Thomas K. Young: A failure of plant's magnitude must have consequences
Published: Saturday, January 18, 2014 at 6:01 a.m.
Last Modified: Thursday, January 16, 2014 at 3:35 p.m.
Joe Little's Jan. 5 column in The Sun deserves a response. So much of it was just plain wrong.
Former Gainesville Mayor Pegeen Hanrahan, testifying in support of the biomass plant before the Public Service Commission, said that “we are keenly aware of our fundamental commitment to provide reliable electric service at a reasonable cost.”
There is considerable evidence to suggest plant supporters also thought this project was their contribution in the battle against global warming, regardless of economic risk.
Little explained that a public utility is just like a private utility except the “earned profit” goes to support the city and certainly not to “enrich” private shareholders. He stated that we have input since they are elected officials, but he didn't mention that nearly a third of Gainesville Regional Utilities customers are not residents of Gainesville and are thus under the control of an unregulated monopoly.
Moreover, he neglects to mention that the Public Service Commission tightly regulates the investor-owned utilities while GRU is largely unregulated. Based on the most recent attempt at annexation, it would appear that most of the people living outside the city prefer it that way.
I suspect that a large majority would prefer a regulated public utility even if their reduced rates would be “enriching private investors.”
This overwhelming rejection is a testament to the city's well-deserved reputation for financial mismanagement. Certainly these customers would welcome the opportunity to negotiate with other providers for competitive rates, just as the University of Florida does.
GRU ratepayers are set to endure the consequences of the worst-case scenario for the Gainesville Renewable Energy Center — a scenario discussed at length at the Public Service Commission and a scenario that is likely to cost the ratepayers and citizens of Alachua County more than $1 billion dollars over the next 30 years.
GRU has moved to mitigate the damage with a costly bond refinancing that will saddle future budgets with increased costs and a questionable retention of overpayments they will return in an equally questionable attempt to hide (for a while) the true magnitude of this debacle. Meanwhile, the city plans to receive increased “monopoly profit” from the utility.
Remarkably, Little alleges there is no evidence of bad management and cites as his authority the Chamber of Commerce that was also complicit in this disaster. Nancy Argenziano, former chairwoman of the Public Service Commission, was an expert who had no ax to grind. (She weighed) all of the facts and decided to resist the withering political pressure brought to bear by the City Commission, the forestry industry and, yes, the chamber. After a 3-2 decision in favor of GREC, she spoke out for the record:
She chastised her fellow commissioners for succumbing to raw political power: “At worst (the approval) clumsily attempts to avoid political consequences for opposing a project backed by a municipality and key legislative and executive officials.”
She had a different take on the difference between municipal and private utilities: “There is apparently a demanding standard for investor-owned utilities, and a significantly slacker standard for municipalities.”
And finally she summed up the reasons why it would be a disaster: “I would have been more amenable to the project if risk-shifting mechanisms were available to prevent the entire risk from being borne by ratepayers. But there is no need (for the biomass plant) and there are no protections.”
A failure of this magnitude must have consequences, both to give relief to those who have been harmed and to set a cautionary example to municipalities that might be tempted to act in such a reckless fashion. The City Commission that bears responsibility for this debacle should not be allowed to retain monopoly rate-setting powers over already abused ratepayers.
Either an independent authority or removal of rate-setting power to the Public Service Commission is essential to restore public confidence and insert an impartial broker into a situation ripe for exploitation by a now financially desperate city.
Thomas K. Young lives in Gainesville.