HOUSE OF REPRESENTATIVES STAFF FINAL BILL ANALYSIS
BILL #: CS/HB 1645 City of Gainesville, Alachua County
SPONSOR(S): State Affairs Committee, Clemons
TIED BILLS: IDEN./SIM. BILLS:
FINAL HOUSE FLOOR ACTION: 81 Y’s 33 N’s GOVERNOR’S ACTION: Approved
SUMMARY ANALYSIS
CS/HB 1645 passed the House on April 27, 2023, and subsequently passed the Senate on May 4, 2023.
Established in 1912, the Gainesville Regional Utilities (GRU) is a municipal utility system providing electric,
natural gas, water, wastewater, and telecommunications services to approximately 93,000 customers in the
City of Gainesville (City) and surrounding areas. GRU is governed by the City commission, who appoints a
general manager to manage the day-to-day operation of the utility.
The bill amends the City charter to establish the Gainesville Regional Utilities Authority (Authority) to govern
GRU. The bill details the Authority’s governance and leadership structure, as well as duties and powers. In
summary, the bill:
 Establishes the Authority as a unit of city government, free from the direction and control of the City
commission and City charter officers, for the purpose of governing the utilities operated by GRU.
 Establishes the powers and duties of the Authority.
 Provides that the Authority will consist of five members appointed by the Governor, to include at least
one member from outside the City boundaries, serving four-year terms.
 Sets qualification requirements for Authority members and provides for a citizen nomination solicitation
process.
 Provides that an Authority member may be removed or suspended by the Governor for cause under
general law.
 Provides for the continued service of GRU personnel under the chief executive officer/general manager
(CEO/GM).
 Requires the performance of all acts necessary to ensure an orderly transition of GRU governance to
the Authority.
 Limits transfers from the utility fund to the City to the aggregate of utility system net revenues less the
flow of funds and requires any remaining funds after the transfer to be dedicated to additional debt
service or used as equity for future capital projects.
 Requires the Authority and CEO/GM to the make all policy and operational decisions for the utility
based only on pecuniary factors and utility industry best practices.
 Repeals section 3.06 of the current City charter relating to the general manager for utilities.
According to the Economic Impact Statement filed with the bill, the bill is not expected to have a fiscal impact.
The bill was approved by the Governor on June 28, 2023, ch. 2023-348, L.O.F., and will become effective on
July 1, 2023.
This document does not reflect the intent or official position of the bill sponsor or House of Representatives .
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 I. SUBSTANTIVE INFORMATION
A. EFFECT OF CHANGES:
Present Situation
Municipal Utilities
Pursuant to s. 2(b), Art. VIII of the State Constitution, municipalities have the governmental, corporate,
and proprietary powers to enable them to conduct municipal government, perform municipal functions,
and render municipal services. Municipalities may exercise any power for municipal purposes, except
when expressly prohibited by law.1 The legislative body of each municipality has the power to enact
legislation on any subject upon which the Legislature may act with certain exceptions. 2 Under their
home rule power and as otherwise provided or limited by law or agreement, municipalities may provide
utilities to citizens and entities within the municipality’s corporate boundaries, in unincorporated areas,
and even in other municipalities.
Many municipalities own and operate electric utilities and natural gas utilities and govern the operation
of those utilities through ordinance, code, or policies. Currently, there are 33 municipal electric utilities
in the state.3 Municipal electric and natural gas utility rates are not directly regulated by the Public
Service Commission (PSC), however, the PSC does have jurisdiction over municipal electric utilities for
matters related to rate structure, power plant transmission line site certification, general reporting
jurisdiction, service territory and territory disputes, energy efficiency reporting, 10-year site plans,
reporting on system hardening and resiliency, reporting on net metering, audits related to regulatory
assessment fees, monitoring renewable energy, reporting on facilities inspection and vegetation
management, and grid bill jurisdiction.4
Most municipal utility systems are governed by the municipality’s governing body (i.e., the city
commission). Six municipal electric utility systems in Florida are governed by separate utility boards, or
“authorities,” which are typically appointed by the municipality’s governing body. 5 These utility
authorities vary in structure, though the charter documents for each generally address the powers and
duties of the authority (including terms related to rate-setting, financing, acquisitions, and eminent
domain), the selection process for authority members (including qualifications and terms of office), the
management and personnel of the authority, the transfer of revenues from utility operations to the
municipality, and the degree of continuing oversight by the municipal governing body.
Current law authorizes municipalities to raise amounts of money necessary for the conduct of the
municipal government. A municipality may do so by taxation and licenses authorized by Florida’s
constitution or general law, or by user charges or fees authorized by ordinance. 6 Municipalities routinely
transfer a portion of their utility earnings to their general funds for non-utility purposes, though the
amounts and percentages may vary widely among municipalities. 7 These transfers may be limited in
some circumstances by ordinance, but they are not governed by state law.
