Downtown Retail Incentives

[Non-RedNeck Westsider]

Ron,

This is not a continuation of my earlier JEA rants.  Most of JEA's policies are automated.  There is no human thought or compassion in effect when they put in a work order to shut off your power.  The work orders are computer generated, plain and simple.  I think it would benefit you greatly to go to the main branch, speak to one of the CSMs and explain your situation to an actual person.  Someone that has the ability and authority to actually see that you've been a long time customer in good standing with an explainable blip on an otherwise perfect history.  There's a good chance that they will refund all if not most of your deposit.

[ronchamblin]

Thanks Non-Red.  If I had the time to engage someone down there, and if I really had the desire to get money back, I would do so.  But to be honest, my concern is to question if it is necessary and appropriate for JEA to hold the deposit funds, amounting to hundreds of millions of customer money.  Besides, it would probably take me three days to get through to the right person at JEA, and then, if my objective was to get most of my deposit back, it would take another two weeks of negotiating.  But ....... thanks.  I rest.

[marksjax]

Ron,

Thanks for the explanation. I never thought about all the $$ that is tied up in deposits either. That would be worthy of a thread all on it's own (first, is it necessary and/or excessive and second is it being used for operating expenses or investments or is it just sitting in a bank? hmm, another question comes to mind- which bank and who decides which bank to use? Decisions, decisions!).

Best of luck and keep fighting the good fight Downtown!
Mark

[Bativac]

Ron, both the property tax increase and the deposit being required by JEA are insane. I applaud your efforts downtown and hope you can afford to stay there for the long haul. I've been in there several times... it's one of the few parts of downtown that makes it feel like a "real city" if that makes sense.

[ronchamblin]

     Upon thinking more about the deposit policy of JEA, I have come to realize that the deposit system, as implemented by JEA, is necessary in order to be fair to all JEA customers.  If JEA did not require heavy deposits, then those businesses and residents who skipped out, leaving large unpaid electric bills, would place the burden of paying their unpaid bills indirectly to all the other JEA customers.   

     Unfortunately some residents probably depart the area, intentionally leaving the unpaid bills at JEA.  And too, some businesses go down, leaving large sums unpaid with JEA.  Therefore, to insure that those who use electricity ultimately pay for it, even if they go out of business, or must leave town, the deposit equal to twice the average monthly bill must be assessed to all who are thought to be somewhat a risk of not paying their bills.

     I see no other method of protecting JEA customers, or the JEA balance sheet.  This deposit system "forces" those using electricity to pay for all they use.

[BridgeTroll]

How did you come to that extremely unpopular conclusion Ron?

[ronchamblin]

Bridge and Stephen.  The following might explain why I believe that JEA has no other choice but to impose the two month average monthly deposit to all customers; that is, if their objective is to keep rates as low as possible.  I am not saying that there is no corruption, waste, or obscene salaries or expenditures within the JEA system.  But, follow me through on this.  Where am I wrong. 

Let’s assume that there were absolutely no deposits for residential or commercial customers.  Let’s assume that under this arrangement that JEA was operating at a profit, stabilized, and all the customers were happy about “no” deposits.

Let’s assume that JEA had structured the rates slightly higher to absorb the occasionally unpaid bill left by an exiting commercial or residential customer.
This arrangement would seem okay, as their would be no huge deposit fund, and the “losses” incurred upon JEA by exiting non-paying customers would be “paid for” by the JEA customer base.. you and me included… by way of the slightly higher rates. 

What is wrong with this arrangement?  The bottom line is that the unpaid bills are “paid” by the large customer base of JEA.  The people who clearly “make out” are those exiting without paying their last two or three bills.  But, all is good.  JEA’s running costs are taken car of because of the slightly higher rates to cover this kind of non-payment.   

The above scenario does not agree with me because those who exited without paying their bills get off scott free.  They in effect have stolen electrical power for a period of at least two months, and who has to cover the losses?  You and me. 

I would rather these residential and commercial customers be forced to pay a deposit equal to an average of two months bills, allow JEA to hold the deposit, to be used in the “end” to pay their power usage if they decide to go out of business, or to skip town. 

This two month deposit scenario does not allow “any” JEA customer to exit or disappear while owing money to JEA.  Result?  You and me do not have to pay for the power they used during their last two months of being a JEA customer in the form of slightly higher rates.

