The pursuit of a wood-burning biomass power plant that could generate 100 megawatts of electricity for Gainesville overcame a major hurdle Thursday.
After a lengthy debate, the Florida Public Service Commission approved the Gainesville Renewable Energy Center by a vote of 3-2.
The high-profile project is a step forward in supporting renewable energy development in the state, the commission decided in its need-determination hearing, despite uncertainty about its impact on rate payers.
I think this is the ideal opportunity to make a commitment to renewables that we have authority to do, said Commissioner David Klement, whose appointment was thrown out by the Senate last month and is in his last week in office.
The much-debated plant -- constructed, owned and operated by Massachusetts-based American Renewables -- has a 30-year contract to provide its biomass energy to Gainesville Regional Utilities, the city-owned utility corporation.
The commission delayed its vote on the project when it last came before members in February.
The city will not have to rely on an alternate energy source like the plant until 2023, a fact that prompted the commission to delay its decision when the city brought the project before it in February. The commission held the special conference Wednesday to assess the need for the plant and the project's cost-effectiveness.
Much of Thursday's debate revolved around the uncertainty of the project's impact on rates.
Staff told the staff commission Wednesday that the projects impact on rates was uncertain. Rates will rise by at least $13 if the project is approved, staff revealed.
The biomass plant could save rate payers as much as $448 million over 30 years if carbon regulation legislation is passed, allowing the city to hedge against the rising costs of coal and other energy sources.
If federal or state carbon regulation legislation is not passed, the project would have to raise rates to make up for a loss of $56 million.
Lewis Walton, director of marketing for Gainesville Regional Utilities, told Sunshine State News that the plant will remain a good deal for taxpayers.
If carbon legislation is delayed, theres still only a slight change, he said. As fossil fuels continue to rise, then we believe we will be more competitive with those rates and produce long-term savings for our customers.
Commission Chairwoman Nancy Argenziano, who voted against the plant with outgoing Commissioner Benjamin Stevens, said the unknowns of the project made her wary.
She said she could not decide if the project was cost-effective or a better choice than other forms of alternative energy. She said she personally supported renewable energy, but the new information discussed did not give her the information she needs.
Without those answers, I dont think that I can support the project, she said.
Others shared her concerns but pointed out that impact on rate payers was not a necessary consideration for the PSC in this case. Since GRU is a city-owned utility, it decides the rates, not the PSC.
I do believe it is appropriate to give deference to a local government that is closer to the people they serve, said commissioner Lisa Edgar.
Commissioners Klement, Edgar and Nathan Skop all voted for the project, saying the benefit of furthering renewable energy in the state outweighed the danger of higher rates.
Im very glad that the Public Service Commission has determined the need determination so the plans for our biomass plant can go forward, said Gainesville Mayor Craig Lowe to Sunshine State News.
Earlier in the meeting, Gainesville residents who opposed the project tried to get the PSC to formally recognize the federal Environmental Protection Agencys Greenhouse Gas Tailoring Rule, which was proposed this month. But it was rejected.
One of the people to introduce it was Paula Stahmer, a former chairperson of the Suwanee-St. Johns Group of the Florida Chapter of the Sierra Club. The city should expand conservation efforts and use other techniques to reduce energy use, such as installing meters in homes, she said.
"Instead, the city is planning to increase its customer base," she said.
The project has also been opposed by the current chairman of the group, Brack Barker. Besides concerns about the projects potential to clear-cut local forests, there are many questions about how American Renewables operates as a company, he said.
The project now needs to receive an air permit from the Florida Department of Environmental Protection, which must present the project to the governor and his cabinet.
Reach Alex Tiegen at Alex.Tiegen@gmail.com or (561) 329-5389
