ReEnergy To Close Lyonsdale Biomass Energy Plant

ReEnergy To Close Lyonsdale Biomass Energy Plant

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With less than two weeks to go before Christmas, there's some bad economic news  from Lewis County. A business is closing its doors - affecting more than 100 jobs in the region.

The ReEnergy plant in Lyonsdale is pulling the plug on its biomass energy plant on December 29.

The plant, which turns north country wood into electricity, employs 22 people. It also supports more than 100 jobs in other industries such as logging and trucking. 

When the plant closes, 18 workers will be laid off, a few others will be reassigned to other ReEnergy plants, and the ripple effect will be felt throughout the region.

The facility is closing because it's losing critically-needed subsidies from the state. But, there is a ray of hope - ReEnergy says it's trying to work with the state Public Service Commission to get those subsidies back.

"There is a possibility that the facility could reopen, but without having some affirmative action from the Public Service Commission, we have no choice but to close the facility," said ReEnergy Chief Executive Officer Larry Richardson.

"We've been in touch with our elected officials who represent us in Albany and we're hoping that they can help us out," said Lewis County Manager Ryan Piche.

If the plant cannot be saved, ReEnergy will offer laid-off employees continued health insurance benefits through March of next year, along with severance pay based on years of service. The company also says it will work with the state Labor Department to help displaced workers with unemployment, job search assistance and training opportunities.

The following is a news release from the company:

The 22-megawatt ReEnergy Lyonsdale energy facility has used biomass material from logging operations and local sawmills to produce an average of 162,000 MWh of electricity per year, enough to supply approximately 21,000 homes. The facility also has supplied process steam to the adjacent Twin Rivers paper mill when requested and its ash by-product is used by local farmers as fertilizer.

The facility has employed 22 individuals with a payroll of approximately $2 million per year. When operating at full capacity, the facility purchased approximately $6.6 million annually in biomass fuel from local loggers, thus providing a year-round market for their otherwise low-value wood products. In total, ReEnergy estimates that the Facility supported more than 100 direct and indirect jobs in various forestry and other support industries.

As a result of the cessation of operations, a few of the facility’s employees will be reassigned to other ReEnergy plants, and the remaining 18 will be laid off effective Dec. 29, 2017. The affected employees will be offered continued health insurance benefits through March 2018, along with severance pay based on years of service, and ReEnergy will work with the New York State Department of Labor to conduct meetings with the employees to assist with unemployment benefits, job search assistance and training opportunities.

The plant began commercial operation in 1992. In March 2011, ReEnergy purchased the facility and subsequently made significant investments to improve the facility’s efficiency and performance. In late November, the facility experienced a forced outage due to an equipment failure, and the company determined that it was not prudent to invest in the significant repair cost in light of the expiring REC contract.

The facility needs to be able to monetize its renewable energy attributes in order to be financially viable,

Because of its vintage, the ReEnergy Lyonsdale facility was placed in the “maintenance resource” category of the state’s Renewable Portfolio Standard (RPS) – considered to be an important baseline renewable resource (pre-dating the 2004 RPS) that would otherwise terminate operations without the ability to sell RECs in NYS. Thus, on September 29, 2017, the company submitted a petition to the New York State Public Service Commission (Commission). In this petition, ReEnergy requested a six-month extension of its existing Maintenance Tier contract at the existing price (for the time period January 1, 2018 - June 30, 2018) while the Commission completes its rule-making regarding the implementation of the revised Maintenance Tier in the Clean Energy Standard (“CES”) proceeding. ReEnergy further requested that once the Commission completes said CES rule-making, the Commission authorize NYSERDA to award ReEnergy an additional 30-month extension of its Maintenance Tier contract from July 1, 2018 through December 31, 2020 at a new, higher price for the entire annual net output of the facility. The Commission has not yet acted on that petition, and is not expected to until after the first of the year

ReEnergy Chief Executive Officer Larry D. Richardson said that the company, while awaiting the Commission’s order on Lyonsdale’s petition, will continue to pursue repurposing of the site, which could include the construction of a renewable fuel oil (“RFO”) facility and utilization of the existing interconnection’s excess capacity – and ultimately perhaps all of the interconnection’s capacity – to construct a utility-scale solar project. “It was our hope that the Lyonsdale biomass power plant could continue operating under a new REC contract for the 18-24 months it would take to develop the RFO facility, so the jobs and fuel supply chain could remain intact,” Richardson said.

In recent months, ReEnergy signed a memorandum of understanding with Ensyn Corporation (together with its affiliates, “Ensyn”), which is a company developing biocrude production facilities incorporating their proprietary technology. Ensyn has been successfully marketing its biocrude product from its Renfrew, Ontario facility as RFO™, a renewable liquid biofuel, to petroleum refiners and the institutional district energy market, including colleges, municipal district energy systems, government buildings and healthcare facilities. Ensyn is also in the late stages of construction of 10.5 million gallon-per-year facility in Cote Nord, QC.

“Having already established heating oil customers in New England and the Midwest, upstate New York is in an ideal location for the expansion of Ensyn’s customer base, and the construction of a new RFO production plant,” Richardson said. “Through the ReEnergy/Ensyn collaboration, New York State and its forest products sector could enjoy significant economic and environmental benefits.”

An RFO production facility would utilize locally harvested biomass feedstock – the same type of feedstock in approximately the same quantities as the Lyonsdale biomass facility, and would employ a similar number of employees in similar positions, restoring these jobs at the facility site in Lewis County. The facility would produce 20 million gallons of RFO™ per year.

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