Rates vs. Bills: An open letter from GLM leader Nancy Deren to our City Commission

Part I. Rates vs. Bills

GRU’s rates have become a hot button issue in the past couple of years. Much confusion seems to exist in understanding the difference between GRU rates and bills. We hear those terms used interchangeably, but they are two very different measurements.

Increasing rates and bills have had an impact on many GRU customers, and have created hardships for some, especially those in inefficient housing or commercial buildings. We can agree that some of the factors in these increases, such as the feed-in-tariff and biomass contract, although important to diversifying our energy supply and reducing our exposure to volatile fossil fuel prices, could have been better negotiated and implemented for the benefit of our community.

Our City Commission has listened to the criticisms and suggestions of the Gainesville Area Chamber of Commerce and others, given serious attention to addressing current GRU policies and procedures that need improvement or revision, and taken numerous steps to implement changes to mitigate the impacts of those higher rates and to ensure we have clear policies, transparency, and well-defined direct lines of communication going forward.

Our concern is that the fixation on rates is distracting us from dealing with very large challenges looming ahead for utilities, transportation, water, and other core city functions. If we move on and restore a focus on implementing well-researched, innovative, and diversified programs, our entire community will be better served now and in the future.

Rising rates are a national issue, not unique to GRU. The Bureau of Labor Statistics recently released the annual electricity price index showing that 2014 was the most expensive year ever for electricity in the U.S., with the average price of 14.3 cents/kWh last summer, surpassing 2013 which previously had the highest ever average prices at 13.1 cents/kWh. High rates are relative—and are related to electricity sales, fuel mix and where you live: Customers in Hawaii pay 36.98 cents/kWh; Vermont’s average rate is 17.4 cents/kWh.

Rates are going up across the country due to a combination of factors that include flattening demand and sales, increased cost of extraction and delivery of fossil fuels, aging infrastructure, and a 100-year old outdated utility model.

The on-going criticism about GRU rates refer to comparisons with other utility’s rates based on 1000-1200 kWh/month usage. Criticisms are also in regard to commercial rates, even though they are worded to imply residential rates. However, most (88.9%) GRU customers are residential users, and most (74%) of those residential customers use less than 750kWh/month, 84% use under 1000kWh/month, so most of us are in the two conservation rate tiers, where those electric bills are some of the lowest in the state.

Rates do not equal bills! You can have low rates and high bills or have high rates and low bills.

Rates are a red herring for two major reasons:

  • Rates distract us from addressing major root causes of high bills: inefficient housing and commercial buildings, our habits, and lack of awareness about our energy and water use.
  • Rates distract us from addressing the elephant in the room: that the current centralized, antiquated utility model and rate structure, based on “burn to earn,” is in direct opposition with the need to drastically cut our fossil fuel use and conserve and protect our water.

Developing new utility models that generate revenues in completely different ways is a global imperative. The entire way rates are determined must change. Energy costs are going up across the world, and are becoming more difficult to afford, and we have less control over these costs than we do over our consumption and policies.

Part II. Efficiency is the Key

Most existing housing, and buildings in general, are inefficient energy sinks. Buildings consume more energy in the U.S. than transportation or industry. Almost half of Florida’s energy use goes into buildings. Gainesville residents are especially affected since more than 88% of GRU’s customers are residential, and renters make up 51% of those customers. Renters have limited control over their housing energy efficiency, and this affects their bills. This applies to renters of commercial space as well.

In addition to energy inefficient housing, lack of knowledge and awareness about how to reduce electric and water use affects the bills of customers at all income levels.

How do we mitigate the very real and hard impact of higher costs on our most vulnerable citizens? Again, this is a national issue that we are all facing and will be facing in a much bigger way over the rest of this decade and beyond. We need to be vigorous and creative in developing ways to buffer those who are already heavily impacted.

GRU and the city have already been proactive in implementing an array of programs including LEEP, Project Share, and partnering with the Community Weatherization Coalition in an effort to assist those most affected.

The fastest, most effective way to reduce utility bills for everyone, residential or commercial, regardless of income level, is energy conservation and efficiency. The cheapest kW is the one you don’t use.

