Video Transcript: CFO Melissa Dykes Explains JEA's Rates
Hello everyone, I'm Melissa Dykes, JEA's Chief Financial Officer. When you receive your bill each month you may wonder what all the different rates, fees and charges actually mean. I understand utility rates can seem complicated so I'd like to help explain JEAs rates and bills.
First, it's important to understand utility rates are set following a rigorous analysis and process and follow various state utility and financial regulations, as well as utility industry standards. As your community-owned, not for profit utility, there are no profits in our rates that go to shareholders like investor owned utilities. Instead we pass along contributions and fees to local governments to help keep the tax base lower.
Further, our rates are based on what is called a cost of service that is a detailed financial analysis on what it costs us to deliver our services to our various customer classes: residential, commercial and industrial. It's a lot! By regulation we are required to set rates based on the cost to serve and we are not allowed to knowingly subsidize or provide free service to any customer or entity. It is these governing regulations standards and principles that create the components of our rates and in turn the components of your bill. So now let’s break down your bill.
At a high level, your bill consists of two things: charges for the utility services you use including the infrastructure and support systems to bring them to your home or business, and government transfers which include fees, taxes and a contribution to the city's general fund.
Now let’s get into the details beginning with the electric portion of your bill. The Basic Monthly Charge for electric is the minimum amount customers pay for a portion of the electric system infrastructure and fixed costs regardless of consumption, such as meters, the meter network, the distribution system to deliver your utility service the billing and payment system and other service delivery operations and programs. The Energy Charge pays for things like power plants and transmission wires that power our city. It also helps fund city government. The Fuel Cost pays for the fuel JEA buys to generate electricity. The Environmental Charge helps fund compliance with state and federal regulations. It also helps make sure JEA is a good steward of the environment. The Gross Receipts Tax is charged to all electric public utilities in Florida. It goes directly to the state and the franchise fee and public service taxes are collected by JEA and passed through to local governments like the City of Jacksonville, the City of Atlantic Beach the Town of Baldwin and unincorporated portions of Clay County depending on where you live.
JEA's water and sewer rates are based on a tiered system. Because water is such a precious and limited resource, JEA is regulated by the St. Johns River Water Management District. It gives JEA a permit to draw water from the Floridan aquifer for our customers and that permit agreement requires JEA to encourage conservation. One way we do that is with tiered rates. On the water, wastewater and irrigation side of your bill, the Basic Monthly charge is the minimum amount all customers pay for a portion of the system infrastructure and fixed costs regardless of consumption, such as meters and the meter network, the distribution and collection systems to deliver your utility service, the billing and payment system and other service delivery operations and programs. The basic monthly charge is also based on the size of your water meter. This meter is like a hose, bringing the appropriate amount of water into your home. Most people have a 5/8 inch meter or 3/4 inch meter, but some large homes have a one inch meter. The bigger your water meter, the more water is available to you and therefore the higher your basic monthly charge.
The next charge on your bill is the consumption charge. This is where those tiered rates come in. Two-thirds of all JEA water and sewer customers use between one and six thousand gallons of water and sewer each month. This puts them squarely in the first tier of rates but what if you use more? If you use between seven and 20 thousand gallons a month, you'll be charged at two rates: the first six thousand gallons from tier one and the next seven to 20 thousand gallons from tier two. If you use more than 20,000 gallons you must pay accordingly from all three tiers.
There's also a tiered system for sewer and irrigation and we invite you to learn more about it at jea.com/rates. The water, wastewater and irrigation portions of your bill, also include an environmental charge to help fund compliance with state and federal regulations and to help make sure JEA is a good steward of the environment. And it includes franchise fees and public service taxes collected by JEA and passed directly to local governments.
If this sounds like a lot of rates, fees and charges it is. But I also know it costs the average JEA customer just $6.71 for one entire day of electric water and sewer service. That's great value for all we provide. Electricity to light your home, fresh water to drink and wash with and sewer service available at the press of a handle. I'm Melissa Dykes.