Biomass Lease Terminated by Jasper Clean Energy in Indiana

- by Matthew Crane, April 21, 2014. Source: Dubois Coun­ty Free Press

Dr. Nor­ma Kreilein, her hus­band, Mike, Alec Kalla and Rock Emmert were all in ses­sion dur­ing the Jasper Util­i­ty Ser­vice Board (USB) meet­ing Mon­day night — the eve of Earth Day — when it was announced that Jasper Clean Ener­gy would be ter­mi­nat­ing the lease to cre­ate a bio­mass pow­er plant in Jasper.

John Rudolf, a free­lance writer cov­er­ing a sto­ry for Notre Dame Mag­a­zine about Dr. Kreilein — a Notre Dame alum­ni — and her organization’s bat­tle against the City of Jasper for the past two-and-a-half years, sat by him­self in the pub­lic seat­ing. Rudolf’s pedi­gree includes the New York Times and Huff­in­g­ton Post, where his sto­ries grav­i­tat­ed towards envi­ron­men­tal and polit­i­cal issues.

Now a free­lancer, the Mass­a­chu­setts writer didn’t know — and appar­ent­ly, nei­ther did the mem­bers of Healthy Dubois Coun­ty in atten­dance — that night would reveal itself to be the cur­tain call for the Jasper Clean Ener­gy saga.

Attor­ney Bill Kaiser, with the firm Bing­ham Green­baum Dahl, made the announce­ment regard­ing Jasper Clean Ener­gy CEO Jay Catasein’s let­ter to the city inform­ing them of the pend­ing ter­mi­na­tion of the bio­mass con­ver­sion lease.

Accord­ing to the let­ter, the project is no longer eco­nom­i­cal­ly viable due to

• The cost in uti­liz­ing the exist­ing steam tur­bine in the facility
• The con­tin­ued decrease in the price of alter­na­tive sources such as wind and solar power
• The abun­dance of rel­a­tive­ly inex­pen­sive nat­ur­al gas reserves in shale
• The clos­ing of coal fired pow­er plants in the region being replaced by more effi­cient pow­er gen­er­a­tion stations
• The lim­i­ta­tions on the Jasper Pow­er Plant site includ­ing the lim­it of the elec­tri­cal trans­mis­sion line run­ning from the pow­er plant
• The com­ple­tion of new­er, low­er effec­tive-cost and more effi­cient large-scale biomass/gas pow­er plant projects
• The lag­ging region­al elec­tric demand dri­ven by lack­lus­ter eco­nom­ic recovery
• The Indi­ana Util­i­ty Reg­u­la­tion Com­mit­tee push­ing greater effi­cien­cy and dri­ving down elec­tric­i­ty demand

Accord­ing to the let­ter, the lease will be ter­mi­nat­ed June 20. Kaiser stat­ed there could still be dis­cus­sion between the city and Cat­a­sein regard­ing oth­er alter­na­tives. “There is noth­ing that requires you to do that,” Kaiser stat­ed. “He cer­tain­ly has exer­cised his right under the lease to basi­cal­ly iden­ti­fy he can­not meet the require­ments. He still has time to do that, but at this point he has decid­ed eco­nom­i­cal­ly he is not in the posi­tion to obtain a pow­er pur­chase agree­ment which would make the project eco­nom­i­cal­ly feasible.”

SB chair­man Wayne Schuet­ter made it clear he didn’t know of any Hail Mary pass­es left for the pow­er plant con­ver­sion at this point. “Mr. Cat­a­sein told us after the set­tle­ment that he would review the project and get back to us,” Schuet­ter said. “Well, now he has got­ten back to us.”

Cat­a­sein point­ed out in his let­ter that the new gas pow­er plants being brought online are 600 megawatt facil­i­ties, while the Jasper Clean Ener­gy would have pro­duced about 75 megawatts of pow­er from the com­bined gas/mis­cant­hus-fired tur­bine. Accord­ing to Cat­a­sein, it isn’t eco­nom­i­cal­ly viable to com­pete on the same scale with the invest­ment into the con­ver­sion of the old­er pow­er plant and its low­er amount of pow­er pro­duc­tion. “We are also lim­it­ed in the amount of pow­er that can run through our con­nec­tion to the grid,” Kaiser explained.

Alec Kala wore a dust mask and sat next to Rock Emmert, a mem­ber of Healthy Dubois Coun­ty, dur­ing the Jasper Util­i­ty Ser­vice Board meet­ing Mon­day evening.

