Bill limiting city utilities’ charges to outside customers advances in House

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Cities operating their own utilities would be restricted in how much they could charge customers they serve outside the city limits, as well as how they can use money received from such customers, under a bill advancing in the House.

The bill (HB 1277) would reduce the maximum rate charged by city-owned utilities to outside residents from 50% to 25% of the rate charged to city residents.

Also, any new agreement, renewal or extension to provide outside electric, water or other utility service would require a public meeting in the area to be served. And a city could only use 10% of the money received from outside residents for general government functions, and must use the rest either on utility-related investments or return the funds to the customers.

It would apply to 33 cities’ electric utilities throughout the state, including those in Orlando, Jacksonville and Tallahassee, which serve 3 million Floridians, according to the Florida Municipal Electric Association (FMEA).

Rep. Demi Busatta Cabrera, a Coral Gables Republican sponsoring the bill, said it’s about giving outside customers a say in their own rates.

“Right now what we have is taxation without representation and it’s not fair,” Busatta Cabrera said.

The bill passed on a 14-2 vote through the House Commerce Committee on Thursday, and its next stop is the House floor.

Even some supporters, though, had reservations about the bill, and opponents fret that it could hamper cities’ coffers.

“Any reduction in utility revenue, which is often obligated for bonds to secure capital improvement projects, could have significant consequences on municipal finances,” said Ryan Matthews, an FMEA lobbyist.

The Senate, though, has advanced a watered-down version of the bill. Its version (SB 104) only deals with city-owned water and sewer utilities. It requires a city with a facility in another municipality to charge the same rates to customers in that municipality as it does its own residents. That bill has one more committee stop in the Senate before making it to the floor.