Is Wood Resource Recovery a “mom and pop” tree clearing business victimized by Gainesville’s biomass plant operator?
Or did the Gainesville company simply bite off more than it could chew when it signed a 2010 contract with Gainesville Renewable Energy Center (GREC)?
Judge Monica J. Brasington on Monday heard opening arguments and testimony in a trial that will determine the $17.4 million answer to those conflicting questions. Brasington will decide in the non-jury trial whether or not Wood Resource Recovery is entitled to that amount in damages.
For background: Gainesville Regional Utilities in 2009 signed a 30-year power purchase agreement with American Renewables, a company that then built a $500 million plant that converts biomass to electricity for the public utility. To produce that electricity, GREC annually requires hundreds of thousands of tons of wood chopped into small pieces. Wood Resource Recovery gathered and supplied that processed wood for GREC in 2013 and 2014 as the plant began operating.
What occurred between that time and this week was the subject of an hour of opening statements on Monday morning.
Patrice Boyes, attorney for the wood supplier, said its 2010 contract with GREC represented a “sea change” in the scale of the company’s operations. Its main allegation is that GREC concealed information about the type of wood the plant could accept from suppliers and changed its standards for the biomass material in the middle of the contract. This, Boyes said, eventually cost Wood Resource Recovery millions of dollars in lost business as GREC stopped accepting its deliveries.
Attorney Mike Piscitelli, speaking for GREC, said the wood supplier was putting forward excuses to disguise its lack of production capacity compared with what the plant requires (more than 700,000 tons in 2014).
“You’re going to find that this dispute is not about plastic. It’s not about yard waste. It’s not about screening. It’s not about agriculture. It’s certainly not about financing. And it’s not about wait times,” he said.
“To put it in perspective, WRR entered into an agreement that was just too big for them. They were not able to manage the project in such a way as to be as profitable as they wanted.”
Piscitelli and GREC contend in their trial brief that the wood supplier “cannot prove that it was ready, willing, and able to deliver its contracted volume of urban biomass at any point in time…”
Gaston has been in the wood removal business in Gainesville since the 1980s. While still contracted with GREC in 2014, his company processed wood from the trees cleared as part of two major developments: Butler North and Celebration Pointe.
“The wood from those trees ended up at GREC,” he said Monday.
But before he did any work for GREC, he said he was warned. Richard Schroeder is president of BioResource Management, another Gainesville company that does business with GREC. Schroeder and Gaston have been friends for 35 years, and as they collaborated to supply the local biomass plant, Gaston said Schroeder cautioned him.
“He said, ‘This is what’s gonna happen. They’re going to go out there and build this enormous plant, and it’s gonna have a lot of bells and whistles. And it’s not going to work properly,'” Gaston recounted. “‘They’re going to blame it on the wood, and,’ he said, ‘not only are they going to blame it on the wood, but they’re going to blame it on your wood.'”
Gaston said he laughed about that prediction at the time.
His decision to terminate the contract with GREC and sue the company came after nearly two years of attempting to deliver wood to the biomass plant. A lawsuit was not his first choice, he said, although GREC’s lawyers did accuse Gaston in their trial brief of suing “on the belief that litigation had more potential for a payday than performance.”
But why did he keep delivering wood for 19 months after GREC first told him his wood deliveries contained too much plastic and other foreign material and thus were no good?
“I felt like if we could help them get over whatever problems they were having (with the plant), that that would eventually benefit us. And at some point… maybe they didn’t need as much volume as they requested and they were trying to get rid of us. That’s what it felt like.”
Here’s what happened in other parts of this trial: