April 19th, 2024 Information on Rates

At your Lake Worth Beach Electric Utility, we are please to report that the increase in PCA costs that we experienced in 2022 and early 2023 caused by the global fuel crisis is behind us.

Information on Rates

At your Lake Worth Beach Electric Utility, we are please to report that the increase in PCA costs that we experienced in 2022 and early 2023 caused by the global fuel crisis is behind us.

What external factors led to increases in your bill?

To understand how these affect us we must first understand that our electric rates are made up of two major costs, a portion referred to as the “base energy charge” and a variable cost referred to as the “purchased power cost” (listed in your bill as “Power Cost Adjustment”).

Our base energy rates are reviewed annually as a part of our budget process but aren’t likely to change by a large amount as this category is made up of things like debt service on infrastructure improvements under our System Hardening and Reliability Improvement Program, maintaining our power plant, poles, wires, transformers, and substation equipment you see throughout the community.  Base energy charges also include the cost of the nuclear energy we purchase on your behalf, which is relatively stable in price. Base energy costs, for the most part, are known ahead of time, remain relatively stable throughout the year, and have somewhat predictable escalation.

In Lake Worth Beach we often like to think of ourselves as being in control of our destiny due to having the benefit of owning our own utilities. Even though we own our own power plant it is antiquated and expensive to operate, it has served us well for since the 1960s and still delivers value to us today by serving as a backup source of capacity and energy.  To save you money we instead purchase electric energy and capacity from large wholesale energy providers under a competitive bid process that yields much lower costs than we could achieve if we produced the electricity ourselves, and it is this cost that varies based on external factors such as the cost of natural gas.  These costs are included in the Power Cost Adjustment or “PCA” portion of your bill. 

Fifty to sixty percent of our electricity is produced by natural gas in highly efficient power plants located across the state, with a small percentage of our electricity coming from coal.  The most efficient power plants use natural gas as a fuel source to power large turbines and make electricity. Natural gas is transported by pipelines from sources along the US southeast gulf coast and can fluctuate in cost just like the gasoline you use to power your car. Changes in global demand for natural gas without a commensurate increase in market supply can lead to increased prices, as did increases in demand as our economy and manufacturing sector rebounded from the effects of the Covid pandemic.  As the nation’s electricity producers seek to reduce their carbon footprint we continue to see demand for natural gas increase as older coal power plants are retired and replaced or converted in part with more efficient and cleaner natural gas fueled power plants.  A lack of sufficient pipeline capacity to get natural gas from production wells to markets, has played a role in increased natural gas prices, as have growing exports of natural gas from the US to overseas markets.  In 2022 these market forces beyond our control combined to drive the cost of natural gas to historic highs, in turn leading to high electricity prices and increases in our customers’ electric bills. 

Fortunately for us, two consecutive relatively warm winters in the northern part of our country, coupled with increases in natural gas storage volumes, have led to price decreases which have been passed on to our customers in the form of PCA rate decreases.  A portion of the money we saved was set aside in a newly-created Rate Stabilization Fund, which will allow us to partially offset any future increases.  Our residential customers currently enjoy electric rates among the lowest in the state of Florida.

With the benefit of prudent planning and steps taken over a period of many years we have been able to lessen the effect of natural gas prices on our rates:

  1. We enjoy a lower exposure to natural gas prices than most utilities in the state by virtue of being a part owner of the Florida Municipal Power Agency’s (FMPA) St. Lucie Project, a Nuclear Power Plant investment from which we’ve received energy since the 1980s. This power plant produces approximately 36% of our electricity, and with a low cost of fuel and refinancing of debt undertaken when interest rates were at historical lows, it produces electricity for us at a stable and competitive cost. This power plant will remain a low-cost and greenhouse gas -free feature of our portfolio at least through 2043 and will help enable us to reach our net-zero goals for greenhouse gas emissions by 2045.

  2. Coal plays a small part in our portfolio by virtue of us being a part owner of the FMPA Stanton I Project, a coal power plant investment from which we’ve received energy since the 1980s.  This produces up to 10% of our electricity over the course of a year.  While this power plant was designed to burn coal in reality it also uses cleaner-burning natural gas a fuel source, which can at times be lower in cost.  This plant is scheduled for retirement by year-end 2025 and we will replace its output with clean solar energy.

