Gainesville Renewable Energy Center said Monday it is filing arbitration against the city of Gainesville because of Gainesville Regional Utilities withholding a couple hundred thousand dollars in payments.
GRU has withheld approximately $223,732 in payments plus interest, according to GREC, after a city audit report in September found that GREC had overcharged GRU nearly $900,000 for energy from Dec. 2013 to May 2015 — a fee city officials said was passed onto GRU customers.
Additionally, GREC said, GRU is withholding about $55,000 in monthly payments.
Because of this, GREC said in a press release it “was left (with) no choice but to file for arbitration.”
The city audit said the overcharge resulted in a miscalculation of the Construction Cost Adjuster, used to adjust non-fuel energy charges paid by GRU, in the city’s 30-year biomass contract with GREC.
According to the audit, GREC used a Euro to Dollar exchange rate instead of the contractually agreed Dollar to Euro exchange rate in setting the Construction Cost Adjuster — resulting in the overcharge.
GREC denies error in calculating the cost adjuster rate, saying “It is calculated exactly per the letter of the agreement, and exactly as the parties intended.”
In its arbitration demand, GREC said the city confirmed the calculation was correct in Nov. 2011.
“In every instance, the City demonstrated that this calculated and
agreed contractual rate was correct by paying it,” GREC said.
In response to the findings, GRU in October demanded nearly $1,000,0000 from GREC in compensation for the overcharges - a demand GREC has refused.
Mayor Ed Braddy told the Alligator that GRU General Manager Ed Bielarski had not yet briefed him on the arbitration demand.
“But I’ve been in conversation prior to today with the general manager that this might happen,” Braddy said. “It’s not unexpected on our end.”
Braddy said the biomass contract outlines that the city and GREC submit an arbitration to resolve any disputes.
Braddy said he wants to put an item on the agenda list when city commissioners meet again in January to recommend Bielarski work with the city’s appropriate legal staff to prepare an arbitration defense.
Bielarski could not be reached for comment as of press time.
Contact Hunter Williamson at hwilliamson@alligator.org and follow him on Twitter @hunterewilliam
