suck as mornings and evenings costs the company more in fuel because the gas-powered plants are fired up to meet demand.

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