Photo: GRECThe Gainesville Renewable Energy Center is now under construction.
Paying the Price
In 2009, when the Gainesville City Commission entered into a 30-year contract to buy up all the electricity generated by a private, 100-megawatt biomass plant, it seemed like a win-win for the economy and environment alike.
Gainesville Regional Utilities, the city-owned utility that serves 92,000 customers, had originally planned a new coal plant. But public concerns over coal, as well as the specter of cap-and-trade taxes at the federal level and an anticipated requirement from the state that utilities balance energy portfolios with renewables, pushed the utility to alternatives. Gainesville ultimately settled on the biomass plant — to be fueled by a million tons a year of wood residue from the area’s considerable forestry industry and municipal wood waste — along with one of the most progressive solar programs in the nation.
American Renewables, a joint venture of Baycorp Holdings, Energy Management and Tyr Energy, won the bid to build the $394-million Gainesville Renewable Energy Center, now under construction off U.S. 441, about eight miles north of downtown.
Supporters thought it would provide long-term stability in energy costs. But natural gas prices have fallen 20% since 2009, burning a hole in that assumption.
When the city approved the deal, the utility expected to be able to use half of the energy and sell the rest on the market, hiking the average monthly bill by $10.56. Meanwhile, with neither federal cap-and-trade nor a state renewable energy standard having materialized, GRU will have among the highest energy rates in the state.