1 Section 166.021(2), F.S., provides that any activity or power which may be exercised by the state or its political subdivisions is
considered a municipal purpose.
2 Pursuant to s. 166.021(3), F.S., a municipality may not enact legislation on the following: the su bjects of annexation, merger, and
exercise of extraterritorial power, which require general law or special law; any subject expressly prohibited by the constit ution; any
subject expressly preempted to state or county government by the constitution or by ge neral law; and any subject preempted to a
county pursuant to a county charter adopted under the authority of the State constitution.
3 Presentation on Florida Pub lic Power, Florida Municipal Electric Association (herein Florida Pub lic Power), slide 2, available at
https://www.myfloridahouse.gov/Sections/Documents/loaddoc.aspx?PublicationType=Committees&CommitteeId=3226&Session=2023
&DocumentType=Meeting+Packets&FileName=ecc+2-9-23.pdf (last visited Apr. 13, 2023).
4
Id. at slide 3.
5 The Keys Energy Services Utility Board is the only utility authority in the state with elected board members. Key West has an elected
board, with two of the five members from outside the city limits. Florida Pub lic Power, slide 8.
6 S. 166.201, F.S.
7 Florida Pub lic Power, slide 6.
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 Extraterritorial Jurisdiction
A municipality that operates a water or sewer utility outside of its municipal boundaries may impose
higher rates, fees, and charges on consumers receiving service outside of its corporate boundaries as
compared to the rates, fees, and charges imposed on consumers within its boundaries. The
municipality can accomplish this in two ways:
 First, for consumers outside of its boundaries, it may add a surcharge of up to 25 percent of the
rates, fees, and charges imposed on consumers within its boundaries. This mechanism does
not require a public hearing.8
 Second, it may set separate rates, fees, and charges for consumers outside its boundaries
based on the same factors used to set rates for consumers within its boundaries. It may add a
surcharge of up to 25 percent of these charges, provided that the total of all such rates, fees,
and charges for service to consumers outside its boundaries may not exceed the total charges
to consumers within its boundaries by more than 50 percent for corresponding service. Rates
set in this manner require a public hearing at which all users served or to be served by the
water or sewer utilities and all other interested persons will have an opportunity to be heard
concerning the proposed rates.9
Gainesville Regional Utilities
Gainesville Regional Utilities (GRU) was established in 1912 as a city-run electric utility.10 It is the fifth
largest municipal electric utility in Florida, serving approximately 93,000 retail and wholesale customers
in the City of Gainesville (City) and surrounding areas.11 GRU offers electric, natural gas, water,
wastewater, and telecommunications services. An audit for Fiscal Year (FY) 2021-2022 states that
GRU in September 2022 had $1.9 billion in capital assets 12 and operating revenue of $525 million.13
GRU’s residential electric utility rates in February 2023 were the highest in the state among municipal
utility providers.14
The City’s charter provides that the City commission appoints an at-will general manager for utilities
who is responsible for the efficient administration of the utility system. 15 The City commission is
comprised of seven members: four elected from single member districts, two elected at-large, and one
who is elected as mayor.16
The charter sets forth the general manager’s powers and duties, which provides that the general
manager is:
 Responsible for and has exclusive management jurisdiction and control over operating and
financial affairs of the utility system including, but not limited to, the planning, development,
production, purchase, sale, exchange, interchange, transmission, and distribution of all
electricity; the planning, development, purchase, sale, exchange, interchange, transmission,
and distribution of all natural gas; the planning, development, supply, treatment, transmission,
8 S. 180.191(1)(a), F.S.
9 S. 180.191(1)(b), F.S.
10 GRU, Milestones, https://www.gru.com/100thAnniversary/Milestones.aspx (last visited Apr. 13, 2023).
11 GRU, Ab out GRU, https://www.gru.com/AboutGRU.aspx (last visited Apr. 13, 2023).
12 GRU, Financial Statements and Independent Auditors’ Report, Gainesville Regional Utilities, Gainesville, Florida, September 30,
2022 and 2021 (herein Financial Statements and Independent Auditors’ Report), 8, available at
https://www.gru.com/Portals/0/2023%20Updates/Audited%20Financial%20Statements%20for%20the%20Year%20Ended%20Septemb
er%2030,%202022_final.pdf (last visited Apr. 13, 2023).
13
Financial Statements and Independent Auditors’ Report 14.
14 Florida Municipal Electric Association, Electric Bill Comparisons, https://assets.noviams.com/novi-file-
uploads/fmea/Rates/2023/2023_february_rates.pdf (last visited Apr. 13, 2023).
