LCEC reduces its electric rates
Beginning Jan. 1, LCEC customers saw the fourth rate decrease in two years.
Cape Coral city official agree it’s a good thing – just not as good as it could be.
LCEC’s elected Board of Trustees last month voted unanimously to reduce rates for this year, bringing rates from $114.16 per 1,000 kWh to $106.55 per 1,000 kWh.
This marks a residential rate reduction of nearly 7 percent since 2014, with customers paying less for electricity now than they did in 2008, according to LCEC.
The electric cooperative also returned $10 million in retired equity to active and inactive cooperative members.
The rate change is not a huge reduction, equating to maybe a dollar a month, as electricity costs about a dime per kWh, said LCEC spokesperson Karen Ryan.
“Electricity is already not that expensive. Compared to other things, a dollar savings is pretty big,” Ryan said.
According to the Florida Municipal Electric Association, the average investor-owned electric utility rate in Florida is $128.59 per 1,000 kWh. The average rate for the 33 municipal electric utilities in Florida is $114.41 per 1,000 kWh.
LCEC rates are well below the state average and the lowest among Florida cooperatives, the company said in a statement.
“One of our strategic goals is to be one of the lowest-priced utilities in Florida. We have been working to improve our processes, manage our costs and utilize technology,” Ryan said. “The previous decreases can also be attributed to that.”
Ryan added that the recent drop in the price of oil had little to do with the rates, as LCEC has a power supply contract with FP&L.
While FP&L customer rates remain lower, the investor-owned utility has the lowest rates in the state, with millions of customers to spread out the costs, Ryan said.
FP&L customer rates also dropped this month with an average residential customer seeing a decrease of about $2.50 per month, according to an FP&L press release.
Its rates are now below those charged in 2006 when a typical home bill for 1,000 kWh was $108.61, the release states. In 2015, that average bill was $96.72 with the 2016 bill for the same usage dropping to $94.30.
Cape Coral city officials welcomed the LCEC rate reduction but said the 17 percent difference in rates charged by the two utilities is nothing for LCEC to be proud of, especially since FP&L supplies LCEC with its power.
“LCEC is lowering their rates less than what FP&L is. Now, instead of paying 14 percent more than Fort Myers customers, Cape Coral residents are paying 17 percent more,” said Connie Barron, city spokesperson.
Barron said many of LCEC’s fees remain the same, but some savings is better than no savings.
“I don’t want to make it sound like ‘so what.’ Someone will always be higher than someone else. It’s nice they’re passing the savings along, and it’s the right thing to do,” Barron said.
Relations between the city and its electric services provider were sometimes testy in 2015.
The city is trying to determine whether to purchase LCEC’s assets and municipalize electricity or renew the franchise agreement it has with the cooperative but with more favorable terms.
Cape Coral’s current 30-year agreement with LCEC expires at the end of September but will remain in effect if there is no decision on municipalization or renewal.
Cape Coral City Manager John Szerlag and LCEC CEO Dennie Hamilton are expected to meet sometime this month, with both sides hoping that progress can be made in the negotiation process.
As an electric cooperative, its members, or ratepayers, “invest” in the electric system and are allocated equity annually, which reduces the need for loans or bonds. Whenever financially feasible, some of the equity is retired and returned to members/customers over the five-county services area, LCEC officials said.
Over the years, LCEC has retired and returned more than $231 million in equity, according to information supplied by the co-op.