ALACHUA ‒ The City of Alachua has negotiated a new power supply agreement now that Alachua’s new Legacy Park Electric Substation has been completed. The new substation gives the City the ability to draw power from different providers, allows an overlap of electrical services if one provider loses power, and strengthens the City’s negotiation position when purchasing energy.
Alachua’s energy needs have been supplied since 1992 by Gainesville Regional Utilities (GRU). The current agreement, which provides for constant pricing of $58 per Mw-hr, terminates March 31, 2022. In February, the City issued a solicitation for future wholesale power suppliers and received proposals from seven suppliers, ultimately selecting GRU and the Florida Municipal Power Agency (FMPA) which has multiple suppliers including Duke Energy. The proposed agreements will result in reductions to wholesale electric costs and diversify the City's electric supply mix with staggered expiration terms, constant pricing, and market-driven options. The cost of both contracts is approximately $7-8 million annually.
GRU's contract will run April 1, 2022 to Dec. 31, 2026 with the original Substation No. 1 as the source. Pricing will be a consistent $42 per Mw-hr. The GRU contract also the option to deliver solar energy in the future if the City elects to award a new solar supply contract or construct its own solar project.
The contract with FMPA will run April 1, 2022 to Dec. 31, 2027 utilizing the Legacy Park Substation as the delivery point. The rate will be subject to market conditions, primarily natural gas prices, estimated at approximately $42 - $44 per Mw-hr. The FMPA contract also allows for delivery of FMPA solar project entitlements, which is estimated to come online in 2023.
“We felt this was a win-win for the city by diversifying our suppliers and making the rates competitive,” said Mayor Gib Coerper. “We are doing this now to be looking forward to future needs and not waiting until the need is critical.”
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