The September 2014 International Energy Agency Report calls energy efficiency the “first fuel,” with potential to boost cumulative economic output by $18 trillion by 2035.  We have many examples of this potential here in Alachua County:

  • The School Board achieved savings of $1.6 million in the 2012-2013 school year due to aggressive investments in energy efficiency.
  • The county commission has used recommendations from the Energy Conservation and Strategies Committee to reduce use and bills across county departments and facilities. Alachua County has saved hundreds of thousands of dollars over the past five years despite rising rates.
  • The county jail is the latest example: Bills were reduced from $74,385 in January 2013, to $43,097 in January 2015 despite higher rates, directly because of energy efficiency upgrades and reduced waste of water and electricity.

Individuals can achieve dramatic reductions as well. Simple energy efficiency upgrades, such as providing low flow shower heads, faucet aerators, fixing leaky toilets, and providing consumer education by the Community Weatherization Coalition has reduced the GRU bills of nearly 600 low-income residents by up to 24%.

Individuals can reduce their electric and water bills by 15% to 70% by changing habits and making energy efficient, durable upgrades to housing and appliances. They also gain a healthier, more comfortable living environment.

Gainesville and Alachua County have a long-standing commitment to environmentally aware policies and practices. We have been at least ten years ahead of most of Florida and the Southeast in adopting energy and water conservation and efficiency measures and increasing our use of renewable energy.

Part III. A New Model for Utilities

Nationwide, the utility industry is in the process of wrestling with what some are calling the “utility death spiral,” of how to make the transition away from the current antiquated utility model that includes centralized fossil fuel-based generation, one-way power distribution, and constantly growing consumption. Our goal must be to move to a multi-faceted, distributed model based on efficiency and renewables, that is more reliable, resilient, less polluting and which can accommodate a range of new technologies.

Making the transition to a publicly owned smart grid, broadband, renewables and conservation is essential for our economic prosperity, health and safety, and national security. While we initially will face challenges as well as upfront investments, the decision to engage in diverse and renewable sources of energy will ultimately be less expensive.

It is exciting that GRU is already exploring possible measures such as community-owned solar, fiber optics, smart grids, and time-of-use and other rate structures. This is where we need to focus, rather than stay stuck on on arguing about the past.

Look at Texas. It is the largest fossil fuel producing state and now one of the largest alternative energy producers in the country. Texas has invested almost $8 billion in publicly funded wind upgrades since 2009. Citizens voted for higher rates to invest in those changes, and now in Texas, wind costs $0.025/kWh, while natural gas costs $0.125/kWh.

Gainesville and Alachua County have made investments in energy conservation and renewable energy that have gained us national recognition, have reduced our carbon footprint, have provided us with a more diverse fuel mix, and have given us more energy security and stability than any other county in Florida.

GRU is the most diversified, comprehensive utility in Florida. GRU is not solely dependent on electricity production for revenues, having already diversified into water/waste water, fiber optics, and renewables, providing us a huge competitive advantage going forward.

Our city’s public utility can offer more long-term energy security, price stability, and reliability than utilities that purchase all their power and are completely dependent on natural gas and coal. GRU customers already have a diversified mix of local, renewable, stable electricity thanks to biomass and solar investments, landfill methane purchases, and conservation measures.

GRU is well on the way to meeting the new EPA Clean Power rules, which puts us far ahead of the rest of Florida.

Now is the time to focus on how to accelerate GRU’s shift to fully becoming a utility of the future with an innovative 21st century business model. In the short term, all GRU customers must be encouraged and assisted to find ways to reduce and manage their bills while we research and develop what new models and rate structures will best fit our community’s needs and will serve our city well in the long term. The Innovation Economy will not exist without it.

Write a letter to your representative in support of the Clean Water Protection Act and end mountaintop removal

Please join us in our efforts to get Congress to pass the Clean Water Protection Act and end mountaintop removal. You can learn more about the bill, and contact your Representative, by visiting ilovemountains.org.  Here is a letter written to Rep. Corrine Brown by our own Jason Fults.

