County picks private partner for biomass plant

By Andrea Damewood, Columbian staff writer

Published:

Updated: July 12, 2011, 3:25 PM

 

In a 2-1 vote, Clark County on Tuesday picked a private partner to continue its controversial plans for a biomass plant in downtown Vancouver.

But Commissioner Steve Stuart, who was an early champion of the project, unfurled a list of concerns about the project — including its carbon neutrality and whether the county’s new private partner will be able to sell the power it produces — and said he was uneasy about putting the county’s money on the line.

The county’s agreement with Schneider Electric says the company will spend $1 million to $1.2 million over the next three months on final due diligence for an electricity-generating biomass plant at the corner of West 11th and Harney streets. But the contract also puts the county on the hook for up to $395,000 if certain conditions, including several market forces, fall through.

“There are some risks on both ends,” Schneider Electric Project Manager David Palmer said. “But there is a process in there to protect the county.”

Schneider, a global company with headquarters in France, will build, finance and operate the plant, with no financial support from taxpayers. It will also lease the property from the county, which is expected to bring $1.5 million over 20 years.

In turn, Clark County would purchase hot water to heat and cool five buildings near the plant, including the Public Services Building and the Clark County Jail. Schneider will sell the excess energy the 5 megawatt plant produces. The biomass plant helps the county further its sustainability goals by burning woody forest debris that would otherwise be burned in open slash piles, said Mark McCauley, the county’s general services manager.

But since word of a biomass plant spread, the project has had its share of detractors, including downtown neighbors and members of the Vancouver City Council. The project is also caught up in a city review, with attorneys for Schneider Electric arguing a biomass plant is allowed in light industrial zones. But its not clear if the city’s planning staff share that view, and the project could wind up before a hearings examiner.

Stuart said that after talking with enough people, he doesn’t feel that this is the right project for downtown. He also said he’s not convinced the city will back down in the land use dispute.

Four market forces could kill the project and require the county pay Schneider: ability to connect to the power system; ability to sell the power on the market; ability to find enough biomass fuel; and also ability to find a private financier. Stuart wondered about the plant’s ability to connect with the power grid — if Clark Public Utilities is at its capacity, then the plant would have to run a line directly to the Bonneville Power Administration’s Ross Complex in north Vancouver.

He also said biomass-generated power is expensive, and the only reason is would sell is because it’s attractive to those trying to meet green power initiatives. If hydropower, of which there is a current surplus in Washington, were to be deemed a green energy as well, “then all bets are off,” Stuart said.

“The bottom line is there is a financial responsibility for the county if it doesn’t pan out,” he said. “I’m not comfortable moving forward.

But Chairman Tom Mielke, who had initially balked at the idea of using federal energy grants, said that biomass is a gamble worth taking.

“I think this is a step forward,” Mielke said. “When you start any business, it’s a venture. I encourage my counterparts to move forward, and we’ll address these issues down the road.”

Commissioner Marc Boldt said he was concerned about the energy market.

“I’ve been a farmer all my life — I try and figure that market out before I start growing plants,” he said, before ultimately siding with Mielke to continue .

Schneider and Clark County are hoping to finish due diligence by Oct. 31, so that the company can begin construction in time to get an $8 million or more federal energy grant before the program expires at the end of the year.

Palmer said that Schneider will conduct an “extensive” public outreach as part of the final planning phase. The questions about pollution, noise and visuals will be answered in the coming months. The project will meet all air standards and also use the best available technology to control pollution, he said.

“There’s a lot of technology around to make this a quiet, clean, good neighbor project,” Palmer said.

A county staff report shows the project — which would include retrofitting a portion of the sprawling South Pepsi Building to install boilers and other equipment — will cost up to $28 million and be completed in 2013. Using biomass instead of natural gas to heat the county buildings is the equivalent of taking 6,200 cars off the road, the report says.

County staff also estimate that during construction 10 to 12 local professional jobs along with 40 to 50 construction jobs will be created, along with $2 million in sales tax. Once the plant is up and running, six to 10 private professional and service jobs, plus 10 to 15 jobs in fuel recovery and transportation would be created, generating $1.43 million annually in payroll and taxes.

At each step of the due diligence process, the county’s financial liability increases, from a minimum of $75,000 in the first weeks to a maximum of $395,000. The contract includes three “deliverables” that Schneider must present to the county for review along the way. With each deliverable milestone, the amount the county must pay in the event of biomass falling through goes up.

Many of these variables were covered by consultants LD Jellison as they conducted higher-level feasibility studies, McCauley said, but Schneider “has to got to validate all the work.”

Palmer said that his company is already confident that it has found a supplier of biomass fuel, and is also already gaining interest from private investors. The power connectivity and their ability to sell the power remain more open-ended, he said.

After Tuesday’s meeting, Stuart said he wasn’t expecting Mielke to be the one to push biomass ahead.

“I was surprised he would support federal renewable energy subsidies and grants and gamble with county finances,” Stuart said, adding he wasn’t happy with putting all of the decisions on whether a biomass plant downtown will pan out in the hands of Schneider Electric. “They determine it’s not feasible, not us.”

Andrea Damewood: 360-735-4542 or andrea.damewood@columbian.com or www.facebook.com/reporterdamewood or www.twitter.com/col_cityhall.