On Wednesday, the Florida House State Affairs Committee voted against amendments to a bill changing control of Gainesville Regional Utilities (GRU) and pushed the bill to the next stage.
Introduced by state Rep. Chuck Clemons, R—Newberry, the local bill would authorize the governor to appoint a board independent of the city commission to manage GRU. The legislative delegation for Alachua County approved the bill 4-1 for Clemons to submit.
State Rep. Yvonne Hayes Hinson, D—Gainesville, dissented on that vote and submitted two amendments for the committee to consider. The first allowed GRU customers to elect the independent board instead of the governor, and the second limited the independent board’s authority if appointed, placing limits on eminent domain and selling services.
The committee voted down both amendments.
The five-hour meeting began to run short on time, and Chair Lawrence McClure, R—Dover, limited questions, comments and debate on the bill to 30 seconds per person. McClure placed the same limitations on other bills before the committee, including one with more than 100 public commenters.
Hinson said the issue of state interference with GRU has continued for some time and called concerns of bankruptcy messaging. Gainesville voters defeated a state-sponsored referendum in 2018 that would have created an independent board elected by the city commission.
“I was a Gainesville city commissioner in 2012 to 2015, and I have witnessed an aggressive pursuit of GRU by legislators since that time,” Hinson said. “Its genesis did not begin today.”
Meanwhile, Clemons called the situation around GRU’s finances a crisis caused by the city commission control.
State Rep. Anna Eskamani, D—Orlando, asked what compelling state interest exists for Tallahassee to intervene and Clemons said to prevent GRU from going broke.
He said GRU’s level of debt, at $1.69 billion, sits four times higher than comparable utilities. He also told the committee that, in the last four years, the city commission has transferred $68 million more than GRU has earned in profit from the utility’s budget to the city’s general fund.
Clemons also pointed to bills that exceed other municipal utilities in the state. He also stated that the independent board cannot sell GRU or assets without voter approval.
“This bill will help to right the ship and provide stable leadership and separate the city commissioners from the apparent conflict of interest that they're currently undergoing,” Clemons said.
According to February 2023 data by the Florida Municipal Electric Association, GRU had the highest residential 1,000 kWh bills for municipal utilities. Among all utilities, Duke Energy ranked slightly higher, followed by GRU then Key West and then Florida Public Utilities. All four sat within $4 of each other.
Hinson said the Legislature has failed to give Gainesville a chance to crawl out from its debt situation, a process currently in the works, since highlighting the problem.
Gainesville Mayor Harvey Ward briefly stated those efforts to address concerns presented by the Joint Legislative Audit Committee in February. In the 30 seconds given, he noted the commission has set a formula for calculating how much money is transferred from GRU to the general government, resulting in a 55% reduction. That reduction forms part of the plan passed by the Gainesville commission on April 13 to lower debt by $315 million in 10 years.
Eskamani said the utility is still highly rated and called the bill heavy-handed. Currently, bond rating agencies rank GRU as an investment-grade utility.
The bill passed 14 to 5 and will now proceed to the chamber.