Gainesville Regional Utilities eyes University of Florida power contract

Gainesville Regional Utilities wants to build a plant to supply most of the University of Florida's electricity, with the revenue helping to stabilize customers’ bills in the coming years.

The Gainesville City Commission on Thursday is scheduled to vote on hiring firms to help the city's utility company submit a proposal to UF to build the new Central Utility Plant on Gale Lemerand Drive. They include: a finance partner, law firm and engineering and construction contractor.

The university expects to save more than $16 million a year in energy costs from the new plant, a statement on the university’s website says. UF will be soliciting proposals from other energy provides as well as GRU.

But the natural gas-fired plant UF has endorsed would be a step backward for green energy policy, student protesters and environmentalists have said.

In June, the UF board of trustees approved of the Central Energy Plant Project to the dismay of some green-energy advocates who want the university to consider renewable energy instead, particularly solar.

UF says on its website that the university carefully weighed its options before deciding to go with the gas-fired plant, which will be UF's largest source of energy for the coming decades.

“Prior to moving forward with a plan, technology options were compared by UF’s team for costs, known energy requirements, local impact, environmental impact and construction and timeline feasibility,” UF's statement said. “Combined heat and power was selected as it provides the best overall solution while establishing a baseline for future integration of other energy distribution concepts. This results in an efficient, resilient, long-term model for meeting the needs of the university.”

The campus currently receives steam from Duke Energy's cogeneration plant, which is responsible for the distribution network that connects a majority of the buildings on campus for steam use.

The facility has been in operation for 25 years and is nearing the end of its service life. It will be decommissioned by the end of 2027.

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On Sept. 24, about 50 student protesters held a rally at the corner of University Avenue and 13th Street demanding that UF halt the plans for the new natural gas-fired energy plant.

Makenzie Griffin, a UF student who is the president of Climate Action Gator, said Wednesday that there should be no excuse for UF not using renewable energy, like solar, to generate its campus power.

Griffin said it might cost more to generate power by solar, but UF should do it anyway.

“We think that UF has plenty of land and plenty of building space on top of the roofs to put the solar panels,” she said.

Griffin said when natural gas is burned it releases greenhouse gases, contributing to climate change. “Most likely this (methane) is going to be from a fracked source,” she said.

She said the University of California is using solar as a major source of power generation on its campus, and UF can and should follow suit.

According to a recent press release from the University of California, nearly half of the university's electricity came from green power sources in 2020, defined by the EPA as the renewable energy sources that provide the highest environmental benefit, including solar, wind, geothermal, biogas, eligible biomass, and low-impact small hydroelectric sources.

Isabel Muir, campus organizer with Florida Public Interest Research Group, said she hopes the University of Florida reconsiders its plans to move ahead with a natural-gas fired energy plant.

“I think it’s ridiculous,” she said.

She said UF — which was recently ranked No. 5 in a recent U.S. News & World Report of the nation's top universities and located in a state where climate change is a daunting problem — has a unique opportunity “to take real action and set an example for other schools in the state and throughout the country.”

“And instead, they are going to build a gas plant, pretty much eliminating any opportunity for them to transition their energy usage to anything remotely near renewable energy,” she said.

Gainesville Mayor Lauren Poe said Wednesday that he agrees that UF is going to have to significantly rely on solar power to reach its carbon-reduction goals.

“But one of the big challenges that UF has is that they need steam to heat and cool all of the buildings on our campus,” he said. “And that is a byproduct from a more traditional approach. That is sort of their immediate challenge.”

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He said UF made the decision to move forward with the gas-fired plant approach and GRU is simply replying to an invitation for different companies to submit proposals.

“We are definitely benefiting from participating in that process,” he said. “It certainly makes sense to keep those dollars local that will be reinvested in our community. That’s going to pay local workers. We’re going to have a much better direct working relationship.”

Poe said UF is also more likely to achieve carbon-reduction goals and increase renewable energy by having GRU as a partner rather than teaming up with a national or international company.

“We’ve shown, and continue to be committed, to renewable energy, and so I think we are the perfect partner for UF looking into the future on how to achieve our mutual goals of a carbon-neutral Gainesville,” Poe said.

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To submit a competitive proposal, the city is planning to hire several experts. The city commission on Thursday will decide whether to hire JP Morgan as its finance partner. The firm would be entitled to $2.25 million if GRU is the winning proposer, but nothing if GRU isn’t selected.

The commission is also scheduled to voted on whether to hire Holland & Knight as outside counsel to assist in the negotiations and bond issuance. "If GRU is chosen as a short-listed proposer, legal fees are estimated between $300,000 and $600,000," the staff report says.

The commission is also scheduled to vote on whether to enter into a contract with the power plant contractor and engineering firm, Frank Lill & Son.

This article originally appeared on The Gainesville Sun: Gainesville Regional Utilities eyes UF power contract