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JEA Finance and Audit Committee Recommendation: Decrease Fuel Charge and Reduce Previously Approved Water/Sewer Rate Increase

Jacksonville, FL (May 7, 2012) – Today, the JEA Finance and Audit Committee agreed to recommend a fuel charge decrease and to eliminate the approved water/sewer service availability and environmental rate increases that were scheduled to go into effect October 1, 2012.

The Committee is recommending lowering the current variable fuel rate charge of $47.74 to $43.60 per megawatt hour effective July 1, 2012. This will lower the monthly electric charges by $5.18 for the residential customer who uses an average of 1,250 kWh.

JEA’s cost for the fuels it uses for electric generation have declined recently; in particular, the price of natural gas is down most significantly. This rate decrease is due to JEA’s fuel diversity and excellent operating performance, which have allowed JEA to shift more towards natural gas. And in 2012, JEA expects 63 percent of electric generation to come from low-cost natural gas; this is four times more generation from natural gas than in 2007. The variable fuel rate is set annually during the budget process.

On the water and sewer side, the Committee will recommend to eliminate the previously approved service availability and environmental rate increases scheduled to become effective October 1, 2012.

JEA’s performance is allowing JEA to:
• Reduce five-year capital costs by 30 percent ($236 million)
• Pay for infrastructure projects out of current year revenues
• Use no new borrowed money for projects over the next five years
• Take advantage of lower interest rates
• Create savings from several significant bond refundings

The Finance and Audit Committee, comprised of JEA board members, will report at the May 15 JEA Board of Directors meeting.

JEA is the seventh-largest community-owned electric utility in the United States and one of the largest water and sewer utilities in the nation providing electric, water and sewer service to residents in northeast Florida.