BENSON - Two companies which see opportunities to generate over $27 million in annual economic benefits to the Benson area while also saving Xcel Energy ratepayers millions of dollars are asking for the chance to make their case.
The Chippewa Valley Ethanol Company of Benson and BioPro Power of Spicer have filed an appeal with the Minnesota Public Utilities Commission. They are challenging a PUC order issued last month that advances plans to sell the 78-acre site of the former Fibrominn power plant in Benson to Brightmark Energy of San Francisco, California, for $1 million.
With the appeal, the two regional companies are hoping the PUC will hold a contested hearing at which they can make their case to buy about eight acres of the property, according to Truman Homme, CEO of BioPro Power, and Chad Friese, general manager of Chippewa Valley Ethanol Company. They want to save the combustion facility on the Fibrominn site before it is dismantled by Xcel, they said.
Xcel Energy plans to dismantle the power plant, which burned a mix of poultry litter and wood chips to produce electricity. It began production in 2007 but was closed last year. Xcel showed that it would save ratepayers money if it purchased and closed the plant rather than buy the expensive electricity it produced from biomass.
Brightmark Energy is currently conducting a feasibility study of its proposal to develop an anaerobic digester on the site. It would use wastes from large dairies in the area and possibly other farms to produce renewable natural gas. The gas would be distributed to an interstate natural gas pipeline near Benson and earn the company revenues from sales of the gas as well as from renewable energy credits from the state of California.
Chippewa Valley Ethanol Company and BioPro Power offered Xcel $2.25 million to purchase an eight-acre corner of the site containing the Fibrominn combustion building, and as much as $2.75 million for the entire site. Either way, the companies stated they could co-exist with Brightmark Energy on the 78-acre property, since Brightmark has no need for the combustion building.
Their offer also included a commitment to post a bond and take on the costs of dismantling the power plant if their plans for the site did not work out. Xcel is expecting it will cost it $13,450,000 to dismantle and remove the combustion facility assets desired by the two companies, according to information from the company handling sales of assets on the site. Ratepayers would be spared the dismantling expense if the companies' offer is accepted, Homme said.
With technology owned by BioPro, Chippewa Valley Ethanol is interested in using corn stover to produce steam energy for operations at its ethanol plant located next to the site. The current Fibrominn combustion facility could be readily adapted to this use, according to Homme.
The Chippewa Valley plant produces 50 million gallons of ethanol a year using natural gas to produce steam for the operations. Friese said the company cannot expand its operations without a new source of natural gas. The current gas line is operating at near capacity, and it is unrealistic to expect a multi-million investment by its owners to expand it.
Adapting the Fibrominn plant to use corn stover offers an opportunity to produce natural gas at a competitive rate for Chippewa Valley Ethanol, he said.
It would also make it possible for the company to expand its ethanol production to 120 million gallons annually. Importantly, it would also allow many of the cooperative's member-farmers to earn additional income by selling corn stover. All said, the expanded operations would mean an additional $27 million in economic activity that would be circulated in the local economy, Friese said. He and Homme noted that current purchases of natural gas mean Chippewa Valley Ethanol is sending millions of dollars out of the area.
Xcel Energy declined the bid offer by Chippewa Valley Ethanol Company and BioPro Power in favor of the Brightmark bid. The city of Benson made known it supported the Brightmark proposal, explaining it had been working with the company for a long time on the proposed project.
Chippewa Valley Ethanol and BioPro came to the table relatively late in the game, said Homme and Friese, but pointed out that their bid reached Xcel in time to be considered. They argue that the PUC as well as Xcel should be looking out for the best interests of the Benson area and Xcel's ratepayers by approving the bid.
Both met recently with local legislators in hopes of winning support for the proposal. They met with Benson City Council members in November in hopes of winning city support, but were not successful.