Representative Corrine Brown

2111 Rayburn HOB
Washington, D.C. 20515

Dear Representative Brown,

My name is Jason Fults and I live in Gainesville. I am a Florida native, but attended college in Kentucky, where I first learned of the highly-destructive practice of mountaintop removal (MTR) coal mining. The apocalyptic images of MTR that I witnessed throughout the Appalachian region have stayed with me, and in 2011 I formed an organization called “Gainesville Loves Mountains” to help ensure that our community’s energy procurement doesn’t harm people in other communities that I love. Gainesville Regional Utilities (GRU) has, and continues to, burn coal that is mined using MTR. We believe that this practice is an atrocity against the planet, and against the residents of Appalachia, and that our community should not contribute to this atrocity through purchasing coal mined in this fashion.

We have engaged with GRU, the Gainesville City Commission, a variety of civic organizations, and hundreds of local citizens on this issue. We have also collected nearly 1,500 signatures on a petition to our City Commission calling on them to end GRU’s relationship with MTR coal. A few months ago, the Gainesville City Commission discussed our community’s connection to MTR. Gainesville Loves Mountains turned out dozens of citizens and our Commission voted unanimously to direct the City Attorney to draft a resolution condemning MTR “…and the resulting environmental, social and economic devastation incurred by such practices.” They are also considering an ordinance that would curtail any future purchases of MTR coal by our utility.

While we believe that end-use consumers of energy have a responsibility to minimize their impacts, and support Appalachian residents’ efforts to safeguard their own communities, it is clear that federal action will be required to fully end the destruction of MTR. As such, your constituents continue to call on your support for The Clean Water Protection Act (H.R. 1837). We believe that this bill will help to curtail the practice of MTR and protect the quality of life for Appalachian coalfield residents who face frequent catastrophic flooding, pollution, negative health consequences, and loss of drinking water as a result of this practice.

Please feel free to contact me if you have any questions about our work or would like to further discuss the connections between north Florida and Appalachia and how our citizens can work together to end destructive energy practices such as mountaintop removal coal mining.

Thank you for your attention and we look forward to hearing from you on this issue,

Jason Fults

A Step Closer

On April 17th, the Gainesville City Commission heard the voices of our brothers and sisters in Appalachia who have spent decades combating the poisonous repercussions of MTR. The spirits of Judy Bonds and Larry Gibson, both of whom visited Gainesville and inspired our movement, were in the Commission chamber standing with us.

Many of the local citizens who gave testimony were first-time attendees at a Commission meeting. Others drove from nearly an hour away because of their heartfelt commitment to this issue. They were young and old, and many of them had roots in West Virginia and Kentucky. Led by Commissioner Lauren Poe, and moved by the passionate testimony of dozens of citizens, the Commission voted unanimously to direct the City Attorney to draft a resolution condemning MTR “…and the resulting environmental, social and economic devastation incurred by such practices.”

The Commission also voted, by a 5-2 majority, to direct our utility’s General Manager to help draft a policy that states “…Gainesville Regional Utilities (GRU) will no longer purchase coal sourced from MTR operations, and will from the effective date forward only purchase performance or compliance coal from the Central Appalachian region from deep mine operations.” Both the resolution and the policy will need to come before the Commission again for final approval.

All of our Commissioners expressed trepidations about how a transition to solely deep-mined coal could potentially impact electricity rates, and Commissioner Chase and Mayor Braddy would not support the policy for this reason. Yet Commissioner Poe wisely inserted an “escape clause” into the motion that would allow the Commission to temporarily suspend the policy if it was found to have a significant impact on rates. The policy deals clearly with rate concerns. It is also comparable to the MTR policy of Duke Energy, the nation’s largest utility and one of GRU’s main competitors.

Gainesville Loves Mountains believes that this policy is a sound compromise between fiscal concerns and our commitment to environmental stewardship. Our supporters have collectively spent hundreds of hours volunteering for weatherization programs for low-income residents and are keenly aware of the difficulties that high utility bills can bring. We’ve said it before but it bears repeating: our community does not have to choose between dirty energy and high utility bills.

In addition to our efforts to end GRU’s consumption of MTR coal, we are also pursuing comprehensive energy efficiency policy that will help residents and businesses conserve energy, strengthen our local economy, and transition our community away from a dependence upon fossil fuels. We have been leaders in the countywide effort to adopt a financing mechanism for clean energy and energy efficiency retrofits for local businesses. We are also advocating for a “Renters’ Initiative” that would finally bring the financial benefits of energy efficiency to everyone in Gainesville, not just property owners.

