ReEnergy Holdings reopens Black River generation facility

FORT DRUM — ReEnergy Holdings, LLC earlier this month announced the reopening of its Black River generation facility at the U.S. Army’s Fort Drum installation near Watertown.

The facility operates with 60 megawatts of generation capacity, Latham, N.Y.–based ReEnergy Holdings said in a news release.

It could provide energy to satisfy all of Fort Drum’s power needs, which currently peak at about 28 megawatts, but could rise as the base population grows, the company said.

ReEnergy Black River has submitted a proposal to the U.S. Department of Defense as part of a competitive-procurement process to provide sustainable energy to Fort Drum.

ReEnergy Black River produces about 422,000 net MWh (megawatts) of electricity annually, which is enough to supply the power needs of about 55,000 homes, according to the company website.

Identifying stranded, undercapitalized assets in the biomass-to-energy industry is part of the business strategy at ReEnergy Holdings, says Larry Richardson, company CEO.

“Our focus has been here in the Northeast, so the Black River facility itself was one that we were aware of for several years and saw this as an opportunity,” Richardson says.

The facility includes a 45,000-square-foot boiler room and an 8,600-square foot warehouse and maintenance shop, the company said. The plant sits on about 10 acres of land.

ReEnergy Holdings, LLC, a portfolio company of New York City–based Riverstone Holdings LLC, owns and operates facilities that use forest-derived woody biomass and other wood-waste residues to produce “homegrown,” renewable energy, the firm said.

It also owns facilities that recycle construction and demolition debris.

Affiliates of Riverstone Holdings LLC and a senior management/co-investor team comprised of industry professionals formed ReEnergy in 2008.

ReEnergy operates in six states, employs about 290 people, and owns and/or operates nine energy-production facilities with the combined capacity to generate 325 megawatts of renewable energy, the company said.

Restarting the plant

ReEnergy Holdings acquired the Black River generation facility in December 2011 after its former owner, Energy Investors Funds of Needham, Mass., idled the plant in early 2010. The plant had primarily burned coal to produce electricity, the company said.

ReEnergy then invested more than $34 million to convert the facility to use biomass as its primary fuel in a project that started in 2012.

 “We self-funded the construction financing,” Richardson says.

ReEnergy Holdings “self-performed with various vendors [a] significant amount of the work” in the retrofit project, but Pittsfield, Me.–based Cianbro Corp served as the general contractor handling the site work, civil work, and fuel-yard installation, Richardson says.

ReEnergy employs 33 full-time workers at the plant. They include the plant manager, the operations staff, a maintenance staff, and an administrative staff, he adds.

In addition, an estimated 144 people are working in logging crews with 15 companies collecting forest residue from regional forests that ReEnergy has under contract in its fuel-procurement program.

In all, the facility will create an estimated 307 new direct and indirect jobs in the community, the firm said.

ReEnergy also owns biomass-to-energy facilities in Lyons Falls in Lewis County and in Chateaugay in Franklin County.

ReEnergy Holdings doesn’t disclose any of its revenue information, Richardson says.

The New York State Energy Research and Development Authority (NYSERDA) has selected ReEnergy Black River to sell renewable-energy credits to NYSERDA under New York’s Renewable Portfolio Standard, according to the company.

That’s a program tasked with obtaining 30 percent of New York’s electricity from renewable sources by 2015.

Wood, willow for fuel

ReEnergy plans to spend about $11 million in annual wood purchases from local loggers. The company has acquired and leased wood chippers to 14 of its fuel suppliers in New York, allowing loggers to secure long-term agreements to provide fuel to ReEnergy biomass-to-energy facilities, while also buying wood chippers under ReEnergy’s lease-to-own program.

Under the terms of these contracts, the loggers will make long-term commitments to sell their biomass fuel to ReEnergy. They will pay for the chippers over time, as the firm deducts the equipment-purchase payment from its payment to the suppliers for the biomass fuel, the firm said.

Ownership of the chipper will transfer from ReEnergy once the supplier has fully paid for the equipment.

But wood won’t be the facility’s only source of fuel.

Through a program launched in 2012 and funded by the U.S. Department of Agriculture (USDA) and in collaboration with the State University of New York College of Environmental Science and Forestry in Syracuse, the ReEnergy Black River facility also will use locally grown shrub willow as a fuel.

Up to 3,500 acres are planted within an eligible region that spans nine counties, including Jefferson, Oswego, Lewis, Oneida, St. Lawrence, Clinton, Franlin, and Essex.

ReEnergy will purchase the harvested willow and use the biomass to produce energy at its biomass-to-energy facilities, with the Black River facility accepting about 80 percent of the fuel.

USDA offices in the nine counties will administer the funding.

The 11-year project is expected to produce a total of nearly 400,000 green tons of biomass for use in ReEnergy facilities. The willow, which can be harvested every three years, will have the potential to continue producing biomass for at least another decade after the program is completed.

SFI standard certification

At its grand-opening event on May 31, ReEnergy Holdings announced that the Sustainable Forestry Initiative (SFI) Standard has certified the firm, verifying that ReEnergy’s biomass-procurement program promotes land stewardship and responsible-forestry practices.

“We recognize the commitment and effort ReEnergy has made to procure fiber from responsible sources,” Kathy Abusow, president and CEO of the Sustainable Forestry Initiative, said in the ReEnergy news release.

“The SFI Standard promotes responsible forest management for all forest uses. Third-party certification to SFI Fiber Sourcing requirements promotes best-management practices for water quality, logger training, and prompt regeneration of the forest,” Abusow said.

The nonprofit Washington, D.C.–based SFI, Inc. is an organization responsible for maintaining, overseeing, and improving a sustainable forestry-certification program that is the “largest single forest standard in the world,” the ReEnergy release said.

Contact Reinhardt at ereinhardt@cnybj.com