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Plug pulled on Alexandria biomass plant

Sunday News Correspondent

April 08. 2017 9:43PM
State and regional leaders are concerned about the future of the biomass plant on Smith River Road in Alexandria that is owned and operated by Indeck Energy. (Bea Lewis/Union Leader Correspondent)

ALEXANDRIA - State and local leaders are expressing concern that Indeck Energy will idle electric generation at its biomass plant at month's end, but company representatives say the decision to mothball the facility was driven solely by the weak wholesale market and the low reimbursement rates under the state's Renewable Portfolio Standard law.

Rich Killion, a spokesman for Indeck Energy Services Inc., headquartered in Buffalo Grove, Ill., said that one-two punch made continued plant operations unsustainable.

Management met with the 16 local workers on April 3 and told them the facility's last day of operation will be April 30.

"We're extremely aware of the impact. It was a tremendously difficult decision," Killion said.


But Killion said once the plant is shut down, all maintenance and other precautions will be taken to assure that it could be brought back online if market conditions improve.

The company has reached out to the Governor's Office and District 2 State Sen. Bob Guida, R-Warren, to tell them about the impact the shutdown will have on employees, suppliers and other vendors, and to make them aware of the challenges of operating a small biomass plant in a very trying market.

"They're committed to having their voice heard and to be part of that," Killion said.

Tuesday at 1:30 p.m., the House Science, Technology and Energy Committee will hold a hearing on Senate Bill 129 that seeks to address the structure of the state's Renewable Energy Certificates and how they are valued, a critical component to keeping the state's biomass plants operating.

The legislation's prime sponsor is Sen. Jeb Bradley, R-Wolfeboro, who was a key figure in the deregulation of the state's electric industry at the turn of the millennium.

Jasen Stock, executive director of the New Hampshire Timberland Owners Association, said he's been fielding phone calls from landowners to loggers throughout the central part of the state since earlier this week, when news broke of the plant's closing.

"It's a huge concern for our members," Stock said of the trickle-down effect the plant's shuttering would have on landowners, foresters, loggers, sawmills and feedstock providers.

Biomass plants consume a tremendous amount of low-grade wood and, without a reliable outlet for that material, the closing would have a negative impact on the timber industry.

"We have a situation now where the sawmills are feeling the pinch and are having to stockpile their sawdust and mill waste. That has a ripple effect," Stock said.

Independent biomass plants in the state now consume an estimated 200,000 tons of wood annually in multiple forms, including whole-tree chips, sawdust and other clean-processed wood fuel.

The state has a Renewable Portfolio Standard law, and Stock said the Timberland Owners Association is among those groups working with policymakers to seek adjustments to help biomass plants continue operating.

While New England ratepayers have historically shouldered the highest electric rates in the country, Stock said the current wholesale market rate for electricity is at an all-time low.

Biomass plants and the electricity they generate for the wholesale market is just one part of the equation, according to Stock, who said lawmakers need to recognize the economic benefits of the jobs, timber taxes and other revenue the industry generates.

Killion echoed those sentiments.

"The benefits of that plant extend well beyond the boundary of the facility itself. From the employees to the loggers and the various vendors they interact with on a daily basis, that's what makes this so difficult for Indeck," he said.

District 2 Executive Councilor Joe Kenney, R-Union, said he was saddened to learn the Alexandria plant is to close April 30, and that the decision was prompted by the wholesale electricity market hitting historic lows of 2 to 3 percent.

"I don't think they want to close, but are taking a wait-and-see approach to assess what the market is going to do," he said.

Indeck Energy Services Inc. is a privately held developer, owner and operator of power generation projects.

The Alexandria biomass plant, at 151 Smith River Road, was built in 1986 on 22.1 acres. In 2016, the town assessed its land and improvements at $6,854,300.

The company has paid its annual property tax bill of $128,998, but has failed to file its annual report and paid a $100 fee for the business to retain its good standing status with the state Secretary of State's Office.

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