September 30th, 2005
INCREASED FUEL COST TO IMPACT OCTOBER ELECTRIC BILLS

Florida Keys Electric Cooperative urges consumers to use energy wisely as fuel prices continue to climb in the wake of Hurricanes Katrina and Rita.

FKEC purchases 99% of its power from Florida Power and Light, and FPL uses natural gas to produce approximately 40% of its power. It also uses oil to generate roughly 20%. Therefore, the record high cost of fuel required to operate FPL power plants is reflected in electric bills because FPL passes on its fuel costs directly to FKEC, and FKEC passes them on to its members.

FPL recently passed an additional fuel charge to FKEC that was in excess of $1.1 million dollars. FKEC members will begin to see the effect of this additional charge in their October bills, which could increase by more than 20 percent.

Neither FKEC nor FPL makes a profit on the fuel used to generate electricity.

"FKEC wants its members to know that the higher October bills are the result of rising fuel prices alone, and not an increase in the base rate," said CEO Tim Planer. "FKEC's Board of Directors and staff work hard to minimize expenses and control costs, but the price of fuel is beyond our control."

According to FPL, natural gas prices have increased from $1.69 per million BTUs in 1999 to an estimated average cost of $10.55 for August through December 2005, and residual fuel oil prices are projected to increase from $8.76 per barrel in 1999 to an average of $49.86 per barrel in 2006. Crude oil, from which residual oil is refined, climbed from $12.34 per barrel in 1999 to an estimated average cost of $65.05 for August through December 2005. Experts who monitor future fuel prices predict 2006 prices will be even higher.

"Since fuel cost is not expected to decline in the near future, the higher electric bills may unfortunately be with us for some time," Planer said.

To help counter the increase in electric bills due to high fuel costs, FKEC encourages its member-consumers to use energy wisely. For a free Home or Business Energy Audit, contact FKEC at 852-2431 in Tavernier or 743-5344 in Marathon.