COLUSA, CA (MPG) – The Colusa City Council last week approved three lease agreements for a sizable portion of the old Pirelli Cable plant and 10 acres of vacant land at the wastewater treatment plant with the city’s energy partner, BC&E USA Colusa.
Wayne Herling, BC&E project manager, said securing all the property needed by Dec. 31 would lock in the tax credits available from President Joe Biden’s 2022 Inflation Reduction Act.
City officials and Herling fear the tax credits may not be available if President Donald Trump’s administration cancels the tax credits, initially pitched as the Green New Deal, as they have indicated.
“It wouldn’t affect us if we started the projects in 2024, and we believe that we can get the projects started.”
Herling said BC&E has already completed the PG&E bio mat process and has invested more than 5% of the project’s total cost in the planning process, a requirement for the tax credits, which the IRS made available for the first time this year.
Colusa officials have been working with BC&E for more than a year and the city now owns a 12.5% stake in a $100 million project that will use German-developed equipment to convert biomass waste, such as agriculture residues, biosolids, cannabis waste, and wood chips into renewable energy.
The City Council in 2021 purchased the 200,000-square-foot industrial property located on Will S. Green Road, now called the Colusa Bioinnovation Center, for $3.1 million, using a $1.5 million grant and a low-interest loan from a city enterprise fund.
BC&E had initially planned to lease just 35,000 square feet of the building for five years with two extensions (15 years) for the initial phase of the project, but because of the tax credit urgency, BC&E is leasing 75,000 square feet of the northside of the building, 75,000 square feet of the southside of the building, and 10 acres of vacant land of the wastewater treatment plant, with an option to move the project to East Clay Street should the city be successful in a land swap for the cannabis project that was slated to go in on that location.
The 10-acre portion of the 88 acres the city is seeking for athletic fields could be used for one of three electrical interconnection sites with PG&E, a component of the project’s electricity transmission.
The City Council on Dec. 3 approved the three lease agreements for a one-time payment of $9 million for the first 10 years.
While the company will not have anything built on solid ground by the end of the year, securing the property should secure the tax credits that may not be available to green energy projects started after Jan. 1, 2025.
“What is important is that on these projects, you have to have safe harbor,” Herling said.
The City Council, in previous action, signed a power purchase agreement for the electricity generated by BC&E, enough to offset about $300,000 in energy costs for public facilities.
Officials said investing available tax credits in renewable energy is just the first step in meeting the State of California’s mandate to use renewable energy to meet 100 percent of its needs by 2045. If the project moves forward as BC&E plans, Colusa could later purchase the plant outright and become the first municipality in the state to generate 100 percent renewable energy to meet its own power needs.
Colusa City Manager Jesse Cain said the city purchased the former cable plant, which was vacated more than 20 years ago, with the intent to create some type of biomaterials facility that would create jobs, help farmers with their agriculture waste, and better the local economy.