Feb. 26, 2008 — An alternate-energy company from Arizona plans to restart the cogeneration plant at Sierra Pacific’s former Susanville mill site and sell 13 megawatts of electricity. A press release from Renegy Holdings, Inc, of Tempe, announced the company’s intention “to use this property for the operation of the presently idle biomass facility.” Renergy estimated the plant could be fully operational by the end of 2008.

The company may sell the electricity locally, according to Renergy’s Investor Relations Representative Megan Meloni.

“Anything is possible,” Meloni said on Thursday, Feb. 21. “It comes down to who enters a power-purchase agreement and who pays for the off take of power.”

Renergy bought the plant for $1.3 million in November 2007 and apparently investigated moving it. However, in a Feb. 13 press release, company officials announce plans to keep the plant in place.

“Obviously, they would like to start it in place instead of move it,” said District 5 Lassen County Supervisor Jack Hanson, who said he and District 3 Supervisor Lloyd Keefer met with Renergy officials in early February as members of the county air pollution control district board.

Renergy plans on “making a number of upgrades to make it a more palatable cogen plant than it might have been under Sierra Pacific,” Hanson said at the board’s Tuesday, Feb. 19 meeting, “and they realize that it was not necessarily created as a cogen plant but more of a steam-generating plant for the drying of the lumber.”

Hanson said Renergy’s plans for the cogen plant may change Sierra Pacific’s proposal for a shopping, commercial and industrial area and park at the former mill site.

Gary Blanc of SPI and Paul O’Sullivan of Catlin Properties, Inc., told the Susanville City Council on Wednesday, May 3 about preliminary plans to turn the 260-acre former mill site into the Susanville Riverwalk. The development would be comprised of 54 acres of retail; 34 acres of new office; 46 acres of light industrial, industrial and warehousing; 78 acres of housing and 30 acres of parkways and pathways along the Susan River and other open areas.

“I’ve been in contact with some of the principals at Sierra Pacific and obviously with the cogen plant and some other issues, they’ve kind of changed the configuration of the development and I think that we can get some of the Sierra Pacific folks up to reintroduce that project,” Hanson said.

The county has an updated map it will release to the public, he said.

“I’d like to see that come back on the radar screen for both county and city staff and discuss how we’re going to move forward with that piece of property,” Hanson concluded.

Renergy’s plans
In a Feb. 13 press release, Renergy officials announced the reason for leaving the plant in Susanville.

"Preliminary results of our studies indicate that a sufficient supply of wood waste fuel may exist in the Susanville area, and as such, we intend to restart the plant in its current location," stated Bob Worsley, chairman and CEO of Renegy. "We are currently in discussions with a local forest products and timber company for the supply of wood waste. We are also in discussions with government agencies, local green waste sites and other parties relating to long-term forest thinning and other contracts that may enable us to secure additional fuel.”

The company already has begun applying for all necessary air and operating permits, Meloni said, and is in discussion with utilities interested in purchasing the power output.

Leaving the plant in Susanville and avoiding the costs associated with relocating and reassembling it will lower the cost substantially from the $15 million the company originally projected.

“Including acquisition costs, we now estimate the total cost of refurbishing and commissioning this plant at less than $800 per kilowatt, whereas the cost to build a new plant can range from $2,500 to $3,000 per kilowatt,” Worsley said.

Renergy entered into an agreement with Sierra Pacific Industries to lease, with the option of purchasing, approximately 40 acres of land.

The company’s plans to reopen the plant are subject to securing necessary financing to refurbish it, according to the press release, and obtaining any required construction, operation and environmental permits, identifying and securing necessary fuel sources at a cost-effective rate, entering into a power purchase agreement for the entire power output of the plant, and other activities necessary to restart and operate the plant.

Renergy is a green energy company focused on acquiring, developing and operating a growing portfolio of biomass to electricity power generation facilities. Its first project is Snowflake White Mountain Power, a 24 MW biomass facility under construction near Snowflake, Ariz. It is scheduled to begin supplying electrical power to Arizona's two leading utility companies in the second quarter of 2008.