Settlement would end lawsuit over biomass contract negotiations

Published: Tuesday, December 11, 2012 at 4:53 p.m.
Last Modified: Tuesday, December 11, 2012 at 4:53 p.m.

Biomass opponents would drop a lawsuit seeking to declare the city’s contract for the power plant null and void in exchange for a televised Gainesville City Commission meeting dedicated solely to the issue of the plant and the terms of the contract.

Those are the conditions of a proposed settlement agreement between local anti-biomass organization Gainesville Citizens CARE and city government. The City Commission is expected to vote on whether to accept the settlement agreement at its Dec. 20 meeting.

Gainesville Citizens Care, which is made up of local residents Jo Beaty and Lee Price, filed a lawsuit in April alleging that the negotiations leading up to the City Commission's May 2009 approval of a 30-year contract to buy all of the output from the 100-megawatt plant violated the Sunshine Law.

In a deposition, Price said the lawsuit was intended to make the city “abandon the project.”

The suit alleged that the contract negotiating team assembled by Gainesville Regional Utilities General Manager Bob Hunzinger was an “appointed advisory committee” and that its meetings therefore should have been publicly noticed and open to the public with minutes recorded.

The proposed settlement agreement notes that the city and the member companies of the Gainesville Renewable Energy Center, as the biomass plant is known, continue to dispute those allegations and admit no wrongdoing.

The proposed settlement agreement requires the City Commission to schedule a future, televised workshop on the biomass plant and the city’s contract to purchase power. Gainesville Citizens Care will be given a “minimum” of four hours to make a presentation. All documents and overhead displays that the group’s representatives include in their presentation would be shown during the televised broadcast of the meeting.

Representatives of GRU and GREC will be present to answer questions, and the City Commission will accept public comment but is under no requirement to vote or take any action on the plant.

A follow-up workshop also will be required if “all interested persons” present at the first meeting do not have an opportunity to speak.

Marcy LaHart, the attorney representing Gainesville Citizens CARE, said if her clients had prevailed at trial, the City Commission would have had the option to schedule a “cure” meeting and again approve the biomass contract.

“I think the settlement agreement actually gives us more than what we would have gotten if we had gone to court and prevailed,” said Marcy LaHart, the attorney representing Gainesville Citizens CARE. “My client will have a full public forum. If there had been a cure meeting, they could have limited public comment to three minutes each as they do at City Commission meetings.”

Al Morales, the chief financial officer for GREC, said the company entered the settlement agreement to avoid spending more time and money on litigation.

“We entered into the agreement to avoid the continued time and expense of litigation,” Morales said. “We nevertheless feel very strongly that there was no violation of the Sunshine requirements. We feel the whole process was handled properly.”

The biomass plant is rising up on the property of Gainesville’s Deerhaven Generating Station off U.S. 441. Construction is approximately 70 percent complete, and the plant is expected to go online in late 2013.

Numerous factors have changed since the City Commission approved the contract in 2009. Natural gas prices have dropped, making gas a far less expensive alternative at this time. Expected federal cap-and-trade legislation and a state requirement for utilities to have renewable energy portfolios have not come to pass.

Those factors have combined to make the upward pressure on rates greater than initially expected.

The City Commission and GRU are taking a series of moves -- including a bond refinancing,a potential arrangement to pre-purchase power and a hotly debated decision to build up a fund of more than $20 million through customer fuel adjustment charges -- to try to limit the initial rate impact to $10.56 per 1,000 kilowatt-hours in 2014.

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