Biomass power plant at juncture
As a new administration prepares to take office in Madison, with a different attitude toward renewable energy than the Doyle administration, We Energies is pressing forward with plans to build a wood-burning power plant in north-central Wisconsin.
The state Public Service Commission will hold a hearing on the project this week, with a decision expected early in 2011.
Concerns about greenhouse gas emissions, the cost of the project and even competition for biomass are all being reviewed as the proposal makes its way through the state approval process.
We Energies is optimistic, as it has won all the local approvals it needs from officials for the Village of Rothschild and the Village of Weston, utility spokesman Brian Manthey said.
"We believe we've answered every question that has come up, and we are pleased that we've gotten unanimous support from the municipal boards for the project," he said. "We'll continue to supply the information needed to move the project forward at the state level."
The $255 million project at the Domtar Corp. paper mill in Rothschild, south of Wausau, would generate 50 megawatts of electricity, enough to power about 40,000 typical homes. It also would provide steam for the Domtar mill.
But the project remains controversial, with critics raising questions about its effect on the environment.
The local school district has raised concerns about a projected increase in particulate matter emissions, which can cause respiratory problems. The plant wouldn't comply with new rules the U.S. Environmental Protection Agency is about to adopt.
We Energies says forecasts that emissions would increase are based on an unrealistic projection that the plant would operate 365 days a year. Based on its projected operation, particulate emissions would remain the same or fall when measured at schools near the plant, Manthey said.
The plant would generate more greenhouse gas emissions at a time when the state is promoting renewable energy to reduce those emissions, said Dennis Grzezinski, an attorney for Save Our Air Resources, a group of local residents who object to the proposal.
"If you cut down a forest and make it into furniture and buildings, that wood is going to continue holding the carbon for 50 or 100 years longer, depending on how well those items and buildings are maintained. If instead you take that wood and burn it today, that's a whole different picture of what's going on in the atmosphere," Grzezinski said. "That's just a huge addition of greenhouse gases in real time."
We Energies considers the project "carbon neutral" because the burning of wood is merely accelerating the eventual release of carbon caused by wood decaying in forests.
Domtar, which would handle the biomass harvesting for the project, has committed to deploying sustainable forestry practices to keep the forest healthy and collect carbon from the air as new trees grow.
In a ruling on global warming emissions this month, the Obama administration delayed until next year a decision on whether biomass power plants will qualify as carbon neutral.
Because the EPA is regulating greenhouse gas emissions under the Clean Air Act, the state Department of Natural Resources will review the project under emergency rules that are expected to be adopted soon, according to Andrew Stewart, a DNR permitting manager.
Mark Thimke, an environmental lawyer with Foley & Lardner in Milwaukee, said he expects the EPA will allow certain types of biomass power plants to be qualified as carbon neutral, but it's too soon to say what the agency will do.
"Where EPA draws the line is likely to be the big question, especially with the new Congress increasing oversight of the agency's decisions," he said in an e-mail.
The $255 million cost of the Domtar project is also raising concerns.
An analysis by auditors at the PSC found that building a wind farm would be less expensive for customers than building this project. The commission suggested that We Energies explore the possibility of burning wood in conjunction with coal at some of its existing coal-fired power plants, such as its older coal plant in Oak Creek.
An estimate by the customer group Citizens' Utility Board found the plant would be twice as expensive as a similar-sized wind farm, executive director Charlie Higley said.
While the cost may be higher, We Energies said the utility wants to diversify its renewable energy sources beyond wind. And unlike wind and solar projects, biomass power plants have the added benefit of being able to run round the clock.
In addition, Allan Mihm, We Energies director of generation projects, said the project is more efficient because it's supplying electricity and steam. It would cost the utility $20 million more to build a power plant separate from the paper mill, he said.
CUB is concerned that the electricity the Rothschild plant sells into the Midwest wholesale power market will be costly and saddle customers with higher costs.
That is an issue now before state regulators with the proposed Charter St. biomass project in Madison.
Madison Gas & Electric Co. is forecasting it will need to run its natural gas-fired power plant in Madison more frequently, increasing costs by $3 million for utility customers. CUB is seeking to have the University of Wisconsin-Madison or utility shareholders shoulder those higher costs instead of ratepayers.
The Charter St. plant is being converted to burn natural gas and biomass at a cost of $250 million. The proposal is designed to settle air-pollution lawsuits filed by environmental groups that challenged the emissions from the Madison coal plant.
But Governor-elect Scott Walker recently announced his opposition to the proposal. He has requested that the Doyle administration halt work on the biomass portion of the Charter St. project.
The We Energies project is being built at a time when the state has an ample power supply, but We Energies needs to add renewable power to comply with Wisconsin's 10 percent renewable power mandate.
That law requires that 10 percent of the state's power come from renewable sources by 2015. We Energies must boost its renewable power contribution to 8.26 percent of sales by that year.
Construction would start next year and last for about 30 months. The project is expected to create about 400 temporary construction jobs in addition to jobs at the power plant and in the logging and forestry sectors.
Meanwhile, a northern Wisconsin paper mill has come out against the proposal, citing concerns about whether there is enough wood to supply the plant and whether the project would boost paper prices.
"If this project is implemented as currently proposed, it will adversely impact our current biomass fuel procurement and our pulpwood procurement, including increasing the cost of woody biomass," said Bruce Ridley, manager of Packaging Corp. of America's Tomahawk mill, which employs 426 people.
Domtar responded in a PSC filing that its studies show there are plenty of tree tops and branches left over from logging to supply the new facility, and that it will not require big shifts for the logging industry to adapt to meet demand for the biomass plant.
A public hearing on the project is planned for Tuesday in Rothschild. The hearings will continue on Thursday in Madison. More information on the project is available at psc.wi.gov or www.we-energies.com/biomass.
Copyright (c) 2010, Milwaukee Journal Sentinel/Distributed by McClatchy-Tribune Information Services.