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Thursday, April 28, 2011

PSC says proposed biomass plant too costly for consumers

From an article by Brian E. Clark on WisBusiness.com:

Citing what they described as high costs, members of the three-person Public Service Commission said We Energies and the Domtar Corp. paper company will have to bear more costs for a proposed biomass plant in Rothschild that would produce both electricity and steam.

The $250 million plant will use waste wood and sawdust to produce 50 megawatts of electricity, as well as steam for Domtar’s papermaking operations.

Phil Montgomery, the new PSC chairman, said at Thursday's PSC meeting that the state currently has adequate power supply reserves, but that We Energies needs to build the plant to meet state mandates that 10 percent of its power be produced from renewable resources by 2015.

Montgomery, a former legislator who chaired the Assembly Committee on Energy and Utilities, said he continues to support the renewable standard.

“But I don’t think anyone in the Legislature thought we would be experiencing this economic downturn we’re in now,” he added, noting that he hopes We Energies and Domtar can reduce costs to electricity ratepayers.

Commissioner Eric Callisto said he has trouble with the overall economics of the plan and how it has been structured between We Energies and Domtar.

Callisto said he is concerned with everything from the financing and operating costs to the rates that consumers will have to pay for the power generated by the plant. . . .

Commissioner Lauren Azar said she believes biomass may become Wisconsin’s best energy resource, but she said the Rothschild plant construction cost is approaching $5,800 per kilowatt hour, which she called “unacceptably high” and almost on par with the price tag for building a nuclear power facility.

Wind turbine construction costs are about half that figure, she said. But recent actions by the Legislature and governor over wind farm-siting rules have caused at least two companies to abandon projects because of regulatory uncertainty, she said.

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