Nathan Skop: Heavily-redacted contract clouds GRU solar deal

OPINION

BY NATHAN SKOP

I am writing in response to the opinion piece, “Solar deal is all-around win for GRU customers,” written by Gainesville Regional Utilities (GRU) General Manager Ed Bielarski and published in The Gainesville Sun on June 16, 2020.

In this latest installment of GRU propaganda, paid for by GRU customers who are burdened with some of the highest electric rates in the state of Florida, Mr. Bielarski claims that GRU customers a getting a great “deal” with a “respected partner” on the 20-year solar Power Purchase Agreement (PPA), citing the same talking points that GRU used to justify the biomass contract a decade earlier.

What GRU (Bielarski) conveniently fails to mention is that the Origis 20-year solar PPA is another heavily-redacted contract. Just like the redacted biomass contract, GRU customers will never know the actual cost ($/MWh) being paid for this unnecessary solar power because GRU management once again sided with the out-of-town developer rather than demanding full transparency for GRU customers who get stuck paying the bill for this City Commission mandate.

Like a mindless sheep, GRU management has allowed Origis to hide behind a broad and overreaching trade secret claim regarding the heavily-redacted bid response and the proposed 20-year contract. As one of many illustrative examples, Origis has redacted the value (number of basis points) above the prime interest rate, asserting the redaction is a trade secret. The same nonsensical claims apply to the redacted numerical values for standard boilerplate insurance coverage requirements. Despite GRU trying to charge me $2,800 for public records related to this solar solicitation process (further illustrating the lack of transparency by GRU), I actually discovered that the bid submitted by NextEra (FPL’s parent company) affiliate Florida Renewable Partners was more transparent than the bid submitted by Origis, as NextEra disclosed key information such as the annual generation produced by the solar array. Origis redacted the same information.   

While redactions may be appropriate during a competitive bidding process, GRU should have demanded full transparency for GRU customers during the contract negotiation process, consistent with the Navigant report recommendations that cited the lack of transparency by GRU and the City Commission surrounding the biomass contract.

GRU management conveniently claims that GRU is forced to accept the contractual redactions because Origis has claimed the redacted information is a trade secret. Nothing could be further from the truth; GRU management is once again blatantly lying by omission. GRU’s claim is contradicted by Section 15.13(c)(ii) of the draft contract, which states that GRU has “sole discretion” to find no basis for Seller’s redactions, in accordance with Florida law. Furthermore, as the proposed buyer of solar power under a 20-year contract, GRU management has the unilateral power (i.e., negotiating leverage) to demand a fully-unredacted contract as the condition precedent to entering into any long-term agreement. Just like the biomass contract, GRU management failed to require full transparency, siding with the out-of-town developer rather than demanding full transparency for GRU customers. Given the choice between being awarded a lucrative 20-year solar contract in the midst of a recession and COVID pandemic or not being awarded a contract due to redactions, it seems obvious that Origis would agree to a fully-unredacted contract.

The bottom line is that GRU has no obligation to enter into a contract that is heavily redacted. The contract remains heavily redacted solely because GRU management, the Utility Advisory Board, Mayor Poe, and the Gainesville City Commission have failed to demand full transparency for GRU customers. GRU customers who get stuck paying the bill for this City Commission mandate have every right to demand full transparency and know the actual cost ($/MWh) that GRU is paying for unnecessary solar power under this 20-year contract.

In 2009, JEA openly disclosed the actual cost of electricity ($/MWh) for their 15 MW solar PPA in a public record without redactions. A decade later, we could compare the cost to assess whether GRU is actually getting a great “deal,” but GRU and their “respected partner” are hiding behind their heavily-redacted contract.

Beyond the heavily-redacted contract, GRU management has also exposed GRU customers to unnecessary risk. Under the draft contract, it appears that GRU customers could be financially responsible if Origis does not qualify for the Investment Tax Credit (ITC) due to project and siting delays. Additionally, GRU management is asking for approval of a blank check. The draft agreement is not in its final form, and the interconnection agreement has not even been provided. No approval should be considered by the City Commission until the final agreements are reduced to writing and provided to the City Commission and GRU customers for public review.

In closing, GRU management, Mayor Poe, and the Gainesville City Commission apparently didn’t learn anything from the biomass contract debacle. Where is the full transparency that GRU customers were promised? Unfortunately, the City Commission is far more adept at virtue signaling and hypocrisy than addressing valid concerns relating to the systemic lack of transparency in City government. 

As the English novelist and satirist George Orwell once wrote, “In times of universal deceit, telling the truth becomes a revolutionary act.” 

Nathan Skop, Gainesville

Nathan A. Skop is an attorney and former Florida Public Service Commissioner.

The opinions expressed by letter or opinion writers are their own and do not necessarily represent the views of AlachuaChronicle.com.