Questions to Ponder While Reading
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Should the City of Tallahassee Provide Costs & Benefits for Going Green Initiatives?
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Is $50 Million a Year Too Much to Spend to Exclusively Use Natural Gas to Generate Electricity?
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What is the Tangible Benefit of Exclusively Using Natural Gas for Electricity Generation?
The City of Tallahassee’s electric rates rank as some of the highest in the state of Florida. One of the major reasons for this is the almost exclusive use of natural gas as the source for electricity. Natural gas is considered one of the more clean burning fuels when compared to other options.
In 1992 the City adopted a law that requires a referendum on any proposal that includes the use of coal as a fuel for electricity. And in 2006, a referendum on purchasing electricity from a coal plant in Taylor county passed at the ballotbox, but the project was never completed. Tallahassee’s Mayor John Marks, recently commented on his city’s commitment to natural gas and the environment in July, 2008:
“We have cleaner air, cleaner water, and we have a better environment – that’s the pay-off,” Mayor John Marks said. “We should use all of our resources as efficiently as we possibly can. Going green is just taking that concept a step further, especially when fuel costs are so high.” Marks said the city has long been at the forefront of environmental conservation, from its electric utility’s reliance on clean-burning natural gas ……..
From the website WaterandWasteWaterJobs.com.
Based on the high electric rates in Tallahassee and the strong commitment of our community to natural gas, Tallahassee Reports has initiated research to determine how much the citizens of Tallahassee pay to have the benefits of natural gas.
The Analysis
One of the ways of evaluating the financial impact of Tallahassee’s commitment to natural gas is to compare what citizens and businesses of Tallahassee would have paid in electric rates if Tallahassee would have had the rates of other cities around the state that use power generated from a more diverse fuel supply.
Tallahassee Reports has completed an analysis using the average rates of three different utilities. These utilities are Progress Energy, Gainesville Regional Utility and Talquin Electric. These utilities were chosen because of their geographic proximity to Tallahassee and the diverse fuel mix they use to produce electricity.
The table below shows that if the average rates of this group of three utilities would have been in place in Tallahassee in 2006 and 2007, the rates paid by Tallahassee citizens would have been $43,425,000 less in 2006 and $50,252,000 less in 2007. The estimate for 2008 is $50,000,000.
Comparison of Revenues
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Year |
Tallahassee Electric Utility Revenues Under Current Rates
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Tallahassee Electric Utility Revenues Under “What If” Rates
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Difference Between Current Rates and “What If” Rates |
|---|---|---|---|
|
2006 |
$327,000,000 |
$283,575,000 |
$43,425,000 |
|
2007 |
$338,000,000 |
$287,480,000 |
$50,252,000 |
|
2008 |
$340,000,000-EST |
$290,000,000-EST |
$50,000,000-EST |
Therefore, over a three year period, the citizens of Tallahassee have paid approximately $143 million more in electric rates than if the city would have had the average rate of the group of utilities that include Progress Energy, Gainesville Regional Utility and Talquin Electric.
Implications
The analysis completed by Tallahassee Reports indicates that relying on natural gas increases the average electric bill of all customers – residential, commercial, & industrial- by approximately 15% or a total of $45-$50 million per year. For comparison purposes, the City of Tallahassee spends approximately $47 million on the Tallahassee Police Department.
The additional $50 million paid for the natural gas leaves the Tallahassee economy when it is paid to the natural gas supplier.
What is Tallahassee getting for $50 million? Is the air in Tallahassee that much cleaner than say in Gainesville? Tallahassee Reports submitted a public data request to the City of Tallahassee seeking “any studies completed in the past 3 years that analyses the costs and benefits of the City’s policy to rely on natural gas as the main fuel for generating electricity?” The response to the request was “The City has not conducted any studies in the past 3 years that specifically evaluated the costs and benefits of reliance on natural gas as a fuel for power production.”
Tallahassee Reports did research air quality and found an EPA web site that compared the air quality in Alachua County – home of Gainesville Regional Utility – to Leon County air quality. For 2007, the site reports that Leon County had 5 unhealthy days and Alachua County had 6 unhealthy days for air quality related to asthma and other lung disease- see results here. The site also reported that in 2007 for people with heart disease and air quality issues, both Alachua County and Leon County had 3 unhealthy days – see results here.
The Cost of Going Green May Cost More Than You Think added by Staff on
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To: County Commissioners and Tourist Development Council
Re: Green [Ecotourism] Cheeks in Seats = Heads in Beds
Please don’t raise bed taxes to cover the $500,000 airline subsidy. Don’t double dollars going to a performing arts center that may never be built. You don’t need to raise taxes. Simply put all cultural and non-tax regenerating programs, “Cheeks in Seats” programs on a $600,000 per year budget. Use the 4th cent for “Cheeks in Seats.” Use the rest for “Heads in Beds” tax regenerating expenditures. Don’t eat the seed corn.
“Cheeks in Seats” for the airline subsidy is not authorized by statute. “Cheeks in Seats” is authorized for building a performing arts center. But, it is not authorized for lobbing efforts to raise taxes by the PAC organization. http://www.taxteaparty.com/taxfortax
Ice Capades, French Horns, Mama’s, Spouse’s and Pivot Points aside, commissioners have done enough to “jump start” private contributions for the PAC. Over ONE MILLION DOLLARS have been spent to “jump start” private donations. Another million remains to be spent. Let the wonderful PAC organizers now raise some real private money.
Direct future 4th cent collections and the existing $1M reserve if you wish to “Cheeks in Seats” if you must. But, keep the remaining dollars focused on tourism marketing “Heads in Beds” and regeneration of the bed tax dollars for future marketing. Just say Ecotourism.
May I suggest that you redirect the 4th cent to Ecotourism “Heads in Beds”? I think one could make a case that a targeted airline subsidy could be designed around Ecotourism that might fit into the “Heads in Beds” tax regenerating model and statute.
Pace Allen, Tallahassee native, Attorney, CPA, former Chairman – Tallahassee Area Convention & Visitors Bureau
General Partner, Paden Properties, LLC
Professional Green Hotel Management, http://www.paden.info
Mobile: 850.556.0709