Developers hoping to build a large wood-fired energy plant in North Springfield say it’s too late to meet the deadline for federal tax credits to help lower the project’s cost.
But despite that setback and a discouraging assessment from the state’s hearing officer, the application for the 35-megawatt plant is moving forward.
In their filings with the state, developers of the biomass facility have said the tax credits are needed to make the project viable.
The renewable energy incentives for biomass expire at the end of the year, and the Springfield project will miss that deadline.
“We would have needed to sign a construction contract by September of 2013,” said Adam Winstanley, one of the two developers behind the project. “We obviously are still looking to finalize our permits, so we’ve gone well past that date at this point.”
Winstanley said the absence of tax credits could raise the price for the power the plant generates. The credits would be worth about $55 million to the $200 million project.
But Winstanley said some potential buyers will pay more for renewable base load power.
“I do have a potential offtaker that could buy the majority, if not all the power,” Winstanley said. “The power is valuable enough to them that they would be willing to pay the price that we would need to make the project viable.”
Winstanley Enterprises and its partner Weston Solutions applied in 2011 for a Certificate of Public Good from the Vermont Public Service Board. The company has been working since then with state agencies.
It recently forged an agreement with the Agency of Natural Resources on a sustainable harvest plan. If approved the plant would consume about 400,000 tons of wood annually from Vermont forests.
Chris Recchia is Commissioner of the Department of Public Service, which represents rate payer interests before the Public Service Board. He said the agreement on the forest plan is an essential step.
“I think that will go a long way towards making it clear that this project is using wood in a sustainable way,” Recchia said. “And that it’s going to make sure that the wood resource and the soils that support forest management are going to be well maintained."
Earlier in the permitting process, the department said the power the plant would generate was not needed in Vermont.
But an abundance of inexpensive natural gas has changed the equation. Recchia said 3,000 megawatts of power are about to disappear from the grid.
That includes 600 megawatts from Entergy Vermont Yankee, which plans to close at the end of next year.
The biomass proposal had another setback in November when the state’s hearing officer in the case issued a proposal saying the permit should be denied.
The recommendation was based on the heavy truck traffic the project would bring to residential streets around the North Springfield Industrial Park.
Adam Winstanley said that shouldn’t be an issue.
“We have resolved that problem by working out an agreement with the town of North Springfield, to build a new access road from Route 10 into the industrial park.”
A final round of oral arguments dealing with the hearing officer’s recommendation, is planned before the full Public Service Board in January.
