The F.H. Stoltze Land and Lumber Co. marked its centennial Tuesday with a groundbreaking dedication ceremony for a new co-generation plant that is expected to be operational by October 2013.

The footprint structures for the combined power- and heat-generating plant were on display for about 80 people who attended the event at the Stoltze sawmill west of Columbia Falls.

“This is a big day for Stoltze,” said Chuck Roady, the company’s vice president and general manager. “There aren’t many companies in Montana that are 100 years old and there really aren’t many companies in the wood products business that are 100 years old.”

Several government officials attended, as did Carolyn Benepe, a granddaughter of F.H. Stoltze, who established the company in 1912.

The new co-gen plant was praised as an innovative way to make efficient use of wood byproducts from Stoltze logging operations.

“It’s an example of this company’s forward-looking nature and why they’ve been around so long,” said Richard Opper, director of the Montana Department of Environmental Quality.

Roady emphasized that there is a need to maintain a wood products processing infrastructure in Montana even if the logging industry has declined, particularly on federal forest lands.

“If we could replicate this model in other places, we certainly would,” said Deputy U.S. Forest Service Chief Jim Hubbard, who echoed the importance of retaining wood processing facilities.

Roady noted that the plant would not be possible without a power purchase agreement with Flathead Electric Cooperative.

The co-op agreed last February to purchase up to 2.5 megawatts of power from Stoltze at 9 cents per kilowatt hour, a move that will allow the co-op to receive Renewable Energy Credits.

Larry Jellison, the plant project engineer, said Stoltze will sell all power generated at the plant to the co-op and Stoltze will purchase all of its power from the co-op.

“It’s a whole new business for Stoltze,” Jellison said.

Actual construction on the project got under way about four months ago, Jellison said, and by agreement Stoltze needs to be generating power by October 2013.

Stoltze borrowed $20 million for the project, which just a few years ago was expected to be much larger — a plant capable of generating 20 megawatts — but Flathead Electric Cooperative could not consume that much electricity. The 2.5-megawatt plant will be capable of powering about 2,500 homes, but that will be just about 1 percent of the co-op’s total load.

The plant will burn about four tons of green fuel per hour, including bark, sawdust and slash that would otherwise be burned in forests with far more pollution than the co-gen plant will produce.

The plant will be physically dominated by two 82-foot-tall fuel storage silos and a building with a 40,000-pound boiler with a turbine generator and pollution control equipment.

Roady thanked the Forest Service, the Department of Natural Resources and Conservation and the DEQ along with other partners for their support for the project.

Although Stoltze is recognizing this year as its 100th, it is the successor to the State Lumber Co. that was incorporated and operating as far back as 1898, according to research conducted by historian Mary Tombrink Harris and Ron Buentemeier, who worked at Stoltze for 43 years before retiring.

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