Fuel and Purchased Power

The cost of fuel is a major portion of all consumers’ electricity bills.

Electric power plants in Florida use a variety of fuels to generate electricity. These fuels include oil, coal, nuclear and, one of today’s most commonly used fuels, natural gas.

Fuel and purchased power costs are the largest single variable expense for electric utilities, and they can vary greatly on the basis of supply and demand and other factors. Under utility regulations, these costs are passed along to customers at cost, through a charge on their bill commonly referred to as a “fuel adjustment fee.” Utilities do not profit from increased fuel and purchased power costs.

The “fuel adjustment” is just one portion of the typical electric bill. A few years ago, the cost of fuel made up a smaller percentage of the average utility customer’s bill. Due to the sharp rise in the price of fuel, especially natural gas, fuel costs have come to represent a much larger portion of consumers’ electricity bills, as compared to utilities’ base rates, which have remained fairly steady.

Municipal utilities are consumer-owned and not-for-profit, so providing affordable, reliable power is our first priority. However, to remain financially sound, it is necessary to recover fuel costs from customers in a timely manner.

Here at the Utilities Commission, we buy almost all of our power from others off the national electric transmission grid. Effective Jan. 1, 2012, you will be paying $29.28 for fuel and purchased power per 1,000 kWh.