Wednesday, February 10, 2010

PSC almost knocks down Gainesville biomass plant


Conceptual rendering of American Renewables proposed plant in Gainesville


The Florida Public Service Commission on Tuesday appeared ready to vote down a proposed biomass power plant in Gainesville before city officials asked the PSC to delay the vote.

Gainesville officials say the 100-megawatt American Renewables LLC plant will provide needed renewable energy and reduce the city's dependence on coal plants, which contribute greenhouse gases.

But three of the five PSC commissioners said they would have difficulty voting to declare that the plant is needed as required by state law.

The city won't need the power produced by the plant until 2023, even though the plant would begin operating in 2013, according to the PSC.

City officials hope to sell power to other electric utilities and benefit from a federal investment tax credit and greenhouse gas legislation pending in Congress.

But if the city can't sell the power, the plant will cost $100 million during the 30-year life of the project, according to the PSC.

"They are taking a huge risk with rate-payers' money here," Commissioner Nathan Skop said. Still, he and other commissioners praised Gainesville for planning ahead for its power needs -- perhaps too far ahead.

The PSC delayed action at the request of Gainesville officials, who said they wanted to present additional information before the commission voted at a later date.

Mayor Pegeen Hanrahan said after the meeting that building a smaller plant may not be as cost-effective. She said the city is on a tight deadline to take advantage of the federal tax credit.

"That makes a substantial difference in the economics of the project," she said. "To try to remain on track enough that we can still qualify for that 30 percent tax credit."

She also said the city had delayed its need for the new power plant through an aggressive program to promote solar energy and conservation.

(Story copyrighted by Bruce Ritchie and FloridaEnvironments.com. Do not copy or redistribute without permission.)

2 comments:

Carl said...

Money illusion. Another instance of the federal government encouraging mal-investment by distorting relative prices via the tax code. This might be a good idea in time, but if it's not economically feasible without tax grants, then it shouldn't be done at all. If it is feasible without the grants, then do it without grants. Projects that don't stand on their own are very likely to fall down on top of taxpayers and ratepayers. See Fannie Mae/Freddie Mac.

Anonymous said...

In addition to the concerns the PSC has noted, with which I agree completely, I am also one more voice opposing the biomass plant from both a methodological and local financial perspective.
I believe it is very short-sighted to invest or commit contractually to this technology. My primary objection is environmental because I do not believe burning forest product or forest waste (green wood) is thermodynamically efficient nor will it be "free" of other negative polluting impacts. Over the planned unit life of the plant, we will inevitably be harvesting wood and waste from the forest themselves, which greatly alters
the nutrient recycling capability of the system. This "starving" of the forest will lease to either an increase in the distance over which wood is hauled, making it progressively less efficient, or application of fertilizer on a massive scale.

To me, the preferred alternative is natural gas. Only the most naive individuals can believe that drilling off the Florida coast will be put off
indefinitely. The resource off of Florida is really a gas resource, not a liquid resource, and will make natural gas in Florida the most economical
alternative. In addition, looking down the road to the installation of more and more industrial scale fuel cells increases the value of starting now to
establish our community as a natural gas community.

Lastly, protections afforded us under the contract for the biomass plant will prove, like the waste collection contract, to not provide any guarantee of
performance or methodology. We will essentially be held hostage by this agreement and the "for profit" company will be the only winners. I honestly believe that in 20 years GRU will have been forced to buy them out. If GRU is to be a
long-term source of revenue for the city, then GRU should be able to mange any new facility and any "profits" retained in our community, BUT not until it is internally, financially justified. We see this now in increased rates consequent of increased efficiency in the community. Conservative use remains the preferred solution.

r