Seth Johnson
The Gainesville City Commission voted 6-1 on Wednesday in support of Gainesville Regional Utilities’ (GRU) 2023-24 budget and scheduled rate increases, part of a seven-year rate increase plan approved in 2021.
The rate increases, 3% for electric and 5% for wastewater, will add $4.75 to the average GRU monthly bill. Commissioner Desmon Duncan-Walker was the lone dissent, and the commission still needs two more votes to make the changes final. Those votes are set for Sept. 7 and Sept. 21.
If finalized, the new rates will start in October, but customers will likely see smaller electricity bills than last October. In fact, for 800 kilowatt-hours, the price will be $21 less than a year ago. That’s because GRU dropped its fuel adjustment pass-through cost in April and July.
Mark Benton, GRU’s director of accounting and finance, said he wouldn’t be surprised by another reduction in the fuel adjustment cost as natural gas prices continue to fall. Natural gas prices increased 300% in 2021 and 2022, skyrocketing the pass-through cost for customers.
Benton cautioned that the gas industry can be volatile, and GRU adjusts the fuel adjustment cost on a monthly basis.
The seven-year rate increases form a key part of GRU’s plan to reduce debt. In May, GRU presented a plan to cut its $1.7 billion debt load by $315 million over the next decade.
Other actions include a reduced transfer to the general government budget, previously scheduled debt payments, and cuts in operations. As part of next year’s budget, GRU plans to eliminate 20 unfilled positions.
Commissioner Casey Willits said he didn’t want to increase rates and leave the incoming GRU Authority—created by state legislation this past spring—to spend the new revenue.
The GRU Authority is scheduled to begin operational control of the utility on Oct. 1, with a first meeting on Oct. 4, although the city has filed a lawsuit to stop the transfer of control.
Willits said the city will catch the flak for raising rates while the new authority gets credit for putting the new funding to use.
Commissioner Bryan Eastman also stated concerns on Wednesday. He said he felt uncomfortable raising rates only two weeks before the new authority takes control.
“I think that this is a decision that Gov. Ron DeSantis and his political appointees can determine when they come in,” Eastman said.
He asked what would happen if the City Commission didn’t vote for the increased rates. GRU General Manager Tony Cunningham said the motion doesn’t just concern the rate increases but also the budget for the utility that his staff believes is best for providing reliable services. He noted that GRU can’t stay on the debt reduction plan without the increases.
“That is a strong recommendation that we approve [the budget and associated rate increases] and continue to go forward as we transition to the board,” Cunningham said.
The City Commission voted on the planned seven-year rate increases in coordination with seven years of reduced transfers from GRU to the general government, intending to create a healthier financial situation for the utility.
The city’s ability to raise utility rates without consulting the state’s Public Service Commission and its willingness to raise those rates is one reason outside agencies have kept GRU’s credit rating stable. However, a Standard & Poor’s Global Ratings report in June said analysts see no way to increase that rating in the next two years.
Gainesville’s current city budget is the result of past elections when only 3% of the population elected the winning candidates. Those elections used to be in spring, not the fall like other elections. That means the decades of policies and budgets were set by campaign donor special interests, elite “experts”, NGOs seeking contracts, and ambitious pols hoping to move to Tally or DC someday (hence the focus on national and global — not local — agendas).
That’s why the cost of living, poverty and crime increases in such cities with springtime elections. We aren’t alone.
Yep! Look at where that way of thinking rules everything: Seattle and Oakland! Both are dangerous and lawless hell-holes where criminals rule the street, exactly what Gangsville could become with “leaders” like this! Throw them out. DON’T Vote DEC candidates !
The first order of business for the new GRU board should be to move the tier 1 cap from 850 to 1200kwh.
Doing so would show Cunningham, the Mayor, and the Commissioners what protecting our neighbors from the effects of climate change truly looks like.
Rising temps are causing the neighbors to exceed the current 850kwh cap too early in the billing cycle. Tier 2 billing rates are hurting our neighbors Mr. Mayor.
The average tier 1 cap across all the utilities in the state is 1000kwh.
Let’s be number one in the state for climate change mitigation where it counts most. Let’s do our best to try and keep our neighbors in tier 1 billing for the entire billing cycle.
Word to the wise, when the new board raise the cap, the public is going to hold them in very high esteem.
The sooner that the irresponsible City Commission is stripped of their control of GRU, the better. Their hair is on fire and they have no shame.
Since the community has to pay more, I hope the decision makers are making some sacrifices too. I hope they try to come up with other solutions before saying, “increase rates.” It’s bad enough how high the bills were, when staffing was low.
LOL! They won’t cut a dime for anything they want.
What a fine utility GRU was! Back in 2009 before DEC agenda candidates Queen Pegine Hanrahan and Lauren Poe were in, we had the lowest rates in the state! Again: The Lowest! Today, after the failed DEC candidates destroyed GNV finances, only Tourist Trap Key West is in our ballpark. Great job DEC!