NORTH FORK – Backers of a plan to build a $15 million biomass plant in North Fork confirmed Tuesday that financing on the project closed escrow in the final hours of 2019 — paving the way for construction to finally begin in April.
“We closed just hours before midnight on New Year’s Eve,” said project coordinator Greg Stangl of Phoenix Energy. “It was a real nail biter.”
Millions of dollars in state tax credits attached to the project were set to expire at the end of 2019 if plant backers could not sell the tax-exempt bonds necessary to fund construction. At one point in late 2019, seven different law firms were involved in finalizing details related to orchestrating the complex bond sale.
“Everything’s now been signed and the investors’ money is in our bank account,” Stangl confirmed Tuesday. “North Fork Community Power (NFCP) now has the resources necessary to complete the project.”
Stangl, CEO of private-label power company Phoenix Energy, is partnering with the North Fork Community Development Council (CDC) and new player EQTEC PLC, a company based in Ireland, in the plan to build the 2-MW plant.
Phoenix and the CDC each own roughly 30 percent of NFCP while EQTEC now has a 20 percent ownership stake in the project, which, in its current configuration, has been in the planning stages for nearly a decade.
EQTEC CEO David Palumbo said on Tuesday: “We are delighted that together with Phoenix Energy we have now achieved financial close with North Fork. Despite facing challenges outside our control in the financial closing process, both teams worked relentlessly and creatively” to get the deal done.
“Reaching financial close is a crucial milestone for us,” Stangl said. “And the partnership established with EQTEC has been instrumental getting us here.”
Stangl said he will continue to be the project’s day-to-day manager. “We’ll spend the next couple of months in engineering,” he said. “As soon as the soil at the Old Mill Site dries out, we’ll start building — probably no later than April or May. By April of 2021, we should be in a position to flip the switch.”
North Fork Community Power plans to sell the energy generated at the plant to PG&E for $0.19 cents a kilowatt. Ongoing bankruptcy issues at PG&E had been a major roadblock in trying to get the project financed.
The new plant will create at least a dozen new local jobs and operate 24 hours a day using giant gas engines to convert dead trees into electricity — and biochar, a by-product Stangl believes could some day be as valuable as the electricity produced at the facility.
Close of financing on the North Fork project is also encouraging to backers of plans to build similar biomass power plants up and down the Sierra in areas historically once home to bustling lumber mills, including Mariposa.
District 5 Supervisor Tom Wheeler said he was ecstatic when he heard the news about the North Fork project. “Finally, after almost 20 years of trying to make something like this happen. Hallelujah!”
“This is going to be such a big plus for North Fork and the CDC,” Wheeler added. “Now they’ll be able to get more businesses to come into the Old Mill Site — and be able to electrify them more cheaply.”
Under the terms of its agreement with the joint venture, EQTEC will be paid about $2.5 million by NFCP for equipment and the supply of engineering and design services for the project going forward.
Stangl estimates the new biomass plant, once operational, will have a valuation of about $20 million — and be capable of generating annual revenues of approximately $4 million.
“It’s been just an incredibly difficult and amazing process getting the project to this point,” he said Tuesday. “I feel like half the State of California, including Governor Newsom, worked on this for us quietly behind the scenes.”
Stangl also singled out Supervisor Wheeler as “one of the unsung heroes in helping to make this happen.”
“So many people like Tom had to go to bat for us on this,” Stangl said. “Now we can go into 2020 with a renewed enthusiasm and confidence. Project’s like this can make a real difference for our environment and society.”