After years of talk about lowering electric rates for Lake Worth Utilities customers, the process of reducing power costs will begin Thursday night, when a city selection committee will evaluate bids from eight electric power providers.
The city plans to negotiate a contract by September with hopes of lowering electric rates beginning in 2014, when Lake Worth’s power-supply agreement with the Florida Municipal Power Agency expires.
Some of the power providers’ proposals go beyond simply transmitting electric power to the Lake Worth Utilities grid.
The team of Wartsila North America and Burns & McDonnell suggests a new power plant containing four gas-fired generators that would produce up to 73.8 megawatts of power, enough to meet most of the utility’s demand.
Gainesville Regional Utilities offers to share its conservation programs to reduce demand on the Lake Worth grid as well as the feed-in tariff program it uses to encourage the installation of solar panels on homes and businesses in Alachua County.
UR Solar Power’s plan calls for installing solar panels on homes and businesses, while Covanta Energy is offering renewable power from waste-to-energy plants.
Florida Power & Light Co. submitted a bid with four alternatives that includes construction of a 1-megawatt solar farm on city land east of Interstate 95 at 22nd Avenue North.
Another part of the FPL proposal says the company “would be open to a conversation about a potential acquisition of the city’s electric system,” a possibility touted by mayoral candidate Tom Ramiccio last summer and proposed by residents fed up with high power bills.
FPL charges $96.29 for 1,000 kilowatt hours of electricity (the amount used by a typical residential customer in a month). That’s 24 percent less than the $127.37 charged by Lake Worth Utilities for the same amount of power, according to a 2011 rate comparison compiled by the Florida Public Service Commission. The statewide average price for 1,000 kilowatt hours was $126.01.
Lake Worth Utilities serves approximately 24,100 residential and commercial power customers, including about 1,830 in Palm Springs and 5,300 in unincorporated Palm Beach County. The city-owned utility’s power customers are the only ones in Palm Beach County not served by FPL.
The possibility of selling the city’s electric utility to FPL is generating varied reaction from commissioners.
“FPL is continually requesting rate hikes,” Commissioner Suzanne Mulvehill said. “I would like to hear what residents have to say about selling the city’s largest and most valuable asset and forever being at the mercy of another utility.”
Commissioner Andy Amoroso said all options — including selling to FPL — should be considered.
“At the end of the day, it’s about lower rates,” Amoroso said. “But we need to make sure that what we do today works for us in 10 years, financially.”
The electric utility feeds the city’s general fund budget through “dividends” and contributions for administrative expenses. Commissioners for years have looked for ways to wean the general fund from utility money to further reduce power rates.
The search for less expensive sources of power for Lake Worth Utilities began in 2008, when the commission voted to end the city’s power-supply agreement with FMPA, an Orlando-based power cooperative. Because of a prolonged exit clause in the FMPA contract, the new power supplier won’t begin serving Lake Worth Utilities until Jan. 1, 2014.
Commissioners hope reducing electric rates will boost the value of property in the city and ease the strain on the city budget. Lower power rates will “clearly position the city to attract immediate investment across all sectors,” Vice Mayor Scott Maxwell said.
The seven-member selection committee that will choose the new power supplier includes Mayor Pam Triolo, the four city commissioners, Finance Director Steve Carr and Mary Lindsey, chairwoman of the newly formed Electric Utility Advisory Board.
The committee is expected to produce a short list of power suppliers Thursday during a meeting set for 6 p.m. at city hall. Presentations by finalists are tentatively set for July 10 at city hall, followed by final selection of the new power provider.
City officials, a utility consultant and an outside attorney who specializes in power issues are scheduled to negotiate the contract with the selected provider in July and August. Commissioners are tentatively scheduled to approve the new power-supply contract on Sept. 18.
Source: Palm Beach Post