The board’s primary focus was the electric budget, which is over $80 million. They discussed changes to the wholesale purchasing formula that impacted budget projections, necessitating a reevaluation of cash levels and a more conservative budgeting approach. Despite initial concerns about potential rate increases, the board opted for reduced capital spending to avoid burdening customers with higher costs. This decision, while avoiding a rate hike, sparked concerns about reduced services such as tree trimming. The board emphasized that their main objectives are maintaining reliability, operating safely, and ensuring competitive pricing.

A key topic was the distinction between a power cost adjustment and a rate increase. The power cost adjustment, which relates specifically to changes in fuel costs, directly impacts customer bills without altering the overall rate structure, which includes base rates and fixed charges. It was noted that the power cost adjustment increase was necessary to cover fuel expenses rather than operational costs or personnel expenditures.

Further discussion highlighted the financial health of the electric fund and the implications of power cost adjustments on customer bills. Maintaining a specific cash reserve, ideally closer to $15 million, was emphasized as it directly influences credit ratings. Falling below this threshold could potentially lower credit ratings, affecting future financing options. A chart illustrating power cost fluctuations from October 2015 to the present was presented, showing a notable drop when costs became too high. The board aims to avoid overcharging customers while ensuring sufficient funds to cover expenses, targeting around $3 million in the power cost adjustment reserve account.

August’s performance was described as “super good,” characterized by lower energy consumption due to consistent usage rather than peak demands, resulting in a financial outcome that exceeded expectations. This led to speculation that a second adjustment in April might not be necessary, although this remained uncertain. The discussion included specifics about the estimated capacity peak and actual usage, underscoring how slight variations in consumption could lead to financial differences. A $900,000 difference in August compared to estimates highlighted the challenges of predicting energy use and costs, particularly with unpredictable weather patterns.

Inventory management was another topic. The electric utility maintains an inventory of approximately $68 million, including supplies like wires and transformers. Board members expressed confidence in handling post-hurricane recovery efforts due to this substantial stock, although concerns about replenishing inventory post-disaster were raised. The process of reimbursement from FEMA was noted. Despite potential delays in replenishment, the current inventory would suffice for immediate needs, including the Arbor Park project, which would utilize 54,000 parts from existing supplies.

Comparisons of public power versus investor-owned utilities were discussed, with references to local sentiment and experiences. It was suggested that if Leesburg sold its electric utilities to Duke Energy, customers would face higher costs. Financial discussions included the electric utility’s debt service, amounting to approximately $3.8 million per year out of a total budget of $72 million. The budget for capital expenditures was mentioned as being $3.2 million, with future expenditures projected to be between $3 million and $5 million based on various factors.

Concerns regarding electric rates and state regulations were also addressed. The potential legislative change mandating a 6% franchise fee on customers in the city raised questions about its implications for future operations. The absence of influential legislators like Senator Baxley was highlighted as a concern for maintaining favorable conditions for municipal electric utilities. There was speculation about the feasibility of a territory swap with Duke Energy, noting that growth areas for electric service are concentrated around specific regions, influencing future service expansion.

The board also discussed past financial decisions, such as reducing the transfer of funds from the electric department to the general fund, which had declined from $5.4 million in 2013 to $1.5 million in the current year. This reduction was part of strategic efforts to maintain low rates. However, concerns about the implications of this reduced transfer on the electric system’s operations and compliance with state law were raised.

Lastly, the meeting addressed upcoming adjustments in electric rates, with concerns about potential increases. Seasonal factors influence energy consumption and budget projections. The utility’s efforts to manage costs and consumption were highlighted, with some members pointing out the need for customers to adjust their usage habits to mitigate rising electric costs.