Submitted By: Marie Brooks
presenter
Presentation By: Doug Peebles
end
Department: Electric Utility
FORMAL TITLE:
title
Budget Resolution 2025-114 to amend the Fiscal Year 2024-25 budget to offset unanticipated bulk power expense by transferring the power cost adjustment over-collection to the Electric Utility Reserve in the amount of $3,701,630
end
OCALA'S RELEVANT STRATEGIC GOALS:
Fiscally Sustainable
PROOF OF PUBLICATION:
N/A
body
BACKGROUND:
The Power Cost Adjustment (PCA) rate serves as the mechanism through which fluctuations, both positive and negative, in power costs are passed through to customers. Power costs and sales are reviewed monthly to project potential over- or under-collections for the year. Although the PCA may be adjusted as frequently as monthly, recent practice has been to make limited adjustments to promote rate stability for customers.
At the close of Fiscal Year 2024-25, the PCA program reflected an over-collection relative to actual power costs incurred. The over-collection amount, totaling $3,701,630, was primarily due to a prior-year adjustment, favorable market conditions earlier in the fiscal year, and a largely conservative rate-setting practice. Concurrently, the Utility experienced an increase in bulk power costs totaling $6,968,957, driven by heightened market demand during the year, resulting in expenditures that exceeded the adopted budget. Early projections indicated that $112 million would be sufficient to cover the Fiscal Year 2024-25 expenditures; however, the actual bulk power cost totaled approximately $119 million by the end of the year.
FINDINGS AND CONCLUSIONS:
The Rate Stabilization Policy establishes a reserve funding range of 15 to 25 percent of projected fuel costs. As of September 30, 2025, the reserve is funded at approximately 23 percent of the power cost and complies with policy requirements.
To ensure the Electric Utilities Fund maintains its required cash-on-hand and remains adequately p...
Click here for full text