The Novo BioPower facility near Snowflake

The Novo BioPower Plant in Snowflake is a 27 megawatt biomass power plant engaged in biomass power generation utilizing wood waste as a primary fuel source. The Novo Plant has two long-term power purchase agreements in place with Arizona Public Service and Salt River Project.

Poor little Nell is tied to the railroad tracks and the wildfire freight train is barreling down on her, spewing sparks out the stack.

Looks hopeless.

But is that Dudley Do Right, riding to the rescue?

Oh, wait — that’s the Salt River Project — determined to save faltering forest thinning efforts in Arizona, even if it means paying a little more for electricity.

At least, SRP’s director of water rights and contracts says the public utility recognizes the deep link between the watershed and wildfires and so will do whatever it takes to keep forest thinning efforts alive.

“There’s a lot going on behind the scenes. Essentially, we’re willing to pay for biomass if that’s what it takes,” said Bruce Halin. “When it comes to investing money from SRP’s perspective, we want to make sure we invest in whatever is the best technology that will get the most acres thinned. If that’s biomass power, yeah, we’ll probably do that.”

The declaration from a top SRP official offers a glimmer of hope for forest thinning efforts and the survival of the existing 28 megawatt biomass electrical plant in Snowflake operated by NovoPower.

The Arizona Corporation Commission (ACC) dashed once-high hopes for future thinning efforts when it decided on a 3-2 vote to not require Arizona Public Service and other utilities it regulates to buy at least 60 megawatts of power produced by burning wood scraps from thinning projects.

That vote seemed to have crippled forest thinning efforts, by eliminating the best current market for the saplings, wood scraps and brush that make up about half of the material removed to thin the overgrown forests of northern Arizona. The forest now has 800 or 1,000 trees per acres, while the fire-adapted, pre-settlement forest had more like 50 trees per acres, according to numerous studies.

NovoPower is the only biomass burning electrical power plant in Arizona. It is sustained by contracts with SRP and APS to buy the power it generates. The two giant utilities entered into the contract with NovoPower because of an ACC mandate to buy electricity generated from renewable sources. At that time, burning biomass was much cheaper than generating electricity from wind and solar. But advances in solar technology have reversed that advantage, which means APS and SRP both have a financial incentive not to renew their current contracts with NovoPower.

If that happens, NovoPower would likely shut down by 2024, eliminating the only existing market for biomass from wood scraps in Arizona. That would likely cause the collapse of already lethargic forest thinning efforts in the Coconino, Kaibab, Apache-Sitgreaves and Tonto forests — the core area of the sputtering Four Forest Restoration Initiative (4FRI).

The ACC vote rejected imposing a biomass mandate, although an APS study showed that the converted coal-burning Cholla power plant would generate some 60 megawatts of electricity annually from burning wood scraps. When combined with the output of NovoPower, the mandate would have created a market for biomass that would have supported the thinning of 50,000 acres annually – the target pace for 4FRI.

Even at 50,000 acres annually, it would take about 20 years to thin the more than 2 million acres of overgrown forest in the 4FRI project area. Fire experts say the region faces a huge risk of a wildfire, like the one that wiped out Paradise, Calif. last year, killing 85 people and destroying 20,000 homes.

APS issued a non-committal statement saying “We continue to participate in forest restoration efforts through our own vegetation management program and through our existing contract with the Novo Power Plant, which has enabled the thinning of thousands of acres of forest in northern Arizona. Forest restoration is a statewide problem that deserves a statewide solution. We look forward to work with stakeholders on a solution.”

Backers of 4FRI were in disarray after the Corporation Commission rejected a year-long lobbying effort to impose a biomass mandate. After the Commission vote, APS expressed support for thinning efforts – but pointedly refused to promise to go forward with biomass plans regardless. Without an order from the Commission, APS could not put the costs of converting Cholla in its rate base or recover the higher cost of biomass power, compared to natural gas or solar.

However, the publicly owned SRP provides both electricity and water to customers in the Valley. So the company’s business depends not only on selling electricity, but on providing water to customers in the Valley.

Studies have shown that a high-intensity wildfire would sear the soil and dramatically increase runoff, filling reservoirs like C.C. Cragin and Roosevelt with mud.

Advocates for the biomass rule argued that APS also benefits from a healthy watershed – not to mention the danger to billions of dollars of infrastructure should a crown fire take out transmission lines. In California, Pacific Gas and Electric declared bankruptcy in the face of billions of dollars in liability after downed power lines sparked a series of devastating wildfires.

However, SRP so far is the only power company to step up to do what it takes to foster forest thinning efforts.

“APS benefits significantly from the water in the watershed – a lot of the towns that buy its power get water from the watershed and a lot of water users are getting power from APS,” said Halin. “We are concerned with the silting of those reservoirs prematurely should those forests burn. But it’s not just the water. The ecosystems, the local communities – all enjoy an economic benefit. So we’re willing to step up and do our share.”

SRP has already partnered with both Payson and the US Forest Service to foster thinning projects on the watershed of the C.C. Cragin Reservoir, which supplies 3,000 acre-feet annually to Payson and perhaps 11,000 acre-feet annually to Phoenix.

Halin said SRP will make a final decision after it looks at the industry response to the latest request for proposals to thin some 300,000 acres of Forest Service land in the 4FRI project area.

The RFP is expected out soon, laying out the guidelines for logging projects in a project area that includes all of Rim Country and a chunk of the White Mountains.

In earlier phases of 4FRI, the Forest Service settled on a single contractor to thin some 100,000 acres, but that contractor has thinning only about 15,000 acres in the past seven years – mostly for lack of a market for the biomass.

The 4FRI project “has been stuck in neutral,” said Halin. “We need to attract larger, better capitalized industry to get to that 50,000 acres a year goal. “We have to get the response back from industry. Allowing the market and allowing highly capitalized industry to come in and provide as more realistic, market-driven approach will get us to a more supportable place.”

Halin said he expects NovoPower will bid on the next round of contracts.

However, Novo Power’s caught in a chicken and egg problem – or perhaps a pine cone and sapling dilemma.

Brad Worsley, president of NovoPower, has said that unless there’s an assurance there’s a market for the biomass power he can generate in coming years, there’s no point in bidding on any of the contracts in the next phase of 4FRI. Only the kind of guarantee SRP and APS have provided for the past decade made it possible for NovoPower to bid on the biomass produced by thinning projects.

But Halin said SRP won’t let forest thinning efforts die.

“Let’s go through the (Forest Service) RFP process to understand what’s the best option for us to pursue. Until then, it’s just speculation,” said Halin. “It’s a little early to make a commitment. We need to make an educated, business-like decision. But we need to solve this problem.”

OK. So Nell’s still tied to the tracks.

The wildfire engine’s still speeding along.

But that does look like Dudley up on the hill, sizing up the situation.

Contact the writer at paleshire@payson.com

Contact the writer at paleshire@payson.com

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