WildEarth Guardians

Thursday, May 17, 2007
Biomass Plant a Bad Investment

Through WildEarth Guardians diligent efforts the plant's air quality modeling was revised due to inadequate analysis by WWPP and the Air Quality Bureau
Contact: Albuquerque Tribune

I bet you didn't know that you might be buying into a $94 million biomass plant.

As citizens of Torrance County you may soon be the sole owners of the proposed 35-megawatt Estancia Basin Biomass Facility. You will lease it to Western Water and Power Production (WWPP), the designers and promoters of the plant, in the hope that they will make a profit, stay in business and provide a few jobs.

Who cares if the plant hasn't presented the public with a business plan that shows they have secured sources of fuel wood to run the plant for the next 20 years? Who cares if the U.S. Forest Service said they've made no deals with WWPP for National Forest biomass? Who cares if the plant will use over 450 acre-feet of water a year, depleting our shrinking aquifer?

Who cares that the county will be liable for the construction debt and legal fees if the plant goes under and the bond rating tanks?

These are just minor details.

While Torrance County slept, our well-intentioned commissioners were working on an Industrial Revenue Bond agreement with WWPP to the tune of $94 million to build the Estancia biomass plant. They signed a statement of intent to issue the bonds where the county will retain ownership of the bond-financed facility and lease it back to WWPP at a rate sufficient to pay the principal and interest on the bonds as they mature. As an added benefit, the facility will also be exempt from a number of county taxes- taxes that would otherwise go into taking care of the roads that will be degraded from the thousands of trucks hauling biomass.

And why do you think WWPP came to the county looking for money instead of looking for private investment? Because private investors know about business and they know a bad investment when the see one.

This isn't the first time WWPP wanted to build a biomass plant. They've been trying to do this all over the state for a number of years. And they keep getting shot down. There's a reason for this. It's risky and not economically viable. WWPP needed a host of tax breaks to make it look barely profitable on paper. PNM even shot down WWPP's proposal two times last year because the numbers didn't add up. It seems PNM's decision-makers reluctantly succumbed to political pressure and finally bought into biomass.

In a recent phone conversation, Phil Reese, the operator of a 50-megawatt biomass plant in California, was adamant that any biomass plant will likely fail unless it gets at least 9 cents a kilowatt hour. Jack Maddox, vice president of WWPP, stated at a recent public meeting that the Estancia plant is only going to be paid 6 1/2 cents a kilowatt hour from PNM. Hope those tax credits last 20 years.

And who is going to pay to maintain the roads? Mr. Maddox stated that WWPP "will work with the county" to maintain the roads but the county just gave them a total exemption from gross receipts taxes and a 50 percent reduction in county property taxes. Do you really believe WWPP is going to voluntarily offer to cough up money to maintain county roads?

Fuel wood sources will also be in high demand from the plant so WWPP will be competing directly with local wood cutters. As we have seen from the 44,000-acre Chupadero Mesa state land lease, local woodcutters have been completely cut out of the process. You had to have pre-existing purchase power agreement for biomass to even bid on the wood. And a sweet deal it was at only about $1.50 an acre total cost.

As a result, the state Land Office is now vulnerable to lawsuits for violating the New Mexico Constitution on open and free competitive bidding. A lot of political pressure going around, I'd say. And you don't have to look far to see where it's coming from.

One final comment: WildEarth Guardians is owed a debt of gratitude from the citizens of Torrance County. Through their diligent efforts the plant's air quality modeling was revised at least three times due to inadequate analysis by WWPP and the Air Quality Bureau. If we have to breathe the stuff, at least the air will only be as dirty as current coal-fired air quality regulations demand- if that's any solace.

For more detailed information on the proposed biomass plant, please visit www.biomassinfo.blogspot.com

Bud Latven is a resident of Tajique.

Copyright 2007 Albuquerque Tribune - Reprinted with permission