Unlike most citizens of the United States, the residents of Gainesville own their own utility, Gainesville Regional Utility (GRU). In comparison with Jacksonville Electric Authority (JEA), which is the 7th largest utility in the country, GRU is modest in size. Progress Energy (now merged with Duke Power) is the nation’s largest utility, which serves portions of Alachua, Dixie, Gilcrist, Levy, Marion, and Citrus Counties. They are already charging their customers in Levy County for two nuclear power plants that may never be built.
In Gainesville, the contract with American Renewables to build a 100 megawatt biomass plant has been a constant irritant in the sides of GRU’s ratepayers. Combined with an over generous pension plan for city employees, this plan has the potential to cause serious fiscal harm for those who count on them for electric power. While the health and environmental reasons are more difficult to quantify, the business reasons are quite straightforward. First, the plant is highly leveraged. (Namely, GRU and the city have borrowed an enormous amount of money for its construction.) Second, the energy biomass is not competitive with natural gas at the moment. When the contract was signed with American Renewables in 2012, the price of natural gas was over $10.00/MBTU. Earlier this year the cost dropped below $2.00/MBTU. While the cost has risen to somewhat over $3.00/MBTU at the time of this writing (December 2012), the “hope” that it will rise much further is problematic because natural gas is in plentiful supply across the country and the southeast. Since half (i.e. 50 megawatts) of the power can be sold to the current ratepayers (at higher rates of course), the other half must be sold back out on the grid. Since the cost of the power generated by the biomass plant is approximately 50% higher than the spot market, there have been no takers as of this writing. Thus, the Gainesville City Commissioners are now having to deal with the problem of how to finance a plant with a large fixed cost and no income. For a subset of the multitude of links detailing this biomess, click on the some of the links listed below.
“We continue to oppose the development of biomass production as an alternative to solar and wind power. Biomass production depletes the environment by decreasing topsoil, using more water, fertilizer and diesel fuel than it is worth and creates more pollution.”
Excerpt from the 2003 Florida Chapter of the Sierra Club Water Policy Statement.
Full Florida Chapter Water Policy Statement statement:
- SSJ votes to oppose the GRU/GREC biomass power plant-March 13, 2010
- “We Told You So” by Ray Washington-Gainesville Sun July 2, 2012 op-ed
- Refinancing GRU debt
- Tick, Tick, Tick– A July 1, 2012 Gainesville Sun Editorial
- Gainesville City Commission Meeting June 21, 2012 (Move time slide to hour 5:00)
- Electrical Utility Rates Should Rise
- A Captive Ratepayer Speaks
- Energy Justice Network-Biomass Basics
- Up in Smoke, by George Wuethner-January 12, 2010
- Fired Plants generate Controversy-Justin Scheck, April 29, 2010
- Energy generated by sawmill biomass can’t compete.-Missoulian July 28, 2012
- Group Protests Biomass Outside City Hall-Gainesville Sun Article-August 2, 2012
- Citizen Comment at the August 2, 2012 City Commission Meeting
- Its all about one Thing: Money, by Ray Washington, August 10, 2012
- The biomass mess continues, by Thomas K. Young
- Massachusetts Tightens Rules, Wall Street Journal, August 17, 2012
- The Biomass Monitor–a blog
- The Sound of Silence, Gainesville Sun Editorial-August 18, 2012
- Everything is Bigger in Texas, including Biomass, Energy Justice Network, August 15, 2012
- Gainesville’s Water Future–op ed by Bob Knight, October 14, 2012
- Huge explosion rips through Europe’s first biomass power plant
- Ray Washington: It’s time for real negotiation on behalf of ratepayers, Gainesville Sun, December 31, 2012
- Austin Energy Users Foot Bill for Biomass Plant
In a more positive development for GRU, the Gainesville City Commissioners approved the nation’s first solar feed-in tariff in February 2009. This program is open to small, medium and large projects, but is capped at 4 MW per year. As of 2011, Gainesville has increased solar generated electricity from 328 kW to 7,391 kW. Solar energy now makes up approximately 1.2% of peak load energy (610 MW) in Gainesville.