Escanaba, Michigan, city council says woody-biomass burning 'no longer viable,' expects tax credits to end; city chooses Fuel Streamers to buy power plant, which will continue to be coal-fired, other bidders proposed converting to biomass

Bdebbie Garcia

LOS ANGELES , September 2, 2011 (Industry Intelligence) – The city of Escanaba, Michigan, has decided to sell its electricity plant to Houston-based Fuel Streamers Group, which will continue to run the facility as a coal-fired operation, reported the Daily Press on Sept. 1.

The other bidders all proposed converting the plant to burn woody biomass, which is “no longer viable,” according to a statement from the council, which indicated that biomass tax credits are likely to be discontinued.

Also, the interested parties had “shifted their interest from biomass to wind energy and solar energy,” said Tom Butz, the city’s engineering consultant with Power System Engineering. Signing deals with biomass companies has “significant uncertainty,” he said, the Daily Press reported.

The decision, which was made during a joint meeting of the city council and the Electrical Advisory Committee on Wednesday, was “quite clear (because) biomass wasn’t going to work,” said Electric Superintendent Mike Furmanski.

The deal is expected to close before the end of this year, reported the Daily Press.

The other bidders included ProEnergy Services LLC of Sadalia, Missouri, which is currently operating the plant, and Recast Energy LLC of Richmond, Virginia.

Fuel Streamers said it has better technology to operate the power plant and will retain the plant’s current workforce, said City Manager Jim O’Toole, the Daily Press reported.

The plant is currently losing US$1.5 million a year, said Escanaba Mayor Gilbert Cheves. The city, which has been subsidizing power costs to keep electric rates down for residents, will save money by selling the plant and buying its electricity, he said, reported the Daily Press.

Traxys North America of White Pine, Michigan, also had been interested in buying the plant, according to a July 19 report by the Daily Press that was carried on IndustryIntel.com the same day.

The primary source of this article is the Daily Press, Escanaba, Michigan, on Sept. 1, 2011.

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