WHITE MOUNTAINS — What is the future of wildfire? And what does that have to do with electricity and electrical rates?
That’s the question before the Arizona Corporation Commission regarding a proposal from Novo Power in Snowflake.
Brad Worsley, president and CEO of Novo Power came before the 4FRI Stakeholders Group meeting last week asking for support for his company’s bid to expand their business by adding an additional 50 megawatt power plant fueled by the waste material from forest restoration.
Novo Power was the only company that responded to a Request for Proposals (RFP) put out by APS last May seeking proposals for the expansion of forest bioenergy, as part of the company’s renewable energy portfolio. A study on bioenergy was also a stipulation made by the ACC for a rate hike requested by APS that allowed the utility to collect $95 million more in revenues.
Worsley told the members of the stakeholder’s group that last week that APS is considering scrapping the project because Novo Power was the sole respondent to the RFP.
“At the utility level, there is no interest in biomass,” Worsley told the group.
Worsley’s sentiments likely reflect the the recent trouncing of Prop 127 at the ballot box last month. The measure sought public approval for a constitutional mandate to require Arizona utilities to provide 50 percent of their electricity from renewable resources by 2050. The parent company of APS, Pinnacle West, spent over $20 million to oppose the measure. Prop 127 was opposed by nearly 69 percent of voters. The threat of a significant jump in electric rates for customers was one of the primary reasons for the unpopularity of the measure.
But wildfires cost a lot more than a few extra bucks on your utility bills, Worsley said, pointing to the devastation of the Camp Fire in California. Worsley said that the ACC could mandate the expansion of forest biomass energy as a way to help pay for the cost of forest restoration
According to APS’s own calculations, expansion of biomass generation would raise customer’s rates by $1.54 to $4.13 per month in order to cover the cost of forest refuse-fueled bioenergy.
Worsley is proposing to buy and move a 50-megawatt bioenergy plant that was previously used in Texas to Arizona, plus the existing 28-megawatt plant in operation at Snowflake.
“What we were prepared to propose to the state is about 78 megawatts that we felt we could do at the most affordable cost,” he said. That’s less than one percent of all of the power generated in the state, he said.
While the forest thinning planned as part of the Four Forest Restoration Initiative — 4FRI — is well below its targeted goals of 50,000 acres per year, most of the thinning that has occurred has been done on the Apache-Sitgreaves National Forests, and he attributes that in part to his company.
Burning the waste from the forest gives value to a product that otherwise has no value at all, and is simply a liability to loggers. Worsley said that about 50-60 percent of material that is thinned has no commercial value other than to be burned to create electricity. Loggers can sell him their waste material and gain some value from the product.
“It’s as much a philanthropic effort as (anything) … our expectations for our return on investment are much lower than most,” Worsley said. The electricity produced he said, is more of a by-product, with the primary value in healthier forests and watersheds that are better protected from fire.
The reason for that is that bioenergy is more expensive to generate than other kinds of renewable energy sources — three to four times the cost of some solar and wind energy. Part of the reason for that is the transportation costs involved with the fuel.
“In May, APS issued an RFP to evaluate bioenergy solutions the marketplace could offer in Arizona. This process confirmed that the main challenge today is affordability for customers because biomass, as proposed, was a much more expensive way to generate electricity than other options. Forest health benefits are extremely important, and something we will continue working with stakeholders to assess. An important part of that stakeholder process must include a look at all cost-effective and equitable ways to fund and achieve sustainable forest health. At this point, the Arizona Corporation Commission is requesting a review of all potential solutions, including funding through the state legislative process,” said Jeff Burke, director of resource planning for APS in an email.
Worsley said he doubts that there is much political will in the legislature to fund bioenergy.
The 4FRI Stakeholders Group is sending an official comment in support of Novo Power’s proposal to the ACC, and Worsley was asking as many entities as possible to also send support comments, including the U.S. Forest Service.
Complete loss of
Worsley even worries that his plant in Snowflake could shut down when their contracts with major utilities are up in four years. He says he is not sure he sees the political will in the state to invest in solutions to the forest thinning problem.
“No one wants to be the one responsible to get this thing done, yet everyone wants it done,” he said. “I think that the current actions of the utilities demonstrate that there will not be an appetite for this power in the future because of its cost,” he said.
The time for the ACC to act is now, Worsley said. He said that under the state’s 2006 Renewable Energy Standard and Tariff, the ACC can mandate the development of biofuels. He said that the issue is not really about his business, but about protecting the forest and helping to prevent wildfire.
“It’s well-documented that the cost to prevent (fire) is one-tenth of the cost to react,” Worsley said in a phone interview on Friday.
The cost of the California’s Camp Fire is measured in nearly 90 lives lost with hundreds still missing, and billions in property loss and damages. No cause for the fire has yet been confirmed, but problems with utility lines from Pacific Gas and Electric are a potential cause of the fire.
“It’s so terribly correlated to what we are trying to do in Arizona,” Worsley said, noting that major transmission lines also cross the Apache-Sitgreaves National Forests.
The ACC will vote on the proposal on December 17.