GRU plans for electric rate increase ahead of DeSantis-appointed board - Gainesville Sun
GRU plans for electric rate increase ahead of DeSantis-appointed board
GRU expects to increase electric, wastewater for customers to offset rising costs, debt
Andrew Caplan
Officials for Gainesville Regional Utilities plan to ask the City Commission for rate increases for electric and wastewater for the upcoming budget cycle, the municipal utility announced this week.
The projected annual increases have become an industry standard but come at a time when Gainesville's utility is under more scrutiny than ever before — and more so than any other utility in the state.
In June, Gov. Ron DeSantis signed a controversial bill that took away the Gainesville City Commission's century-long control of the utility, placing all decision-making powers with a board he will soon appoint. Supporters of the bill say GRU's debt and rates were of grave concern and without evidence claimed the city was on the brink of bankruptcy, despite other utilities around the state having higher rates and more debt. The city and a community group have since filed lawsuits to stop the new board from taking over.
GRU officials are now asking for the commission to approve a 3% increase in electricity and a 5% hike in wastewater rates to help offset rising costs and assist in the city's plan to reduce its debt. The plan calls for reducing the utility's debt by $315 million over the next decade, something lawmakers demanded prior to passing House Bill 1645.
"We don’t take rate increases lightly, but this request is a crucial part of our debt-reduction plan,” said GRU General Manager Tony Cunningham in a news release.
More: Gov. Ron DeSantis signs controversial state takeover of Gainesville utilities
More: GRU bills drop in 'high' rankings, now comparable to Newberry, Ocala, Tampa
What's the cost?
The average impact to customers, however, appears to be minor and is anticipated to be around $2.50 for an electric bill and $2.25 for wastewater. There are no expected increases for water or gas.
GRU's debt repayment plan includes the city cutting expenses and significantly reducing about $19 million through the government services contribution, formerly known as the General Fund Transfer (GFT). And with inflation costs, GRU anticipates even higher prices in labor and chemicals. Chlorine and ammonia, for example, will go up 216% and 325%, respectively, the release said.
“All of these pieces are critical to the puzzle,” Cunningham said. “The City Commission recognized this when they approved our debt-reduction plan in April.”
Current GRU rates
The municipal utility previously ranked first in the state for the highest electric bills earlier this year but now ranks No. 7 in the state among city-owned and investor-owned utilities, with lower rates than Duke Energy, Florida Power and Light (Northwest Florida) and Ocala. Among municipal utilities, GRU currently ranks fourth in the state.
A large reason for the drop in rankings came after GRU reduced its fuel adjustment charges in April. The utility estimates it has saved the average customer about $24 a month since then. When using the standard 1,000-kilowatt hours (kWh), the savings reach about $30.
The City Commission will discuss and vote on the requested increases at a future meeting prior to the adoption of the budget in September.
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