Panel will compare GRU with other utilities


Published: Tuesday, February 26, 2013 at 6:05 p.m.
Last Modified: Tuesday, February 26, 2013 at 6:05 p.m.

The Gainesville Area Chamber of Commerce wants to make sure electric rates in Gainesville stay in line with other cities it competes with for relocating companies and so existing businesses can survive and thrive.

The chamber announced Tuesday that it formed a committee that will study a peer group of cities with municipal-owned utilities and other cities competing for companies. Among the issues the group will look at is the amount of revenue Gainesville Regional Utilities and other utilities transfer to city government general funds and the governing structure with the City Commission serving as board of directors.

GRU is budgeted to transfer $36.7 million to the city's general fund this fiscal year, 9.9 percent of its $370.07 million in operating revenues. The national median transfer rate for public utilities is 5.2 percent of operating revenues, according to a 2010 survey by the American Public Power Association.

As part of the announcement, the chamber said that state Rep. Keith Perry, R-Gainesville, has agreed to hold off on legislation to hold a referendum on the governing structure until the findings are in. He is considering filing legislation to require a referendum of all GRU customers, including those in the unincorporated county, to vote on whether GRU should be governed by an independent board.

Perry could not be reached for comment Tuesday.

State Rep. Debbie Mayfield, R-Vero Beach, filed a bill Feb. 12 that would put municipal utilities that serve people outside the municipalities under the regulation of the Florida Public Service Commission. People in unincorporated areas cannot vote for city commissions that govern the utilities.

The Florida Municipal Electric Association opposed the bill Tuesday, saying it adds an unnecessary layer of government bureaucracy that would raise rates, delay decision-making and intrude on home rule.

The chamber's Energy Study Group will report later this year to the chamber's Public Policy Committee that makes recommendations to the full board of directors for policy stances.

The group is led by former mayor and state representative David Flagg and retired University of Florida economist David Denslow.

Flagg emphasized that he has no foregone conclusions. He said he has already heard from a couple city commissioners and he told them there is no hidden agenda.

"As responsible trustees of GRU, they're going to wonder if we're out to get GRU or if we're out to stir the pot more on the biomass plant. This is not at all about the biomass plant. Rather it's about getting information they can use to make GRU even better if possible," Flagg said.

It is, however, about rates and the biomass plant is expected to raise costs to residential users by $10.56 per 1,000 kilowatt hours — more for commercial users — when the plant comes online Oct. 1.

At $127.67 per 1,000 kWh, GRU already had the fifth highest rate of 33 public utilities in Florida in February, according to the Florida Municipal Electric Association.

GRU and city commissioners have faced contentious backlash about the expected rate increases and terms of the contract to purchase energy from American Renewables, exacerbated by the ongoing election campaigns for City Commission.

"My observation is this has turned into a political discussion instead of one based on data and case study," said chamber Chairman Mitch Glaeser, vice president of the Emory Group. "The decisions moving forward need to be well thought out and discussed and that should be the conversation that we move towards, so having a very well-rounded, very respected group brought together can focus on Gainesville's future."

The group also includes five members of the Public Policy Committee, two of whom, Ken Cornell of Bosshardt Realty Services and Dean Cheshire of Cheshire Companies, ran for County Commission last year, along with Mike Giampietro of Generation Wy, Charles Anchors Jr. of North Florida Regional Medical Center and Chuck Clemons of Santa Fe College.

The other members are Rich Blaser of natural gas wholesaler Infinite Energy, former city and county commissioner and state representative Perry McGriff of Johnson Fletcher Insurance, Rose Fagler of Plum Creek timber company and formerly of GRU and Progress Energy, Joel Islam of Florida Food Service and Lamonte Newsome of Mount Carmel Baptist Church.

GRU is "more than happy" to provide the group with any information it may ask for, said Nona Jones, GRU community and government relations director.

"We have a shared interest in the future of energy for our community, so the announcement certainly doesn't change that," she said.

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