UF rejects GRU to build power plant; company hoped revenues would stabilize electric bills

Gainesville Regional Utilities will not get a contract it was seeking to build a plant to supply most of the University of Florida with power.

GRU was hoping the revenue from the project could help stabilize customers’ bills in the coming years.

GRU and Duke Energy, the two local electric companies, did not make the shortlist of companies that submitted proposals to build the Central Utility Plant on Gale Lemerand Drive.

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The Gainesville City Commission recently hired consultants to help the city's utility company submit a proposal to UF to build the new plant. They included: a finance partner, law firm and engineering and construction contractor.

“They were retained, but there will be no work to be performed,” said utility spokesperson Dave Warm in a text message on Monday.

The university expects to save more than $16 million a year in energy costs from the new plant, it said in a recent statement.

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

City Commissioner David Arreola said Monday that he was not displeased that GRU did not get the contract. He said UF should have, at the very least, first evaluated proposals for renewable energy, such as solar, to provide electricity to UF.

“I’m against any new fossil-fuel infrastructure, period,” he said. “I think that the UF idea in the first place is about 20 to 30 years outdated. We’ve had significant scientific research and studies that has shown for 50 years now we’ve needed to get off off fossil fuels. Here we are, 50 years later, still building fossil-fuel infrastructure.”

In an email dated Dec. 16, city commissioners were informed that GRU is not a finalist for the project.

“Unfortunately, I have received notification that GRU was not shortlisted by UF and will not proceed to the proposal phase of the Central Energy Project,” GRU General Manager Ed Bielarski informed commissioners.

He added that he was "extremely disappointed that the university has not given the utility the opportunity to continue, given our success with the South Energy Center, and the City/University partnership that is often spoken of."

"When I know more, I will communicate it with you all," Bielarski said.

Bielarski, who could not be reached for comment last week, included an attached email from a UF official explaining that GRU did not make the shortlist, but the university official does not divulge details explaining why.

Lisa Deal, chief procurement officer at UF, said in the email that the university's selection committee “took considerable time to read through and evaluate all responses received.”

“However, the response submitted by your group was not selected to move forward in the process,” she said.

Deal could not be reached for comment.

Mayor Lauren Poe said in a text message on Monday that city officials were disappointed to learn the news that GRU is out of the running for the contract.

“While I am disappointed that we will not be able to further our power supply partnership with UF, we knew that this would be a highly competitive process,” Poe said. “We will continue to work with the university on new opportunities to help them achieve their goal of 100 percent renewable energy and a carbon-neutral campus.”

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.

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.

UF's current electric plant 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.

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, UF says on a statement on its website.

“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,” the statement said.

There were 11 companies that responded to UF’s “invitation to negotiate,” with four chosen as finalists.

None of the finalists are registered with the state’s Division of Corporations and it is unclear whether they have ties to other electric companies.

The finalists are: Gator Campus Energy, Gator Campus Utility Partners, Gator Energy Services and Swamp Power Partners. Gator Campus Energy is a Delaware limited liability company that was formed on Oct. 18, 2021, records show.

The companies that put in proposals but were not chosen as finalists include: GRU, Duke Energy, Chesapeake Utilities Corp., Gator Energy Partners (Centrio), Gator Energy Partners (Engle), Green Gator Energy and Sustainable Gator Energy Consortium.

Nathan Skop, a local attorney and frequent commission critic who was a state Public Service Commissioner from 2007 until 2011, said Monday that even though GRU had a "fiduciary duty" to submit a proposal to build, operate and finance this plant, the incremental revenue stream generated from it “probably wouldn’t make a noticeable difference in lowering GRU electric rates and may have resulted in GRU issuing additional debt.”

This article originally appeared on The Gainesville Sun: GRU fails to make short list in competition to build UF power plant