Utility Rates – FY 2003-2004

David S. O’Brien, Director, Physical Plant Division

The Physical Plant Division is responsible for providing utilities service for the University campus. Each year, we establish rates based on anticipated raw utility cost, plus other production, distribution and operational costs to provide these services. Conversely to last fiscal year when we benefited from decreases in our raw utility costs, our expected costs for this year have increased dramatically thereby causing increases in our own rates. Contrary to the rate analysis done earlier in the year (which was transmitted by DDD in March), we are pleased to report that the final determining factors will drive an electricity rate increase of 3.5% instead of the 8-10% reported earlier. However, we have just been informed by our electricity provider of their intention to obtain approval from the Public Service Commission for another increase as soon as possible. At this time they are unable to quantify what this increase will be and therefore we cannot access the impact on our rate to UF customers. In addition, we were notified in mid-July that our raw steam costs will increase almost 100% effective July 1, 2003. Due to a reduction of internal overhead we have been able to minimize the increase to our customers to 54.7%. Our steam cost is contractually tied to federal natural gas and labor indexes. Although the labor index has increased modestly, the natural gas index is at a near record level. Because electricity and steam are the primary production costs for chilled water, that rate will also increase. These increases are just as dramatic as the decreases last year and clearly demonstrate the relationship between fossil fuel costs and world events impacting these costs. Utility rates are in effect as of July 1, 2003 and changes from the previous fiscal year are denoted below. Although it is our intent to establish and maintain rates for the entire fiscal year, substantial rate changes for our raw utilities are beyond our control and could result in mid-year adjustments.

Electricity	$ 0.0614/KWH	3.5%	Increase
Chilled Water	$ 81.65/KTH	13.5%	Increase
Steam	$ 5.91/KLb	54.7%	Increase
Water	$ .99/Kgal	7.6%	Increase
Waste Water	$ 1.96/Kgal	19.5%	Increase
Refuse	$ 4.21/CuYd	15.7%	Increase