Gainesville Regional Utilities (GRU) received the go-ahead Thursday to move forward with a bid to build a new power plant on the UF campus.
The City Commission voted 5-1 to approve GRU creating a proposal to build a central energy plant on Gale Lemerand Drive. The natural gas plant would provide steam, chilled water and electricity to the UF campus, according to the university’s invitation to negotiate.
GRU, if successful, would design, finance, build and operate the central energy plant. However, GRU must first qualify for a shortlist of potential bidders on the project.
Ed Bielarski, GRU’s general manager, told the commission that getting a team in place to make the shortlist would cost no more than $200,000 and would involve signing agreements with financial partner JP Morgan, engineering procurement and construction contractor Frank Lill & Sons, and outside legal counsel Holland & Knight.
Money to cover the costs of getting on the shortlist and preparing a bid initially would come from salary savings from current open, unfilled positions at the utility, he said.
If the city utility company makes the shortlist, it would cost them an estimated additional $600,000 to $1 million to prepare a bid, Bielarski said.
GRU would return to the commission in December to authorize the next step if they’re shortlisted.
Most of the commissioners supported GRU making a bid for the project even though it would require the utility to invest up to $1.2 million in the proposal process.
“UF partners with us and that money stays here in our community and funds projects for our neighbors or it goes to an out of state applicant and we never see that money again,” Commissioner Reina Saco said.
The university currently gets steam from an on-campus plant run by Duke Energy. The contract with Duke runs out in 2027 at which point the existing plant will be decommissioned.
The city commission has been moving toward renewable energy sources for GRU, but authorized GRU becoming involved with the natural gas powered plant.
“The power plant is going to happen, no matter what,” Commissioner Adrian Hayes-Santos said. “If it’s going to happen no matter what, I would like for those tens of millions of dollars in revenue to stay local. If it stays local and comes back to the city, that directly goes to lowering the rates, making it cheaper for everyone in our community to purchase power.”
The city is hoping GRU’s ongoing relationship with UF helps out their potential bid.
“UF is GRU’s number one customer,” Mayor Lauren Poe said. “…Who better to help the University of Florida achieve their sustainability and carbon reduction goals than GRU.”
GRU also built and continues to operate the South Energy Center, which serves the UF Health South Campus. The South Energy Center provides electricity, chilled water, and steam as well as emergency power to the hospitals on the South Campus.
“It doesn’t mean we’ll get [the final contract but] I think this opportunity is a significant one for our entire community,” Poe said.