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Thursday, June 19, 2008

PNM Cancels Contract With Biomass Firm

By Laura Nesbitt
Mountain View Telegraph
      Efforts that began in 2003 to build a biomass electricity generating plant near Estancia have again been delayed.
    David Cohen, president and co-owner of Western Water and Power Production LLC, received a letter June 12 of “immediate” termination of his company's contract with Public Service Company of New Mexico.
    “Under the contract we had until May 31 to get financing and commence construction,” Cohen said.
    Officials at PNM see the matter differently.
    “Under the terms of the contract, Western was supposed to have financing for the project more than a year ago. We have been as flexible as we can be,” said Don Brown, director of communications for PNM.
    Cohen asked for a four- to six-week extension of the WWPP contract when he met with officials from the public utility recently.
    “We also said that instead of delivering the power by December of 2009, we wanted to extend that date to March of 2010,” Cohen said.
    Cohen admits that WWPP still needs to raise about $35 million to $40 million in equity before beginning construction.
    But PNM officials were not convinced that WWPP will be able to finance the project, Brown said.
    “We'll issue a (request for proposals) for renewable energy projects to see if there are other projects out there to supply us with renewable energy” at least through the end of 2010, Brown said. The request for proposals will be issued sometime in July.
    PNM has enough renewable energy to meet the requirements of the renewable portfolio standard through 2009, Brown said.
    According to Brown, WWPP is “free to submit another proposal, but it will be evaluated against any other project submitted.”
    In May 2007, the New Mexico Environment Department denied a request by WWPP for an air quality permit. Cohen filed an appeal of the denial in June, which generated hearings in Moriarty in August. The state's Environmental Improvement Board overruled the New Mexico Environment Department denial.
    An order granting an appeal by WWPP for a renewable energy production tax credit was issued by Energy, Minerals and Natural Resources Department Secretary Joanna Prukop in February.
    “Repeated delays from state government killed a project that made great sense for the environment and for energy production,” said Enrique Knell, spokesman for Rep. Heather Wilson, who wrote several letters to Gov. Bill Richardson in support of the proposed plant.
    “The costs to our air and water quality doesn't justify investing in forest biomass when there are cheaper renewable energies available now,” said Bryan Bird, public lands program director for WildEarth Guardians.
    Despite the setbacks, Cohen remains optimistic.
    “My initial review of the (PNM) letter doesn't look like PNM has abided by the contract. We're reviewing the termination letter and have not formed a position on whether it is indeed an effective termination,” Cohen said.
   

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