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Sununu Veto of Bill to Subsidize Wood Chip-Burning Power Plant Threatens Future

  • A trailer carrying between 25 and 30 tons of wood chips from a logging job, enough for about one hour of electric generation, is emptied at the Springfield Power biomass plant in Springfield, N.H., Wednesday, August 1, 2018. The facility is one of the 6 independent biomass plants that have been impacted by Sununu's veto of S. 365 that would have required utilities to purchase a portion of their electricity from the biomass plants. (Valley News - James M. Patterson) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com.

  • Control Room Supervisor Barry Cantlin monitors equipment at Springfield Power Wednesday, August 2, 2018. The power plant, which came online in 1987, burns chipped logging waste to fire a boiler and create steam that runs a turbine generator, putting out 15 MW of electricity per hour. (Valley News - James M. Patterson) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com.

  • Trucks carry chipped wood from logging jobs within 75 miles of the Springfield Power biomass plant to be burned to generate electricity, Wednesday, August 2, 2018. The plant burns about 640 tons of the chips per day. (Valley News - James M. Patterson) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com.



Valley News Business Writer
Saturday, August 04, 2018

Springfield, n.h. — Chuck Theall, with a burly woodsman’s physique and white Santa Clause beard, stands on the ground near a pile of wood chips piled higher than a house.

The warm scent of pine lingers in the air.

“I worked 10 years in nuclear power in the Navy. Got out, interviewed at a trash plant,” recalled Theall, sweat stains soaking through his Carhartt T-shirt under a warm afternoon sun. “I didn’t like that.”

He heard that a new wood-burning electrical power generation facility in rural New Hampshire was looking for a steam plant operator. That was 30 years ago. Theall said he stayed because the work and small town life suits him — and there’s something really pleasant about being around freshly cut wood.

“It smells like Christmas trees all the time here,” he said.

Theall, 58, is the general manager of Springfield Power in Springfield, N.H., the biomass power generation plant off Interstate 89. The pale blue painted facility with a towering white chimney stack is visible to thousands of motorists on the highway who drive past it daily, although no signs advertise the purpose of the plant.

But the 17 megawatt plant — enough to power 15,000 homes — may not be burning much longer, according to Theall.

Already losing money for the past three years, Springfield Power and New Hampshire’s five other “independent” chip-burning plants say Gov. Chris Sununu’s recent veto of legislation that would have required the state’s utilities to purchase a portion of their electricity from biomass power producers all but seals their doom. The plants say they can’t afford to operate without the assured income.

Sununu, in vetoing the bill, said the measure would have cost $25 million annually over three years and led to higher electricity bills for ratepayers while not doing anything financially to prop up the struggling biomass plants.

‘We Don’t Know What Will Happen’

The state’s timber industry disputes those claims and says the veto will have far-reaching consequences on New Hampshire $1.4 billion timber industry, hurting everyone from timber producers, loggers, truckers, heavy equipment dealers, fuel suppliers — on top of the six biomasss plants that collectively employ about 150 workers and spend nearly $50 million buying wood chips from regional loggers.

The Springfield Power chip-burning plant provides only a fraction of the approximately 1,300 megawatt hours of electricity generated in the state each year. But, besides employing 20 workers — pay starts at $14 an hour — the plant spends between $5 million to $7 million annually to buy wood chips and logs from area suppliers within a 75-mile radius.

Theall relies upon a network of about 20 loggers who deliver 125 tractor-trailer loads of wood chips each week. Each truck load carries between 30 to 36 tons of chips. At the current market rate of $23 per ton for chips, that’s $690 to $828 per truckload.

Since the veto, Springfield has imposed a quota on the amount of chips it purchases from each supplier, cutting by half however many truckloads a particular supplier previously was delivering.

The purpose of the quota is to maintain the least amount of fuel supply available on hand in the event the Legislature doesn’t override the governor’s veto and the plant goes into “shut down mode,” Theall said.

“We don’t know what will happen after Sept. 13,” he said, referring to the date the Legislature has set to vote on the governor’s veto.

Rolling in nearly all day, trucks dump their loads into a hopper and the chips are carried on a conveyor line into one of two, 80-foot tall concrete silos that store up to 1,000 tons of chips each.

