Show Low's IDA will issue bonds for a biomass plant

By: Donna Rescorla, The Independent

07/21/2006

WHITE MOUNTAINS - Two governing bodies had to approve a $39 million bond for a biomass plant adjacent to Abitibi Consolidated.

At its July 18 meeting, Show Low City Council approved the plan for its Industrial Development Authority (IDA) to issue Solid Waste Disposal Revenue Bonds in the amount of more than $39 million. The bonds will be used by Snowflake White Mountain Power to build and operate a biomass plant.

     At the July 17 board meeting, supervisors were asked to pass a resolution approving the plan. They were told that, since the plant will be built in an unincorporated area, both the councilors and supervisors had to approve the project.
      "This project qualifies for a tax-exempt bond as a solid waste facility," Scott Higginson, who represents Snowflake White Mountain Power, told the supervisors. "When we applied for the bond, the Navajo County IDA wasn't in place so we went to Show Low but we still have to come before this board."
      At a public hearing with the Show Low IDA, no one attended, supervisors were told.
      "Can you give us an update?" Supervisor David Tenney asked. "People are asking about the status, the timetable. There are a lots of logs out there."
      Higginson said the plant is already under construction.
      "We are bringing parts of an existing boiler from Texas and a new boiler is on order. The turbine and generator facilities are in Maine.
      "We anticipate a real vertical look in September. It must be fully operational by the end of next year."
      SRP and APS have already agreed to purchase power generated by the plant, he said.
      There are several benefits associated with the biomass project, he said. The first is that work is going on in the forest to thin it with Renegy being the largest logger. Renegy has 15 contracts for removing dead trees from the Rodeo-Chediski fire and employees 65 to 70 people, he added.
      A second benefit is economic, with the plant expected to create 10 new jobs through Abitibi Consolidated. A third is the increase in the stability of electricity for the White Mountains, Higginson said, with electrons created to serve Snowflake/Taylor, Show Low and Pinetop-Lakeside.
      "It's nice to see something being done in the forest," Tenney said. "We appreciate what you are doing."
      "We already have a half year of fuel," Higginson said. "By the time we start, we will have three year's worth. Most plants operate on a 90-day supply."
      Asked where the plant was located in Show Low, Higginson said, "That's why we're here. It's west of Snowflake, located on Abitibi property and 15 feet from their boiler. It's in Navajo County. It's properly zoned and we have the proper permits."
      Supervisor Percy Deal asked how much area the plant needed. Higginson said they had leased approximately 110 acres, 10 for the plant and the rest for material storage and sawmills. It's located adjacent to the Apache Railway which is also owned by Abitibi.
      Supervisors approved the resolution in support of the bond. The resolution states the bonds are to be paid solely from the receipts and revenues of the IDA pursuant to a loan agreement by it and Snowflake White Mountain Power.
      Background material states the plant will be a 24 megawatt plant and will be operated by Abitibi. At 20 percent moisture content, the plant will burn 125,000 tons of green waste a year.