There is still much work to be done on all these fronts, and we invite all who love mountains and all who love Gainesville to join our efforts. Communities everywhere face difficult choices ahead as the age of low-cost, easily accessible fossil fuels comes to an end. We all must grapple with the implications of this monumental transition by vigorously pursuing energy security and energy efficiency, and through persistent, focused efforts to reduce our energy footprint. Last Thursday’s Commission meeting was a small victory, but it was an important one. Our sincerest thanks to the Gainesville City Commission, the citizens of Gainesville, and the inspiring work of our friends in Appalachia for moving us one step further along the path to a clean energy economy.

-Jason Fults

Gainesville MTR Ordinance Letters of Support from Appalachia

We’ve received several letters of support from our allies in Appalachia in support of our ordinance ending Gainesville Regional Utilities’ purchase of coal mined by mountaintop removal. We want to take this opportunity to thank them and share their encouraging words as we prepare for tomorrow’s City Commission meeting.  Come out and show your support for Appalachian communities by standing alongside your fellow Gainesville citizens!!

Take some time and read the letters below to see how much this means to our concerned friends in Appalachia. Click on the image to view the full letter:

Kentuckians for the Commonwealth's letter supporting MTR Ordinance

Kentuckians for the Commonwealth’s letter supporting MTR Ordinance

A letter of support for the MTR Ordinance signed by several concerned action groups in Appalachia

A letter of support for the MTR Ordinance signed by several concerned action groups in Appalachia

Alliance for Appalachia Letter for Community Publication

Alliance for Appalachia Letter of support for MTR Ordinance

 

 

PACE Presentation to the Alachua County Commission

Our sincerest thanks to all of you who came to the County Commission meeting Tuesday in support of our efforts to get PACE financing, or Property Assessed Clean Energy, in Alachua county.

For those of you who missed our presentation,  click here: just click on item #2: “Presentation: Property Assessed Clean Energy (PACE).”  We HIGHLY recommend at least checking out Dr. Wendell Porter’s part of the presentation, which we think everyone in our community should view.

For anyone who’d like to get involved in our efforts to pass PACE in Alachua County, feel free to join us at our next committee meeting on Monday, April 7th at 3:30pm.  This meeting will be at the County Administration building downtown, in the Community Treasures room on the 1st floor.  And again, we strongly encourage all of you to directly contact the County Commission to express your support for PACE.

Thanks again for your support.  We were very well-received by the Commission and we’re optimistic that our PACE efforts will ultimately succeed.

Venue and Sponsorship Change: Gainesville Loves Mountains’ City Commission Candidate Forum

Due to the City of Gainesville and the Community Redevelopment Agency’s sponsorship of the Cinema Verde Environmental Film and Arts Festival, Cinema Verde will no longer be allowed formal involvement with our planned Candidate Forum and the Forum will instead be held at a neighboring venue.

On Saturday, February 15, 2014, from 5:30pm – 7:30pm, Gainesville Loves Mountains will host a forum for candidates in the upcoming City Commission election. The forum will be held at The Civic Media Center, 433 S. Main St., Gainesville, FL. Members of the public and media outlets are encouraged to attend to learn more about the candidates’ positions on energy and sustainability issues.

All ten candidates in the election have confirmed their attendance at the forum. The forum will be structured so that candidates from one district do not need to stay for the entire time, although they are welcome to do so. The schedule is as follows:

5:30-6pm: District 2

6-7pm: At-large

7-7:30pm: District 3

Gainesville Loves Mountains would like to remind the public, and all attending candidates, that we are a registered 501(c)3 educational organization that is legally prohibited from endorsing candidates. We view this forum as an educational public service to the community, and it is 100% free and open to the public. We have invited feedback and participation from all ten candidates, and are committed to providing each of them with equal time to respond to our questions.

GLM would also like to offer a special thanks to the Civic Media Center, an alternative library, reading room, and infoshop, and a proud Gainesville institution since 1993, for their flexibility and support in hosting our Candidate Forum.

Oppose Rep. Perry’s GRU Governance bill!

January 15, 2014

 

Dear Mayor and Commissioners,

 

The bill Representative Perry presented last Friday is a dreadful undermining of local control of our city’s assets and your ability to conduct our city affairs, including long term strategic planning and fiscal prudence, and I call on all of you to vigorously oppose this misplaced attempt at disenfranchising we city residents, the owners of Gainesville Regional Utilities (GRU), and the undermining of your fiduciary responsibilities to the City and its future.

