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Gainesville Regional Utilities Customers Pay More To Use Less

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Gainesville residents like to be green. And Gainesville Regional Utilities likes to conserve.

But using less energy means generating less money for Gainesville services such as police and parks.

Someone has to make up that shortfall, and it’s the customer.

Kendall Litton-Jensen, GRU spokeswoman, said GRU customers are using significantly less energy than they did a decade ago.

GRU generated $20 million less in 2013 than it did in 2010, according to financial statements.

To offset the loss, the average bill for a customer using all four of GRU’s services — electric, natural gas, water and wastewater — increased about $6 in October, GRU spokesman Patrick Donges said.

GRU ranked second in the state for highest residential bill and third in the state for highest residential electric rates in October.

“We have to budget according to certain market factors that are not in our control,” Donges said. “As costs go up — as they tend to do every year — we have to do the same thing as everyone at home. We react to the market as everyone else does.”

It’s Not Easy Being Green

Like Gainesville residents, GRU and the city of Gainesville are also going green.

Gainesville has been working since 2002, when it joined the Cities for Climate Protection Campaign, to reduce greenhouse emissions, according to GRU’s website.

In 2009, the Gainesville City Commission unanimously agreed to a 30-year Purchase Power Agreement in order to provide more sustainable energy. In the agreement, GRU would purchase a portion of its energy from the Gainesville Renewable Energy Center, a biomass facility that uses waste wood to produce energy, Litton-Jensen said. If left to rot, the wood would release carbon dioxide and methane, which is 20 times more potent as a greenhouse gas than carbon dioxide alone, according to the center’s website. In contrast, the energy center produces carbon-neutral energy from the waste wood.

GRU spent about $8 million on energy from the biomass center in August 2014, according to a GRU invoice. Donges said about 30 percent of GRU’s energy comes from the biomass center.

GRU supplies power to about 93,000 customers in Gainesville and surrounding areas, according to GRU’s website

A City-owned Utility

The city has a vested interest in GRU’s profits — it relies on GRU to help pay its bills. In addition to the 10 percent utility tax included in customers’ bills, a portion of GRU’s annual profits go back to the city.

This annual transfer of funds pays in part for police and fire rescue, the upkeep of public parks and the alleviation of city debt.

Donges said GRU’s general fund transfer is Gainesville’s largest annual revenue source, making up about 35 percent of the city’s total revenue. GRU is handing over about $37.3 million of its revenue to the city for 2014, he said.

The utility generates about $350 million a year on average, according to financial statements.

This year’s transfer is projected to be lower — about $34.9 million. To avoid the need to raise more revenue for the city through increasing the transfer fund, Gainesville implemented hiring freezes, eliminated employee raises and took money out of other specialized funds, said Gainesville City Commissioner Todd Chase.

GRU also left 59 positions unfilled, Litton-Jensen said.

Still, Chase said the utility bill price hike was unavoidable. He said this process is a matter of basic economics of supply and demand and cost versus price.

“When the overall energy used by your customers decreases… the result is an increase in the cost per unit,” he said. “The costs have to be recovered.”

About Shannon Kaestle

Shannon is a reporter for WUFT News who may be contacted by calling 352-392-6397 or emailing news @wuft.org

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