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Chinese Station biomass plant contract in limbo

Lack of a long-term contract means plant owners can’t justify investing millions on upgrades and maintenance, while a dead-tree wildfire catastrophe looms in the Sierra Nevada.


Guy McCarthy / Union Democrat Chris Scoville, of Sierra Resource Management, shows blue stain marks on a section of tree killed by bark beetles, Wednesday at the Tuolumne County Wood Sort Yard down the road from Pacific Ultrapower’s Chinese Station biomass plant.

The 20-megawatt biomass plant outside Chinese Camp that burns wood chips to produce electricity is still without a new long-term contract, leaving the future of the facility uncertain.

The plant’s short-term contract extension to sell electricity to Pacific Gas & Electric ends July 31.

This comes as the Forest Service has more than doubled its estimate of Sierra Nevada trees killed by drought stress and beetle infestation.

The ongoing tree mortality crisis is considered a statewide emergency.

The Pacific Ultrapower Chinese Station plant on Enterprise Drive can burn 540 bone-dry tons of wood chips and wood waste every 24 hours, 320 days a year.

Chinese Station employees were busy this week working with wood waste from multiple high hazard tree removal projects on the Highway 108 and 120 corridors, including around 425 tons of log chunks from beetle-killed trees taken out of Leisure Pines subdivision in the Mi-Wuk Village area, Groveland and Pine Mountain Lake.

They’re also receiving high hazard fuel from timber sales areas inside the 400-square-mile Rim Fire burn.

Contract necessary

Rick Carter, plant manager at Pacific Ultrapower Chinese Station, says lack of a long-term contract means plant owners can’t justify investing millions on needed upgrades and maintenance.

“The primary thing that needs upgrading and maintenance is the boiler,” Carter said Wednesday. “It needs major maintenance and most of it needs to be replaced. That can cost several million dollars, from $3 million to $5 million.”

Chinese Station is operating on an extension of a long-term power agreement with PG&E that’s almost 30 years old, Carter said. Chinese Station employees are hopeful another three-month extension is approved by then.

“We believe it’s likely,” Carter said. “For August, September and October. We’re not sure when we’ll hear on the extension. It’s up to the Public Utilities Commission.”

The California Public Utilities Commission regulates privately owned electric, natural gas, telecommunications, water, railroad, rail transit and passenger transportation companies.

“If the PUC does not formally approve that before the end of July, we would be at high risk if we continue to operate past the end of July,” Carter said. “The risk would increase for the plant if the three month extension is not approved before July 31.”

According to state Public Utilities Commission documents dated June 3, 2016, PG&E is seeking PUC approval of PG&E’s pricing amendments to a 30-year agreement with Pacific Ultrapower Chinese Station. The amendment has a term of three months, from Aug. 1 through Oct. 31.

The correspondence between the state and PG&E refers to Gov. Jerry Brown’s Oct. 30, 2015, Emergency Proclamation on Tree Mortality.

Wood Sort Yard

In heat approaching 100 degrees Wednesday afternoon at the Tuolumne County Wood Sort Yard down the road from Chinese Station, Chris Scoville with Sierra Resource Management pointed out bark beetle tracks and blue stain marks on sections of trees killed by infestation.

“This here is 20 to 25 truckloads,” Scoville said. “It’s all going to be chipped for burning to make electricity.”

A Timberjack shovel loader on tracks stood idle with its metal jaws agape over the pile of log chunks. Off to one side were two log decks stacked 20 to 25 feet high, 75 feet long and 100 feet long.

More blue stain marks on logs showed the trees they came from were dead or dying, Scoville said.

“Blue stain is fungus that comes after the tree starts dying,” said Scoville, who was acting woodyard manager Wednesday. He normally works as a logger for Sierra Resource Management. “Any tree that died can get blue stain.”

“This yard is open to anyone who wants to bring wood in,” Scoville said. “PG&E has dropped a lot of wood and people have a lot of wood on their properties. We just want to get as much fuel off the land as possible. As long as it’s not slash or dirt they can drop it off here free of charge.”

Ongoing projects

Chinese Station employs 25 people and this week they were receiving high hazard fuel from tree removal projects at Leisure Pines, from the Twain Harte grade and further uphill on Highway 108, and from just above Groveland along Highway 120, Carter said.

“At the same time we also have a deal taking fuel from the Rim Fire burn,” Carter said. “We have a deal in place, but we haven’t started getting the fuel. It’s coming from the Ridge North sale, up close to the 120 heading toward Cherry Lake.”

Another high hazard project Chinese Station has under contract is for fuel from the Ascension Sale, also in the Rim Fire burn in the Cherry Lake area, Carter said.

In addition to the 25 people who work there, Chinese Station also helps generate more than 160 outside jobs. Most of the plant and outside jobs support Tuolumne County residents.

The average total compensation for Chinese Station employees, including salary, benefits and annual bonuses is about $130,000, Carter said. Socio-economic impact from Chinese Station in Tuolumne County totals more than $55 million, according to a consultant hired by IHI Power Services Corporation, an owner of Chinese Station.

Plenty to burn

The Forest Service announced June 22 there are now a record 66 million dead trees in the Sierra Nevada based on its aerial surveys in May. Scientists identified 26 million more dead trees across 1,100 square miles in Tuolumne, Mariposa, Madera, Fresno, Tulare and Kern counties since October 2015.

“Tree die-offs of this magnitude are unprecedented and increase the risk of catastrophic wildfires that puts property and lives at risk,” Agriculture Secretary Tom Vilsack said last week.

The Forest Service updated its dead tree count three days after President Barack Obama concluded a Father’s Day weekend visit to Yosemite National Park.

Between August and October in 2013, the Rim Fire burned 257,314 acres, destroyed 11 houses and 98 outbuildings, leveled several residential camps, caused 10 injuries and cost $127.3 million to fight. Most of the fire damage occurred in and near the Stanislaus National Forest and Yosemite National Park.

Aside from the 2013 Rim Fire and its devastating aftermath, Cal Fire, the Forest Service and other fire agencies in the Mother Lode hope to prevent a repeat this fire season of the catastrophic 2015 Butte Fire in Calaveras County, which killed two residents, destroyed more than 500 homes and burned 110 square miles of watersheds.

"Tree die-offs of this magnitude are unprecedented and increase the risk of catastrophic wildfires that puts property and lives at risk.”

— Tom Vilsack, Agriculture Secretary