Cogen Update 11/4/09
The County Board of Supervisors heard updates on the Loyalton cogen plant this Tuesday.
Peter Huebner reported on on-going efforts to join the Nevada County Biomass group.
Supervisor Goicoechea, with assistance from Tom McClintock’s person, Tim Hollabird, traveled to Carson City to meet with a senior official of Governor Jim Gibbons, of Nevada about the cogen plant, and SPI’s contract with NV Energy. Also present were Jim Turner and Mark Pawlicki of SPI.
That meeting did not produce any resolution.
Dave Goicoechea reported that several local governments and agencies including the Truckee/Donner Public Utilities District and possibly the Plumas Sierra Rural Electric Cooperative are preparing to protest the sale of 46,000 "units" or services in California from NV Energy to a subsidiary of Algonquin Power. They will claim that the sale endangers an already fragile grid. The effort will probably result in a longer comment period. The Sierra County Board resolved to join the effort.
The Prospect confirmed from sources at SPI and PSREC that the cogen plant did, indeed, supply power to the local grid during outages of other transmission lines. If the power goes out this winter, it could stay out for days or more. Tune up the generator.
We also learned that the cogen plant is hostage to NV Energy just to get power out of the plant to sell to anyone. An unconfirmed report indicates that NV Energy is not selling the line that the cogen plant needs to reach the grid.
Tim Beals, County Director of Planning and Building, has been very involved with efforts to get the cogen plant back on line. He commented that a lot of local people are putting energy into the plant, and we need an indication from SPI whether there is a realistic possibility they will open the plant again.
Local people continue to work hard to get the cogen plant on line again, but it is up to SPI and NV Energy. Dave Goicoechea noted, "it isn’t likely they will tell us what’s going on."
Prognostication: Only a fool would guess what will happen with the cogen plant now, so here goes.
Is SPI still negotiating with NV Energy?
Conventional wisdom: yes
NV Energy :no, there’s no need to negotiate, the contract was signed years ago.
Prognostication: probably, yes, but probably not the negotiations we might think.
Will Algonquin refuse to buy the 46,000 California units from NV Energy without having the cogen plant on line?
Conventional wisdom: no
Algongquin: (they wouldn’t reply to our questions)
Prognostication: There are bigger problems with the deal than Loyalton, though if the movement grows to ask for a longer review period and the possibility of a protest of the sale, it is possible the deal will hang up.
Will SPI reopen the cogen plant?
Conventional wisdom: no
SPI: no, maybe, we can’t say
Prognostication: If there’s money in it and we do all the work of getting them biomass, yes, but probably not.
Will someone reopen the cogen plant?
Conventional wisdom: yes
Unconventional wisdom (off record sources): yes
Prognostication: Probably, but the longer it takes, the less likely it is. It would help if SPI could easily separate the cogen from the rest of the hazmat site at the mill, and if they would price it at garage sale prices instead of trying to wring every dime.
Does it suck having so much of our community employment and resources depending on an energy company in Nevada and one in Canada (Algonquin) and a billionaire in Anderson with us having squat to say?
Conventional wisdom: Oh, yeah.
NV Energy, Algonquin, Red: Say what?
Prognostication: If we don’t get our community pulling together to do something on our own behalf, those of us too poor to move to cities are going to burn up. It does suck serving masters thousands of miles away who are largely oblivious to us. What are we going to do about it, complain?
Dave Goicoechea, Peter Huebner, Tim Beals, the Fire Safe and Watershed Council and friends in other counties are putting a huge amount of energy into this. The community needs to pull together and support them if we are to have a future in biomass.
If we do nothing, the carbon fuel will continue to build up in the woods, and eventually, if it doesn’t burn up, someone from somewhere else, even Florida and Canada, will come for our fuel.
Cogen Update 10/21/09:
The Board of Supervisors heard cogen updates from several sources.
Currently, little has changed, according to a conference call between SPI representatives and County Supes Dave Goicoechea and Peter Huebner, and Director of Hopeful Causes, Tim Beals.
