Date: November 10, 2010
Source: DTE Energy Services
DTE Energy Services (Ann Arbor, MI) said it is acquiring a significant share in a 49.5 megawatt coal-fired power plant in California with the idea to convert it run on 100% biomass fuel. DTE is buying its stake in the Mt. Poso Cogeneration Company facility from owners Red Hawk Energy and Northern Star Generation. The third partner in the plant, MacPherson Oil, intends to continue its ownership and management interest in the facility. The plant, which has operated since 1989, uses a blend of coal, coke and waste tires to generate energy, but DTE intends to convert the facility to use urban wood waste, tree trimmings and agricultural residues. It is expected to be complete in 2012. As a biomass facility, it would produce about 44MW of power, DTE said, enough electricity to supply about 35,000 homes. Power is to be sold to California utility PG&E under a long-term power purchase agreement. DTE has completed a similar biomass conversion in Cassville, WI, and has another under way in Stockton, CA. It also operates biomass power plants in Woodland, CA. and Mobile, AL.
PRESS RELEASE
DTE Energy Expands Its Nationwide Portfolio With Plans to Convert California Coal Plant to Biomass
DTE Energy Services (DTEES) is acquiring a significant interest in the 49.5-megawatt Mt. Poso Cogeneration Company power plant near Bakersfield. DTEES will operate the plant and co-lead its conversion to operate on 100 percent biomass fuel, primarily wood fuel derived from urban wood waste, tree trimmings and agricultural residues.
One of Mt. Poso's three current partners, MacPherson Oil, will continue to have an ownership and management interest.
The other two partners, Northern Star Generation and Red Hawk Energy, are selling their interest. Red Hawk Energy has been instrumental in developing the biomass conversion project.
DTEES has completed a similar biomass conversion in Cassville, Wis. and has another under way in Stockton, Calif. The company also operates biomass power plants in Woodland, Calif. and Mobile, Ala.
DTEES, headquartered in Ann Arbor, Mich., acquires, develops, builds, owns and operates projects for large, energy-intensive industrial customers. The company is a subsidiary of DTE Energy, a diversified energy company involved in the development and management of energy-related businesses and services nationwide, with operations in 26 states.
"We are excited to have the opportunity to acquire an interest in the Mt. Poso plant and to convert into a 100-percent renewable power source," said DTEES Vice President Steve Sorrentino. "The plant already is a leader in protecting the environment, and this conversion will build on that legacy and extend it."
The Mt. Poso plant began operation in 1989 and it employs the best available control technologies to minimize air emissions, uses no potable water (water supply comes from the Mt. Poso oil field), and maintains zero discharge of solid and liquid wastes.
The plant currently operates on a blend of coal, petroleum coke and tire-derived fuel. Operating on biomass fuel, the plant will produce about 44 megawatts of power, enough to supply the electricity needs of about 35,000 homes.
Following the conversion, the plant will provide power to PG&E under a long-term renewable power purchase agreement. The plant will help PG&E meet California's 33-percent renewable power requirement.
Sorrentino said conversion of the facility to burn renewable biomass is under way and is expected to be complete in 2012.
The conversion will employ approximately 90 construction workers at peak. Permanent employment at the plant will increase from 28 today to 38 when the conversion is complete. In addition, the project will create additional jobs and business activity through agreements with fuel suppliers and other companies that will provide services to the plant.
Sorrentino said DTEES hopes to identify additional coal-to-biomass conversion opportunities nationwide.
PRESS RELEASE
Macpherson Energy Converting Cogeneration Plant to Biomass
New Partnership to Operate 44-MW CA Clean Energy Plant
Macpherson Energy Corporation entities have agreed to acquire 50% ownership in Kern County's Mt. Poso cogeneration plant and will co-lead its conversion to a 44-megawatt renewable energy center operating 100 percent on biomass fuel, primarily wood waste. Construction on the biomass plant begins this week with earthmoving.
Macpherson has been one of the owners of Mt. Poso Cogeneration since 1987. The company is managing partner of numerous Kern County oil fields.
Macpherson Energy Corporation and DTE Energy Services subsidiaries acquired the Mt. Poso plant from its previous partners effective November 1. Mt. Poso has a 15-year agreement to sell the biomass energy to Pacific Gas and Electric Company; this agreement has received the necessary regulatory approval from the California Public Utilities Commission.
DTEES will operate the plant and co-lead its conversion to biomass. Macpherson will increase its ownership position in the Mt. Poso cogeneration facility to 50% and will continue to have a management role. Its wholly owned subsidiary Macpherson Oil Company operates the adjacent West Mt. Poso Oil Field, which provides the water supply for the cogeneration plant and produces oil in a thermally enhanced oil recovery operation using steam from the cogeneration plant.
The biomass conversion project is expected to produce 90 local construction jobs, 10 new full-time jobs at the cogeneration plant when conversion is completed in 2012, and additional jobs supplying the wood to the plant and providing other services. The wood to fuel the power plant will come from construction waste, tree trimmings and agricultural sources. All current employees at the plant will keep their jobs and become DTEES employees, while oil field employees will continue to be Macpherson employees.
"We are very proud to take this important step in responsible energy production," said Donald R. Macpherson, President and Chief Executive Officer of Macpherson Energy. "Our biomass project, and the agreement to sell the clean energy to PG&E, will help California meet its renewable energy goals. It is good for the Kern County economy and good for the environment."
The Mt. Poso plant uses the best available control technologies to minimize air emissions, and discharges zero solid or liquid wastes. It currently uses coal as its primary fuel source. "We will continue to be a leader in environmentally friendly energy," Macpherson said.
Macpherson Energy Corporation is a growing, integrated energy provider headquartered in Santa Monica, CA, with principal oil and gas operations in Kern County, CA, and in Alabama. Macpherson is the 10th largest onshore oil producer in California. The company and its employees contribute approximately $120 million annually to the economy in royalty payments, payroll, taxes, and contracts with local vendors.
DTEES, headquartered in Ann Arbor, Michigan, has operations in 26 states including biomass plants in Woodland, CA, Wisconsin and Alabama.
For more information, please contact Dave Hyams, Solem & Associates, 415-788-7788, or 415-260-1959 (cell).
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