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Thursday, February 21, 2008

Proposed Biomass Plant Granted Tax Credit

By Laura Nesbitt
Mountain View Telegraph
    The company proposing to build a biomass electricity-generating plant near Estancia has cleared another hurdle.
    An order granting an appeal by Western Water and Power Production LLC for a renewable energy production tax credit was issued by Energy, Minerals and Natural Resources Department Secretary Joanna Prukop on Feb. 14.
    This was the first time that an interpretation of the 2002 statute creating the tax credits has been required by the secretary, according to Jodi McGinnis Porter, EMNRD public information officer.
    The secretary's order gives energy tax credit to the company for its proposed biomass project, Porter said.
    The tax credit could be worth up to $27.4 million over a 10-year period, the Energy, Conservation and Management Division said in a previous response to the appeal.
    WWPP and High Lonesome Wind Ranch, a wind energy project also proposed for Torrance County, were competing for the remaining tax credits, according to an ECMD chart.
    The application for tax credits by HLWR has been approved, Porter said. HLWR will receive $222,730 in tax credits annually, Porter said in an e-mail.
    WWPP has endured repeated delays in its attempt to build the plant.
    In May, the New Mexico Environment Department denied a request by WWPP for an air quality permit. David Cohen, president and co-owner of WWPP, filed an appeal of the denial in June, which generated hearings in Moriarty in August. The state's Environmental Improvement Board overruled the Environment Department denial.
    Efforts to build a biomass plant in Estancia began in 2003, Cohen said.
    At an April 2006 news conference in Moriarty, Jack Maddox, WWPP vice president, said there were several hurdles remaining before beginning construction, including tax credits from the federal government for renewable-energy projects.
    WWPP has been advised that it can finance the project without the federal tax credit that will expire at the end of the year, Cohen said.
    However, the repeated delays have affected costs for the company, Cohen said.
    "Since we signed our contract with (Public Service Company of New Mexico) almost two years ago, costs have gone up 20 to 30 percent on all of our equipment," Cohen said.
    WWPP has a contract with PNM to make upgrades so they can sell the power to PNM through a substation just below the proposed plant near N.M. 41.
    The transmission lines are owned by PNM but Tri-State Generation and Transmission Association of Colorado is the provider for generation and distribution, Cohen said.
    Construction will begin sometime this spring on the $90 million, 35-megawatt electric plant, Cohen said.
    Energy needs for roughly 40,000 four-member households will be provided by the 35-megawatt electric plant, Cohen said.
    About 150 temporary jobs will be created during the construction phase, Cohen said.
    An agreement between WWPP and Tagawa Greenhouse is still in place for the biomass plant to provide hot water to the greenhouse from the plant, Cohen said.
    "It will reduce their operating costs and result in bringing even more jobs to the community," Cohen said.
    Forest Guardians, which has changed its name to Wild Earth Guardians, has plans to appeal the order in district court, said Bryan Bird, wild places program director.
    The nonprofit organization will argue that the secretary's decision was incorrect. "That it is necessary to show fuel availability," Bird said.
    "The state was not prepared for biomass when we wrote legislation. We didn't understand the implications," Bird said, referring to the state Renewable Energy Act.