JEA Scheduling Hearing In August For Fee Hike That Will Affect Builders Jax Daily Record | Jacksonville Daily Record

The JEA board of directors has scheduled a public wage negotiation for August 24th, during which a vote is expected to be taken on the first fee increases for water, sewage and irrigation capacity in 15 years, which will affect builders and customers connected to the city’s own supply system.

The board will also vote on adjustments to electricity tariffs, but JEA CEO Jay Stowe said at the board meeting on Jan.

“As we go into next year we should analyze and take a look at all of our tariffs, all of our fees, all of our fees, and make sure they meet requirements and not a 15-year gap in all of these activities in the future,” said Stowe.

Board Chairman John Baker, Vice Chairman Bobby Stein and Members Marty Lanahan, Joe DiSalvo, Leon Haley and Zachary Faison Jr. voted to call the hearing on June 22nd.

Board member Tom VanOsdol was absent.

The fees cover the cost of expanding the capacity of JEA’s water and sewage systems to connect new apartments and shared flats.

JEA staff suggested an increase in the one-time water capacity fee, which should be introduced gradually over several months. According to a presentation by JEA director of financial planning and analysis, Juli Crawford, fees would rise from $ 339.50 per water line to $ 936 by April 2023.

Crawford said JEA staff are also recommending that the board increase the one-time canal capacity fee from $ 1,274 to $ 5,114 and the irrigation fee from $ 339.50 to $ 1,053 by April 2023.

The fees would be introduced gradually with four incremental increases, according to the report.

JEA expects the combined fee increases for water and wastewater services to generate annual revenue of $ 36 million through fiscal 2023.

The information in the Executive Board meeting package shows $ 327.2 million in projects under JEA’s five-year capital improvement plan related to capacity growth.

On April 23, some of the projects were completed, others are in the drafting stage.

Crawford said JEA’s tariff consultancy, Stantec, reviewed the fee increases and approved the rating.

The August hearing will also look at likely increases in meter and tap charges paid by customers connected to the utility’s water system. This increase is intended to cover JEA’s material and labor costs for the installation.

The report shows that JEA will consider an increase of $ 97.70 from $ 202.30 to $ 300 for a ¾-inch gauge. A 1-inch tap increases $ 750 from $ 610 to $ 1,360 as part of the proposal.

JEA officials said the utility is collecting about $ 1.6 million annually on ¾-inch gauges and faucets.

Crawford said JEA employees also recommend ending a 25 cents per 1,000 gallon water price discount for commercial customers using 10 inches or larger yards.

If approved in August, the tariffs would come into effect on October 1st.

Answer from the builders

Greg Matovina, interim general manager of the Northeast Florida Builders Association, said on June 17, the JEA’s proposed fee increases add further costs to home builders and contractors at a time when labor and material costs have already increased prices for single-family homes and apartment rentals cause.

JEA leadership met with NEFBA on April 14 about the fee increase and has been communicating with other industry groups since the board began looking into the fee increase earlier this year.

Matovina said builders and contractors are likely to pass the increase in capacity and connection fees on to consumers in a market that is already pricing out some homes out of reach for some potential buyers.

At the moment Matovina said: “The demand is off the charts. We can’t build it fast enough. ”

He said NEFBA would like JEA to consider setting capacity rates at the start of subdivision and multi-family construction projects so that builders can be more confident about forecasting costs.

“We acknowledge that fees have not increased in the last 15 years. JEA shouldn’t let it go up so quickly all at once in the future. Take it gradually and don’t let it all take effect right away. Do it in two or three phases so the market can pick it up, ”he said.

NEFBA also wants to combine the power plant capacity fee and the JEA Service Line Extension fee in one fee.

“This is typical for many other supply areas. Both are decisive for the economic development and the integration of customers in the JEA system, ”it said in a memo from the NEFBA on April 9th.

Stowe said during the board meeting that JEA plans to review its fees related to capacity and line expansion costs more frequently.

The Vogtle effect

Stowe told the board that it was right to cut JEA’s fuel bills for residential customers in order to keep bills stable in fiscal 2022.

If approved by the board, JEA will increase the average monthly energy bill for residential customers from $ 69.88 to $ 71.71 based on 1,000 kilowatt hours per month.

Crawford and Stowe said delays in the construction and operation of Vogtle nuclear power plant in South Georgia were the main reason for the rate hike.

JEA signed an agreement with the Municipal Electric Authority of Georgia in 2008 to harness nuclear power from the power plant under construction about 20 miles south of Augusta, Georgia when the estimated $ 20 billion project is completed.

As of 2016, JEA officials have said Vogtle’s construction delays have increased the JEA’s costs by $ 900 million.

Despite the reduction in electricity debts and cost reductions from the closure of the St. Johns River Power Park, an electricity purchase agreement with Florida Power & Light, and increased solar energy consumption, JEA officials said the base rate increase was necessary.

JEA executives would offset this with a lower average fuel fee in fiscal 2022, which would drop from $ 32.50 to $ 30.50.

The monthly base fee of $ 5.50 and the environmental fee of 62 cents per 1,000 kilowatt-hour remain unchanged for the average user.

The report says the average JEA home bill would stay unchanged at $ 123.34 after taxes and fees.

Even without an increase in household energy bills, JEA expects additional revenue of $ 22 million in fiscal year 2022 with the changes, according to the report.

According to a June 8 report by The Augusta Chronicle, MEAG expects Southern Nuclear to begin commercial operations of Vogtle Unit No. 3 on January 18, 2022.

An independent study by the international management consultancy firm Roland Berger, which was presented to the board on June 22nd, shows that there is likely to be at least another six months delay before Vogtle’s unit three goes online and starts generating electricity for the JEA system.

Bill Kemp, director of Roland Berger, told the board that delays are likely at Block # 4 of the plant as well.

Berger said the Georgia Public Service Commission, a power regulator, estimated longer delays.

Stowe said each month of the delay will cost JEA approximately $ 5.8 million, or 0.2% of the estimated JEA investment in the Vogtle plant of $ 2.9 billion.

The need for possible rate hikes of 1 to 2% in the three years after 2022 will be determined through a service cost study, said Stowe.

In the long term, however, the low energy costs from the Vogtle plant will have a positive effect on JEA’s budget, says Stowe.

Despite the latitude given by the board to adjust the JEA’s proposed 2022 budget, Stowe said there are no plans to increase fuel consumption by mid-year and JEA will conduct a study of service costs before its staff make recommendations to the board.

Baker said it was “wonderful” to pass on the neutral impact on utility bills, but said costs need to be monitored.

“We will be conscientious about protecting our installment payers, but we must also be conscientious about protecting the JEA and we’re passing on the costs we can,” said Baker.