Published on Wednesday, May 19, 2010

Fibrowatt finished here

by Karen Martin, Staff Writer

Fibrowatt is history.

With an unexpected motion by Dr. Jim Harrell Jr. to cease all discussions with Fibrowatt, the Surry County Board of Commissioners voted unanimously to discontinue negotiations with the company.

Prominent members of Elkin were in attendance at the commissioners meeting with powerful words and thoroughly researched information in hand to oppose the industry being allowed to come into the area.

“I’ve been struggling in the details of the deal with Fibrowatt,” Harrell said. “Sometimes you get a first impression of a company that is not fully accurate. Over the last six to eight months, I’ve seen the public’s opinion and their struggle with the legitimacy of Fibrowatt.

“At some point it becomes an issue that’s not worth it,” he said. “The Fibrowatt issue has been a distraction from things the county needs to be doing. It (the issue) has been keeping us from being unified.”

Terry Walmsley, vice-president of environmental and public affairs of Fibrowatt said although he had not yet, (as of Tuesday afternoon), spoken to anyone with Surry County or any of the county commissioners, he had heard through media reports of the decision to discontinue negotiations with Fibrowatt.

“It did come as a bit of a surprise,” Walmsley said. “We’ve been working with Johnson (Paul), and Dr. Harrell and when we met a little over a month ago, we thought we had come to an agreement.

“We have held two open house meetings and a large forum at the Elkin high school where we tried to dispel some of the incorrect information about our industry. We have had outreach with the local groups who have been in opposition to us.”

“The Fibrowatt officials refused to respond to our questions and request for more information,” Harrell said. “They continued to keep information private and unclear. I believe we’ve made the best decision for the county and it’s residents.”

Walmsley said that the length of time it has taken waiting on a power purchase agreement allowed the percieved negatives about the alternative power plant to gain traction in the community.

“If we would have been allowed to get through the power purchase agreement and move into the permitting process, a lot of the rumors would have been dispelled,” Walmsley said. “The United States has a very complex and comprehensive permitting process and the environmental impact of the omissions from the plant would have been better explained. The process of permitting the plant is very transparent because of the nature of the industry. It is unfortunate that we’re not going to be allowed to come to the end of the process.”

According to Harrell, the property that was proposed as the location for the Fibrowatt plant was initially found in reference to another industry’s interest in moving to Surry County. A site located in the current industrial park was too small for the interested company, therefore, the county went in search of a larger parcel.

“Almost simultaneously, Fibrowatt came in,” Harrell said. “Fibrowatt proposed using the site for it’s biomass energy plant. The initial proposal seemed to be a good one and the company along with the county moved forward.”

In a packet of information formulated by Lucy Chatham for the county commissioners, Chatham provided not only the history of why Fibrowatt was proposing a plant here, but also reasons why she felt the county commissioners had incomplete information.

“...Key to this (reason for Fibrowatt proposing Elkin as a location to build a plant), is a recent piece of enacted NC legislation requiring power companys to buy a certain percentage of biomass-produced (specifically chicken litter) power by 2014 at a rate higher than what it normally costs to produce energy from traditional plants,” Chatham wrote. “The Fibrowatt proposal to locate a plant in Surry County should be viewed by the county as a venture-capital investment and vetted as such — in addition to the County considering the project in the light of economic development. This is due to the nature of the proposal from Fibrowatt and the magnitude of Surry County taxpayer funds that will be invested. The risk, reward, and payoff must be carefully considered.

“Given that this is Surry County’s first foray into a venture capital investment, I strongly recommend that the commissioners retain their own investment banking firm to collect, review, and evaluate the pertinent data, and to render a professional opinion about the probable success of this venture. The firm should be requested to give especially careful consideration to all risks, liabilities, and opportunity costs attendant to this venture because the county, unlike the other limited partners, has the additional liability of housing the manufacturing site.

