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The Final Word by Chuck Swann
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This Final Word was written earlier for publication today, May 16. And it is about a pending piece of Washington State legislation that Kapstone, at Longview, Washington, hopes Governor Jay Inslee will sign today. If he does, Kapstone stands to earn a hefty amount of cash yearly from its wood-waste-burning boilers. We'll have to wait until our next edition to tell you about the governor's decision, but here is how Kapstone hopes the play will go down.

The bill that has cleared the Washington legislature and now awaits the governor's decision would allow older biomass operations like Kapstone's to sell renewable energy credits. If permitted to do so, Kapstone could rake in some really big bucks. Instead of building their own renewable energy operations, utilities can purchase renewable energy credits to meet the standards in a voter-approved state initiative. Kapstone and other pulp mills in Washington want to sell those credits.

Under current state law, only mills with biomass burners constructed after 1999 can sell renewable energy credits. This leaves out Kapstone, which has furnaces and boilers dating back to the 1950s and 1960s. The bill on the governor's desk would amend the law so that any operation that made significant upgrades to its biomass facilities after January 1, 2010, could sell renewable energy credits. (Kapstone has argued that it should get a pass for major biomass-burning upgrades it has made at its Longview mill since 2007 and which boosted Kapstone's biomass energy production to 25 megawatts.) Passage of the bill in question could result in the company being able to sell just 13 megawatts of energy credits, but that amount would be worth hundreds of thousands of dollar a year.

Governor Inslee vetoed a similar bill last year, concerned that biomass energy could undercut the competitiveness of other renewable energy operations, including wind and solar. But the Daily News reports from Longview that the pending bill comes at a time when demand for renewable energy is poised to expand across the state. Currently, electric utilities with more than 25,000 customers must get 9.0% of their power from renewable sources. That share will increase to 15% in three years.

As to the eventual fate of this piece of legislation, as we have often said about ongoing news in the pulp and paper industry, "Stay tuned!"

Chuck Swann is Senior Editor of Paperitalo Publications.


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