DARRINGTON – National Energy Systems Co. has shelved plans to build an electricity-generating plant next to the lumber mill here, due to changing conditions in the power market and the mill’s own expansion plans.
A week ago, state and regional regulators issued draft air quality permits for the proposed wood-fired co-generation plant.
But up to three months ago, the mill’s owners decided that NESCO’s plant wouldn’t be ready in time to provide the steam needed for the sawmill’s expanding operations, said Steve Zika, chief executive of Hampton Lumber Mills.
Instead, Hampton has started going through its own permitting process to add more drying kilns and construct its own wood-waste boiler to produce steam. That boiler will have a 4- to 5-megawatt generator, but it would not be large enough to produce electricity for the outside market, Zika said.
“It would produce just enough to run the mill,” he said. “It would not be nearly as much as NESCO was looking at.”
David Eaden, a vice president for NESCO, said his Kirkland-based company doesn’t want to hinder the sawmill’s expansion.
“For Darrington, the health of that mill is the most important thing,” he said.
Additionally, the high prices and demand for electricity of just two years ago has changed somewhat, he said.
Despite the change in plans, the air quality permit process for the plant will proceed, along with Thursday night’s public hearing in Darrington, said Alan Butler of the Puget Sound Clean Air Agency.
“They applied and are in a process,” Butler said, adding that the permitting process would likely end only if NESCO formally withdraws its permit application.
He indicated he wasn’t aware that NESCO had decided not to build the co-generation plant.
In early 2003, NESCO revealed its plans to build a 15- to 20-megawatt plant that would burn wood waste from the Hampton mill. In addition to producing electricity, steam from its wood-fired boiler would be used in the drying kilns at the mill.
While many Snohomish County officials welcomed the proposed plant and the two dozen jobs it could create, others worried about the potential environmental impact. The draft air quality permits called for the plant to coordinate with the mill’s operations to reduce potential pollution.
Even though Hampton plans to build its own wood-fired boiler over the next two years, Eaden said NESCO hasn’t fully ruled out its project at the mill.
“If market conditions were to change, that would make our co-generation plant an option,” Eaden wrote in an e-mailed statement Thursday. “We would be happy to support Hampton and would have permits in place to expedite our response time.”
The proposed air quality permits, however, would give NESCO just 18 months to begin construction of the plant. Otherwise, the project may be required to undergo more scrutiny, Butler said.
Hampton took over the Darrington sawmill two years ago from Summit Timber Co. and invested more than $15 million to remodel the mill, which cuts dimensional lumber mostly from Douglas fir and hemlock logs.
Zika said the mill’s production has risen in recent months, prompting the need for more lumber-drying capacity. The mill, which employs two shifts, is expected to cut 200 million board feet of lumber this year and more than 300 million board feet in 2005. As a result, a third shift could be added next year.
Reporter Eric Fetters: 425-339-3453 or fetters@heraldnet.com.
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