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After Long Debate, Now Comes Bargaining with Biomass Plant Owner

After Long Debate, Now Comes Bargaining with Biomass Plant Owner

The Gainesville City Commission’s seven members took their time over multiple meetings late into the night deciding what to do next about the new biomass plant.

When it was over, the commission voted 4-3 to offer a relatively low price of $400 million to buy the plant from its builder, Boston-based Gainesville Renewable Energy Center. Despite the decision, the future of the plant (which is now operating in a testing phase, amid complaints about noise, dust and air pollution), is uncertain.

The only thing that the commission vote on Thursday (Oct. 17) did was authorize a team of city officials, with Commissioner Randy Wells participating, to negotiate a potential deal with GREC and bring it back to the commission for final approval.

On Thursday, the commission heard GRU staff, led by General Manager Bob Hunzinger (who has just announced his resignation and will not be part of the negotiating team), clarify information about the pros and cons of the purchase.

The public also had its say. The critics of the current agreement between the city and GREC adamantly insisted that buying the city out of the deal was wrong.

Commissioner Susan Bottcher was puzzled. “The same people who told us to get out of the contract are now saying don’t buy the plant,” she said. “Buying the plant is essentially getting out of the contract.”

As midnight approached, Commissioners Wells, Yvonne Hinson-Rawls, Lauren Poe and Thomas Hawkins voted “yes” on making the offer, saying the potential benefits outweighed the risks.

A savings to customers was the major benefit that staff and about a dozen consultants had outlined throughout the meetings on the topic.

For the purpose of illustration, the staff had used a purchase price of $620 million, not the final $400 million the commission is offering, in many of its scenarios about the economic impact.

Under city ownership in a $620 million scenario, the impact would be $4.33 per month in the first year for a customer using 1,000 kilowatts, the amount the staff consistently uses for illustration, Hunzinger said.

That’s $9.15 less than the $13.48 than is now projected for the first year, and the savings would be even greater with a lower purchase price. “The savings is not a drop in the bucket,” Hinson-Rawls said.

In voting “no”, Mayor Ed Braddy and Commissioners Todd Chase and Bottcher, said the risks were too high to make an offer.

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They noted the following risks:

  • The bugs are still being worked out of the plant
  • Buying the plant will increase the city’s debt
  • The plant faces potential lawsuits over noise and dust
  • Federal regulators may require additional costly air pollution controls

“We did not spend enough time on risk to justify going ahead,” Braddy said.

The commissioners in the majority responded that concerns about such issues would be addressed as part of the city’s due diligence during the negotiating period.

“We spent a great deal of time on risk at meetings,” Poe said. “We talked ad nauseam about them.”

 

 

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