JACKSONVILLE, Fla. — JEA is proposing a rate increase in 2024 as part of its efforts to offset nearly $5 billion in costs associated with the Plant Vogtle nuclear power plant in Southeast Georgia.
During a board meeting Tuesday, the utility laid out its plan for a possible 2.9% rate hike – its third increase in three years. It comes as the utility is looking for ways to increase revenue over at least the next 20 years as it is obligated to spend approximately $250 million per year to buy fuel from Plant Vogtle.
It’s unclear how much bills will go up because of Plant Vogtle, but Action News Jax crunched the numbers and determined it could eventually result in an average monthly bill increase of $40 per month over the next two decades. However, JEA says it’s too early to make that determination since the utility doesn’t officially forecast decades into the future.
The utility does have $245 million in a stabilization fund to help pay for Plant Vogtle, but it’s expected to be drawn down by 2028 even though the board projected a 32%-45% compounded increase to base rates from 2023 to 2032.
Georgia Power Co., Plant Vogtle’s owner, announced in July that Unit 3 has completed testing and is now in commercial operation, seven years late and $17 billion over budget. A fourth reactor is also nearing completion at the site.
Besides Vogtle, JEA still has rising costs associated with operations & maintenance as well as debt service. The utility said on Tuesday it is considering creating a debt ceiling of $4.5 billion which would improve its debt-to-asset ratio and enable it to borrow money so it has additional liquidity - but the utility insisted it’s in sound financial condition.
The proposal would need to be reviewed by the Council Auditor’s office and approved by city council.
“We want to have the latitude without having to amend the budget in future years. There has never been a debt ceiling previously, and we have historically had higher debt than that previously. This is actually to incorporate both latitude and discipline for future years, as a matter of ongoing financial management process, and is unrelated to our debt expectations for FY24,” according to a JEA spokesperson.
“It provides future budget planning transparency, and allows us to respond to contingencies without having to seek additional city approvals for any and all increases in debt levels, so long as they remain below the cap, which is again lower than previous year borrowing amounts.”
JEA says it will discuss the proposed rate increase during upcoming meetings with a possible vote in February 2024. If approved, the rate hike would go into effect in April 2024.
[SIGN UP: Action News Jax Daily Headlines Newsletter]