The Cost of Going Green – Calculation Update

A  recent article posted by Tallahassee Reports -“The Cost of Green May Cost More ThanYou Think”- reported that the citizens of  Tallahassee had paid approximately $45-$50 million  a year above  what they would have paid over the last three years if Tallahassee would have had the average electric rates of  three utilities with a more diverse fuel source. Tallahassee Reports used Progress Energy, Gainesville Regional Utility and Talquin CO-OP for the comparison. 

Since publishing that article, a number of interested parties have questioned how this number was calculated.  Detailed below is the calculation using Progress Energy data. 

In 2007 the City of Tallahassee collected $340 million in electric revenues and produced 2,756,000,000 kwh in electricity. The $/kwh price is calculated by the dividing the revenue by electricity produced. Using this formula, for 2007, the citizens of Tallahasee  paid  .1234 $/kwh ($340,000,000/ 2,756,000,000kwh).

In 2007 the Progress Energy collected $4.10 billion in electric revenues and produced 39,282,000,000 kwh in electricity. The $/kwh price is calculated by the dividing the revenue by electricity produced. Using this formula, for 2007, the customers of Progress paid .1045 $/kwh ($4,100,000,000/ 39,282,000,000 kwh).

To calculate what revenues would have been collected from the citizens of Tallahassee under Progress rates, we multiplied the Progress rate ($.1045 per  kwh) times the amount of electricity consumed by the citizens of Tallahassee in 2007 (2,756,000,000 kwh). The resulting revenue that would have been collected is 288,000,000.

Subtracting what the citizens of Tallahassee paid in 2007 ($ 340 million) minus what they would have paid under Progress rates ($288 million)  equals $52 million.

Sources for this calculation include Annual Reports and Florida Public Service Commission documents.

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