Minutes of the call reflect much of what we already knew: long hauls, poor quality fuels, a miserable rate of pay from NV Energy, and to a lesser degree, griping by locals to the Governator and Air Quality were reasons for closing the plant: it simply wasn’t making money and candidly wasn’t worth the effort.
Almost as a reflex there was a little bitch about law suits and timber harvest plans. That, though, isn’t really the issue, since local environmental groups including Sierra Forest Legacy and, by rumor, High Sierra Rural Alliance, both support biomass and small log utilization. That is not to say that a bad plan wouldn’t be appealed.
Most successful cogen plants in the western U.S. are associated with lumber mills, because the cost of the biomass transport piggy-backs on the cost of logs for lumber. Further, having the cogen plant part of the lumber mill guarantees a ready source of fuel, even if logs have to be chipped.
Being free standing, the Loyalton plant is at the mercy of trucks, and there is no lumber to balance costs.
However, SPI spokesmen were clear that the plant still has value, is relatively new and is ready to go. They were willing to meet to discuss any effort at long-term fuel delivery.
A fuel source within 30 miles is desirable. A decent rate of return from NV Energy is a must.
At the Board meeting, Jim Turner, captain at the helm of the cogen plant, thanked the Board on behalf of SPI for their effort and support, and repeated that the plant is ready to go, should SPI, or anyone, choose to fire it up.
But, who else would want to fire it up?
There are rumors that SPI would take $39 million for the plant, but that’s probably twice what it’s really worth. Prospect inquiries to Plumas Sierra Electric Coop indicated that there is an interest there to purchase or lease the plant, but probably not under the current circumstances.
NV Energy recently sold 46,000 units in California to Algonquin Power HERE.
The Prospect has inquiries regarding the plant to Algonquin Power, and NV Energy, but as of press time, neither had responded. It might seem odd, but megabillion dollar corporations don’t like telling their secrets to podunk newspapers. Still, we ask, because you want to know.
A source who asked to remain unidentified reported to the Prospect that the "grid" for this area was "running on the edge" of not having enough power because the cogen plant, which was a good "buffer" against shortages, is down.
According to Jim Turner, there are a couple of months of fuel stockpiled at the plant; not enough to make it through winter. If the cogen plant were to reopen this year, there would have to be a frantic stockpiling of biomass fuel.
This is not a problem. Dave Goicoechea and Peter Huebner have been working like beavers to bring chips to the mill. There is the possibility of grant and other funding for biomass transport. The Sierraville Ranger District of the U.S. Forest Service has repeatedly spoken in support of the cogen plant and of a willingness to support it with biomass sales. The Sierra County Fire Safe and Watershed Council has been aggressive about planning, intending to send all of their hazard fuel reduction project waste to the cogen plant. Mike Freschi, operations director, and Cindy Noble, executive director, have been active on the ground, locating quality biomass for the plant through the county landfill sites and through negotiations with private landowners. SPI was recently successful in a bid for some timber and a great deal of brush and small trees. Jim Turner estimates the plant running full steam will use 100 yards of biomass an hour.
The forests around us are choked with excess understory. It endangers our communities and our watersheds; it’s a risk to human life, clean water and clean air. It’s also a valuable resource awaiting appropriate infrastructure.
Should anyone want to fire the plant up, trucks could start tomorrow bringing Sierra Arabia crude to the yard.
There has been the complaint that the cogen plant created "unbearable noise". Supervisor Goicoechea noted that the noise that was unbearable was the silence at the plant.
Also: state and federal elected representatives from California and Nevada have requested that Dave Goicoechia stop calling them at home about the cogen plant, and Homeland Security is aware of Peter Huebner’s threats to "go to Washington to talk to someone about this." The last thing we want is for Washington to realize we have carbon fuel in the woods. They’ll attack us to save us from Schwarzenegger and force their idea of democracy down our throats.
