GREEN COVE SPRINGS – When residents woke up Wednesday morning, they paid 12% more for the electricity to brew their first pot of coffee, to watch the morning news and to work out on the treadmill after the City Council passed a much-debated increase Tuesday.

The city’s utilities department said the increase was necessary to replace aging equipment and replenish supplies that had been depleted because rates hadn’t been raised for years to keep pace with costs.

In addition to the immediate 12% increase, council members voted 4-0 to increase the fee for developers from $2,200 to $2,600 for each new lot; to convert streetlights to LED and adjust fees for area lighting; and increase the cost for new meters from $125 to $200.

The ordinance calls for no increase in fees for fiscal year 2025-26, a 6% increase in 2027, 7% bump in 2028 and 3% increases in 2029 through 2032.

The city owns its electric company. Residents will see an increase in their August bill, Assistant City Manager Mike Null said. The reason no increase was scheduled for the 2026 budget is that the fiscal year starts in October.

The council hired Leidos to complete a rate study in July 2024, and the company recommended an immediate 14% increase, followed by a 6% increase in 2026 and a 2% increase in 2027.

City hall chambers were overflowing with residents for the first reading of the ordinance on May 6, and the council voted 3-2 against the ordinance after hearing angry complaints.

The council returned to pass the first reading on June 17 after it tweaked the increase to 12% for 2025, no increase in 2026, 6% in 2027, 7% in 2028, and 3% annually for four years.

Councilman Ed Gaw questioned why the increases were spread out over eight years, primarily since the electric company is currently operating at a $1.8 million deficit.

“We’re going to operate at a deficit through 2026, right? Meanwhile, the cost of materials and labor is going to continue to increase,” Gaw said. “My point is, any delay in required revenue to maintain a reliable electrical system becomes more expensive the farther in the future you get.”

Null said the city can adjust future rate increases.

“In this ordinance, we’re not committing to anything beyond 2026,” he said. “We’re only proposing the one increase. The other numbers we looked at were projections what we know now. Obviously, as we get closer to budget time next year, we’ll have another 10 to 12 months of data to review.”

City Manager Steve Kennedy said, “We can begin this process of recovery.”

In other business:

• The council approved the first reading of an ordinance and transmittal to the Florida Department of Commerce for Amendments to the Public Facilities Element and Conservation Element of the Comprehensive Plan by adopting the updated Water Supply Facilities Work Plan. The plan is required to be updated every 10 years.

• The council approved the payment of $41,910 to Irby for electric transformer box pads for phase 2 at the Rookery.

The council meets on the first and third Tuesday of each month at 6 p.m. at City Hall.