In short, the current deposit policy keeps rate lower for you and me simply because the otherwise higher rates aren’t necessary to cover the occasional non-payment by an exiting, departing, or failing customer.  The bottom line is that “somebody” is going to pay for the electricity produced and supplied.  The currently enforced deposit policy insures that in each case, those who consume, ultimately pay for their consumption, and not me and you in the form of increased rates.  Sorry about the repetition. 

[Ralph W]

Now, if only that procedure was followed for property insurance. You and I would not have to pay the high rates we do because someone decides to build on a barrier island or a flood plain. A substantial deposit, a huge substantial deposit to be assessed to and held in escrow for those who have their home wiped out and then rebuilt. As it stands now the risk is spread out over the multitudes so that the few are spared outrageous policy costs.

I hear that State Farm is about to raise rates because they are contemplating huge claims for sink hole damages. I don't think I live in a sinkhole prone area so why should I have to help cover other peoples losses or contribute to the bottom line of a for profit company should there be no sinkholes.

[BridgeTroll]

The real unpaid bill rate is more like 3% unpaid balances.

Citation please?

[Non-RedNeck Westsider]

Seems like JEA has hijacked a thread, hmmmmmmm, powerful conglomerates at work indeed.

[ronchamblin]

      Stephen.  I would like to work this thing through to what could be a solution.  So….lets suppose that there was in fact a lower deposit fund, perhaps $20,000,000, enough to cover a few commercial and residential non-payments.  This would allow all of us to have a deposit equaling only ten to twenty percent of our monthly bill.  With time, occasional customer non-payments would lower the fund slightly, so that once below a certain level, all of us would have to pay a slight additional deposit, which would be tolerable as its necessity would be understood.     

     So, instead of my current $9,100 deposit, it would be only about $1,000 or so.  If I ran into bad times, and began to sink into history, I would or could leave an unpaid JEA bill amounting to $9,000 or so.   My small deposit of $1,000 would pay for some of it, but JEA would still be stuck with $8,000 unpaid as a result of my business demise.

     In the above decreased deposit arrangement, considering the possibility that I would never have the funds to pay the bill, you and your fellow JEA customers would pay it for me by paying the increased rates.  Somebody has to pay for the coal and operating costs.  If I do not pay for my use, then you and others will pay for me. 

     So it seems that we must make a decision as to whether or not we want to get into a form of welfare for the unfortunate customers who run into troubles and are unable or unwilling to pay for electricity they consume. 

     Personally I do not want to be on the receiving end of welfare.  I would rather pay the two months average bill of $9,000 ahead of time, so that if and when things got tough, I could proudly exit the JEA system having paid for all of the electrons I had consumed.  An additional benefit of having the large deposit is the fact that, if and when I closed my doors, it would be a nice bit of cash returned to me upon my exit from the system.

     So………… welfare or no?  Do we want to pay for other’s use of JEA power?  If we do not mind paying the bills of those who cannot or choose not to, then by all means, we can go the route of the much lower deposit policy.  However, If we do not want to participate in a form of welfare, we must also see the necessity of having every customer pay a deposit equal to the average of two months usage. 

     As shown by my first posts on the subject, the high deposits, and the high multimillion dollar deposit funds each year, at first seem excessive and unreasonable, but in the end, we, as customers, pay less for our electric service if JEA maintains the current system of deposits.

     As one approaches going out of business, one begins to scramble for funds.  The time for a business to pay a large deposit equal to twice a monthly bill is during the good times, when it is usually not a burden.  By this method, his last bill is paid, JEA is covered, and you and me do not have to engage in welfare by paying for the power used by the unfortunate who have to exit the system unable or unwilling to pay their last two months of usage.   

     

     

[ronchamblin]

You're making me think Stephen.  Not used to it, and it hurts. Be back.

[Non-RedNeck Westsider]

Stephen's model could be quite correct under the assumption that every JEA account is charged a 200% deposit.  But in reality, the only accounts that are required to maintain a 200% monthly balance are the ones that have already proven to be potential liabilities due to a poor credit history upon signing up for new service or a poor JEA credit rating based on non-payments and disconnects among other things.

So the question now would be how many customers are required to pay / have paid the 200%, and how many others have either a minimal or no deposit.

[BridgeTroll]

There are also alot of assumptions or "facts" Stephen is using that may or may not be correct.  50% return on basic service?  Losses due to non payment 3%?  Theoretical vs actual exposure?  Just to list a few...

[cephus]

I called JEA yesterday about setting up a new account and the deposit amounts I was quoted were: $0 good credit (which is what I paid), $300 poor credit, $500 or 2 months avergae whichever is greater for customers with no credit.