Utility bills have skyrocketed; Quincy officials try to figure out why

Quincy utility bills have been much higher than normal lately, and local officials are still trying to figure out why.

The Quincy Commission recently acknowledged some of the reasons bills have been higher are because meters owned by the city have not been read in a timely manner, and that some customers’ bills have not been sent out consistently on time.

However, those aren’t the only reasons bills have been astronomically high for others.

In short, officials said the price of utilities overall have gone up because the price of natural gas, which generates electricity, has gone up.

In a workshop on Thursday, March 10, Quincy commissioners heard from Mike McLeary Florida Municipality Power Agency about the rate stabilization and fuel adjustment rate.

Although he wasn’t familiar with Quincy’s specific situation, he was able to explain how fuel rates may impact electric utilities.

McLeary said 75 percent of the energy in Florida is generated from natural gas, and every month the fuel adjustment rate fluctuates.

McLeary pointed out how gasoline for vehicles has gone from $2 to $4, and he said natural gas has done similar.

“What we have seen since January 2020 just before the pandemic, prices have raised somewhere between 75 and 250 percent, depending on what it is,” McLeary said.

McLeary said it ultimately boils down to the cost of the product itself.

“The way fuel adjustment works is when you set your rate, you guessed the cost of fuel would be somewhere in this ballpark so you had a relatively low fuel adjustment cost because you were pretty close to that guess when you set your kilowatt hour rate,” McLeary said.

He said now, because the price of energy is going up, the city has to compensate for that because the guess is no longer close, since no one knew prices would jump.

Commissioner Angela Grant Sapp asked if a true rate stabilization plan would have helped absorb the cost of the rising fuel costs that took place in October that the city is now charging customers for.

McLeary said the rate stabilization fund would have helped incrementally.

“I came from a utility that had a really robust rate stabilization fund,” McLeary said. “I promise you it didn’t keep up”

He said the fund kept costs down for a little while so the utility provider had to time go send letters to customers letting them know a price increase was coming.

McLeary said rate stabilization is a good thing if the funding is there, but also takes a significant amount of planning in advance, on the city’s part.

Quincy Utilities Director Robin Ryals said if gas prices rise and stay high, the city’s rate stabilization funds will still run dry.

“Is there something that we as a city could do to control that cost?” Harris asked Ryals.

Ryals suggested that city utilities customers make lifestyle changes.

Ryals said one way to lower bills is reducing usage during peak hour, but he said that requires effort from the citizens as well.

He said everyone gets home in the evening and turns their heat on to warm up their home or turn the air conditioner on to cool it.

“Put the thermostat on 78 in the summer and leave it alone,” he said. “Let it come on when it’s going to come on.

He also suggested that people invest in their homes by insulating them properly.

He mentioned that people with two units in their house often turn one unit off, thinking they’re going to cut their bill in half.

“That one that’s running is going to work twice as much to do the whole house and the light bill and the light bill stays the same,” Ryals said. “Then the city gets the blame.”

While Ryals said customers can do their part to lower utility bills, he also said the city needs to invest in its system.

“Us investing in our system can help keep our peaks down,” Ryals said.

Former Quincy Commissioner Derrick Elias went before the board, to discuss his utility rate.

He said the average citizen isn’t going to get caught up on the algorithms used to calculate utility bills.

“At the end of the day, when people believe that they are not using any more utilities, they’re using less, they’re freezing, they’re cutting back on everything but yet their utility bill still goes up, and we just tell them ‘oh it was cold, oh it was this’ – that’s really frustrating to them,” Elias pointed out.

Elias gave the commission an example.

He said a few years ago, his father was in the hospital for about seven weeks, and nobody was at his home, but his utility bills went up.

Elias said citizens want to know what they can possibly do when they’re cutting back, but their bills are still going up.

The commission did not have a solution for that issue, but Harris did acknowledge the city needs to investigate what’s causing people to be charged for utilities they haven’t used.

During the workshop, the city also discussed ending the Hurricane Michael Surcharge.

“What can we do – in terms of the commission – to eliminate that charge?” Harris asked.

The Hurricane Michael Surcharge Ordinance has a sunset provision, which means that it’s expected to end in January 2023, city attorney Gary Roberts explained to the commissioners.

The Hurricane Michael surcharge serves as collateral for one of the city’s loans.

Roberts reminded the commissioners that he had consulted with the bond attorney and eliminating the surcharge could affect the city’s bond covenant, or in other words cause the city to default on the loan agreement.

The only option to avoid that is the city must have an alternative funding source.

“So, the money is just sitting there?” Commissioner Keith Dowdell asked.

Dowdell also asked if the money could be given back to the citizens.

Roberts said he asked the bond attorney what an appropriate use of those funds would be

He said the revenue received from the Hurricane Michael surcharge can be used to reimburse the city back for money used to pay off a loan the city took out to pay for expenses related to Hurricane Michael.

The city took out a $1.7 loan with Capital City Bank for those expenses, and paid back $981,000 in January.

Roberts said the commission could later decide how they want to use that money that would be put back into the city’s general fund.

“Right now, we’re collecting the Hurricane Michael Surcharge and it’s not a part of our active budget – by active budget, I mean we don’t have any plans to spend that money.” Harris said.

Harris then asked what prohibits the city from giving utility customers a Hurricane Michael Recovery Fee refund, subtracting the same amount that they are billed for the surcharge.

Harris asked staff to research how the city can credit the Hurricane Michael Surcharge back to the utility customers’ bills

“If we got to take it in and we say we’re not spending, give it back,” Harris said.

Carty recommended that the city get a legal opinion on the matter.

Quincy business owner Rolanda Jackson told the commissioners the Hurricane Michael surcharge isn’t what’s making the utility bills extremely higher.

“What happens when the next hurricane comes?” Jackson asked.

Jackson urged the commissioners to educate citizens, and to not make quick decisions.

Sapp said Jackson did make a valid point.

“When Hurricane Michael came, we were lost,” Sapp said.

Sapp said after Hurricane Michael hit, the city didn’t even have money in reserves to house, feed or even provide toiletries to utility workers who came in from other cities and states to help.

She said the Hurricane Michael Surcharge was put in place so the city will never be caught off guard like it was again.

Erin Hill - erin@gadsdencountytimes.com

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Utility bills have skyrocketed; Quincy officials try to figure out why

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Luncheon honors female veterans living in Gadsden County

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