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.