As part of the study to determine whether or not a central biomass-fueled heating plant is feasible for Grand Marais, a number of types of biomass have been looked at. The latest plan would be to use leftover biomass from Hedstrom Lumber Company, which would be enough to fuel the 18 potential customers who may be tying into the system. However fuels like this at a local timber sale could also possibly be used.
Cook County Local Energy Project (CCLEP) representatives appeared before several governmental entities this month with updates on the investigation of whether or not it is feasible to heat government and commercial buildings in Grand Marais with a central biomass-fueled heating plant.
ISD 166 unsure about 25-year contract
Paul Nelson and Gary Atwood talked to the ISD 166 school board on November 7, 2013 about the work being done to investigate the feasibility of heating the school with biomass. The new YMCA structure attached to the school building is also compatible with the hot water heat the biomass plant would provide.
“It still looks like it’s a feasible project,” Nelson said. “It has to pay for itself. It’s not going to be paid for by community dollars.” He said the U.S. Forest Service supports the project and the Energy Division of the Minnesota Department of Commerce is recommending it to the legislature and the governor for bonding.
“It’s moving forward rapidly right now,” Nelson said. Atwood said their goal is to have customer contracts signed and bids in by the end of January for presentation to the Grand Marais Public Utilities Commission and the city council by mid-February.
The new propane boilers inside the Cook County Schools facility could be leased to the city as a backup system. The feasibility study estimates the school would receive over $78,000 a year for the lease. Customers would be asked to sign a 25-year contract, and the heat would be like another utility along with electricity and water. The system would have lots of potential to expand.
Numerous types of local biomass have been studied. The latest plan would be to use leftover biomass from Hedstrom Lumber Company, which would be enough to fuel the 18 potential customers who may be tying into the system.
Superintendent Schwarz said she is concerned about the rising cost of fossil fuel but also about the risk of signing a 25-year contract. She said she would like an “out” clause in the contract. “Our budget is very volatile, too, and dependent on a lot of variables,” she said.
Mary Sanders identified herself as “a card-carrying environmentalist” but was skeptical about the written update prepared by Mark Spurr of FVB, the engineering company that has handled this phase of the project. “I want some honesty, transparency, and [to] really be able to believe this company,” she said. Superintendent Schwarz said she wanted some information from an independent source.
Nelson said a school district in northwestern Wisconsin has successfully transitioned to biomass heat. It is about 300 yards from a hospital, which is expressing interest in coming on board.
The board outlined several questions that will be passed on to Mark Spurr. Nelson assured the board that they would not be “vacuuming the forest” to fuel the plant.
County approves payment for next phase
Nelson and George Wilkes appeared before the Cook County commissioners on November 19, seeking payment of $81,000 to enable the biomass project to move to its next phase. Auditor Braidy Powers noted that the county had committed to $243,000 from the 1 percent recreation and infrastructure sales tax. The county has paid out $81,000 to date.
Commissioner Garry Gamble said he appreciated the CCLEP representatives coming before the board and providing more information before they released more funds.
Nelson said the biomass study is “considerably further down the road” than CCLEP thought they would be at this point. He said the company working with CCLEP, FVB, had managed to obtain a grant of $250,000 from the U.S. Department of Agriculture, which was not in the original plan. Nelson said the completion date for the project has been moved from March 2015 to February 2015.
Nelson said he thought it was time to have some discussion with the commissioners, since they would potentially be the “landlords” of a biomass-fueled heating plant. He said it might be easier if they could meet with commissioners individually to bring them up to speed.
Commissioner Gamble said commissioners are both landlords and stewards and since they represent the public, he said, “I think it is very important to do this collectively.”
Commissioner Sue Hakes said it is difficult to discuss something in depth at county board meetings and suggested that they hold a work session where commissioners could ask all their questions and get a “tutorial.” Commissioner Doo-Kirk suggested that the session could be conducted via Skype.
Commissioner Bruce Martinson asked the men to refresh his memory about the projected project cost. Nelson said the total cost of the project is $9 million. He said CCLEP met with Representative David Dill and Senator Tom Bakk when they were in the county to ask for a $4.5 million bond from the state. The remainder, said Wilkes, would be acquired through a loan from the U.S. Department of Agriculture, financed through revenues from the project.
Commissioner Hakes said, “As I go to regional meetings, the biomass project in Cook County is what I get questions on a lot and people are excited about it.…You’re getting a lot of positive attention and I think that’s good.”
Auditor Powers asked when a decision was needed from the county. Nelson said it is hoped that all the contracts would be signed by January 10.
Commissioner Hakes asked, “Is the contract that we would sign binding…? We wouldn’t go into it half-heartedly, but is it subject to certain events happening, or certain prices—how would that look?”
Nelson said the contract is being developed with the city of Grand Marais and there would be language — “some really good protections.” However, Nelson acknowledged that it would be a significant commitment for the county. “We’re asking people for a 25-year commitment because that is what our loan from USDA would be,” he said.
Wilkes said they are meeting with Auditor-Treasurer Powers and Maintenance Director Brian Silence to review the plan. He said the board should have a draft contract in a week or so.
A unanimous motion of the board passed to approve a release of $81,000 for the biomass project.
PUC approves customer contract
On November 21, Wilkes, Nelson, and Mark Spurr of FVB discussed with the Public Utilities Commission a customer contract written up by City Attorney Chris Hood.
Spurr said the equipment should last 20-25 years and the piping should last at least 40-50 years. A reserve account would be set up for repairs and replacements. “We want to run a tight ship here,” Spurr said. “This is something that will be reliable and around for many decades.”
Regarding the school’s reluctance to sign a 25-year contract, Spurr said the contracts would ensure payment of bonds. He said people go into a longterm commitment when they buy a boiler for an individual building.
Spurr outlined several funding sources that look promising, including loans from the U.S. Department of Agriculture and the Iron Range Resource and Rehabilitation Board and a $500,000 grant from another source. Nelson said they are working to avoid financial risk to the city.
The PUC approved the proposed customer contracts contingent on Attorney Hood’s approval of some wording changes.
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