Florida Lawmakers Introduce Bills That Would Place Public Power Utilities Under PSC Regulation

by Paul Ciampoli
APPA News Director
March 7, 2023

Legislation has been introduced in the Florida Legislature that would give state utility regulators the ability to regulate public power utilities with customers outside city boundaries.

The bills are HB 1331 and SB 1380. The Florida Legislature’s current session began on March 7. Both bills would take effect July 1, 2023, if signed into law by Florida’s governor.

In essence, both bills seek to place municipal utilities selling retail electric or natural gas service to customers outside their city limits under the full regulation of the Florida Public Service Commission (PSC), among imposing other significant limitations.

“Municipal electric utilities were created to ensure communities had access to affordable, reliable power through an entity that was locally owned, locally controlled and locally operated. Florida’s 33 municipal utilities do that and more,” said Amy Zubaly, FMEA Executive Director in response to the legislation. “Everything Florida’s municipal utilities do is centered on making their communities stronger and the quality of life better for their family, friends and neighbors.”

SB 1380 would revise the definition of the term “public utility,” traditionally inclusive in Florida of investor-owned utilities subject to PSC regulation, to include a municipality supplying electricity to any electric retail customer receiving service at a physical address located outside its corporate boundaries. Under the proposed legislation, full PSC regulation over municipal electric and gas utilities that serve outside-the-city customers would continue for at least five years.

Going substantially further in its restrictions on municipal electric and gas utilities, HB 1331 mirrors the provisions of SB 1380 and also creates a new statutory provision authorizing outside-the-city surcharges on utility customers of up to 10 percent, with the surcharge based on the percentage of customers located outside municipal boundaries.

Additionally restricting are the provisions in the proposed legislation that authorize, but limit, transfer to the city general fund from municipal electric or gas utilities. The legislation imposes limitations on percentages of transfer to the general fund for both inside- and outside-city customers. Of great concern is a provision specifying that the use of general fund transfer is limited to only public utility purposes, or perhaps, a total ban on earning a reasonable return on utility expenses.

“We have grave concerns regarding the proposed legislation that would add additional state regulation to municipal utilities and its impact on our communities and the affordability of customers’ rates,” Zubaly continued. “We look forward to working with the bill sponsors to address any outstanding issues.”

The 2023 Florida Legislative Session runs through May 5.