LAKE WORTH BEACH — Keeping the lights on in Lake Worth Beach is about to get more expensive.
And it won't be long before customers of the city-owned utility see the jump on their bills.
The city commission reluctantly approved a rate hike of 6% for residential and commercial users on Nov 30, with the increases going into effect on Jan. 22.
It marks the first rise in rates since 2014, according to city officials, and comes amid soaring natural gas prices that have increased the cost of doing business.
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"It's not a proud moment," said Ed Liberty, director of the city utility, told the commission after they voted in favor of the hike. "There are no victory laps. It's not a good feeling. It's not an easy thing to do or a popular thing to do, but it's reflective of the economics of what our financial statements tell us."
The bottom line for residents is a jump of nearly $7 per 1,000 kilowatt hours from $107.99 to $114.45. Commercial rates will go up around $12, from $191.23 per 1,500 kilowatt hours to $203.
That's unlikely to go over well with many of the utility's 27,000 customers, who already believe "we have the most expensive electricity on the planet," according to Commissioner Christopher McVoy.
Even his wife thinks so, McVoy said.
"We have fights about it," he told commission colleagues.
It's a perception that's not close to accurate, city officials insist. Even with the impending rate increase, Lake Worth Beach's utility is still cheaper for residents than its competitors.
But that doesn't get much traction among the utility's critics, McVoy admits.
The real issue, he said, are the number of energy-inefficient homes and structures in Lake Worth Beach. That causes more power to be used, making bills higher even if rates are in line with, for instance, Florida Power and Light, which projects a residential charge of $113.85 in 2022.
Packaging water and sewer charges along with electric in its monthly bills also gives the impression the city utility is gouging customers, commissioners agree.
"We all know, in this room, that our rates are not the most expensive," McVoy said during the Nov. 30 electric utility city commission meeting. "They're not even near it. And we could probably stand up here and hire a $100,000 PR company and say, 'our rates are this,' and get nowhere. The reputation we have does not help us."
That's a reputation that's been earned despite Lake Worth Beach not imposing a rate increase since 2014. In fact, there have been three rate decreases during that time as the city utility attempted to maintain cost parity with FPL.
The bill to pay for keeping rates artificially low has come due.
"Those rate decreases and not raising it, it looked good [then] but it was unsustainable," Mayor Betty Resch said.
The commission was given four options, including one that would have increased residential rates by 8% (to $116.65 per 1,000-kilowatt hours starting in April) while keeping the commercial increase adjustment to 5%.
Commissioner Sarah Malega, a gym owner in downtown Lake Worth Beach, asked that consideration be given to small business owners, who were already paying high monthly rates while continuing to navigate fallout from the COVID-19 pandemic.
But Commissioner Kim Stokes said the greater concern should be with residents, particularly low- and moderate-income workers, who are already being squeezed by exorbitant housing costs and rising inflation.
Unlike businesses that can pass off some costs to customers, residents on tight budgets have no such alternative, she said.
"I am looking at the most vulnerable people in our community," Stokes said. "We know we have a high rate of poverty in this area. This is not the only cost they are going to be absorbing."
Possible increase to an online payment portal fee
The rate bump is not the only increase customers could see.
The commission also approved a $3.75 handling charge per $500 transaction for payment of utility bills on the city's online payment portal. Previously, the city absorbed the cost of transaction fees on the online portal — amounting to $1.68 per customer.
The $3.75 charge will go directly to the vendor operating the portal and the city will not profit.
The new transaction fee will impact those who can least afford it, McVoy said, adding the city might be better off taking the approach, "I'm just going to eat the cost."
"We up here have to think, 'Do we want to add more negatives to our reputation?'" he said.
Resident Victoria Mesa Estrada told commissioners it was "irresponsible and unfair" to increase rates while the pandemic is still in play.
"We must have compassion for those neighbors who can't afford to pay an increase," Mesa Estrada said.
With the city utility's credit rating at stake — a strong credit score leads to lower interest costs and translates to lower monthly bills, according to city officials — commissioners said they felt compelled to approve the rate surge.
"This is hard for all of us," Stokes said.
Prior to discussion on the rate increases and transactions fees, commissioners authorized a request for proposal to explore an in-community solar project. A draft proposal will be submitted at the electric utility commission meeting in March.
Liberty, the utility director, has said the initiative is not necessary because Lake Worth Beach has a plan in place to meet the city's solar needs. More than 38 megawatts of solar power were purchased from the Florida Municipal Power Agency and will be offered to residents in mid-2023, he said.
A second solar program would be "redundant," Liberty said in October.
Residents don't seem to agree. Around 20 voiced their support for an in-community solar program at the Nov. 30 meeting. No one spoke against it.
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