15 City of Gainesville Charter, Art. III, s. 3.06.
16 City of Gainesville, City Commission, https://www.gainesvillefl.gov/City-Commission (last visited Apr. 13, 2023).
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 distribution and sale of all potable water; and the planning, development, collection, treatment,
disposal and billing of all wastewater now or hereafter provided by the City;
 Required to submit to the City commission for its consideration a yearly budget for the operation
of the utility system;
 The purchasing agent for all equipment, materials, supplies, and services necessary for
operating and maintaining the utility system subject to policies promulgated by the City
commission;
 Required to propose ordinances to designate the job titles of subordinates that are to be
considered directors of departments;
 Required to appoint and, except as otherwise provided in the charter, remove all directors of
departments at will;
 Required to recommend to the City commission all measures necessary and expedient for the
proper governance and management of the utility system;
 Required to keep the City commission fully advised as to the management, governance, and
needs of the utility system; and
 Required to perform all other duties prescribed by law, the charter, ordinance, or direction of the
City commission.17
The charter also prohibits the City commission from disposing of, or agreeing to dispose of, in whole or
part, the City's electrical or water production or distribution facilities so as to materially reduce the City’s
capacity to produce or distribute electrical energy or water, except by ordinance with the prior approval
of a majority vote of the qualified electors of the City.18
Chapter 27 of the City’s Code of Ordinances sets forth regulations pertaining to each municipal utility
system.19
Prior to 2016, the City utilized an “Energy Advisory Committee” comprised of nine members appointed
by the city commission. This committee had the following responsibilities: to serve as a
communications channel between the City commission, utility staff, and the citizens of the City, in order
to understand and solve the problems relating to energy; to promote public access to information on the
City’s facilities, services, policies, and programs concerning energy, and consider the future energy
needs of the community with respect to the utilities as well as general government; to assist utility staff
by suggesting and reviewing policies affecting programs and services that affect acquisition, delivery,
or utilization of energy resources within the community; and to perform any other duties, which may be
within the purview of the committee and which may be assigned by the City commission.20 In addition,
a “Regional Utilities Committee,” comprised of three City commissioners and an ex-officio member
representing Alachua County, had the responsibility to report to the City commission on GRU-related
matters.21
In 2016, the City replaced the Energy Advisory Committee with a “Utility Advisory Board” (UAB) to
serve as an advisor to the City commission on all policy and governance decisions regarding utility
services.22 The UAB is comprised of seven members and meets at least once a month. All members of
the UAB must reside within GRU’s service territory and receive utility service. A minimum of one
member must reside outside of the City’s boundaries. The membership is comprised of the following: a
representative of a major business (defined as having 25 or more employees) that is a GRU
commercial customer; a person with utility management experience; a person with investment banking,
financial, or certified public accounting experience; a licensed attorney with business, contract, or
corporate law experience; a person with engineering experience; and two persons with any
17 City of Gainesville Charter, Art. III, s. 3.06(2)(a)-(h).
18 Id. at s. 5.04.
19
City of Gainesville Code of Ordinances, ch. 27, art. I-VI.
20 Navigant Consulting LLC, Re: Independent Investigative Review of the Gainesville Regional Utilities (GRU) , April 15, 2015, at 171-
172.
21 Id. at 171.
22 City of Gainesville, Ordinance No. 140384, §2 (Nov. 19, 2015).
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 qualifications the City commission deems relevant or beneficial to service on the UAB. The UAB must
make independent recommendations to the City commission and the general manager of GRU
regarding all aspects of utility governance, including all items that the general manager intends to place
on a City commission agenda.23
2013 Report by the Gainesville Area Chamber of Commerce and Council for Economic Outreach
In November 2013, the Gainesville Area Chamber of Commerce and Council for Economic Outreach
submitted a report to the City.24 The study was conducted by a 12-member Energy Study Group that
produced a report providing four policy recommendations for the City “to help Gainesville remain a
competitively advantaged community for sustainable economic development as it relates to overall
energy costs.”25 The fourth recommendation provided that the method of governance be changed to an
appointed utility authority.26 The report noted that JEA (formerly known as Jacksonville Electric
Authority) was the largest municipal utility in Florida at that time27 and it had a governance structure
under which the board was appointed by the Mayor of Jacksonville, subject to confirmation by the
Council.28 The report also noted that the Orlando Utilities Commission board appointed its own
members from a pool of candidates identified by a city nominating committee, 29 and that Lakeland
Electric had a Commission/Customer Committee Hybrid.30 The report also stated that the City of
Tallahassee had a city commission governance model.31 Acco