“Fibrowatt, a limited liability company, proposes to provide financial and other consulting services to a new start-up Limited Liability Company which wishes to build a plant in Surry County for the purpose of burning poultry waste, wood chips, construction waste, and other, as yet undefined, materials. This start-up company (#1 LLC) will then enter into a lease/sale agreement with a second limited liability company (#2 LLC) which will operate the plant. The heat generated by the burn will be converted into electricity by a simple steam-driven turbine process, and the power will be sold to Duke Power under yet-to-be negotiated contracts. Key to this is a recent piece of enacted NC legislation requiring power companys to buy a certain percentage of biomass-produced (specifically chicken litter) power by 2014 at a rate higher than what it normally costs to produce energy from traditional plants. A third limited liability company (#3 LLC) will then purchase the ash residue from plant #2 LLC and market it as fertilizer.

“Potential revenue streams to be considered by fund investors are federal stimulus funds and tax credits available to LLC #1 as well as county-donated land and reduced property-tax incentives; lease/purchase payments from LLC #2; and State tax credits. LLC #2’s revenue stream is guaranteed by Duke Energy’s purchase contract and Federal and State tax credits. LLC #3’s revenue stream is based on the sale of the fertilizer.”

Chatham spoke to the board after the vote to discontinue negotiations.

“I am so delighted that the commissioners understood their role in determining the effect that this industry would have on a four county area,” Chatham said. “I feel that they (the board of commissioners) really hadn’t fully done their due diligence. If they had, a lot of red flags would have come up.

“I also put together a list of questions, some with the answers, they should have considered,” she said. “I believe the county has dodged a major bullet. I understand why initially they may have seen this as a good thing in as much as bringing industry to the area, but this is ‘dirty industry’. “If they would have done their own investigation, I believe they would have arrived at the same conclusion much earlier.”

Harrell continued to speak of economic development for the area.

“I haven’t seen an issue like this come up in my 20 years of working to help promote our area,” Harrell said. “It shows how important it is that the county commissioners be represented geographically. People beyond four miles out of Elkin aren’t so much affected by the commissioner’s decisions that effect Elkin and its people.”

“Every community has every right to make decisions about the types of business they bring in,” Walmsley said. “In every case, such as with our plant in Minnesota, we’ve been able to dispel statements that have been misunderstood in the final process.”

“We need to work diligently to bring economic development to Elkin and the county,” Harrell said. “Not only in tourism, but industry also. Our area is prime for tourism based workplaces because of the beauty of the county, and the kindness and generosity of our people. We have a great site out there that we can market to other companies that is within the Elkin school district, which is one of the best in the state.”

Countless residents and organized groups have voiced their concerns and produced ‘facts‘ that showed the negatives they believed Fibrowatt would bring to Elkin.

Many of the vineyard owners expressed their concerns also about the harmful atmosphere the by-products of the plant would have created for the grapes.

“Being an organic vineyard, we would be forced to leave the area if the Fibrowatt plant is built here,” Clyde and Pat Colwell, owners of Carolina Heritage Vineyards said. “We can’t take the chance that the omissions from the plant would harm our grapes.

“When the board of commissioners made the decision to stop their negotiations with Fibrowatt, they put the whole wine industry back on track,” Clyde Colwell said. “People were very worried about all of the impacts of Fibrowatt. Not only the omissions, but the traffic, and visual impact of a 300 foot smokestack. “I’m very proud to say that the folks in the wine industry stood up and voiced their concerns. Almost all of the vineyard owners signed a petition in opposition to the industry being brought to our area.”

This was the opinion of several of the Yadkin Valley vineyard owners. During several of the county commissioner’s meetings, doctors, pharmacists, engineers and countless residents who had done their own research on the omissions that would come from the plant told the county commissioners of the dioxins that would be released into the air and could impact up to a 90 mile radius.

“We’re in a position now to move forward with this issue closed,” Harrell said. “Some even suggested that the site would be great for another vineyard.”

Fibrowatt LLC is owned by Homeland Renewable Energy of New Hampshire. Fibrominn, the nation’s first poultry-litter fueled power plant, opened in Benson, Minnesota, in 2007.

© elkintribune.com 2010

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