What makes up the Fuel Cost Recovery Factor?
The fuel cost recovery factor has two components:
- The estimated fuel costs for the quarter
- The true-up (actual fuel cost recovery vs. estimated fuel cost for the previous quarter)
“No profit is made on the fuel costs you pay.”
The city does not add any costs or profits to the fuel cost. The fuel cost recovery factor is a direct pass through of fuel costs charged by the city’s wholesale power supplier, which is currently Progress Energy Florida.
“The fuel cost recovery factor is a direct pass through…”
Quarterly adjustment calculations
The fuel cost recovery factor is re-evaluated quarterly and is typically calculated in the middle of the months preceding the quarter to which the fuel cost recovery factor is applied. Normally this is done in the months of January, April, July and October.
Estimates are just that ~ ESTIMATES
Because the fuel cost recovery factor is based on estimates made in advance, a variation in how much the city collects can be over the estimated costs or under the estimated costs, thus the need for the true-up component. Over collections are returned to customers and under collections are added to future fuel adjustments as a “true-up” factor.