Laidlaw Energy Group, Inc.(fka LLEG)

[Grozny]

Laidlaw reveals details of project

http://www.laconiadailysun.com/BerlinPDF/2009/12/30B.pdf

BERLIN — The 900-page application
Laidlaw Berlin BioPower fi led
with the N.H. Site Evaluation Committee
to construct and operate a
biomass plant in Berlin provides a
detailed look at the proposed project.
The document includes information
on the corporate structure of the
company, construction cost estimates,
number of people it expects to hire,
community impacts and benefi ts, and
a wood supply study. The only part of
the application not open to the public
is the study done on connecting the
proposed 70-megawatt plant to the
local transmission system. Laidlaw
has fi led a request to keep the actual
study confi dential per the request of
ISO-NE, the independent not-forprofi
t organization that manages
New England’s electric transmission
system.
Filed Dec. 16, the SEC has 30 days
to review the application to determine
that it is complete or reject it. Once
the application is accepted, the SEC
has eight months to decide whether
to issue a certifi cate to Laidlaw allowing
the company to develop a biomass
plant on the former mill property.
Laidlaw is proposing to convert the existing black liquor recovery boiler
on the site to a biomass fueled unit.
The boiler was manufactured by Babcock
& Wilcox and originally installed
in 1966. But it was extensively refurbished
in 1993 before the mill was
spun off to Crown Vantage.
Laidlaw is proposing to install a
bubbling fl uidized bed in place of the
black liquor system and upgrade the
existing electrostatic precipitator
used to control particulate emissions.
A new selective catalytic reduction
system would be added to control
nitrogen oxide emissions.
The boiler and emissions control
systems would be enclosed within a
boiler building although the stack
would remain exposed. The project
calls for construction of a new turbine
building next to the boiler to house
the steam turbine generator. A cooling
tower would be installed near the
western end of the property, behind
the boiler building.
Two wood off-loading and storage
areas would be developed. The areas
would be paved to reduce dust. The
main fuel yard would be set up closest
to the boiler and use three tilting
truck dumpers to unload the trucks.
A wood yard would also be set up on
the northeast potion of the site with a
single tilting truck dumper to handle
the delivery of wood chips. Chipping
equipment would be installed in a new
building there. There would be on-site
storage for a 30-day supply of wood.
An electric transmission interconnection
line would be installed
between the site and the existing high
voltage transmission line operated by
Public Service of N.H. Laidlaw said
the interconnection feasibility study
from ISO-NE indicates Laidlaw’s
project will be able to connect to the
system with upgrades estimated at
less than $1 million.
Laidlaw projects the budget for construction
of the project at $110 million
and estimates the impact on the local
economy will be about $80 million. It
will take up to 32 months to construct
the biomass plant, including testing
and commissioning. During the construction
phase, 150 to 300 people will
work on the project. Laidlaw hopes
to see construction underway in the
fourth quarter of 2010 and have the
plant operating by the second quarter
of 2013.
Once the biomass plant is built, the
application states it will employ about
40 people directly and indirectly support
up to 300 people in the timber
harvesting and trucking industries. It
will spend up to $25 million annually
on purchasing biomass for the plant.
Laidlaw said it has agreed to limit
truck deliveries and the operation of
the wood chipping process to daytime
hours, Monday through Saturday, to
limit noise impacts. The plant plans to
purchase water from the Berlin water
system and to connect to the city’s
sewer system. Both systems have
indicated they can handle the added
demand.
Laidlaw controls 60 acres of the
former pulp mill site and argues it is
taking a brownfi eld site and turning
it into an asset for the city. The application
describes the current boiler
as looking run down and states its
planned improvements and landscaping
will enhance the visual appearance
of the property.
Laidlaw currently pays approximately
$170,000 in property taxes
on the property and expects that
fi gure will increase several fold once
the project is complete. At that point,
Laidlaw anticipates being one of the
largest taxpayers in the city.In its application, Laidlaw repeats
its offer to work with the city to
set up a nonprofi t organization to
acquire the remaining 40 acres of
the mill property and put together
a plan to guide future development
there.
Laidlaw has a preliminary agreement
to supply the Fraser Papers
mill in Gorham with waste hot water
from its operation. Converting that
waste heat into hot water for the mill
will improve the overall energy effi -
ciency of the mill and should allow
Fraser to reduce its use of oil and be
more competitive.
The application presents a complicated
corporate structure. Laidlaw
has a development agreement with
PJPD Holdings, LLC, which calls for
PJPD to provide the capital to fund
the project until all the construction
fi nancing is in place. To date, the document
reports PJPD has put up $10
million to acquire the mill property
and pay for the various engineering
and professional studies. PJPD
is an affi liate of NewCo Energy, Inc.
whose owners and board of advisors
include the former and current managing
partners of Accenture’s Utilities
Practice.
According to the application,
Laidlaw has agreed to a 50 year
lease agreement with PJPD and in
exchange PJPD will provide 100 percent
of the capital required to construct
the project.
The capital structure of the project
will be $80 million of debt and $30
million of equity. PJPD will provide
the $30 million in equity while the
debt fi nancing is expected to be provided
by various institutional investors.
The long-term power purchase
agreement Laidlaw expects to sign
with Public Service of N.H. will support
debt fi nancing provided by various
institutional investors.
Homeland Renewable Energy,
described as an indirect equity
owner of Laidlaw, will provide technical
and managerial services to the
project. Homeland recently oversaw
the development and construction
of a 55-megawatt plant in Benson,
Minn.
The application states Laidlaw is
fi nalizing a 20-year PPA with PSNH
that will see the utility purchase
100 percent of the project’s electrical
output. The energy price will be
adjusted based on the cost of biomass
fuel.
The plant would use 750,000 tons
of wood chips annually and there
has been much discussion locally
about whether the region could provide
that much wood on a sustainable
basis. The application contains
a wood study prepared by LandVest,
Inc.
The study looked at the wood
basket for the project as roughly
100 miles or a three hour drive of
Berlin. Within that area, the study
said there are currently ten biomass
plants and seven pulp and paper
mills that consume about six million
tons of low-grade fi ber annually.
The study said the region has the
capacity to generate an additional
710,000 tons per year on a sustained
basis. It said that fi gure could
increase by 500,000 tons if demand
for biomass and pricing increased
utilization from 50 percent to 70
percent.
It also suggested some other potential
sources of biomass.
The application can be read online
or downloaded off the N.H. Site
Evaluation Committee web page at
http://www.nhsec.nh.gov/2009-02/
index.htm