Power plant biomass lease to be terminated

Dave Weatherwax/The Herald

Herald Staff Writer

JASPER — It looks as if the Jasper Clean Energy Center lease is on its way to being terminated.

But the idea of converting the plant into a biomass plant is still on the table.

Atlanta-based Twisted Oak Corp. has given notice that it will terminate the lease with the city for the center, which would have been a biomass plant that burned natural gas and miscanthus grass. The termination will go into effect June 20.

Bill Kaiser, the attorney facilitating the lease details for the city, told the Jasper Utility Service Board about the termination at its meeting Monday night. He said Twisted Oak President Jay Catasien sent the city notice Monday, stating the project is no longer economically viable (a story is on the back page).

“It’s an opportunity lost,” Board President Wayne Schuetter said after Monday night’s meeting. “That money (from the lease) would have given Jasper Utilities and the City of Jasper a lot of opportunities to help our citizens in many ways.”

Had the lease and timeline been enacted as planned, the city would have received $60,000 per quarter from Twisted Oak for the first year of the lease and $425,000 per year for as long as the plant operated. The city also would have received — as royalty payments — a percentage of the income from the sold energy generated by the city’s boiler.

But Schuetter isn’t completely discouraged from the plant being converted in the future.

“Is this a setback? Well, it’s not a step forward,” he said. “But we’ll take a look at it and see where we can go from here.”

Members of Healthy Dubois County attended Monday night’s meeting and heard the announcement.
The group included Dr. Norma Kreilein and her husband, Mike, Ferdinand resident Rock Emmert and Alec Kalla, a French Lick resident who wore a surgical mask to the meeting.

After the meeting, members of the group were animated in their displeasure in the time taken to kill the lease. They also noted that city officials have not acknowledged and agreed with their concerns that the production of biomass energy would further deteriorate area air quality.

“It appears to be potentially a victory for the children and citizens concerned about our high cancer rates,” said Emmert, vice president of the organization, said. “But the city’s consistent silence on the well-documented health concerns is significant. Health was not brought up in any of their discussions tonight.”

Healthy Dubois County has been concerned about health risks that could arise as a result of converting the plant on East 15th Street near the Patoka River.

Dr. Norma Kreilein, president of Healthy Dubois County, said after the meeting that while the organization is glad the lease is being terminated, the action does not mean the idea of converting the plant into a biomass plant is dead.

“This was a total waste of the taxpayer’s money,” Kreilein said. “And it is not completely over yet.”

Schuetter confirmed the biomass plant idea is among the potential future options for the plant. The board’s electric committee will regroup and discuss possible options once the 60 days have passed and the lease is terminated.

“What Mr. Catasien conveyed to us, it wasn’t the biomass that was received negatively,” Schuetter said. “Our market and the production of electricity landscape has changed in the last three years. And with the size of the plant, it’s not as viable as it was.

“As far as continuing with the biomass (idea), we might be interested in that.”

Such a possibility worries Healthy Dubois County.

“We are still concerned,” Kreilein said. “There was no mention about our validated health concerns tonight. They are potentially going back to the biomass idea despite losing all this money (in the 2011 lawsuit pertaining to the lease).”

Jasper spent more than $700,000 from its electric fund fighting a lawsuit Healthy Dubois County filed against the city. The lawsuit, in which the health activists said the city violated the Open Door Law with several executive sessions, was filed the day before the utility service board and Jasper Common Council approved the lease. Because of the lawsuit, the utility service board suspended the timeline on the tasks Catasien had to complete to comply with the lease, which included monthly payments to the city.

The lawsuit lasted more than a year and included an appeal to the Indiana Court of Appeals. It was mutually dismissed in January.

Kaiser said Monday night that Catasien indicated he made his decision because of economics and said the termination did not stem from the lawsuit.

The money the city spent on the lawsuit could be passed on to electric rate payers. General Utilities Manager Bud Hauersperger said when the utility conducts its next electric rate study, the power plant litigation expense could be a part of the study. The electric rate study currently being reviewed does not include the expense.

“We will look at our revenue coming in and going out and our funds to see how much money is available in our accounts. All that has to be taken into consideration,” he said. “We’ll look to see if those funds need to be replenished or not and whether that needs to be done through a rate increase or not.”

The lease stated that Catasien would be responsible for lawsuit costs that exceed $200,000. But Kaiser said that condition would have kicked in if the lawsuit was a challenge against the lease itself.

“The lawsuit was not against the lease,” he said. “It was against the Open Door Law. It was a challenge against the city.”

Kreilein said the lawsuit was filed because of the lease.

“The reason for filing the lawsuit was to invalidate the lease. The lawsuit was the action that was needed to reverse the action,” she said. “The lawsuit was an Open Door lawsuit because of the lack of transparency in the negotiation of the lease. It had everything to do with the lease.”

Kreilein said the utility service board and common council chose to continue with the lease despite knowing the day before their August 2011 vote of approval that a lawsuit had been filed. Therefore, the cost incurred because of the litigation was their fault.

“There never should have been a signed lease when they knew there was a lawsuit. But they signed it anyway,” she said. “They approved the lease and the mayor (at the time, Bill Schmitt) signed it Dec. 30. They knew full well that the litigation was there.”

“They deliberately did that. And then blamed us for costing the taxpayers money,” Kreilein said. “There is absolutely no excuse for it.”

Emmert hopes the matter will not revisited.

“This confirms our convictions that this biomass incinerator is not viable, which HDC emphasized when ending the costly lawsuit in January,” he said. “Hopefully, this will lead to the dismantling of the plant and more transparency by the government.”

A story about Twisted Oak's response can be found here.

A timeline of biomass related events through the years can be found here.

Contact Candy Neal at cneal@dcherald.com.

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