Should utility customers pay a surcharge for bioenergy that helps utilize trees thinned from Arizona’s overstocked forests?
That was one possibility discussed last week at a first-ever workshop on forest bioenergy hosted by the Arizona Corporation Commission.
Representatives from some of the state’s largest utilities, businesses, nonprofits, the Forest Service, and state and local governments all had a chance to weigh in at the workshop, which focused on the problem of biomass in Arizona’s forests and the opportunities and commercial viability of using that forest material to generate power.
“We’re looking at...addressing it in a way that we can make some significant progress in bringing back the health of our forests,” said Commissioner Boyd Dunn, who initiated the workshop. “We’re here discussing an opportunity to address this whole issue by utilizing the Arizona Corporation Commission as a catalyst.”
Among the topics discussed was what it might cost ratepayers to support an expansion of bioenergy in the state, with estimates ranging from $4 per month to less than $1 per month.
“The impact to the consumer will be negligible," said Brad Worsley, the CEO of the state’s only utility-scale biomass power plant in Snowflake, as he discussed costs of building another plant in Arizona.
TREE DEBRIS TO BIOMASS POWER
Biomoss refers to the branches, needles, treetops and small trees that must be removed from a forest during tree thinning, but aren’t useful for traditional lumber products. The Forest Service and others involved in forest restoration in northern Arizona say that one of the biggest challenges to speeding up much-needed thinning of the region’s forests is finding a way to use up biomass.
The other option is to leave it on the ground and burn it, but that is time intensive, costly and produces smoke that affects nearby residents.
Grinding up the biomass and burning it for power not only uses up the biomass but turns the material into a valuable product.
“The only technology that right now is available at an industrial scale to get rid of biomass is bioenergy, which is why we are here today,” Pascal Berlioux told workshop participants. Berlioux is the executive director of the Eastern Arizona Counties Organization, which is actively involved in regional forest restoration projects and pushed for the biomass workshop.
The Novo BioPower Plant in Snowflake burns chipped wood from Arizona's forests to produce 27 megawatts of power, which is under contract by APS and SRP to fulfill part of the utilities’ renewable energy portfolio standard.
But that power represents just a small sliver of the energy produced and consumed in the state.
A QUESTION OF PRICE
As part of its presentation last week, APS representatives provided one look at what it would take the utility scale up its use of forest bioenergy, and what that would cost customers. The utility was required to produce a report addressing those questions as part of its most recent rate increase case that ended this summer.
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Compared to other renewable power sources, biomass power is more expensive, said Jeff Burke, director of resource planning at APS. That makes it hard for the energy source to compete on price alone.
The company came up with a range of options and figured the cost to its customers would be an additional $1.54 to $4.13 per month to pay for power from a new bioenergy plant in the state. Others knowledgeable in the biopower sector said that cost would be even less.
Worsley said deconstructing, moving and reconstructing a plant currently sitting idle in Texas would cost less than half of what APS estimated it would take to build a new plant. Spreading out the cost among all ratepayers, instead of just APS customers, would cut the bill to individuals even more, Worsley said. He estimated the cost could drop to equate to an increase of 1 percent on residents’ monthly power bills.
Several people at the workshop emphasized that the cost to expand bioenergy in order to promote the restoration of Arizona’s forests shouldn’t be borne by APS customers alone. The speakers pointed out that forest restoration and biomass removal creates healthier forest habitat, improves recharge of ground and surface water sources and reduces the risk of catastrophic wildfires, which can cause major damage to drinking water resources and air quality across the state.
“A solution...with statewide benefits and implications should include all Arizona residents,” said David Tenney, director of the Arizona Residential Utility Consumer Office.
There are several ways to bring more bioenergy to Arizona, Berlioux said. One is for state regulators to mandate that utilities ramp up their use of biomass power, which could increase costs for consumers in the end. Another is for state legislators to implement a tax break or some other incentive for utilities that use more bioenergy. A third possibility is to try a voluntary program that would ask people to chip in $1 per month to promote forest health through bioenergy, Berlioux said.
Though they attended the Corporation Commission workshop, the state’s two major utilities were hesitant to make any commitments to forest bioenergy.
“I don’t think we’re quite there yet,” Burke said in response to a question about increasing the utility’s use of biomass power and charging customers the price difference.
The utility and others want to schedule another workshop that will look at the use of biomass from pinyon pine and juniper trees, instead of just ponderosa pine trees, as well as minimum fuel supply needs and ways to spread costs among all Arizonans.
SRP representatives agreed on the need for further discussion.
A mandate “may not make much sense,” said Bruce Hallin, SRP’s director of water supply.
“Biomass power is expensive. I don’t know if it’s the highest and best use of the material,” Hallin said. More important, he said, is attracting sophisticated industry to the state that will first be capable of removing the amount of trees that need to be cleared from the region’s forests and then find innovative uses for biomass that may or may not involve a power plant.
But Worsley said finding a way to use up forest debris has to come first.
“Industry will never come without the ability to get rid of biomass,” he said.