JACKSONVILLE, Fla. — Even with the Plant Vogtle nuclear plant casting a shadow on JEA's financial outlook, the utility can hold the line on electric rates for the next four years but would need a slight increase in 2025, according to a presentation given Tuesday to the utility's board.
That stable outlook contrasts sharply with forecasts last year by the utility's previous executive leadership that JEA would need drastic actions such as deep layoffs of employees or double-digit rate increases for customers because of Plant Vogtle's cost and the impact of energy-efficiency technology on electric usage.
"JEA has a very strong financial foundation," interim Chief Financial Officer Brian Roche told the board.
An entirely new board and executive leadership is running JEA in the wake of the collapse last December of an attempt to seek a private buyer. The current board has staked out a position that JEA is not for sale.
JEA will not need any rate changes over the next two years. In the 2022-23 fiscal year, JEA would need to increase the base rate portion of the bills by 1 percent and by again by 1 percent in 2023-24. But for those two years, JEA also would decrease the fuel rate portion of the bill by taking advantage of the low cost of using natural gas as fuel for electric generation.
The upshot of the base rate going up and the fuel rate going down would be no overall change in the JEA electric rate.
In the 2025 fiscal year, JEA would need a 1 percent increase in electric rates, the presentation shows.
JEA built its five-year forecast around an assumption that it will have zero growth in electric sales. Roche said electric sales could increase over the five-year period but the forecast examines the impact of flat-lined sales.
JEA board member Bobby Stein said the key to keeping rates where they are now is for Jacksonville to continue growing.
"It would be worth at some point coming back with an economic development plan because as Jacksonville grows, JEA makes these numbers easy to work," Stein said. "How do we get involved in the economic development of Jacksonville?"
The five-year forecast is not fully comparable to the 10-year scenario used last year to justify putting up JEA up for sale because it covers a shorter time frame. The 10-year scenario showed the utility's base rates soaring by 52 percent over the decade.
Looking beyond the next five years, JEA will face a financially consequential decision around 2025 in how it will replace electricity generated by the aging 525-megawatt Northside Unit 3 plant that began operation in 1977. The cost of building a new plant could be in the range of $600 million.
JEA will start purchasing electricity from the Plant Vogtle nuclear plant after two reactors being built in Georgia go online by the end of 2021 and in late 2022. JEA's cost will be about $200 million a year for the 20-year power purchase agreement.
But JEA will be able to offset that steep expense by shifting more of its other electric generation to plants that burn natural gas. JEA also will gain savings by closing a coal-fired unit it co-owns with Florida Power & Light at Plant Scherer in Georgia.
Roche said JEA has been transitioning to fuel that emits less carbon dioxide than coal, which used to be the utility's main fuel. He said that trend will accelerate by purchasing nuclear power and more solar power in the coming years.
Board Chairman John Baker and interim CEO Paul McElroy plan to travel Wednesday to tour Plant Vogtle and meet with other utilities involved in the construction of the two new reactors.
Baker told the board that they will use his private jet for the trip in order to reduce travel time compared to driving. He said JEA consulted with city ethics officer Carla Miller about using his plane and was told it is permissible, but the only reimbursement he can get will be the equivalent of tickets for a commercial round-trip flight to Atlanta.