Four N.H. biomass plants in jeopardy
Berlin's Laidlaw project could deepen threat
February 24, 2011BRIDGEWATER — Stakeholders in the state's independent wood-burning plants that generate electricity are ramping up a 'grassroots' lobbying campaign to raise awareness of their difficulties in remaining in business.
The Bethlehem plant off Route 116 is in jeopardy, explained plant manager Mark Driscoll of Littleton. Because their long-term contract to sell electricity at a set price has expired, this and three other plants — Tamworth, Alexandria, and Bridgewater — are either losing money or just scraping by.
The Whitefield and Springfield plants could land in the same position when their contracts run out in a couple of years.
Wood is a local homegrown fuel, and the money spent buying chips and other supplies and to support payroll stays in the state or just over the borders of Maine, Vermont, and Massachusetts.
About 150 plant workers and managers, loggers, foresters, truckers, sawmill operators, and legislators turned out on Thursday night for a three-hour-long informational meeting, "Future of Biomass in New Hampshire," sponsored by the N. H. Timber Harvesting Council.
The market price of Renewable Energy Credits (RECs) has plummeted, from $40 to $12 to $15, and the "load" — demand for electricity — is also down due to the prolonged recession. The per megawatt and per REC selling prices that the biomass plants can command when they do not have long-term contracts are no longer high enough to support operations, explained Mike O'Leary, operator of the 16.3-megawatt Bridgewater power plant.
"We're under water," he said, adding that in one recent month the plant had lost $700,000.
"We're not looking for a home run; we're looking for short-term viability until the economy turns around," he said.
The Bridgewater plant is co-owned by PSEG of Newark, NJ, and Harbart Engineering of Birmingham, Ala., which although very supportive are unlikely to be willing to subsidize operations for months on end, O'Leary said.
"It's important to stress 'jobs, jobs, jobs, in rural settings' when making the case to politicians to keep these six independent plants in operation," explained former N. H. Timberland Owners Association (NHTOA) executive director Eric Kingsley of Innovative Natural Resource Solutions of Portland, Me.
Those on hand were urged to pick up the phone or tap out an e-mail message to Governor John Lynch, Executive Councilors, state senators and state representatives.
"There isn't much time," O'Leary explained.
The biomass plants are spread around the state, providing a market for low-grade wood as well as some 20 good-paying jobs at each facility.
"There are a lot of indirect jobs in the woods, too," explained NHTOA executive director Jasen Stock.
Both the power plant workers and the timber-harvesting crews and truckers are an integral part of their local economies. They buy tires, chains and equipment, stop at convenience stores and buy fuel, and become homeowners in rural communities, where it's hard to keep younger people in these small communities, proponents said.
Using low-grade wood to make green chips is a good forestry practice, making room for high-quality sawlogs to grow.
The wood industry would like to pressure Public Service of New Hampshire (PSNH) to buy electricity at above-market prices from the chip-burning plants.
PSNH isn't doing that now, and its president and CEO Gary Long says that he does not want to return to the time when these power plants held long-term above-market rate-orders that added to customers' costs.
The biomass plants have also recently argued in front of the state Public Utilities Commission against PSNH's proposed 20-year Purchase Power Agreement with Laidlaw Berlin Biopower. They testified that if the Laidlaw plant opens and operates under the proposed guaranteed pass-through price arrangements, the higher chip prices would put them out of business.
The 16-MW Whitefield and Springfield chip-burning electricity-generating plants were sold in October 2010 to the Korea East-West Power (EWP) Company of Seoul, Korea. EWP owns and operates more than 9,500 MW of power generation facilities in Korea and the U.S., with an additional two new units totaling 1,000 MW under construction.
Wood procurement forester Charlie Baylies of Whitefield said the transition from the previous Japanese owners to EWP was seamless, and that DG Whitefield is the intermediary with which he has regular dealings.
The "Pinetree Plants" in Bethlehem and Tamworth are both owned by GDF SUEZ (www.gdfsuez.com) of Paris, France. GDF SUEZ employs 200,650 people worldwide and in 2009 had revenues of $108 billion (US). Its North American unit operates 60 power plants with approximately 7,000 MW of generating capacity, and their facilities supply some 20 percent of New England's annual natural gas demand.