Novo BioPower

The Novo BioPower facility near Snowflake can turn the brush and wood scraps from 15,000 acres of thinned forest into electricity.

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

forest bioenergy?

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.

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(5) comments


Questions for Mr. Worsley: 1) Is APS the only utility to request a RFP for biomass generated power from your company?
2) Is ACC mandating biomass power the only way your business will remain solvent?
While professing concern regarding forest health as his prime motivator, Mr. Worsley is, first and formost, a business owner who is responsible for the viability of his business. If he cannot craft a business model that creates a sustainable recurrent market for his services then his company will not be viable.
Prop 127 failed because it was viewed as a government mandate. Government, by its very nature, is a poor custodian of markets under its control!




I agree with Airwuf that if Mr. Worsley's company cannot compete in the utilities market because the energy produced by burning biomass is 3-4 times as expensive as the other forms of alternative, renewable, "green" energy (solar and wind), he should not be asking the ACC to mandate that we, the APS ratepayers, subsidize his faltering company. If Novo power is "as much a philanthropic effort as anything", it is his responsibility to either fund his philanthropy himself or find income from other philanthropic sources, not force the electric consumers to pay for it at vastly inflated prices. He says that part of the reason for the high cost of biomass energy is the cost of fuel to transport the logs to the plant. That would certainly be true for the existing Snowflake Novo Power plant, which is located many miles from the pine forests where the thinning projects are taking place. It makes no sense to force the public to pay for the development of a non-competitive source of energy that ends up using large amounts of non-renewable fossil fuels for transportation and, at the same time, contributes to the emission of greenhouse gases both in the transportation of the biomass and the burning of it to run the generators. To say nothing of filling our skies with more smoke in addition to the massive amounts already being produced by increased amounts of prescribed burns and managed wildfires by the forest service.

Informed Consent

Biomass is often promoted under the umbrella of renewable or green energy. "Renewables" are not necessarily cleaner than other fuels. It only refers to whether an energy source is replenishable or replaceable on some reasonably short time scale. Because biomass has a lower heating value than fossil fuels, burning biomass emits more carbon dioxide than coal or natural gas per unit of energy produced, (150% the CO2 of coal and 300-400% the CO2 of natural gas). At the rate that the ponderosas and all conifers throughout the west are dying due to prolonged drought (or global warming, what ever you want to call it) we will never be able to recapture the carbon from the biomass energy burning of the "6-7" diameter logs from our northern Arizona forests. The 60 million dollar question (which is the conservative estimated cost per year that APS customers would be charged) is why would the environmental groups, which are the major driver in the 4FRI Stakeholders, write a letter to the AZ Corporation Commission in support of this subsidized energy program that will release massive amounts of irretrievable carbon? The article reports that the major incentive is to have someplace to use the trees form 4FRI thinning projects. At the same time, 4FRI rejects changing our outdated log export laws so that we can export these small diameter logs, instead of burning them, for wood fiber manufacturing. I thought that global warming is caused by releasing too much CO2 into the atmosphere. Which is it?

Informed Consent

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