Why Investor-Owned Utilities Want to Take Over GRU
It’s about money
Utilities are regulated monopolies; that means they have assigned territories and they can only grow their business by buying existing utilities. That makes acquisitions vital. Often these acquisitions are disastrous for the ratepayers, as the residents of Florida’s panhandle discovered after their utility, Gulf Power, was acquired by Florida Power & Light parent company NextEra Energy. Despite promises that the acquisition would mean lower rates, the opposite happened, and many residents saw double and triple electric bills; with thousands experiencing power shutoffs, even during public emergencies.
When a utility is owned by investors, its primary goal is to maximize profits for its shareholders. Investor-owned utilities (IOU’s) are only allowed to earn a fixed profit on infrastructure. That means investor-owned utilities have a financial incentive to build things. On every new power plant, substation or transmission line that the company builds or renovates, an investor-owned utility gets to add in a rate of return for itself. It is, essentially, a guaranteed profit margin on every dollar of capital the company invests.
It’s worth noting that a GRU takeover has received heavy support from investor-owned utilities like Florida Power & Light (FPL) and Duke Energy. FPL and Duke have already made offers to buy GRU in the past, and it’s likely they would do so again if given the opportunity.
This is a Power Grab to Privatize a Public Utility and Raise Rates
The proposed takeover would undermine the democratic process removing control by Gainesville City Commissioners and relinquishing control of GRU to a DeSantis-appointed board. This would strip Gainesville residents of their right to elect officials who represent their interests and hold them accountable for their actions. Residents would have no say in the board’s decisions.
Any takeover by an investor-owned utility would lead to job losses and reduced investment in the local community. GRU currently employs over 1,200 people, many of whom are Gainesville residents. In the long-term, the takeover by any investor-owned utility would result in job cuts and the loss of revenue would lead to tax increases.
The proposed takeover of GRU by a Governor-appointed board is a thinly veiled attempt by investor-owned utilities to increase their monopoly on the state’s energy market. It would undermine the democratic process, reduce competition, and would cut the City’s revenue stream and increase local taxes.