COLUSA, CA (MPG) – It was an agonizing decision for the Colusa City Council to go into business with a private energy company, but officials said the Aug. 27 decision to move forward could lead the municipality into a clean and renewable energy future.
After more than one year in public discussions, the council voted 4-1 to acquire a 12.5% stake in a $100 million planned BC&E biomass energy project for $1 and $5 million in available tax credits provided by the Inflation Reduction Act (Green New Deal), which President Joe Biden signed into law in 2022.
The council has been keen on the idea for several months but still feared the risk of a first-of-a-kind public-private partnership that will require the city to buy and sell the excess power the facility generates.
“We take risks every day just being a city,” said Mayor Daniel Vaca, who voted in the affirmative. “It’s still just hard to do. It’s a big project and a big undertaking.”
The indoor biomass project, originally planned at Colusa Industrial Properties, has also shifted to a 15-year lease by BC&E of about 35,000 square feet of the 100,000 square-foot former Pirelli Cable Manufacturing Company, a property the city bought in 2022 for innovative projects, city officials said. The project will take about three more years to complete and will use German-developed equipment to convert about 100 tons per day of locally sourced biomass waste, such as agriculture residues, biosolids (sewer solids), cannabis waste, and wood chips, into renewable energy, according to Wayne Herling, BC&E project manager.
“It really is a win-win, “Herling said. “The government incentivizes these projects because they want these projects built. They want renewable energy.”
City officials said investing available tax credits in renewable energy is just the first step in meeting the State of California’s mandate they use renewable energy to meet 100 percent of their needs by 2045. If the project moves forward as BC&E planned, Colusa could purchase the plant outright after five or so years and become the first municipality in the state to generate 100 percent renewable energy to meet its own power needs.
If the plant goes “belly-up,” officials hope insurance will cover any liability.
“We have to weigh the benefits to the risks to the city,” said Councilmember Denise Conrado. “In my opinion, the benefits far outweigh the risks, if we have the insurance.”
Councilmember Ryan Codorniz, who made the motion to approve the agreement with BC&E and exercise the city’s right to receive the tax credits, said he was comfortable the city was making the right decision.
“I’ve talked to a lot of people about this,” he said.
Colusa City Manager Jesse Cain said the city currently spends about $750,000 per year on electricity purchased from PG&E. In addition to saving about $300,000 annually in energy costs, Cain said his goal would be to see three more facilities built in the next few years as a potential revenue stream that could secure the city’s future and provide low-cost electricity to Colusa residents.
Councilmember Greg Ponciano was the lone dissent, stating there were insufficient assurances the city would be free from liability.
Ponciano, at previous meetings, said he was also concerned that electricity prices from other sources at some point could drop below the amount Colusa must purchase electricity at, leaving the city with unsellable energy, among other concerns.
With the power purchase agreement signed and tax credits secured, the biomass plant could be operational within 18 months, officials said.