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| May 2008
Renegy to acquire biomass power generation facility Renegy Holdings, Inc. (Renegy), a renewable energy company focused on acquiring, developing and operating a growing portfolio of biomass to electricity power generation facilities, announced that it has signed a non-binding Letter of Intent (LOI) for the acquisition of a 20 megawatt (MW) biomass power plant from Sierra Pacific Industries (SPI) for $13.0 million. The plant operates in Loyalton, California and currently sells 10 MW of its electrical power output to Sierra Pacific Power. Under the terms of the LOI, the sale will also include approximately 50 acres of land at the Loyalton plant site along with existing fuel contracts and all operating and environmental permits for the plant. Renegy expects the transaction to close by June 30, 2008, subject to its completion of final due diligence, entering into a definitive purchase agreement for the plant, and other closing conditions. Fuel for the Loyalton plant is comprised primarily of wood waste provided through long-term contracts with local suppliers. Fifty percent of the fuel is currently derived from sawmills and other forest residue from the surrounding area, and the other fifty percent is derived from municipal wood waste accumulating in nearby landfills. To further supplement its fuel supply, Renegy’s fuel aggregation team is currently in negotiations with a large waste management company in the area, and plans to actively explore opportunities to procure forest-derived fuel from U.S. Forest Service lands. |
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