By Brian E. Clark
For WisBusiness.com
Citing what they described as high costs, members of the three-person Public Service Commission said We Energies and the Domtar Corp. paper company will have to bear more costs for a proposed biomass plant in Rothschild that would produce both electricity and steam.
The $250 million plant will use waste wood and sawdust to produce 50 megawatts of electricity, as well as steam for Domtar’s papermaking operations.
Phil Montgomery, the new PSC chairman, said at Thursday’s PSC meeting that the state currently has adequate power supply reserves, but that We Energies needs to build the plant to meet state mandates that 10 percent of its power be produced from renewable resources by 2015.
Montgomery, a former legislator who chaired the Assembly Committee on Energy and Utilities, said he continues to support the renewable standard.
“But I don’t think anyone in the Legislature thought we would be experiencing this economic downturn we’re in now,” he added, noting that he hopes We Energies and Domtar can reduce costs to electricity ratepayers.
Commissioner Eric Callisto said he has trouble with the overall economics of the plan and how it has been structured between We Energies and Domtar.
Callisto said he is concerned with everything from the financing and operating costs to the rates that consumers will have to pay for the power generated by the plant.
“So the next issue is whether those issues can be resolved in a way that can be resolved for at least two of us on the commission,” he said. “That remains to be seen.”
Callisto said he continues to support biomass as part of the state’s renewable energy mix.
“But costs do matter and I believe there is room to lessen the risk to ratepayers,” he said.
Commissioner Lauren Azar said she believes biomass may become Wisconsin’s best energy resource, but she said the Rothschild plant construction cost is approaching $5,800 per kilowatt hour, which she called “unacceptably high” and almost on par with the price tag for building a nuclear power facility.
Wind turbine construction costs are about half that figure, she said. But recent actions by the Legislature and governor over wind farm-siting rules have caused at least two companies to abandon projects because of regulatory uncertainty, she said.
Azar said she, too, thinks Domtar needs to take on more of the risk for building and operating the plant.
She said she also is concerned that Domtar could back out of the project and “leave ratepayers holding the bag.”
Spokesmen for both We Energies and Domtar were noncommittal on what they might do to lower costs for consumers.
“We are taking all the information in and digesting it,” said Domtar spokesman Craig Timm. “Other than that, I can’t go into specifics.”
Likewise, Brian Manthey of We Energies said officials from his company will review the commissioners’ comments and recommendations from Thursday’s meeting “and respond accordingly.”
The next meeting on the Rothschild biomass plant will be held at 10:30 a.m. May 5 at the PSC building, 610 N. Whitney Way, Madison.
