Last November, seeking to gain new momentum (financial and operational), Gainesville Regional Utilities (GRU), owned by the city of Gainesville, purchased the former Gainesville Renewable Energy Center and its 102.5 MW biomass power facility. The acquisition topped off nearly 10 years of a roller coaster ride, ever since the recession when the city and utility became serious about biomass power as an option. Biomass would bring much needed diversity to the GRU power generation portfolio.
Construction on GREC began in June 2011 and was completed in October 2013. The $500 million facility soon began commercial operation with the intention to utilize 1 million tons of woody biomass annually. But the plant, which was already under local scrutiny because of the power purchase agreement, began encountering problems ranging from noise complaints to a lawsuit filed by one of its primary biomass suppliers over feedstock requirements.
It was also difficult for GRU to manage the plant, from the outside looking in, as part of its energy portfolio. The city tried to buy the plant in 2013, but was turned down by the ownership partnership of Energy Management, Inc., BayCorp Holdings, Starwood Energy and Fagen Power, LLC.
In August 2017 the Gainesville City Commission voted in favor of a $750 million purchase of the biomass plant and the deal was struck. Immediately, GRU changed the name of the operation from GREC to Deerhaven Renewable Generating Station.
This was good news for companies such as Gainesville-based Columbia Timber Company, which is now one of the largest suppliers of biomass to the plant, today producing nearly 300,000 tons of fuel chips per year.
Columbia Timber purchased its first Bandit chipper not long after GREC started up and now owns three. While biomass production is just one part of Columbia Timber’s business, it has been a nice addition to its business portfolio.
Background
Columbia Timber Company’s principal owners, Jib Davidson and Norman McRae, formed the company in 1989 when Georgia-Pacific opened the door for them to form a timber dealership. They needed a name quick so they could incorporate and jump on the opportunity. At the time, the space shuttle Columbia was gearing up to launch and the company was based in Columbia County, Fla., so they decided they would use the name Columbia Timber Company temporarily until they could come up with a real name and change it down the road. This temporary name has stuck for almost 30 years.
Davidson graduated from the University of Florida’s School of Forest Resources and Conservation with a major in Forest Management in 1978. He worked in timber procurement for Georgia-Pacific, then transferred to land management where he managed 118,000 acres of timberland for GP. Davidson wanted to better understand timberland as an investment. He left GP and approached the University of Florida’s MBA program where he said he was told timberland is not an investment and he needed to return to the school of forestry if he wanted to grow trees.
Davidson’s desire to better understand how to apply finance to timber management led him to earn a second degree in 1983, this one in Business Administration with a major in Finance and a minor in Real Estate.
In 1984 Davidson formed Florida Forestry Services Company along with his former UF forestry professor Don Post, specializing in a range of timberland management and investment services, working with private landowners and industrial owners.
McRae took a similar path, graduating from the University of Florida in 1982 with a Bachelor of Science in Forest Resources and Conservation. He began his forestry career working for the Florida Division of Forestry as a forest ranger, then he was promoted to a county forester and finally to Forest Area Supervisor for two counties within his district. McRae then served as the Florida branch manager for F&W Forestry Services before linking up with Davidson at Florida Forestry Services in 1987.
Davidson and McRae’s relationship led to the formation of Timber Company in 1989. Columbia Timber Company is a timber dealer and land management company utilizing professional foresters and state-of-the-art computerized technology. Davidson, who is a Certified Forester and the timber tax expert, developed a Timber Investment Program that integrates established financial analysis techniques with traditional forest management techniques. “It allows bankers and financial analysists to understand how the forestry side works,” says Davidson, who today is Chair of the Florida Society of American Foresters. The business integrates timber thinnings, harvesting, reforestation and annual costs with state-of-the-art land management techniques.
Although Columbia Timber owns some of its own harvesting equipment, it relies upon contract loggers for most of their operations. McRae is the operations forester who manages both the harvesting operations and the reforestation activities.
At one point the company had six logging crews working for it, but wet weather, followed by fires and the recession in the late 1990s, caused them to pull back some. They slowly rebuilt and when GREC came into the picture they jumped at the opportunity to start producing fuel chips for the new biomass plant.