SPI Closes Cogen

Sierra Pacific Closes Loyalton Cogen Plant 

Sierra Pacific Industries put out a press release; we got it on Friday.  The PR is presented in its entirety below.

It says what SPI always says: they’re closing the cogen plant; it’s everybody’s fault but theirs.  The Congress, Forest Service, and of course environmental groups are mentioned.

You can read what it says, below, but what does a press release from SPI mean?  At this point, almost nothing.  The company is skilled at turning the plain truth into manure tea; even if the PR contained the pure and unvarnished truth it would be impossible to believe it at this point, even without evidence which seems to refute the claims.  
The PR states that NV Energy reduced the rate they were paying.  As skillful as SPI is at turning the truth into chum, NV Energy is even better.  There is little point getting NVE’s take on the matter.  At this point the infobites the company hands out aren’t even interesting anymore.  The Prospect can paraphrase the likely response:
“NV Energy can’t reveal the particulars of its contracts; SPI is receiving the agreed on payments; NVE has no control over the cogen plant.”
Nonetheless, we’ll attempt to get a response on Monday.

In the PR SPI further blamed congress; always a safe bet but never more than now.  It is assumed that here SPI might be talking about Biomass Crop Assistance Program (BCAP).  Last year BCAP funds were used to subsidize biomass going to cogen plants (under specific conditions); this year the funds are more constrained, because the original program, expected to cost $70 million, eventually cost nearly $2 billion.  Further, the subsidies increased the price of waste woods products so much that pulp and other industries faced increased costs.  As a result, BCAP funds can’t go to wood products with a higher value potential than biomass.  
While only SPI knows how this influences their bottom line, those who watch SPI have noted for some time that wood construction waste has been skirting Loyalton for use in Quincy.  Some have speculated that SPI gets paid by the mile the waste is hauled, and so takes it on to Quincy, which has a lumber mill attached and shouldn’t need the biomass.  The truth is anyone’s guess.

The PR also makes reference to the USFS which, it claims, has failed to meet its responsibility under the Quincy Library Group plan.  Environmentalists are blamed as well as lollygagging FS staff, but most of the referred to lawsuits took place in the Plumas National Forest, which probably effects Quincy more than Loyalton.

Indeed, this reporter has witnessed, every two weeks, a report from the Sierraville Ranger Station which features biomass harvest plans which SPI should benefit from.  Instead, the PR maintains that the plant is simply running out of fuel.  It is possible SPI is actually interested in reduced price logs, since the demand for lumber is so low now it might pay to buy cheap logs and save standing inventories.  

The problem with that is that there is fuel sitting on the cogen site.  Why shut the plant down now (it’s been down for maintenance recently, to the tune of several hundred thousand dollars) while there is still fuel sitting on the site?  Is fuel that is already there still too expensive to use?

A fair discussion of the cost of the cogen plant would have to include the cost of moving biomass.  What the BCAP does is offset the cost of hauling, resulting in a higher return for the investment.  Reducing biomass harvests can mean longer shipping distances.  As we know all to well, our carbon fuel is cursed with air and water, making it a poor performer in a square foot competition with denser fuels like coal.  While is isn’t clear how it could be, it is possible that SPI really can’t afford to keep the mill open even with fuel already present.
But, probably not.
Probably SPI has some really crappy, really greedy reason for shutting down a newly refurbished cogen plant with a stock of ready fuel.  There are those who feel SPI wanted to dump the plant last time it shut down, but too many people went to bat for the plant.  Supervisors, biomass experts, even local media weighed in to save the plant.  NVE was blasted, and in the maelstrom, the truth was badly damaged.  Eventually, the plant came on line again, and was operating at even higher capacity, according to sources close to the plant, and judging by fuel use patterns.  There was some trouble with the Air Quality Management District which wasn’t mentioned in the PR, but might have played a part in the decision.

Since the Prospect received the PR on Friday, we weren’t able to contact the Sierraville District of the Forest Service for comment.  Likewise, we were saved the trouble of seeking information from NV Energy, which, as was mentioned, would likely have been cow crap anyway.  