"Algonquin Power is an open-ended investment trust that owns and has interests in a diverse portfolio of renewable power generation and sustainable infrastructure assets across North America, including 42 renewable energy facilities, 12 thermal energy facilities, and 17 water distribution and waste-water facilities. Algonquin Power was established in 1997 to provide investors with sustainable, highly stable cash flows through a diversified portfolio of renewable energy assets. Algonquin Power's units and convertible debentures are traded on the Toronto Stock Exchange"
Monday, 5 October, Gretchen Bennitt, Northern Sierra Air Quality Management District Director, and Air Resources Board lab staff Mac McDougall and Steven Aston addressed the community at the Loyalton Community Center. They discussed the "black gooey sticky substance" which was the center of a number of complaints about the Sierra Pacific Industries cogen plant. There was a small crowd in attendance, most were officially involved in some way, or the press; there were a few local people. The meeting might have been dominated by the futility of the issue, since the cogen plant has been closed by SPI, but this was not the case. Many in the room were concerned with the viability of the plant from an air quality perspective, with the hope that it will reopen. McDougall and Aston presented evidence, including scanning electron microscopy and energy-dispersive spectoscropy, which evidenced "spherical carbon" which is created at high temperatures, such as the cogen plant creates, and not lower temperature sources such as woodstoves. The material matched a sample taken from the bottom of the SPI burner, and is "consistent with the literature on the combustion of wood and wood ash." It is largely fly ash. The researchers proposed that the substance becomes "sticky" because carbon is damp. The carbon smears easily and the water makes it soft. Some did complain, but in general people tolerated those problems because Loyalton is, and always has been, a mill town. The rich lands of the valley produce first class beef, but they wouldn’t, and don’t support a town. People in mill towns across northern California understand that turning logs into lumber is difficult, dangerous, dirty, noisy work. The mill is gone, and most of the noise and soot have stopped, replaced with the noise of people complaining that Loyalton is dying and no one is doing anything to save it. The cogen plant is silent, and it might possibly become invisible too, since it is feasible to move the plant. It’s one of Red’s toys, he can simply pick it up and move it closer to biomass. It doesn’t need wood, it could burn nearly any plant material, such as peanut husks or corn stalks. However, a very good fuel is obtained when the woods are cleared of understory such as bushes and small trees. The carbon from the plant may well have been the result of burning yard waste, leaves and lawn clippings and twigs, which are high in nitrogen and low in the woody carbon that makes clean fuel. Sierra County has tons of carbon clogging the woods, and many of those present at the meeting had been working to bring that fuel to the plant. If the plant were to reopen, the monitoring would continue. Gretchen Bennitt spoke of her dedication to cogen and her belief that the plant could be run cleanly. She mentioned the considerable money SPI has put into air and water quality monitoring. Why would the Northern Sierra Air Quality Management District Director care whether the cogen plant is running? Because the cogen plant, regardless whatever ash falls from it, is a far cleaner way to dispose of the forest’s excess biomass than open burning, or worse yet, wildfire. Plumas Sierra Rural Electric Cooperative The Prospect spoke with PSREC General Manager Bob Marshall. He is concerned for the loss of jobs to the employees, and to the county, and he is concerned about the loss of electricity from the plant. While PSREC didn’t exactly use power from the plant, it was part of the "network" of electrical service by which different providers cover each other’s backs. The benefit works in our lives like this: "Aw, crap, the power went out. Oh, there it goes. Turn TV back on." The plant was an important local resource to keeping steady power to everyone. But, for a number of regulatory and bureaucratic reasons, PSREC can’t simply call up Red and ask, "hey, watcha want for that old power plant in Loyalton." Mr. Marshall was clearly well informed about the plant, and while he refused to gush forth with the kind of information we all really want, he was clear that PSREC is willing to help where it can. He wouldn’t speculate on any transactions, but made it clear he appreciated the renewable power the Loyalton site provided, recognized how important it is to have a place like the cogen plant to cycle biomass, and was concerned for the loss of jobs. His willingness to talk with involved players can be seen as yet another reason to be optimistic. Recent discussions with Dave Goicoechea and Peter Huebner, discussions by the Board of the Fire Safe and Watershed Council, and assurances from Steve Frisch of Sierra Business Council indicate that people continue to work to assure a reliable source of clean fuel for the plant. Mr. Marshall was clear about the importance of biomass fuels to renewable sources of power, and to the importance of the Loyalton plant. It’s too soon to write off the Cogen plant. NV Energy: The Prospect contacted NV Energy with further questions, specifically asking about a Request For Information seeking renewable energy. We also tried to discover if the company was paying SPI alternative energy rates, and if they might give a short term contract at a higher rate. Here is their reply: Cogen Plant Closure Update: Steve Frisch Steve Frisch is the president of Sierra Business Council, an organization dedicated to rural Sierra Nevada communities. He gave the Prospect a telephone interview regarding the closure of the SPI mill.