 

This bill says that each GRU account holder, city and non-city alike, would get a letter in the mail this summer, at a time of year when a lot of people are gone, with a yes or no vote to create a board that is formed by mostly outsiders — this is not even being done with an election under the supervisor of elections and the public debates that accompany elections. Account holders are not necessarily residents of the City, yet this is going only to them. Anyone with multiple accounts, including corporate account-holders, will get more than one vote, which could skew this vote even more unfairly.

 

In my household are three voting citizens of Gainesville. I am the only account holder, so right there, 2/3 of my household, who are owners of GRU, are denied their right to vote on their asset. In the nine houses on my cul-de-sac, this bill would disenfranchise HALF of the voters, so what is that number going to be across the city?

 

GRU is a city owned asset, a 100-year investment by the residents of this City, and should not be governed by a preponderance of members appointed by other bodies, especially from outside the City, especially by the State (Governor).

 

GRU is a core component of, and integral part of our city’s strategic planning and vision. It is critical for our City Commission to be in charge, since an appointed board has one narrow focus/responsibility, which appears to be only about low rates. It is the City Commission’s broad integrated policies on taxes, energy, environmental quality, public works, housing, transportation, infill development, etc. that must work together, with long term thinking, to create Gainesville’s quality attributes that continue to attract national attention and have buffered us during this economic downturn.

 

The 30% of non-city customers not having a voice is a false argument. I keep hearing that 30% of the owners of GRU are being left out—account holders being confused with owners. Because we have a public utility, everyone does have a voice. Just because they can’t vote in the city, doesn’t mean they are shut out of meetings or not allowed to present their viewpoint or information.

 

I lived outside the city for my first nine years here and I was involved in opposing the proposed new coal plant. Others even more involved than I also lived outside the city limits, but we met with GRU management and staff. We attended city meetings and spoke— we offered research and ideas about conservation and health, — the only thing we couldn’t do was vote for City Commission, but we certainly were heard—and we don’t have that new coal plant either!

 

Most people in Florida and elsewhere not only don’t have a choice of their utility, they have no hope of a voice, because they are under a for-profit private corporation that could not care less what its customers have to say. You live with it or move. And because private utilities are beholden to their shareholders and quarterly performance, what is best for the community and community values are not part of their fiduciary responsibility or interest, so the community is more vulnerable and worse off.

 

The Tampa Bay Tribune reported Oct 12, 2013 a demonstration against Duke Energy where the crowd was out in front of Duke Energy’s downtown St. Petersburg office protesting a proposed settlement with the Florida Public Service Commission that permits the utility to recover more than $3 billion from 1.7 million customers for the nuclear plant that will not be built. Those customers were outside on the street, not in Dukes’ office, not able to have a voice at all!

 

Rates are also a red herring. Taking GRU away from direct governance by the City Commission will not automatically give people low rates or bills, and high rates do not automatically equal high bills. High bills are a housing issue, they are a wasteful habits issue, they are a lack of knowledge issue. They are a global issue of rising electric costs due to shifting to unconventional fossil fuels that are expensive to extract and process. They are an issue of leaky, non weatherized, or non-retrofitted buildings, and a lack of state and national financial and policy support for transitioning to renewable energy and rewarding conservation and efficiency. We tend to waste about 30% or more of our energy and water in the USA.

 

High rates can actually inspire people to learn how to quit wasting, and to seek out ways to lower their use and their bills. High bills hurt the poor and fixed income population, and I support substantial efforts to address the financial stress they are coping with, but that is a housing, lack of knowledge/wasteful habits, income inequality, health and poverty issue that is a systemic problem whether rates are high or low.

 

The cry for low rates distracts us from recognizing the immediate financial and health benefits we gain by implementing vigorous and comprehensive conservation and efficiency measures, and that keep us vulnerable to volatile fossil fuel markets and costs of transport from far away.

 

Please do what you can to oppose this bill, and protect our rights, and our options, as owners of GRU and citizens of Gainesville.

 

Thank you,

Nancy Deren,

volunteer with Gainesville Loves Mountains