ESP cash cow

gas flame

The daily has an article on the city-owned Energy Services of Pensacola (ESP) raising its rates 6.1% (about $3/mo for residential; $30/mo for commercial) – ESP seeks rate hike.

A big deal is made out of ESP hasn’t raised its rates since 2000, which struck me as odd. How could any utility keep its rates flat for so long – when gasoline, electricity, water and other utilities have raised their rates over the last 7 years?

Well part of the reason is that rates have risen, just not the base fees. ESP has a fluctuating rate tied to the actual cost of the natural gas.

I also looked at the ESP budget: ESP pays $1.972 million to General Fund to help pay for overhead at City Hall. It contributes another $7 million to the General Fund. ESP is a very profitable venture.

The City Council may have paid for a study to tell them that they “need” to raise their rates, but ESP is far from being  in any kind of economic jeopardy…unlike the City’s Sanitation Dept.

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