  3. We invested in our own 1.7 Megawatt solar field. In 2017 we placed in service our own solar field on top of the closed City landfill, which is now a source of clean electricity.  This solar field produces up to 0.75% of our electricity over the course of a year. While it yields the most expensive power in our portfolio, it does demonstrate our commitment to clean energy and is constant in price, and operates with zero greenhouse gas emissions quietly right here in our own community.  Our recent selection for a US Department of Energy Grid Resilience and Innovation Partnership Program grant includes funding to both add battery energy storage to our electric system so we can store solar energy produced during daylight hours for use later in the day, and to upgrade the electric system around our long-closed landfill to accommodate additional solar energy at the site in the future.

  4. We’ve committed to significant increases in solar energy purchases. Our 2018 and 2022 Resource Plans called for significant increases in solar energy purchases.  To date we have approved contracts to purchase solar energy from the Florida Municipal Power Agency’s Community Solar Project over a period of twenty years at prices lower than we could achieve on our own. Our commitment to purchase solar energy from these large-scale solar fields which cover hundreds of acres totals nearly 60 Megawatts and requires no upfront investment by our City.  These projects are currently in the process of being permitted and constructed. These solar power plants start producing electric energy for us in 2024 and will increase over a period of a few years.  By year-end 2024 we will see our reliance on natural gas begin to decline even further than today.

In addition to the steps we have already taken to reduce our reliance on natural gas and reduce our carbon footprint we are also updating our electric transmission & distribution system to both improve the efficiency of the system and improve reliability by hardening infrastructure and introducing more technology into the system, making what fuel we use go even further for you.

What internal factors that can raise your electricity bill?

First it is important to note that your Lake Worth Beach utility bill is actually a combined bill for multiple but vital utility services: electric, water, sewer, and refuse service, are all billed you monthly in a common bill. Often when people see a sudden unexpected increase in their bills it may not actually be due to a change in the electric portion of the bill, but for example could be caused by a water leak or high irrigation use which causes the water portion of the bill to increase. Another scenario is if you are cited for putting out trash on the wrong day or for infractions such as too much yard waste being put at the curb, these too would appear on your bill and of course are not part of the electric bill. When reading your utility bill it is important to look at each section of the bill to see if the increase has been caused by a change in your electric usage or by one of the other City utility portions of the bill. If you see an unexpected increase in the water portion of the bill, and you haven’t made a lifestyle change such as adding a swimming pool or sprinklers to your property, do not delay and reach out to a plumber and/or the water utility so you can find and stop the potential leak.

  • A recent change for many households is the addition of an electric vehicle. It is important to note that charging an electric vehicle has a cost, so although you no longer have to pay for gasoline at the pump, your electric bill will increase based on how many miles you drive.  Electric vehicles are much cheaper to operate than gasoline vehicles, so your overall household budget will benefit from your decision to buy or lease an electric vehicle.

  • Appliance end of life. If your AC unit or refrigerator are reaching the end of their service life it is not uncommon for them to be drawing more electricity to maintain cool temperatures. Often this cost can be limited by replacing filters, performing annual service checkups, and cleaning refrigerator coils. Dust and pet hair are particularly common sources of clogged refrigerator coils.  Check your appliance maintenance requirements as stated by the manufacturer and follow their guidance. And of course, one option is to replace the unit as it ages and requires higher repair bills, this will likely save you money in the long term.

  • Another aspect of AC usage that can escalate electric bills is keeping is keeping your home or business too cool during summer months. The suggested thermostat setting is 78 degrees during the day and no lower than 74 at night. Remember setting your thermostat dramatically lower to try and rapidly cool your home will not speed up how fast your house cools down, but it will cause your AC unit to work harder to keep the house at too low of a temperature. If you set the thermostat in the 60s it is unlikely your unit will be able to reach and sustain that temperature and cause it to run continuously, which will not only shorten its life but will also use a LOT of electricity.

  • Lifestyle changes. Have you added members of your household recently, or started working from home? It is easy to overlook that when we increase our time at home we naturally increase the amount of electricity we use in a regular day. You can limit this by turning off lights and other electronics such as computers and monitors when not in use, close the blinds to reduce heat load on the sunny side of the house, and by making eco-friendly changes to LED lighting in the home.

  • Energy efficiency.  If your home or business still has old windows and doors, or poor attic insulation, you will certainly experience high electric bills to keep the living space comfortable.  Please consider upgrading your windows, doors, and insulation.  We can help you with a free energy audit, and our partners at the Solar Energy Loan Fund (SELF) can help you with sources of financing and assistance with your project (www.solarenergyloanfund.org) . 

Your Lake Worth Beach Electric Utility team is working hard to keep our rates competitive, we’re improving reliability and reducing outages, and we offer free energy audits to find ways to save you money.