Mr. Frisch was, as many people are, very disappointed in the plant closure. SBC has championed the use of biomass. See article HERE by SBC’s C. Prestella. However, Mr. Frisch insisted the plant was too valuable a resource to give up on. He encouraged the community to "fight for this thing. Let’s find ways to get the fuel, biomass utilization, forest stewardship contracts." Frisch took the long view: "we, as a society, need to value renewable energy more, and we need to recognize the community value. You have to look to outside resources for help, but we have to keep moving forward, make the effort all over again." Local people, from County supervisors to the Fire Safe and Watershed Council, have been working to streamline the biomass flow to the mill. Some have been critical, saying that giving biomass to the plant will simply make SPI more wealthy. The broader view sees the need for the development of a biomass industry. The cogen plant is the community’s link to renewable energy, and a way to fund the community hazard fuels removal that needs to be done. Mr. Frisch reminded Prospect readers that we don’t have to do it alone. "We will help any way we can; the community needs to rally." He echoed the sentiment held by many in the county: "It’s too soon to give up on the mill." The Prospect has a call in to NV Energy asking about the recent contract negotiations. We’ll keep you posted. 10/2/09 Update: SPI Spokesman Co-gen plant closure update. The Prospect spoke with Mr. Mark Pawlicki, representatives of Sierra Pacific Industries regarding the closure of the Loyalton Co Gen plant. Mr. Pawlicki was clear that it simply was not possible to continue to run the plant under the prevailing circumstances. Though he did not give specific figures, he made it clear that the Nevada buyer of electricity simply did not pay enough. The problem, as has been outlined elsewhere in this newspaper, is that biomass fuel is expensive to ship, handle and process. Mr. Jim Turner, manager of the plant, has stated that the woody debris from hazard fuel removal makes good fuel, but trucking it is expensive. Some of the fuel came from near Sacramento, a trip of 140 miles, and the expense of shipping so far is prohibitive. There are other costs associated with running the plant, including air and water quality tests and maintenance of the boiler and these have increased over the years. Mr. Pawlicki acknowledged the importance of the plant to the county, and lamented its closing. He suggested it was too soon to write the plant off completely, at least not yet. However, "something in the equation has to change" for the power plant to be profitable. The Prospect asked, "would the plant be profitable if the biomass magically appeared at the plant?" Though he didn’t have the exact figures before him, he agreed that if the plant were freed of some of the costs related to fuel shipping and processing it would be more competitive in the electrical market. The cogen plant represents a possible future for the county. If our carbon, the understory and overgrowth that threaten the woods and our communities, could be managed properly, the county could once again have a resource that would support communities and families. The woods are our major asset, to protect them they have to be relieved of biomass. The co-gen plant is the heart of the development of our resource. Rumors are true: Cogen Plant Shut Down The Sierra Pacific Industries co-gen plant in Loyalton is closed "indefinitely". This after the crew had just finished repairs from a lightning strike and done major maintenance.
