Flathead Electric Cooperative managers say they have long been exploring the potential for the development of a biomass cogeneration plant, but so far it has penciled out as the most expensive source to meet future power needs.

With the recent closure of the Smurfit-Stone container mill in Frenchtown, there has been a renewed interest in biomass cogeneration in the Flathead to serve as an alternative and productive destination for the region’s wood-waste products.

Chuck Roady, vice president of F.H. Stoltze Land & Lumber Co., outlined plans to build a cogeneration plant at the company’s sawmill facility west of Columbia Falls during a recent panel discussion at Flathead Valley Community College.

Roady said one of the biggest obstacles to the project is the relatively high cost of continually gathering biomass material to power the plant.

“We have the same interests as Chuck does in biomass,” said Kenneth Sugden, the cooperative’s general manager. “We’ve worked with Stoltze for about three or four years.”

It is true that the co-op will be faced with the need to meet a rising curve in future power loads because hydropower from the Bonneville Power Administration has been capped. The problem is that simply having BPA purchase power from other sources to meet power needs over the next 17 years would cost about half as much as the cost of local biomass generation.

The co-op estimates that adding a 15 megawatt biomass cogeneration plant to the local power grid would lead to electricity rate increases of more than 12 percent.

But Sugden stressed that the cooperative’s board of directors has never shut the door on the possibility.

“One of the misconceptions we hear is that our board has voted [on biomass cogeneration] and it hasn’t,” Sugden said. “Our board has said all along that we are interested.”

He said the board has instructed management to pursue all kinds of alternative energy sources. There is a state-directed goal of having 15 percent of the co-op’s power coming from renewable sources by 2015.

Sugden said the co-op worked with Plum Creek Timber Co. on a potential biomass cogeneration plant for several years, but the company suspended those plans in early 2008.

Now the Stoltze project has taken on a higher profile, largely because of the closure of the Frenchtown pulp mill.

“This has become a big issue and people want to talk about it,” said Mark Johnson, the utility’s assistant general manager. “It has become a more popular item.”

Johnson and Sugden said they will meet with Roady for more discussions on how to make biomass cogeneration more economically feasible.

“We’ve got to either make the project smaller or we have to get the costs down,” Sugden said, acknowledging that some form of government subsidy could advance the project.

Johnson said there currently are better government tax incentives and grant programs available for solar and wind energy projects than there are for biomass projects.

“If it were treated on par with solar and wind ... it would be able to lower the cost of the Stoltze project,” Johnson said.

Solar and wind have won political favor because they are carbon-free energy sources. While biomass advocates maintain it is a “carbon-neutral” energy source, it is not considered to be as clean as wind and solar.

Johnson noted that wind and solar have the drawbacks of not being consistent sources of power and they are not likely to be significant energy sources in Northwest Montana. He said it is obvious to the co-op’s board that the region has abundant timber resources.

“For us, it is the major renewable in our area,” he said.

Sugden and Johnson acknowledged that many people would consider a 12 percent power rate increase to be palatable, particularly if it helped save jobs and the wood-products industry.

However, they said the board must account for the people who could not afford such an increase, particularly during an economic recession. Electricity rates already are slated to go up 3 to 5 percent this spring, an increase that the co-op incurred in October but intentionally deferred over the winter months.

“We have seen an incredible increase in people having a hard time being able to pay their bill,” Sugden said.

Johnson added that the co-op’s billing department is “talking to people they’ve never had to talk with before.”

They said the board must find “a balance” in new energy sources and affordability.

Reporter Jim Mann may be reached at 758-4407 or by e-mail at jmann@dailyinterlake.com