Tag Archives: austin

[NEWS] Financial Concerns Around Idle Texas Biomass Facility

– by Mark Lisheron, May 7, 2018, Texas Monitor

nacogdoches_texas-monitorFor almost six years, Austin Energy customers have been paying about $54 million a year for a power plant in East Texas not to produce biomass energy.

Those customers also paid $128 million to build the plant.

Nearly two years ago, the city of Austin hired a staff of attorneys to see if Austin Energy could get out from under a 20-year contract that even supporters of the wood-burning power plant came to see as a terrible deal for utility customers.

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[NEWS] Investigation of East Texas Biomass Contract Launched

– by Mark Lisheron, July 29, 2016, Watchdog

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Photo: southerncompany.com

Attorneys retained with your tax dollars will determine whether you are throwing good money after bad by trying to get out from under a biofuel deal costing Austin Energy customers $54 million a year.

The legal bill might reach $100,000 before lawyers are able to say if Austin has any choice other than to pay the cost of building a waste wood-burning plant that has for four years produced almost no energy.

Staff for Mayor Steve Adler on Tuesday confirmed the city had hired attorneys to look at the contract between Austin Energy and Southern Power, operator of the idle Nacogdoches Operating Facility in East Texas.

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Biomass Energy Growing Pains

– by Josh Schlossberg, The Biomass Monitor

Eagle_Valley_captionSeveral biomass power facilities have come online over the last few years in Colorado, Texas, Wisconsin, Florida, and Hawaii, but not without difficulties, including fires, inefficient equipment, lawsuits, and competing with the low price of natural gas.

Gypsum, Colorado

Eagle Valley Clean Energy, an 11.5-megawatt biomass power facility in Gypsum, Colorado started operating in December 2013, only to have its conveyor belt catch fire in December 2014. Spokespersons said the facility would be back online shortly, yet as of October, it’s still offline. There have been no further media reports investigating why the facility still isn’t operating, and multiple calls and emails to the facility from The Biomass Monitor were not returned.

Another thorn in Eagle Valley’s claw is a lawsuit filed against the company in U.S. District Court in June 2015 by Wellons, Inc., an Oregon-based corporation that designed and built the biomass facility.

Wellons is suing Eagle Valley Clean Energy for $11,799,864 for breach of contract, accusing the company of “fraudulent transfers” and “civil conspiracy,” involving the transferring of $18.5 million of federal subsidies to “insider” parties in an alleged effort to hide the money. The money was issued to the facility from the federal government under Section of 1603 of the American Recovery and Reinvestment Act (ARRA), also known as the Stimulus, involving payments to reimburse companies building renewable energy facilities.

Wellons claims that, on top of the nearly twelve million dollars Eagle Valley must pay them, they are owed past due interest of $1,185,433.56, with debt accruing at $3254.90 per day.

Another bump in the road for Eagle Valley involves the Chapter 11 bankcruptcy of the logging contractor that provides them the trees to fuel the facility, West Range Reclamation. West Range has provided nearly all of the wood to the facility since it opened, mostly from beetle-killed lodgepole pine from the White River National Forest.

Nacogdoches, Texas

Southern Power’s Nacogdoches Generating Facility, a 100-megawatt biomass power facility in Nacogdoches, Texas, opened in 2012 only to sit idle much of the time due to an inability to compete with the low price of natural gas, according to Reuters.

Rothschild, Wisconsin

In November 2013, WE Energies and Domtar Corp’s 50-megawatt biomass power facility opened in Rothschild, Wisconsin. However, it was offline from December 2014 through May 2015 for repairs, and was operational only 16% of the time during its first full year, in part due to an inability to compete with the low price of natural gas, according to the Milwaukee-Wisconsin Journal Sentinel.

Gainesville, Florida

The Gainesville Renewable Energy Center (GREC), a 100-megawatt biomass power facility, came online in Gainesville, Florida in 2013, and soon ran into controversy with noise complaints from neighbors.

In October 2014, the Gainesville City Commission approved an audit to look into financial transactions between Gainesville Regional Utilities (GRU) and GREC, which increased costs for the utility and its customers.

In April 2015, Wood Resource Recovery, one of the main fuel suppliers for GREC, sued the facility for breach of contract for $5 million in damages. Part of the complaint has to do with GREC’s refusal to take yard waste and materials from agriculturally zoned properties.

In August, the facility shut down temporarily, and when it became operational again, Gainesville Regional Utilities decided not to bring it back online, with no “projected return to service at this current time,” according to Margaret Crawford, GRU Communications Director. Instead, GRU is relying on power that is “more economic than GREC’s facility.”

In September, the city audit report uncovered that Gainesville Regional Utilities was paying $56,826 more per month than it was supposed to, totaling $900,000 in over-payments.

Koloa, Hawaii

Green Energy Team’s 7.5-megawatt biomass power facility in Koloa, Hawaii, was scheduled to start up in April 2015, but the official opening has been pushed back to November because the efficiency level from burning wood chips was lower than it should be, according to The Garden Island. The turbine was dismantled and reassembled, and is currently undergoing more testing.

[NEWS] Austin, TX Councilor: Biomass Energy Contract A Disaster

– by David Barer, February 11, 2016, KXAN

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Photo: Bizjournals.com

City Council agreed Thursday to hire outside attorneys to review risk in a $2.3 billion power contract that one council member has called a “disaster.”

The contract is between Austin and an East Texas wood-waste plant, Nacogdoches Power LLC, for 100 megawatts of power. At a cost of up to $325,000, Jackson Walker LLP will help in “reducing the City’s financial exposure to the biomass plant,” according to council documents.

The problem with the 20-year contract, said Councilman Don Zimmerman, is that “we are obligated to pay an exorbitant capacity fee” regardless of whether we receive power.

Austin is paying “over $50 million a year, even if it produces no power,” Zimmerman said. What’s more, that payment increases each year and could near $80 million by the end of the contract term, he added.

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