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Fibrowatt price high, utilities say
Plans for plants that burn chicken litter stall
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Published: August 31, 2009
Updated: 08/30/2009 11:50 pm
Fibrowatt's plans to build three plants in North Carolina, including one in Surry County, to generate electricity by burning poultry waste have hit a snag.
The company has not reached an agreement with either Duke Energy Corp. or Progress Energy Carolinas Inc. to supply electricity to utility companies that they, in turn, would sell to their customers.
Because of the impasse, Fibrowatt has not applied for state air-quality permits it needs to operate its plants.
Terry Walmsley, a spokesman for Fibrowatt, said that his company needs to reach purchase agreements with the utility companies before it applies for state air-quality permits for its planned plants near Elkin and in Montgomery and Sampson counties.
It will take Fibrowatt two years to build the plants, Walmsley said.
The utility companies and Fibrowatt are facing deadlines.
The N.C. General Assembly passed a law in 2007 that requires utilities to begin getting some energy from pig and chicken manure by 2012.
It also requires that at least 900,000 megawatt hours of electricity sold to retail customers by 2014 must come from poultry litter. Poultry farming is a $3.4 billion industry in North Carolina, and the state has about 5,000 poultry farms.
Duke Energy, Progress Energy and other utility companies have asked the N.C. Utilities Commission for a one-year delay. They say that Fibrowatt wants too much money for the energy it would produce.
The utilities also want the commission to reduce the minimum energy requirement from poultry waste starting in 2014 by a third.
In their filing to the utilities commission, the utility companies didn't mention Fibrowatt by name, but indicated that the "single poultry waste" generator proposed prices that would consume a significant amount of the companies' money that they need to buy other types of renewable energy such as solar and wind power.
A proposed contract with Fibrowatt also would require a 25-year commitment from the utility companies -- a provision that worries Duke Energy and Progress Energy.
But Walmsley said that Fibrowatt's proposals are reasonable.
"It's not unusual to have a long-term contract," he said.
Fibrowatt, a Pennsylvania company, is the only business that offers renewable energy generated from burning chicken waste to North Carolina's electric utility companies.
The delay in reaching agreements might be a good thing, said David Mickey, a spokesman for the Blue Ridge Environmental Defense League.
"What we like to see is that the public get electricity from sources that are clean, affordable and fair to the people who live around the plant," Mickey said.
The planned Fibrowatt plant in Surry would be near a Duke Energy substation, poultry producers, Interstate 77 and N.C. 268.
Mickey's group released a report in May that found that the Fibrowatt plant would exceed the state's toxic air-pollutant limits, contaminating the area around the plant with arsenic, chromium, mercury and other substances.
Fibrowatt disputed those claims, saying that its plant would not add any additional pollutants to the environment, and that it would remove polluting chemicals from the chicken litter.
State Sen. Charles Albertson, D-Duplin, who sponsored the 2007 bill, said that Fibrowatt and the utility companies need to reach an agreement.
"They need to get on with it," Albertson said about the negotiations.
The law is designed to promote renewable energy, reduce the state's dependence on oil and coal and reduce air pollution, Albertson said.
Duke Energy has residential and business customers in 44 North Carolina counties, mostly in the western part of the state. Progress Energy has customers in 54 counties in central, eastern and western parts of the state.
■ John Hinton can be reached at 727-7299 or at jhinton@wsjournal.com.
■ The Associated Press contributed to this article.
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