LUB Extends Fact-Finding Agreement with Energy Production Companies

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The Lamar Utility Board spent only a few minutes with their regular meeting agenda on Tuesday, January 13, and the bulk of the meeting in executive session, reviewing a contract extension with representatives from GreenCastle and BioStar Renewables.  GreenCastle and Lamar Light and Power entered into a 90 day contract last fall, employing the energy developer to explore future options for the use of the power plant operations in Lamar.  GreenCastle is a full service energy developer that specializes in renewable energy and natural gas technologies. BioStar Renewables is an investment firm that specializes in energy infrastructure projects and companies. BioStar is primarily focused on sustainability in the energy sector including solar, CHP (Combined Heat & Power) from both biogas and natural gas.

Light Plant Superintendent, Houssin Hourieh, said a 90 day extension was approved following the executive session.  “The company performed a lot of due diligence regarding their study of the power plant but with pending ARPA litigation, weren’t able to move forward past a certain point,” he explained.  “The company is reviewing our assets.  They’re continuing to evaluate the feasibility of constructing a new gas fired generation plant on this site,” he stated, following the meeting.  Hourieh said the board listened to GreenCastle’s concerns and board members relayed their own concerns to the representatives.  Following the discussion, a letter of intent was signed for an additional 90 days to continue the study.  The superintendent added that GreenCastle has no interests with the Lamar Repowering Project.

Hourieh said part of the lawsuit against ARPA, Arkansas River Power Authority centers on the former power generating equipment.  Lamar Light and Power is seeking redress for some of its infrastructure.  He said, “They need to give us our land back.  We gave them dedicated equipment, permits for the plant in 1972 and we retired the boiler and they basically gutted the Unit 6 system for the Repowering Project.”  GreenCastle is determining how much of the Light Plant’s infrastructure is usable such as the substations and the gas line the Plant has kept operational.  GreenCastle is looking at combined heat and power units which are basically fired by gas.  Hourieh said the cost of developing a new plant depends on the size of power output.  The current plant is rated at 44 megawatts and cost $170M.

Mediation between ARPA and various local parties is being conducted in Denver January 15 and 16 before a retired judge.  A major portion of the litigation deals with cost overruns for the Lamar Repowering Project and an effort to negate the costs of the construction bonds to ARPA customer municipalities.  Lamar was the only ARPA customer that declined to sign and re-affirm ARPA’s organic contract agreement.  A separate lawsuit from several private commercial businesses is also taking part in the mediation process.  Hourieh said the judge’s findings are not binding and the Lamar Utility Board has come to some earlier agreement with ARPA on the proposed decommissioning of the Project and the budget, to the point that the Board is not being represented in the mediation process.  He said any decision on the Board’s side will still have to be brought to the Lamar City Council for a decision.

By Russ Baldwin