Florida House Bill 1633’s possible impact on natural gas services offered by the city of DeFuniak Springs

OKALOOSA GAS DISTRICT current areas of service as listed on their website.

Story by STACY MARTIN 

On March 2, Florida Rep. Brad Drake filed a revision to House Bill 1633 (HB1633) titled: Okaloosa Gas District, Okaloosa, Santa Rosa, and Walton Counties. The bill revises Okaloosa Gas District’s territorial limits and service area to include all of Santa Rosa and Walton Counties providing exemptions to areas of each county already receiving gas services. The exemptions for DeFuniak Springs stated in the revisions of HB 1633 on lines 72 to 74, read: “the area within the corporate limits of the City of DeFuniak Springs and the existing customers presently served by the gas distribution system of said city.”  

Okaloosa Gas District currently serves all of south Walton and the city of Freeport, with a franchise line that ends 10 miles north of SR-20. The bill allows Okaloosa Gas District to take over the remaining county providing an exemption to the city limits of DeFuniak Springs and the areas outside the city limits where the city currently provides gas services.  

The city of DeFuniak Springs currently has a Memorandum of Understanding (MOU) with Okaloosa Gas District that sets boundaries for both for the gas territory and starts roughly 10 miles north of SR-20 on U.S. 331. In 2018, with the help of Rep. Drake, DeFuniak Springs city received $250,000 in appropriations to add gas lines for service below I-10; the farthest point south on the city’s gas line is Sherwood Rd off of U.S. 331 South. After those lines were constructed, it was discovered that the city had gone over the Okaloosa Gas District side of the franchise by a mile, as they were feeding gas to the Walton County fire station on U.S. 331. The MOU with the district notes that Okaloosa Gas would take on servicing the residential lines in that one mile while the city can have commercial gas services. Close to two years later, the city received an additional $500,000 in appropriation to expand their gas services outside the city limits to the north. The city has currently received a total of $750,000 in appropriations for its natural gas service expansion outside the city limits. 

DFS Mayor Bob Campbell notes some of the bill’s concerns, and questions why Okaloosa Gas District is making amendments to the bill to expand their territory instead of any additional MOU’s similar to the one currently held with the city and their territory. With Walton County as one of the fastest-growing counties in the nation and the city of DeFuniak Springs presently experiencing the rise of growth and development, problems with the bill’s language would stop the city from expanding its services outside city limits. The city is making plans for a significant increase in voluntary annexation, and HB 1633, as it is written, could bring potential issues for gas services in that area.  

“If they come in like this, they can keep us from growing, except within our city limits. We are trying to expand our boundaries and not be stipulated by presently served customers,” stated Campbell. 

On April 8, Campbell, along with City Attorney Clay Adkinson, participated in a virtual meeting with Rep. Drake, Okaloosa Gas District, and representatives from the city of Milton in Santa Rosa County. “We are willing to negotiate,” said Campbell. 

Line 73 of the bill puts restrictions on the city’s growth reading: “The City of DeFuniak Springs and existing customers presently served.” The city is interested in negotiating to change that language [existing customers presently served] to a physical territory. “DeFuniak is fixing to bust out in growth and development, and we don’t want to be competing with the gas company on every block every mile.”  

SOUTH WALTON and the city of Freeport are among the areas currently receiving natural gas services from Okaloosa Gas District.

Campbell said that Okaloosa Gas District addressed some concerns in the meeting, noting several citizens want service but can’t get it through the city,  “We rarely get phone calls asking for [gas] services that we can’t provide. It has happened, but it is rare.” said Campbell.  The conversation prompted Okaloosa Gas District, Rep. Drake, and the city to have further negotiations on Monday to hopefully put down territorial boundaries. “If they are willing to work with us and give us our territory, they can go anywhere outside of that,” noted Campbell. 

HB 1633 amendment will take over the additional county of Santa Rosa with exemptions to Gulf Breeze and the city of Milton.  

During Monday’s regular council meeting, Campbell informed the council and the public about the second meeting held on HB 1633 with Okaloosa Gas. Campbell stated that the meeting’s goal was to come to a territorial agreement that would allow the city to benefit from their natural gas services already in place. City Attorney Clay Adkinson said that they identify a section line that runs parallel with CR 192 that by agreement, everything from there and south is with in the city’s existing corporate limits and outside of our corporate limits to where their territory starts (10 miles north of SR-20) would be exclusive to the city of DeFuniak Springs.  Everything north of CR 192 to the state line, with the exception of the town of Paxton, would be a non-exclusive franchise, which would allow the city of DeFuniak Springs to develop and run service to that area but it would be on a first-come, first-serve basis between the city and Okaloosa Gas District. “We feel that is well outside where the city’s desire to develop would be within a 20-30 year plan,” said Adkinson.  

In addition, the agreement with Okaloosa Gas District would allow for an MOU to be met between the city and the gas district should there be any area that the city is not able to serve within that exclusive area, the city and Okaloosa gas will enter into an agreement or MOU to allow that to happen but will not be mandated by the Florida Legislature. Adkinson said that they believe the bill will be amended to reflect the agreement, and staff recommends the city support the language change reflecting the territory boundaries. Also, Adkinson notes that Walton County Board of County Commissioners will be appointing a Walton County representative to the Okaloosa Gas District board.  “This is very much in our favor provided this language is accepted, included, and adopted,” Adkinson said. .  

The Herald reached out to Rep. Brad Drake via email and asked about the bill’s impact on the city and state appropriations for expansion. Drake responded, “I will be proposing additional language to HB 1633 that will allow for expansion of gas services for either the City of DeFuniak Springs or to the Okaloosa Gas District, by allowing the Public Service Commission to determine which of the two can offer the most cost-effective product to the residents that may want to choose natural gas service delivery to their home. So, in a nutshell, whomever can deliver the gas in the most economical fashion and in the best interest of the public would be afforded the service opportunity. This is a win-win for the citizens. Regarding the $750,000 addition to the City of DeFuniak Springs for gas expansion: This was a one-time appropriation for the City to enhance their service capacity. The City can not, nor should not, rely on state government to become the sustaining component of their residential services plan for those who choose to live within its chartered territory. Otherwise, its government becomes more adaptive to communism or socialism rather than capitalism. The city residents can either wait for the City of DeFuniak Springs to offer expanded gas services, or they can allow for an existing provider to offer it. This puts the competition in motion for the two entities to make a case to the PSC for the most affordable, reliable, and economical gas delivery for its residents and customers.”

Regarding the need for legislative action on the Okaloosa Gas District territory expansion as opposed to a contract or MOU, Drake responded: “Nothing would prohibit any partnership agreements between the two entities. There have been agreements in the past between the two entities. However, for territory expansions to occur, the law has to prescribe it – thus the necessitation for a bill.”

HB 1633 is currently in the State Affairs Committee of the Florida House of Representatives.