Sierra County Supervisor Dave Goicoechea said he was "stunned" at the news. Goicoechea owns a ranch adjacent to the SPI plant and has had frequent dealings with Jim Turner, who managed the plant. He said there had been no indications of such a move, and lamented the loss of 24 jobs associated with the plant, plus peripheral support to contractors and local suppliers, plus the jobs he’d hoped would eventually be created by the plant. Recent reports had indicated that the plant was beginning to run "in the black". Complaints of air quality from the plant had been laid to rest by testing. Fuel availability had been a problem (see article HERE) but new biomass sources had been located. However, sources close to the mill say the most recent contract for the sales of the power did not go well. According to Christina Prestella, Sierra Business Council, co gen plants cost about 7-10 cents a kilowatt- hour as opposed to coal burning plants at 5.5. The plant was reportedly not able to receive sufficient reimbursement from the purchaser. It was not a problem of fuel availability. Indeed, Goicoechea and many others had been working towards supplementary funding to make it cheaper to get biomass to the plant. The Sierra County Fire Safe and Watershed Council had been working to streamline the process of getting chips from fuel removal projects to the plant and had orchestrated bins at the county solid waste transfer stations to collect biomass. Private landowners had been talking with the plant about taking hazard fuel biomass collection. The Sierra Business Council had been working to integrate the plant into regional biomass streams. The plant had the potential to create infrastructure so that the overgrowth choking the woods around local communities could be converted to valuable carbon, and so cash. Its closure, while representing a tiny drop in the monthly unemployment rate increase, is a devastating blow to the local economy. It’s also a blow to the environment. There are three main ways to reduce biomass by burning. The first is forest fire, which in addition to ecological and economic disaster is an air quality and greenhouse gas disaster. The second is open burning, which is a wild fire in slow motion, and simply spreads the pollution out over days. The third and by far most desirable is to convert it to electricity, which allows the smoke to be cleaned, reducing pollutants, and replacing non-renewable coal. It is possible the co-gen plant will operate again. It is reported to be ready to "turn the key" to make power. Let’s hope it does. The Prospect has attempted to contact representatives of SPI, but they’ve not responded at this point. If there is a news break, subscribers will be notified.
10/7/09 Cogen Update: Sierra Air Quality Management; NV Energy
Right to Left: Gretchen Bennitt, Peter Huebner, Dave Goicoechea
The substance has been found on horizontal surfaces in the neighborhood of the plant.
At right, Aston and MacDougall
There is no expectation that the carbon is harmful, because the particles are large and not dangerous to inhale. However, people report it does tend to make fine scratches on car finishes if not cleaned carefully. That’s true of any dust.
Gretchen Bennitt noted very clearly that the plant was not putting out more particulate matter than was allowed: it is completely legal.
Not a big crowd
There were some questions of a legal nature regarding who to sue for the damage to vehicles, but it wasn’t the right room for that, and none of the officials had a very clear answer, meaning it isn't their problem.
Many of the people in the room have lived in Loyalton before the cogen plant, when ash from the burner was everywhere. The stack gases were dangerous in those days, and in the worst weather an inversion layer would form, trapping the gases close to the town. If the wind were blowing it would be worse.
A bright idea occurred at once to many people in the county: let’s have Plumas Sierra Rural Electric Cooperative buy the cogen plant. PSREC is widely respected in the community, and already has cogen experience, see HERE(This link is a large PDF). However, nothing is ever that simple, particularly not when an idea is as logical as that.
NV Energy regularly solicits RFIs or RFPs to purchase power from both renewable and conventional sources. We do not release the results of these solicitations, which would include pricing and other terms. However, it is general knowledge that renewable energy sources of power are typically more expensive than power generated using natural gas. NV Energy is always concerned about providing safe and reliable power to all of its customers, regardless of their location. For many decades the company has served its California customers through transmission lines carrying electric power from plants it owns in Nevada and from purchases of power we make from other sources. In addition, there is no need for a short-term contract. We have had a long-term contract to purchase the electrical output from the Sierra Pacific Industries’ biomass plant since 1990. That contract has over 10 years remaining on it.
The Prospect thanks NV Energy for their reply, which is vague and without real information, but which is at least polite.
10/4/09 Update: Steve Frisch, SBC
Photo courtesy M. Freschi
10/7/09 Cogen Update: Sierra Air Quality Management; NV Energy
