By Terry Witt – Spotlight Senior Reporter

            Williston City Council members have begun a discussion of raising electric rates by $8.90 per 1000 kilowatt-hours, a move that looks like it could be painful, but it might not be as bad as it appears.

            A chart presented at a recent electric rate workshop showed Willliston’s rates are second lowest among 33 city-owned utilities in the state, resulting in part from rates not being raised for many years.

            “You guys are blessed to have such a low-cost power utility,” said Jacob Williams, general manager and CEO of Florida Municipal Power Agency (FMPA), which purchases power for Williston on the open market.

            The 8.9 percent rate hike is being proposed at a time when the cost of running the city electric utility is rising, the cost of materials and supplies is high and natural gas rates in the state are double what they were last year.

            Natural gas generates 75 percent of the state’s electricity.

            The city has yet to schedule public hearings to discuss the rate hike. A rate hike workshop was held on March 10 at City Hall. A handful of city residents attended along with city staff.

            FMPA has been successful in buying relatively low-cost energy and passing those savings onto Williston. City electric prices are 17 percent lower than in 2006, Williams said.

            The average Florida family is paying $1,600 to $3,000 more for energy than last year, leading to inflation. Skyrocketing gas prices at the pump are contributing to those numbers.

            National energy prices are up 70-165 percent over last year. The global and national energy supply is not keeping pace with post-COVID energy recovery, according to Williams.

            The projected monthly average cost of 1000 kilowatt-hours of electricity for Williston in 2022, with the rate hike included, would be $110 compared to Clay Electric Cooperative at $112, Sumter Electric Cooperative at $120, Central Florida Electric Cooperative at $119, Gainesville Regional Utility at $125, Ocala at $118 and Duke Energy at $133, Williams said.

            One of the advantages of operating a municipal utility is the ability to transfer funds from the utility to the general operating budget of the city. The general operating budget in Williston funds the police, and fire departments, roads and parks, administration, and the airport.

            “In this year’s budget, the utility fund is going to transfer about $900,000 to the general fund,” said Stephen Bloom, financial director for Williston.

            But the picture isn’t completely rosy.

            Bloom said the utility fund this year spent $300,000 of its cash reserves to fund operations. The electric rates aren’t generating enough revenue to cover all operational costs such as labor, materials, supplies, and purchasing electricity.

            City Manager Jackie Gorman said staff sat down and crunched the numbers and realized that the electric rates were too low to support all the costs associated with the utility.

            “We realized in a few years we would not have enough money coming back from our electric, from our rates to afford to support anything – police, fire wouldn’t have anything – any non-revenue generating programs would have to go away, so we’re in recovery,” Gorman said. “This is something that hasn’t just happened. It’s happened over the years. We haven’t increased rates.”

            Bloom said the utility fund, which covers all utilities, broke even in January of this year, but he said quite a few job positions haven’t been filled. If those positions had been filed, he said it would have been a different story. The utility fund wouldn’t have broken even. The total cost of those positions would be $113,000.

            Mayor-elect Charles Goodman said he noticed one slide on the drop-down screen indicated there would be five rate hikes for electricity through 2026 totaling 15.2 percent.

            The rate hike for 2022 was 8.90 percent, 1.20 percent for 2023, 1.50 percent for 2024, 1.90 percent for 2025, and 1.70 percent for 2026.

            Gorman said the cost of operating the utility will be monitored in the coming years and those proposed rate hikes could change. The city is focused on this year’s proposed rates.

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City of Williston Budget Meeting March 10, 2022; Posted March 19, 2022