Magnets on the conveyor suck up any metal debris mixed in with the chips — maple taps are a constant nuisance — and then sifted through a “sizing machine” to extract any wood pieces and sticks which are larger than 2-by-2 inches. Larger pieces and sticks are diverted to a crusher to be made smaller and then routed back into the system for use.

Chips are pulled from the bottom of the silo and fed into the boiler on grates where they are burned. The heat from the fire boils water that flows through pipes and converts into steam pressure that spins the turbine blades on a 20MW General Electric generator that produces electricity.

The Springfield plant burns about 624 tons of wood chips per day — 26 tons per hour — but can be more or less, depending on wood quality and moisture (poorer quality and higher moisture content requires a greater quantity of chips to burn). The plant runs 24 hours a day for 51 weeks of the year, shutting down a week every spring during mud season — because logging roads become impassable — for maintenance.

Troy Simino, a third generation logger who lives in Cornish, has beeing delivering four truckloads of wood chips each week to Springfield Power from timberland he managed on behalf of clients in Windsor and Sullivan counties.

The approximately 6,000 tons of chips that Springfield plant buys from him annually accounts for about $135,000 in yearly revenue, “the equivalent of a month and a half of revenue of my business,” Simino said. His son Zach, a forestry student at the Thompson School of Applied Sciences at the University of New Hampshire, is studying to enter the trade as well.

Springfield Power has been an important factor in his logging business because it has provided a reliable outlet for the low-grade wood — tree tops, branches, trunks too small to used for saw wood or not of high enough quality to be used for furniture — that otherwise couldn’t be sold.

“About 70 percent of the product I produce on a yearly basis is low-grade product — firewood, chip wood or pulp. Of that 70 percent, a little over half is chip wood,” he said.

In addition to the financial setback, Simino said that without a market for wood chips he would be either forced to leave the low-grade wood on the forest floor or wouldn’t have an economic incentive to thin the forest in the first place. Thinning forests, he said, is important to timber management because added sunlight encourages the growth of healthy trees.

“Good forestry means encouraging the best and brightest prospects and removing those trees that are sick and dying. It’s all about manipulating the sunlight,” he said.

Grim Economics

Springfield Power, then known as Hemphill Power & Light, opened in 1987 and was originally built by Durgen and Crowell Lumber, which continues to operate across the road from the biomass plant. The mill’s late owner, Peter Crowell, partnered with the former Massachusetts engineering firm Thermo Electron to build the facility because “he needed an avenue to get rid of the mill waste at the time,” said Ben Crowell, son of Peter Crowell and today a vice president and co-owner of the mill.

Since then, the biomass has passed through several owners: Hemphill in 2001 was acquired by AES Corp., which in 2007 sold the biomass plant to Japan’s Marubeni Corp. Then, in 2010, Marubeni sold its renewable power assets, which included Springfield Power, to South Korea’s Korea East-West Power Co., which operates it through New Jersey-based affiliate EWP Renewable Corp.

Today, the mill is both the purveying agent for the biomass’ chips as well as a chip supplier itself. His mill still sells about 30 to 40 truckloads of chips to the mill each week.

Since the biomass plant in Alexandria shut down last year, it has been the only outlet for waste it produces from the white wood it buys and logs they harvest and chip on behalf of clients.

Crowell said suppliers like himself could turn to the pulp market to sell their low-grade wood, but since the New Hampshire paper-making industry is a bygone memory now, the remaining paper mills in Maine and New York State are too far to justify the cost of transportation.

Besides, the pulp market is already saturated with suppliers, he said. “One guy pivots and there are 50 guys behind him,” Crowell said.

At Springfield Power, the economics of operating the biomass plant are grim.

Theall, the plant manager, said the current wholesale spot price for electricity — the market which his plant sells into — has been commanding only 3 cents per kilowatt hour. “I need 8 cents (per kilowatt hour) to survive,” he said, noting that his cost of wood chips alone is 4 cents per kilowatt hour.

Although the plants receives 2 cents per kilowatt hour from the sale of renewable energy credits, that still leaves the plant operating at a deficit of 3 cents per kilowatt hour.

But the price of renewable energy credits has been coming down along with the wholesale cost of electricity, and the math no longer adds up, Theall explained.

“When I was getting 4 cents for the RECs and 4 cents for electricity, it could work,” he said. “But it’s not working any longer.”

John Lippman can be reached at jlippman@vnews.com.