Municipal Utility Bill Up Tomorrow in House Energy, Communications and Cybersecurity Subcommittee

HB 1277 (Busatta Cabrera), which substantially impacts municipal utilities and enterprise fund transfers, will be heard by the House Energy, Communications and Cybersecurity Subcommittee on Friday, January 19, at 12:30 p.m.


The bill does the following:

  • Prevents municipalities from realizing a reasonable rate of return on their utilities by capping transfers of utility revenues to fund general government services.
  • Establishes a fluctuating cap on transfers based on an average rate of return approved by the PSC for investor-owned utilities. 
  • Cuts statutorily authorized surcharges on extraterritorial customers in half, starting in July 2025.
  • Will harm small and fiscally constrained municipalities where a utility helps offset a weak property tax base.


It’s unreasonable to further reduce the transfer rate if the utility is serving extraterritorial customers. 

  • These reductions reduce the rate of return for municipal utilities far below that which is allowed for investor-owned utilities.
  •  Extraterritorial customers benefit from services that are funded by utility revenue transfers, including municipal parks, public transportation and transit, aquatic facilities, ball fields and recreation programs, and municipal roads.
  • With few exceptions, municipal utilities ensure that revenues are prudently invested BEFORE considering any transfers to the general fund.


While some reduction in the currently authorized surcharges may be appropriate, a longer transition period would mitigate impacts to bond obligations, interlocal agreements, and planned capital projects that rely on current revenue streams.

Please contact members of the House Energy, Communications and Cybersecurity Subcommittee and inform them of your opposition to the bill and the fiscal impact this bill will have on your municipality.  

Click here for the House Energy, Communications and Cybersecurity Subcommittee contact information.


The League sent a letter to Representative Busatta Cabrera regarding our issues with the legislation. Click here to view the letter.


Please contact Rebecca O'Hara with any questions.

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