Operating out of what used to be an underwear factory in Rabun Gap, the state's first independent power-producing biomass plant officially opened on Earth Day, April 22, thanks to a 20-year, $225 million power purchase agreement put together by lawyers from Autry, Horton & Cole and McGuireWoods.
Green Power Electric Membership Corp., represented by Autry Horton lawyers Charles T. Autry and Roland F. Hall, signed on to buy electricity generated from forest waste such as wood chips, which will then be used by 38 electric cooperatives around the state. A 39th co-op has received board approval to join the group. Hall said he refers to the plant as the state's first "independent" facility of its kind because it is the only biomass plant in Georgia to produce power and sell it to a utility. Some other biomass plants exist in the state, but they do not sell power, instead producing it solely to support their owners' manufacturing processes.
The power producer, Multitrade Rabun Gap, a portfolio company of equity investor Leaf Clean Energy Co., which has offices in London and Washington, was represented by Mark J. La Fratta with McGuireWoods' Richmond, Va., office.
Michael Whiteside, the president of Green Power, said that Multitrade contacted his company about two years ago to gauge its interest in purchasing renewable power. After months of negotiations, the companies reached a deal and Multitrade obtained a $20.7 million loan guarantee through the U.S. Department of Agriculture's rural development program to construct the facility. The plant is located in a former Fruit of the Loom factory that closed in 2006, and Green Power has repurposed the facility, including a boiler that the underwear maker used to generate its own power, to process the biomass.
Autry and Hall said the operation is fascinating to watch. "Semitrailer trucks bring in loads of wood chips, and they … back the semi onto a platform and lock it down," said Autry. "The whole platform pivots on its base, [upending] the truck, and the woodchips fall out by gravity … onto a conveyor belt.
"It's unbelievably clean for something that's burning wood," he said. "You really don't get an odor or smoke or anything."
Autry said contracts to purchase renewable energy are different from contracts to purchase the output of a coal- or gas-fired plant. Coal or gas power is "dispatchable," he said, meaning that you only take the power when you need it. "In this project, you take the power as it is generated, so there are unique issues there," he said, adding that the contract also includes specifications about the type of fuel used, to ensure that it is always environmentally friendly. A biomass contract, he said, also focuses on fuel-price issues, and can include caps or indices to control fuel costs—something that is not an issue, for example, in a contract for the purchase of solar power.
Hall said that renewable fuel contracts also differ from a coal or gas deal because of tax issues. "The developer or the company producing the power typically receives tax credits that may make up a big part of the profit they can anticipate receiving from the project, and there are renewable energy credits, and you have to negotiate who gets those," he said.
In this deal, Multitrade gets the tax benefits—co-ops are not taxable and can't use them; the co-ops get the renewable energy credits, which Whiteside said are not worth much now but could be in the future if legislative changes result in a renewable portfolio standard or laws related to carbon offsets.
This is Green Power's fourth eco-friendly deal, according to Whiteside. He said Green Power also has power-purchase agreements with two landfill methane gas facilities, one in Fayetteville and the other in Taylor County, and a hydroelectric project near Athens at Tallassee Shoals, which is on the Middle Oconee River. Together, these produce about 7.5 megawatts of power.
The new Rabun Gap facility generates 17 megawatts of power, which Whiteside said represents a small portion of overall power use by the individual electric co-ops—about 2/10ths of 1 percent.
Still, it is a large generator of renewable power compared with other facilities in the state. According to Lynn Wallace, a spokeswoman for Georgia Power, her company's Green Energy program purchases 3.2 megawatts of power from a methane gas facility, DeKalb County Seminole Road Landfill, and has 1.5 megawatts of power under contract in a buy-back program from customers who generate their own solar energy.
The production of green power is increasing, however. Wallace said that Georgia Power will purchase an additional megawatt in the solar buy-back program starting June 1. Also around that date, pending approval from the state's Public Service Commission, Troutman Sanders lawyers Kevin C. Greene and Brandon F. Marzo, who also represented Georgia Power in the Seminole Landfill and solar buy-back deals, said that their client will launch a 10-year power-purchase agreement with Waste Management Superior Landfill in Savannah. Wallace said that plant will produce 6.4 megawatts of power.
Greene and Marzo said they're working with Georgia Power now to secure approval from the Georgia Environmental Protection Division to convert Plant Mitchell, near Albany, to a wood-fueled biomass facility that could produce about 100 megawatts of power. Greene said the plant is likely to go online in the next several years.
Whiteside, the Green Power president, said that next year his company plans to begin purchasing power from a biomass facility near Carnesville. The plant's power will come from one of the most renewable fuels of all: chicken poop.