We assume that all these players are chronically incapable of telling the complete truth, or any facsimile of it, an assumption based on history and experience.

And, why should they tell the truth?  Why shouldn’t they operate for a profit motive?  SPI and NV Energy are both for profit corporations, it isn’t lying when they tell a half-truth, it’s protecting corporate secrets.  

Let’s accept that argument.  A corporation, regardless what the current Supreme Court says, isn’t a person.  It doesn’t have to tell the truth, it has no soul.  

A community is also not a person, but it does have a soul.  The community of Loyalton has lived and died by the mill for generations.  The cogen plant is all that’s left of those days; the mill is gone, hauled off on a rail line that probably couldn’t be commissioned again.  It isn’t coming back.  Loyalton’s hope- the county’s hope, is in biomass.   

The community took a hit when, without any notice, SPI pulled the plug on the cogen plant again.  The PR says “fifteen operators” but in truth many, many more people have lost their jobs with the closure, again, of the cogen plant.

It’s much more even than simply the jobs directly supporting SPI and the other local businesses who benefit from those paychecks.  It’s the future, our hope of getting the under-story out of the woods in a carbon-positive way instead of watching the woods around us burn up in wildfires.  The biomass harvest plans would have reduced the fuel load in the woods.  It could create an industry.  Plans which were intended to feed the cogen plant must now either chip and spread, which is controversial because it releases carbon and because it might not protect the woods like fuel removal, or burn it.  Burning is an option which is rapidly fading because of air quality standards.  A forest fire can’t be shut down; slash burning from forest thinning can be, as can wood stoves and prescribed burning.

When the cogen plant isn’t spinning, the necrotic effects spread outward, and quickly.

The partnership isn’t working out.  It is unlikely people will rush to the defense of the cogen plant again.  If it would keep spinning, yes, but it flickers hot and cold like a daddy on alcohol.  The community has too much at stake to trust SPI again.  We need a partner who will operate in good faith, not slam the door without warning.  Any family suffering domestic violence would recognize the nature of our relationship with SPI.

So, what can we do?  The cogen plant isn’t much, a pre-1960s generator and a boiler that is only modestly efficient.  There are certainly less efficient plants operating out there, but a more modern plant would probably get more from a ton of fuel, and probably recycle heat more efficiently for other uses.  Even so, this was the system we had, that we were willing to support.

How could we form a better partnership?
That discussion is continued HERE.  Below, is the press release.


Sierra Pacific Industries to Close its Loyalton, CA Power Plant
Anderson, CA – Sierra Pacific Industries (SPI) today announced that it has sent a notice to NV Energy in Nevada stating that SPI will suspend operations at its Loyalton, CA power plant immediately. The plant’s fifteen power plant operators who will be directly affected by this announcement were notified today.
Numerous government decisions, including decisions not to implement laws passed by Congress, have cut off SPI from feasible fuel supplies and otherwise made it impossible to operate. Additionally, Nevada Energy recently lowered the rates it pays to SPI for electricity generated from the Loyalton plant. The combination of uncertain fuel supplies and reduced energy rates made the facility uneconomic to run.
The circumstances forcing the shutdown include: First, the United States Forest Service failed to carry out its legally mandated timber sales under the 1998 Herger-Feinstein Quincy Library Group Forest Recovery Act (“QLG Act”) (the act mandates unequivocally certain timber sales on Federal Land in the vicinity of the power plant). SPI rebuilt its sawmill in Loyalton relying on the QLG Act, only to have to close it about two years later when the timber supply failed to materialize. Second, litigation filed by environmental groups has blocked certain attempts by the government to offer timber sales that would have produced in-woods biomass from federal land surrounding Loyalton.
As a result of these events, beyond SPI’s control, SPI has been unable to procure sufficient supplies of suitable fuel to operate its power plant in compliance with legal requirements of federal, state, and local law.
Notwithstanding these events, Sierra Pacific Industries is exploring opportunities that might allow it to reopen the facility.

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