Biomass plant again sparks City Commission debate


Published: Thursday, June 20, 2013 at 10:57 p.m.
Last Modified: Thursday, June 20, 2013 at 10:57 p.m.

Biomass-related issues were not on the City Commission agenda Thursday evening, but they still sparked commission debate, disagreement and two votes — neither of which passed.

First up for debate was the city's use of the current fuel charge on Gainesville Regional Utilities electric customers to build up a fund intended to limit the future rate increases for the first few years after the biomass plant comes online.

After critics of the biomass contract spoke during general public comment, Commissioner Todd Chase made a motion to adjust the fuel charge and, therefore, electric bills during the next three months in order to cap the fund at the amount GRU staff, during last summer's budget hearings, had projected it would reach at the end of this fiscal year — some $21.8 million.

"We planned on this amount. Stop there," Chase said.

The motion died 3-3, with Chase, Mayor Ed Braddy and Susan Bottcher in support and Thomas Hawkins, Lauren Poe and Yvonne Hinson-Rawls in dissent.

Poe said he did not want to vote on a "significant" issue that was not on the agenda with GRU General Manager Bob Hunzinger and GRU financial staff not present. Hawkins said the same and noted that the budget adopted last year did not specify a target amount or cap for the fund.

At the end of April, the fuel levelization fund stood at some $23.8 million, about $2 million above the amount projected last summer.

GRU has built up the fund over the past few years by charging electric customers above actual GRU fuel costs. But there had been no public discussion or vote on the fund until last summer's budget meetings for this fiscal year.

The practice of using the electric fuel charge to cushion rate increases then prompted allegations that the city had violated its fuel adjustment charge ordinance.

As a result, in March, the city attorney recommended the City Commission revise the ordinance to reflect the city's "desired rate practices" and to ensure that the utility's use of "industry standard rate tools are more transparent to the public."

The Regional Utilities Committee, which is now comprised of Chase, Braddy and Poe, is scheduled to discuss potential changes at a meeting scheduled for 5 p.m. Monday.

After the fuel levelization fund debate and vote Thursday night, Braddy made a motion that the city send a contract default notice to the company behind the Gainesville Renewable Energy Center biomass plant.

The city and the firm are currently in arbitration over the city's claim that two sales totaling an approximately 57 percent interest in the biomass plant should have triggered the city's contractual right to make a first offer to buy the plant. GREC has responded with a counter claim that seeks $50 million in damages

A default notice could lead the city to attempt to terminate the contract. Braddy said the city was limiting its legal options without sending such a notice.

Braddy's motion failed 5-1. Poe said he did not want to approve such a default notice without consulting with GRU's attorneys. Chase said the move was "unnecessary and redundant."

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