Envelope and chemical plants say high electric rates are pushing them out
As Gainesville considers offering incentives to bring more jobs to its east side, two manufacturers there say the city’s high cost for electricity threatens to push them out.
City commissioners have pitched the idea of re-establishing an “enterprise zone,” which would cut development fees by 50 percent in areas east of 13th Street that encircle the core residential districts of east Gainesville.
The hope is to spark economic development, but power rates from the municipal utility may prove a bigger hurdle.
Gainesville Regional Utilities’ rate for commercial electricty is at or near the highest in the state. A statewide comparison of 2016 rates by Florida Power and Light indicated that GRU’s rates are more than 30 percent higher than the state average.
So the city is also looking to offer a special commercial rate structure to those within the enterprise zone to persuade businesses already there to stay put and perhaps coax new businesses to consider locating there. But today, just two businesses meet the requirements for the discounted rate.
Both Double Envelope Corp. and SiVance, a chemical manufacturer, have said they are considering leaving or expanding outside of Gainesville because of the cost of electricity here.
A new rate structure that would help them is expected to go before the commission sometime in the spring. The proposed enterprise zone will go before commissioners Dec. 7 and again in January.
Wayne Honeycutt, general manager of Double Envelope, an envelope manufacturing business at 2500 NE 39th Ave., has gone before the commission several times in recent months.
“If something doesn’t change with the GRU commercial rates then we will be forced to move,” he said in September.
Double Envelope, a 68,000-square-foot facility, has been in Gainesville for 46 years and has about 85 employees who make an average salary of $48,000. According to GRU, the company has paid $678,000 in utilities over the past 12 months. Electricity makes up most of that amount at $665,000, using a monthly average of 438,000 kilowatt hours (kWh).
Over the last few months, the city expanded the enterprise zone to now include Double Envelope, which would allow the company to qualify for a 20 percent base-rate reduction on its electric bill for the next eight years.
Honeycutt has pushed for a 25 percent discount for 12 years, though…