Regulation could provide a boost for co-gen project
ACC may require utilities to turn to alternative sources
Tusayan's plans for a biomass-fueled power plant may get a push forward if state regulators vote to require utilities to purchase more electricity generated by renewable resources.
"Much rides on the final decision of the ACC (Arizona Corporation Commission) as to the requirements mandated for the purchase of energy from renewable resources," said Barry Baker, chairman of the Tusayan-Grand Canyon Sustainable Energy Project.
The ACC has been working for the past year to develop an Environmental Portfolio Standard that would mandate the percentage of electricity that utilities must purchase from renewable sources like solar, wind, geo-thermal and bio-mass.
The existing standard is 1.1 percent and that sunsets in 2012.
"There's an indication that they're going to do two things," Baker said. "The requirement will be extended and not expire. And the percentage of renewable energy sources will increase incredibly."
Under the draft proposal, which Baker expects will be approved, that percentage would be at 1.25 percent this year, at 2.5 percent by 2012, 5 percent by 2015 and topping out at 15 percent by 2025.
Last month, the Project applied for an $80,000 grant from the Forest Service. They are awaiting word to see if they make it through the first round of rejections to get on the short list. The grant requires matching funds of $20,000.
"It's a long shot whether or not we get it," Baker said. "The Forest Service is looking to award grants for projects that have an immediate effect. Our project is long-term."
They will continue to look at other sources, such as APS, which provided funding for the first phase of the study along with the Forest Service.
The Sustainable Energy Project was formed by the South Grand Canyon Sanitary District to explore the possibility of a co-generation plant that uses woody biomass, municipal waste and other refuse as fuel.
The driving local interest, according to Baker, is in finding cleaner alternatives to the prescribed burns used to rid local forests of fuels that heighten risk of wildfires. It's expected that forest waste from thinning projects would comprise between 75 and 85 percent of the fuel used to run the plant. With the rest coming from household trash and possibly from sludge left over from wastewater processing, the project could have the added benefit of solving some of the area's waste removal issues.
The committee hired TSS Consultants from California in November of 2003 to study the feasibility of siting a plant here. Their research was oriented toward a "fatal flaw"analysis in which they looked for obstacles that would render the project unworkable. They looked at the amount of and long-term availability of fuel, or feedstock, as well as the costs associated with collecting it. They also studied potential sites, permitting issues and costs and performance of available technology.
The project was deemed feasible, but for the cost.
"Right now, it's more expensive to generate electricity through renewable means," Baker said. "It costs APS 4 to 4.5 cents per kilowatt hour to purchase electricity generated from fossil fuels. If a private entity operates the plant, which will generate about 3 megawatts of power, it could charge between 13 and 16 cents per kilowatt hour."
That extra cost will be absorbed by rate payers through a surcharge on their bill.
Baker said that they are looking at the other benefits as well a cleaner way to burn the byproducts of forest thinning, a more economical way to dispose of municipal solid waste and sludge remaining from water treatment operations.
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