JACKSONVILLE, Fla. — The JEA Board of Directors was set to take a deep dive into issues surrounding the utility failing to charge large commercial customers additional capacity fees on Tuesday, but some major questions went unanswered.
The additional capacity fees are a hot-button issue that comes as the utility is considering rate hikes to make up a $107 million projected budget shortfall.
When a building is built, the developer or owner is charged a one-time capacity fee, which is calculated based on how much water the new structure is expected to use.
Those fees are then used to help pay for expansions to the grid to keep up with growth.
An additional capacity fee is charged when a property’s average water usage increases more than 20 percent over that initial estimate.
“It’s very, very complicated, and we have to be consistent with our customers,” said JEA CEO Vickie Cavey during Tuesday’s capacity fee workshop.
During that workshop, JEA’s Board of Directors got a crash course on the issue, which dates back decades.
Members were told JEA never had a plan for tracking and implementing additional capacity fees.
That means an unknown number of commercial customers going back to 1997, when JEA first took over water and sewer responsibilities in Jacksonville, were never charged as their operations expanded.
Complicating things further, JEA’s older accounts lack documentation detailing the initial capacity fees charged and paid.
Capacity fee charges have also changed over time, and historical documentation of average daily usage is lacking.
JEA will have to sort out exactly who wasn’t charged, how much to charge them now and contend with the legal complications of back billing.
“Every one of them is going to be an increase. Probably every one of them is going to be a lawsuit,” said JEA Board Member John Baker.
City leaders who initially raised concerns about the issue have claimed the total uncharged fees could eclipse $100 million.
But JEA’s Deputy Chief Financial Officer John Orfano claims the true figure is a “wild guess”.
“There’s been a number of $100 million. We have no idea where that number came from,” said Orfano.
After the meeting, Action News Jax asked Orfano if there is any indication of how many customers were not charged and whether the utility has any estimate of the total amount of uncharged fees.
Orfano said JEA is “still researching” the answers to those questions.
He did note there have been no concerns raised about JEA’s bond rating at this point.
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