Municipal Utility Bill Passes First Committee

This afternoon, CS/HB 1277 (Busatta Cabrera) passed the House Energy, Communications & Cybersecurity Subcommittee. A “strike-all” amendment was filed that significantly re-drafted the legislation. 

Summary of Strike-All Amendment to CS/HB 1277 (Busatta Cabrera) Relating to Municipal Utilities:

1. Requires new, amended or revised interlocal agreements for extraterritorial municipal utility service (gas, electric, water, sewer) to be written and provides that such agreements may not become effective until the provider municipality holds a joint public meeting with the governing body of the recipient jurisdiction. The purpose of the meeting is to provide information on:

• The nature of the service to be provided
• The proposed rates, fees and charges, including any differential between the rates, fees and charges applicable to the providing municipality’s residents and
• The extent to which any revenues from the provision of the service will be used for non-utility (general government) purposes.

2. Requires a joint annual customer meeting between the providing municipality and the recipient jurisdiction(s) governing body(bodies) for the purpose of obtaining public input on utility matters.

3. Imposes a cap of 10% of gross utility revenues on any enterprise fund transfers that are used to fund general government services. The cap applies to revenues derived from service to extraterritorial customers.

4. Beginning November 2024, requires municipal utilities providing extraterritorial services to provide a report to the Florida Public Service Commission that contains:

• The percent and number of extraterritorial customers
• The volume and percentage of sales made to such customers and the gross revenues from such sales and
• Whether the rates, fees and charges for the providing municipality’s residents differ from the rates, fees and charges for extraterritorial customers and the amount or percentage of any differential.

5. Requires the Florida Public Service Commission to aggregate the information provided by municipal utilities and report the information to the Legislature beginning in January 2025.

6. Eliminates current law authorization for an automatic surcharge of up to 25% on extraterritorial water and sewer service and reduces the maximum total amount of rates, fees and charges that may be imposed on extraterritorial customers following notice and hearing from 50% to 25%.

Next Steps

For cities with a municipal-owned utility that provides water, wastewater, electricity or natural gas, please answer a few brief questions so the Florida League of Cities (FLC) can have data on how this legislation will affect your city. Please respond as soon as possible. We appreciate your feedback!

The FLC will continue to work to address municipal concerns with the bill. Please contact Allison Payne at apayne@flcities.com with any questions.