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Florida House passes GRU takeover bill with majority vote. What happens now?

Andrew Caplan

The Gainesville Sun

Gainesville Regional Utilities is one step closer to being under the control of a new board appointed by Gov. Ron DeSantis.

The Florida House of Representatives passed House Bill 1645 Thursday with an 81-33 vote to establish a five-member board to oversee all GRU-related decisions and remove the City Commission's century-long control of its municipal utility.

Prior to the vote, Gainesville Mayor Harvey Ward asked Clemons in a letter Wednesday to pull the bill, citing significant financial ramifications to taxpayers and city government, despite a questionable economic impact report from a frequent City Hall critic stating otherwise. Ward called the bill "problematic at best" and said it would result in a credit rating downgrade, according to the city's external bond counsel.

Those warnings, however, were ignored Thursday, as were proposed amendments from Democratic leaders who expressed concern that the bill will set a "hostile" precedent for the state to begin taking control of other municipal utilities when it sees fit.

Speaker Pro Tem Clemons argued otherwise, saying from the floor that HB-1645 was a necessary step to bring stability to the utility and lower customer charges.

"There are people who are hurting," he said. "I hear from them every day."

The utility has been the state leader for renewable energy and plans to push toward its goal of being 100% renewable by 2045, a move some lawmakers have criticized.

What did lawmakers say?

Throughout the debate of the bill, it was clear it would be decided by party lines.

Democrats who lived in cities with co-operatives and other municipal utilities shared stories of similar efforts from lawmakers and private utilities to inch toward gaining control of territory, while Republicans said the bill provided representation and painted a bleak picture of the city of Gainesville's financial issues.

Among the amendments voted down were that the utility couldn't be sold unless approved by voters and that the board is chosen by voters.

House Rep. Yvonne Hayes Hinson, D-Gainesville, the only member of the local delegation who has voted against the bill and the only member who lives in GRU's service area, noted this wasn't the first time Clemons and Sen. Keith Perry, the bill's co-sponsor, have attempted to take control of GRU. She laid out a timeline of events where Florida Power and Light and the two lawmakers used deceptive false messaging to take aim at GRU's management.

"I'm asking you to hear my cry," said Hinson pleading to her colleagues to vote the bill down.

Some lawmakers, Clemons included, have argued GRU is on the brink of bankruptcy and is in a poor financial state, though the utility has less debt than Jacksonville and Tampa utilities. It also has a top-tier rating, higher than those municipal utilities, as well as FPL and Duke Energy.

What about JLAC?

Hinson also expressed concern that the bill cut in front of the timeline given to the city to resolve problems outlined in a state Auditor General's investigation, requested by Perry and Clemons. In February, lawmakers on the Joint Legislative Auditing Committee gave Gainesville officials until October to show what steps it was taking to address the issues.

Gainesville leaders since that meeting have taken unprecedented steps to address the issues, some of which include reducing its debt by $315 million, implementing a hiring freeze, raising property taxes as suggested by JLAC members, cutting city services and shaving almost $20 million from the annual general fund transfer − money sent from GRU to the general government side to help pay for city services.

What does the bill say?

The bill itself calls for a five-member board that will be appointed by DeSantis. Board members will be unpaid and serve staggered terms before serving four-year terms.

One member must be a major commercial user or own a company that is, while another must be a county resident outside city limited. Three other members "shall be competent and knowledgeable in one or more specific fields substantially related to the duties and functions of the authority, including, but not limited to, law, economics, accounting, engineering, finance, or energy."

If GRU's customer base serves more than 40% of its customers outside Gainesville limits, then the governor must appoint a second board member who also lives outside city limits.

The bill provides the first time in Gainesville's history that a resident outside city limits would have a say or vote in GRU-related matters.

What's next?

The bill goes to the Senate for a vote. If amendments are approved, though few expect that to be the case, it would then go back to the House for a final vote.

The bill would then head to DeSantis' desk for approval.

If signed into law, Gainesville − a city made up mostly of Democrat voters − would have the first municipal board in the state that DeSantis could appoint and control members to.

A pair of other bills are being floated (HB 1331 and SB 1380), that would also give the Florida Public Service Commission the ability to regulate municipal utilities that have a customer base outside city limits, just as it does with investor-owned utilities.

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