Biomass plant will be fully operational soon

Published: Wednesday, September 11, 2013 at 3:52 p.m.
Last Modified: Wednesday, September 11, 2013 at 3:52 p.m.

Despite being arguably the most controversial issue in the city of Gainesville in the past 20 years, the 100-megawatt biomass power plant just north of Gainesville will soon be fully operational.

Bob Hunzinger, general manager of Gainesville Regional Utilities, said the plant has been doing test runs and will be ready to go in two months.

Now that the plant is built, its owner, Gainesville Renewable Energy Center Inc., wants to sell the plant. On Aug. 23, GREC officials sent a letter to the city and GRU stating their intentions to sell the biomass plant to a third party. However, their contract with the city and GRU requires them to give the city and GRU a chance to buy the plant. The clause in the contract is known as the "right of first offer," and the city and GRU are currently exploring that option.

Hunzinger said the contract with GREC gives the city and GRU a 60-day period, which ends on Oct. 31, to purchase the facility. He also said GREC officials, who sent an email Saturday night indicating the offer still stands, has offered to pay GRU and the city's legal expenses incurred in a recent arbitration and mediation process, a total of about $1.5 million. Also, Hunzinger said GREC has set Sept. 23 as the deadline for the decision to be made.

"It's really up to the City Commission if they want to make an offer to purchase the plant or not," Hunzinger said.

Getting to the point where the plant will be fully operational has not been a smooth process because there are many people who staunchly oppose the 30-year contract the City Commission approved in May 2009 to buy all of the electricity from the $500 million plant built on land near the GRU Deerhaven Generating Station at 10001 NW 13th St.

Although the voices of opposition have made some noise, several candidates running for election to the City Commission on anti-biomass plant platforms were defeated last year at the polls. Nathan Skop loss to Commissioner Lauren Poe in a runoff election in Feb. 2012 and attorney Ray Washington lost his bid to represent District 1 in an election in January 2012. Commissioner Yvonne Hinson-Rawls won that election.

The biomass plant, which will be fueled by wood waste transported to the site daily, was built because city officials realized that GRU will need increased fuel-generating capacity at some point in the future, and investing in it now meant the city will save in the long run because construction costs are expected to continue rising.

In 2002, the City Commission authorized a joint study of solid fuel options in partnership with other utilities, and throughout the next six years, the commission completed a host of steps to determine what would be the best way to invest in new energy fuel production.

Some of those steps included signing the Mayor's Climate Protection Agreement in June 2005 and listening to 15 presentations in May 2007 about possible fuel-generating options.

Below is a snapshot of the history surrounding the biomass plant:

* May 2008: Commission authorizes Hunzinger to finalize an electric power generating contract with Boston-based Nacogodches Power LLC. to build the biomass plant. Nacogodches later became GREC.

* May 2009: Commission votes to approve a 30-year, $3 billion contract with GREC.

* March 2011: Construction begins on the project.

* April 2012: Gainesville Citizens Care Inc. files a lawsuit in Circuit Court, alleging the contract should be voided because it was signed in violation of the Florida Government Sunshine Law. The lawsuit alleges GRU officials held meetings in 2008 and 2009 about the contract without giving public notice.

* December 2012: Commission votes 4-3 in favor of a mediated settlement agreement with Gainesville Citizens Care Inc.

With the biomass plant coming online in two months, utility bills will increase beginning Oct. 1 by about 7.3 percent across all services, based on standard industry comparisons, Amelia Bell, a GRU spokeswoman, wrote in an email.

"The key reasons for the increases are declining sales over the past several years and the addition of a new renewable generation resource, biomass energy," Bell continued. "GRU has taken several steps to mitigate the effect of these factors on customers, including refinancing existing debts and cutting its original 2014 budget by $10.8 million."

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