Update (6/21/2012): Despite our best efforts to cover the biomass issue accurately, the following article may have several mistakes. For details, please read Robert Brinkman’s comments below. The Fine Print’s editors will be available in September to analyze the issue more closely and, if necessary, publish corrections and/or retractions. Stay tuned for a detailed article this Fall analyzing the pros and cons of Gainesville’s future biomass facility. If you have a strong opinion about this issue and would like us to include your perspective, please send your comments and/or contact information to firstname.lastname@example.org (or feel free to comment below).
In 2009, Gainesville officials approved plans for a new biomass energy plant, an up-and-coming energy source that the city’s utility company touts as both renewable and carbon neutral. The plant will turn scrap trees and agricultural products into fuel. It’s slated for completion by late 2013, at which point electricity rates are predicted to rise in order to compensate the plant’s building and production costs.
The 100-megawatt Gainesville Renewable Energy Center (GREC) was designed for Gainesville Regional Utilities (GRU) by American Renewables, a Boston-based conglomerate. The Gainesville City Commission voted to bring the plant to Gainesville in 2010, GRU representative Katherine Weitekamp said, and construction began in 2011—two years after American Renewables officially signed the contract with GRU. With the construction of the plant now well underway, residents will soon face rising electricity rates.
Over the past year, rates have already begun to rise, unrelated to the biomass plant. These hikes are mostly the result of increased regulatory requirements and a slowed economy matched against rising costs, according to GRU’s 2012 budget proposal. Consumers are using less water, for example, so the City Commission voted last summer to increase water rates by $1.26 per month for the average consumer.
In 2009, GRU released predictions regarding the rise in utility rates related to the biomass plant. At the time, some thought it was too early to accurately gauge how the plant would affect prices, but since then, newer estimates have remained roughly the same. GRU and American Renewables maintain that the initial hike will come to roughly $10.56 per month for the average consumer— the result of a one cent per kilowatt-hour increase. This will become effective once the plant is operational. In order to keep the price of biomass competitive with that of coal and natural gas, this increase is projected to taper off to about $5.12 per month by 2019.
GRU estimated the increase in utility rates based on an average consumption of 1,000 kilowatt-hours per month. The U.S. Energy Information Administration cites the national consumer average is actually 958 kilowatt-hours per month. And according to GRU, the average usage in Gainesville is 813 kilowatt-hours per month. The figure used in GRU’s calculated rate increase, however, does not make a distinction between apartments and single-family homes.
To ease some of the financial burden on residents, Gainesville expects to receive tax credits from the 2009 Stimulus Act.
“The tax break wasn’t missed,” said Pegeen Hanrahan, Gainesville’s former mayor and strong biomass advocate, “the plant is on track to receive 30 percent from the federal government.”
Initially, GREC construction will create 350 temporary jobs. Roughly half of these jobs will be filled by local residents, according to American Renewables. Once production is completed, the plant is expected to create 45 new jobs on site and 160 periphery jobs within the forestry sectors.
In the course of the 30-year contract, the natural gas and coal burning energy production plants that are currently in use – Deerhaven Units 1 and 2 – will be phased out in 2024 and 2031. As they are decommissioned, Gainesville’s reliance on the biomass plant will grow.
Despite GRU’s claims that the biomass plant will be carbon neutral, the EPA is still unsure that it really is a “green” form of energy. Currently, the EPA is giving all biomass plants a “three-year pass” while studies are done to determine if the gas emissions from the plants are linked with climate change. Gainesville’s plant will fall under this pass’ umbrella and consequently will not have to apply for permits under the EPA’s Clean Air Act. But while permits may be set aside for the time being, GREC’s original plan did have to be altered to comply with new Maximum Achievable Control Technology (MACT) regulations.
MACT is an annex of the EPA that deals with the combustion of hazardous waste. These regulations, which came about at the end of 2010, resulted in a remodeling of the future plant’s filter system— the “baghouse”—in order to catch smaller emission particles. This change added $10 million to the plant’s construction costs.
The Union of Concerned Scientists, a nonprofit proponent of green and sustainable energy, goes beyond the EPA’s uncertainty, stating that biomass has “environmental risks that need to be mitigated.”
To determine carbon neutrality, the amount of emissions is examined within a certain time frame. According to the EPA, carbon emissions could be argued as neutral if “carbon emitted is offset by the uptake of CO2 resulting from the growth of new biomass.” This growth of entirely new forests, however, takes many years, while carbon emissions from the plant itself are released each day.
Despite ongoing debates over the carbon neutrality of biomass, the Gainesville plant is well on its way to opening. According to their contract, American Renewables will own GREC for the first 30 years, and then GRU will manage it.
However, the plant may not last that long. The lifespan of the average biomass plant is about 30 years, after which it typically requires repairs and updates. So far, no such maintenance plans have been made for the Gainesville plant.
If it makes it through 30 years, American Renewables will hand off the biomass plant to GRU, which will be left to decide how to manage either the plant’s decommission or renewal.
To see how the rate increases beginning in late 2013 will affect your monthly GRU bill, turn it over and find the electric consumption for the month. Then multiply that number by 6.1 cents.