ESCANABA - Escanaba Green Energy is hopeful to become the owner of the Escanaba power plant by Dec. 20 - the extension date council agreed to during a joint meeting with the Electrical Advisory Committee (EAC) on Tuesday.
The new closing date is one of many extensions granted to EGE during the past few months. Escanaba and EGE have been negotiating a sale of the coal-fueled plant since this spring. EGE plans to convert the facility to burn biomass.
EGE President Charles Detiege expressed to the city's administration that the company remains committed to the purchase which has taken longer than expected to finalize.
"EGE is appreciative of all the support that the city has provided to EGE throughout this process," Detiege said in the written request for the Dec. 20 extended deadline. He was hopeful the deal could have been finalized before Thanksgiving.
"But as we all have stated before, the closing of a complicated project financing calling for funding over $30 million and the conversion of the station to long-term economic viability is something that often takes longer than all had hoped," he stated.
Detiege added he is "heartsick that the closing process has taken longer than everyone had planned."
The most recent delays have been due to EGE's financing taking longer than expected with its lender, Provartis AG from Europe. A Provartis representative answered questions from council and EAC members via a conference call at Tuesday's meeting.
EGE expects to invest more than $30 million in the purchase, conversion and modernization of the plant. Once the facility is converted, EGE expects to employ about 25 high-skilled workers with a spin-off of 75-100 skilled jobs in the wood harvesting and transportation sectors.
To date, EGE has paid $200,000 on the $1.6 million price for the facility and property. The company also plans to pay the city for supplies of coal and diesel fuel remaining on site on the closing date.
Conditions EGE proposed on itself as part of Tuesday's extension included the company paying an extra $60,000 to Escanaba for "the time and cost that the city has incurred as a result of the delayed closing."
EGE will also continue to pay any additional legal expenses the city incurs as a result of the closing delay.
EGE also agreed to pay insurance on the plant beginning Dec. 5 - the expiration date of the the city's current policy - in the event the sale is not finalized by then.
EGE's site plan to convert the plant and construct a fuel storage yard and a processing facility was approved by the city planning commission on Nov. 8.
If all goes as planned, construction would begin in April to convert the plant from coal to wood chips, according to Detiege. Plans call for the first of two boilers to be converted to burn biomass by October 2013. The second boiler would be converted by December 2013.
For years, Escanaba has been trying to sell the power plant because it is less costly for the city to purchase energy from a supplier compared to generating its own electricity using coal.
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Jenny Lancour, (906) 786-2021, ext. 143, email@example.com