Millions of Americans in Florida could see changes to their utility bills after Governor Ron DeSantis signed a new utility law on June 11. The new law is designed to stop certain extra fees, known as surcharges, that some city-run utility companies charge customers.
The changes will not happen immediately because the law will take effect on July 1, 2027, as per Florida Politics. The law applies to municipal utilities, which are utility services operated by cities and towns. It covers water, sewer, natural gas, and electricity services provided by municipal utilities.
Florida utility bill changes
One of the biggest changes is that city-run water and sewer utilities will no longer be allowed to charge a 25% surcharge to customers who live outside city limits, according to Florida Politics. A surcharge is an extra fee added on top of a customer’s normal utility bill.
The law also says a utility cannot charge the extra fee if the treatment plant providing the service is located inside the city receiving the water service. The legislation came after concerns involving North Miami Beach and Miami Gardens, where residents were paying higher water bills because of a surcharge arrangement.
25% water surcharge ends
A city study found that North Miami Beach was adding a 25% surcharge to water supplied to Miami Gardens from the Norwood water treatment plant, as noted by Florida Politics. The Norwood water treatment plant is located within Miami Gardens city limits. Even though the plant was inside Miami Gardens, customers there were still being charged the additional 25% fee.
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The surcharge affected around 130,000 water accounts that were considered outside-city customers, according to another Florida Politics report via The Sun. The extra fee increased monthly water bills for thousands of residents and businesses. The surcharge reportedly generated about $10 million in revenue each year. Before signing the new law, DeSantis had vetoed an earlier version of the legislation.
Ron DeSantis utility law
The governor said the previous bill would have forced state officials in Tallahassee to act as a referee in a dispute between two local governments. DeSantis argued that any solution should apply across Florida rather than focus on a single dispute between municipalities. The final version of the bill was rewritten to create statewide rules for municipal utility surcharges.
Miami-Dade County Commissioner Oliver Gilbert III welcomed the signing of the law. Gilbert made the surcharge issue one of his main priorities while serving as mayor of Miami Gardens. After the bill was signed, Gilbert called it “a victory for the people of Miami Gardens.” He said residents and businesses had been paying more for water service simply because of where they lived, as noted by The Sun. While the law removes many surcharges, it does not eliminate every surcharge immediately.
Lower water bills in Florida
Some utilities will still be allowed to keep charging certain surcharges if they are needed to meet obligations tied to older financial agreements. These financial agreements include covenants and bonds that utilities use to fund projects and infrastructure. The exception only applies to agreements that were already in effect on July 1, 2024.
The surcharge must also still have been in place on March 1, 2026, for the utility to qualify for the exception. Utilities using this exception cannot keep the surcharge forever. Any remaining surcharge covered by the exception must be phased out by July 1, 2029. If the utility’s debt obligations are paid off before that date, the surcharge must end sooner.
The new law is expected to reduce utility costs for many Floridians who have been paying extra fees on water and sewer services simply because they lived outside city boundaries, as per Florida Politics. For customers affected by the current surcharge system, the law could mean lower utility bills once the changes begin in 2027.
