Plans revived for US$275M, 75-MW biomass power project in Berlin, New Hampshire, developed by Laidlaw Energy, backed by Cate Street Capital, after six small wood-fired power plants agree to drop legal challenge, five receive PPAs
August 24, 2011
– Laidlaw Energy Group Inc.’s plans to build a 75-megawatt biomass power plant in Berlin, New Hampshire, are on track again, after a group of six small wood-fired power plants agreed to drop a threatened legal challenge, reported New Hampshire Public Radio (NHPR) on Aug. 23.
Under the new deal negotiated, five of the plants were offered agreements lasting about two years and worth about US$20 million, to sell electricity to Public Service of New Hampshire (PSNH), according to a new filing with the Public Utilities Commission (PUC).
The deal still needs approval from the PUC, reported NHPR.
Portsmouth, New Hampshire-based equity firm Cate Street Capital, which is backing the $275-million Berlin BioPower project, had previously abandoned the plans because of the legal threat but now will find it easier to obtain needed financing.
A new agreement also been reached in which Cate Street Capital will pay the City of Berlin $34 million to $43 million over 22 ½ years, in lieu of taxes, said Berlin Mayor Paul Grenier.
The smaller plants, which were at risk of going out of business, had threatened to file a complaint with the Supreme Court about the PUC’s approval of a 20-year power purchase agreement in which PSNH would buy electricity from the Berlin BioPower plant, NHPR reported.
Cate Street Capital resumed discussions with the six small biomass power plants last month, at the request of New Hampshire’s governor and other state officials, according to a July 22 article in the Union Leader that was carried on IndustryIntel.com on July 25.
Laidlaw Berlin BioPower LLC acquired the former Fraser Paper Mill in Berlin in December 2008, with the intention of undertaking the biomass energy project, according to Laidlaw’s website.
Among the key assets acquired was the facility’s Babcock & Wilcox boiler, which was installed in 1993 at a cost of $100 million. Babcock & Wilcox is the engineering, procurement and construction contractor for the Berlin project, Laidlaw indicated on its website.
The Berlin project has received all material permits and approvals, according to Laidlaw, which also stated that it has agreed to sell its equity stake in the project when financing closes.
The primary source of this article is New Hampshire Public Radio (NHPR), Concord, New Hampshire, on Aug. 23, 2011.