New owner spending millions on Lyonsdale biomass plant

LYONS FALLS — The new owner of the Lyonsdale biomass electric facility is putting millions of dollars into refitting the facility, a company principal said Wednesday.

ReEnergy Holdings LLC, Latham, bought the plant, 3823 Marmon Road, on May 1 from Central Hudson Enterprises Corp., a subsidiary of CH Energy Group Inc., Poughkeepsie, and is upgrading the boiler and the power generation system to increase the reliability of the facility.

“Things are going very well through our first few months of operation,” said Thomas E. Beck, a principal with ReEnergy. “We are definitely going to be spending millions of dollars to improve the reliability of the facility and that will definitely result in the ability to provide a very stable outlet for wood residues for local foresters.”

“The facility is 20 years old and has a lot of pieces and parts that have not been upgraded or updated, and we went into the acquisition knowing we would want to do those repairs,” Mr. Beck said. “A fair amount of that will be completed this year and the balance next year.”

The company has filled a few open positions, bringing the staff to its expected level of about two dozen.

And the company is looking to add to its north country presence. The state’s Public Service Commission will consider today whether to allow the sale of the former Fort Drum cogeneration plant on Second Street.

If approved and the deal closes, ReEnergy Black River LLC — a subsidiary of ReEnergy Holdings — will convert the 50-megawatt plant from coal to biomass fuel, primarily wood chips, but also tires and solid fuels, according to the petition it filed with the PSC on April 22. The current owner of the plant is Black River Energy LLC, controlled ultimately by United States Power Fund LP.

Mr. Beck didn’t want to talk about specifics as the parties are still negotiating.

“The PSC approval is one of the conditions to closing,” he said.

The Black River Generation facility leases 11.8 acres from the U.S. Army, which owns all property on post. In the past, it employed up to 35 people and paid property taxes to the town of LeRay, Carthage Central School District and Jefferson County for the improvements on the tax-exempt property.

“It would again have a significant number of jobs, both on site and through revitalized forestry practices,” Mr. Beck said.

The facility was originally a cogeneration facility that supplied buildings on post with steam and sold power to Niagara Mohawk. That steam contract was in effect from 1988 to 1998.

The Fort Drum facility is authorized now to burn bituminous coal, anthracite coal, fuel oil, wood, petroleum coke, tire-derived fuel and other fuels. ReEnergy Black River plans to convert it to a wood, tire-derived and other fuel facility. It wants another 4.2 acres leased from the Army to process and store wood fuel.

The facility has changed hands several times. United States Power Fund LP bought it on May 26, 2004. Black River Generation LLC does not sell the power or own property besides the Black River Generation facility. EIF Hamakua LLC owns Black River Generation LLC and is owned by USPF Holdings LLC, controlled by United States Power Fund.

The commission approved an ownership transfer on July 15, 2010, to Catalyst Renewables LLC, but that transaction never occurred. Catalyst Renewables, Dallas, will transfer its rights to acquire membership interests in Black River Generation to ReEnergy Black River.

ReEnergy Black River was created by ReEnergy Holdings to acquire the generation plant at Fort Drum. ReEnergy Holdings is a portfolio company of Riverstone Holdings LLC, an energy and power-focused private equity firm that manages nearly $16 billion of investments in the energy industry. The holdings company is a member of the Biomass Power Association.

It also owns a 31.3-megawatt tire-to-energy generation facility in Sterling and plans to acquire 102.5 megawatts of co-generation power capacity and 12.5 megawatts from a back-up generator at Rumford Paper Co., Rumford, Maine.