Alec Kala, a mem­ber of Healthy Dubois Coun­ty Inc. from French Lick, main­tained that the announce­ment Mon­day evening is exact­ly what he and oth­ers in the orga­ni­za­tion have been telling the city since they learned of the plan in 2009. “It’s a waste of mon­ey,” Kala complained.

Healthy Dubois County’s legal bat­tle regard­ing alleged Open Door Vio­la­tions by the City of Jasper dur­ing lease nego­ti­a­tions was set­tled in Jan­u­ary. The group main­tains that the city held dis­cus­sions with Cat­a­sein through a vol­un­teer group to avoid pub­lic scruti­ny of health con­cerns being iden­ti­fied by the grass­roots orga­ni­za­tion known as the Con­cerned Citizens.

“They should have had pub­lic com­men­tary in 2009 before this ever went through the secret meet­ings,” Dr. Kreilein said. “It should have been vet­ted to the edu­cat­ed mem­bers of the com­mu­ni­ty. We, every­one, has been yelling loud and clear. I became involved because I knew the qual­i­ty of peo­ple who were oppos­ing this.”

Kreilein took the helm as the spokesper­son for the new­ly formed Healthy Dubois Coun­ty, Inc. after the depar­ture of Chris Breedlove. Breedlove, a local preach­er, who had formed the con­cerned cit­i­zens group that even­tu­al­ly orga­nized itself under the Healthy Dubois Coun­ty standard

“Yes, we are hap­py, this is a win for the women and chil­dren of the com­mu­ni­ty,” Rock Emmert said. “At least for now, but they didn’t say the plan was dead.”

The plan isn’t dead accord­ing to Chair­man Schuet­ter. “We aren’t tak­ing any steps for six­ty days,” he said, refer­ring to Catasein’s time­line, “and then it will be dis­cussed in an elec­tric com­mit­tee meeting.”

Accord­ing to Schuet­ter, with the right plan, bio­mass is still a viable option for the pow­er plant.

The city has spent over a mil­lion dol­lars on the project between the lit­i­ga­tion expens­es and lease nego­ti­a­tions. Those costs don’t include the pur­chase of the Hei­dorn home adja­cent to the pow­er plant prop­er­ty for $315,000.

The city con­tends that they wouldn’t have the expens­es they incurred if they hadn’t relin­quished Cat­a­sein from the respon­si­bil­i­ty of mak­ing quar­ter­ly lease pay­ments due to the lit­i­ga­tion by Healthy Dubois Coun­ty. “The city would have basi­cal­ly been even,” Schuet­ter explained.

Healthy Dubois Coun­ty dis­agrees, say­ing the city made a vol­un­tary deci­sion to relin­quish Cat­a­sein of those lease option pay­ments and effec­tive­ly plac­ing the costs on the city rate payers.

Accord­ing to the Jasper Util­i­ties Man­ag­er Bud Hauersperg­er, the fees asso­ci­at­ed with the pro­pos­al process, lease nego­ti­a­tions and lit­i­ga­tion could be passed on to the rate pay­ers even­tu­al­ly after future rate stud­ies are conducted.

The pow­er plant will not have to be test­ed for at least a year since it did not opt into the capac­i­ty pay­ment mar­ket with Mid­con­ti­nent Inde­pen­dent Sys­tem Oper­a­tor, Inc. (MISO). If the city choos­es to take capac­i­ty pay­ments for the poten­tial pow­er gen­er­at­ed through coal at the plant, they will have to apply next year.

“We might go back to putting out request for pro­pos­als, look­ing for sus­tain­able, ded­i­cat­ed bio-fuel crop,” Schuet­ter said. “Mis­cant­hus is part of that. If some­one else out there oth­er than Cat­a­sein says, ‘yeah we think that’s a good idea. It’s been used in Europe and we think we can do it here.’ If they come in and dis­cuss it, then we are back to dis­cussing some kind of lease for that.”

The USB main­tained that it was trans­par­ent and fol­lowed the Indi­ana Open Door Law dur­ing the pre­vi­ous lease nego­ti­a­tions. If no oth­er options are brought for­ward by Cat­a­sein such as some­one elect­ing to pur­chase pow­er from Jasper Clean Ener­gy between now and June 20, the USB and Jasper Com­mon Coun­cil will like­ly move for­ward with seek­ing oth­er options to res­cue the strand­ed asset.

“In 60 days, we roll up our sleeves and go back to work,” Board mem­ber Ken Sendel­weck said dur­ing the meeting.