Albany Green Energy wins delay for Georgia biomass project

The Georgia Public Service Commission on July 17 approved some changes related to a 42-MW biomass project, including a delayed commercial operation date.

On Jan. 16, the Georgia commission ordered that all Qualifying Facilities (QF) biomass projects that had noticed into Georgia Power’s 2015 request for proposals (RFP), including the projects on the Proxy QF Notice of Intent waiting list, be granted the opportunity to enter into contracts under Georgia Power’s 2015 Proxy-Price QF program. 

On July 3, Albany Green Energy LLC (AGE) filed a request for amendments and consent of its November 2013 contract with Georgia Power. Albany Green Energy will sell to Georgia Power electric energy and capacity associated with the approximately 42 MW biomass cogeneration plant that is currently being developed in Albany, Ga.

For more some time, AGE and its affiliates have worked with The Procter & Gamble Paper Products Co. to develop the facility. The facility will be co-located with, and provide a significant amount of renewable energy generated steam to, the paper manufacturing facility of P&G, which is one of the largest industrial customers of Georgia Power and one of the largest employers in the Albany area. As such, the project has the potential to make the Albany Plant P&G’s single largest renewable energy site globally.

On May 15, Sterling Planet Holdings Inc., an affiliate of AGE, and Constellation NewEnergy Inc., an independent power producer that desires to finance, construct, own and operate the facility, entered into a letter of intent (LOI). Under the LOI, Sterling Planet and Constellation agreed to negotiate, among other documents, a purchase and sale agreement (PSA) under which Sterling Planet would cause the sale of AGE to Constellation or its designee, subject to the terms and conditions to be set forth in the PSA. The entire project is in the final stages of formal due diligence by P&G and Constellation.

In connection with negotiating the PSA, Constellation has selected DCO Energy LLC as its preferred engineering, procurement and construction contractor to finalize construction of the facility, subject to the execution of a binding engineering, procurement and construction contract, which is also under final negotiations. DCO has informed Constellation that, following Sept. 1, 2014, it will take 33 months to complete construction of the facility and achieve commercial operation.

Without significant extensions that reflect the particular factors associated with the project, the project is not expected to be economically viable and the benefits associated with the facility, including P&G’s goals for its Albany Plant and more broadly as part of P&G’s corporate sustainability goals, are unlikely to be realized. AGE requested that the Required Commercial Operation Date (RCOD) be changed from Dec. 1, 2015, to June 1, 2017. AGE also requested several amendments to its PPA.

The commission on July 17 granted several approvals, including that Albany Green Energy’s request for an extension of the Required Commercial Operation Date to June 1, 2017, is approved. Georgia Power will need to negotiate with Albany Green Energy on the other requested amendments to Albany Green Energy’s Power Purchase Agreement and prepare a consent and amendment document for commission approval.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.