Berlin Station & IPPs have gone back to the table

Berlin Reporter

By Edith Tucker

CONCORD — Negotiations between Cate Street Capital of Portsmouth to protect its investment in the planned 75-megawatt wood-fired biomass Berlin Station-Laidlaw project in Berlin and five of the state’s Independent Power Producers (IPPs) resumed on Friday, July 15, in the offices of the McLane law offices. Despite work continuing over the weekend, no agreement had been reached by Monday evening, however, said Cate Street Capital president John Halle in a Monday evening telephone interview. “I’m very hopeful,” Halle said. Negotiations have been conducted on the Internet, by telephone, and face-to-face.
Two of the five IPPs remain holdouts and have not embraced a 20-month deal that the other three have agree to sign, explained Halle, who did not divulge any specifics or company names. Nonetheless, cash payments, letters of credit, the potential purchase of Renewable Energy Credit (RECs) and other concessions and considerations have apparently been on the table.
“Everyone appears to be negotiating in good faith,” Halle said. Governor John Lynch, Commissioner George Bald of the state Department of Resources and Economic Development (DRED), and CEO Gary Long of Public Service of New Hampshire (PSNH) have all played an active role. PSNH is giving serious consideration to declaring a stalemate if an agreementhas not been reached by Friday afternoon, July 22.
PSNH is a key player because the utility signed a 20-year Purchase Power Agreement (PPA) with Berlin Station which the state’s Public Utilities Commission (PUC) green-lighted after revisions were made, as called for, to its April 18 conditional order. The revised PPA established that PSNH would purchase 100 percent of the electrical power generated at the Berlin facility at a lower price than previously proposed. When the PUC approved the revised PPA, the IPPs then said they would collectively take the case to the state Supreme Court, as is their right.
The stakes are high, however, since a year’s delay could not only stop the Berlin Station project from going forward, but also close down the IPPs, the bulk of which do not have PPAs but must sell their electricity on the spot market. Wood-burning biomass plants provide an important market for the state’s low-grade wood. The IPPs purchase about 1.2 million tons of wood chips annually, providing jobs in the plants, in the woods, and hauling chips, and also support ancillary services.
An estimated 750,000 tons of wood chips would be burned annually at Berlin Station, providing the beleaguered city with 40 permanent jobs and jobs in the woods, plus help restore its eroded property-tax base. Halle has warned that the project no longer by financial viable if construction work cannot start soon.
Work must be begin on its 27-month construction schedule before winter sets in. Evidence is on hand that Halle does believe that an agreement can still be reached this week, however. Cate Street ordered Babcock and Willcox to send its advance team to Berlin to work out the project’s logistical requirements in the event that negotiations do succeed and the go ahead is given to begin work.
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