Michael Gross, Director of Sustainability THE FUTURE OF BIOMASS IN CALIFORNIA Michael Gross, Director of Sustainability

Energy Goals In California we have goals when it comes to how we generate our energy.

Hydro-Electric Dams Natural Gas Power Plants AUOTO To meet these goals we built hydro-electric dams, and natural gas fired power plants.

Solar Panels Wind Turbines Geo-Thermal Plants AUTO In later years the production of renewable energy became another goal and to achieve this, we installed Solar Panels, Wind turbines, and geothermal power plants.

Biomass Power Plant As a Californian, we also relied on biomass to be counted as a renewable energy source. Although this was NOT the primary goal for being built, biomass power plants are important waste management tools producing renewable electricity as a byproduct.

California: 1960’s In the 1960’s California had a goal to cleanup its air and go from this.

California: 2000’s To this…

CARB: California Air Resources Board GOAL Attain and maintain healthy air quality Protect the public from exposure to toxic air contaminants Provide innovative approaches for complying with air pollution rules and regulations. The California Air Resources Board, also known as CARB was established in 1967 when then-governor Ronald Reagan signed the legislation. The stated goals of CARB included attaining and maintaining healthy air quality; protecting the public from exposure to toxic air contaminants; and providing innovative approaches for complying with air pollution rules and regulations.

CARB: Goals Automobile Emissions At its beginning CARBs main goal was controlling the emissions from Automobiles.

CARB: Goals Industrial Emissions Followed closely by measuring and limiting the emissions from Industry

CARB: Goals Agricultural Waste Soon thereafter, CARB focused on smoke emissions from farming operations and the timber industry predominately from the: Open-burning of agricultural wastes in the fields, and the slash in the forests from the harvesting of timber

CARB: Goals Lumber Mill Waste And the never-ending smoke from the “tee-pee burners” from open-burning of lumber mill wastes.

Biomass Facilities Starting in the early 1980s more than 60 Biomass power facilities were constructed in California to use forestry and agriculture wastes more beneficially. Goal achieved, the Biomass power industry helped dramatically reduced the air pollution form open-burning in California

Urban Recyclers Soon urban wood waste found a home with biomass power plants. Because of AB 939, companies like Zanker, would start wood waste recycling operations which kept these commodities from entering the landfill.

Biomass Facilities 2000 Plant Name Fuel Tons Diamond Walnut 33 Wheelabrator Martell 120 SPI - Susanville 100 Sierra Forest Products 90 Soldedad Energy Partnership 95 Delano Energy 375 Mendota Biomass 180 Tracy Biomass 150 Pacific Oroville Power 140 SPI - Loyalton Mount Lassen Power Burney Mtn Power Shasta Renewable 80 Dinuba Energy 70 Eel River Energy 250 Fairhaven Power 108 Madera Power 175 Blue Lake Power Plant Name Fuel Tons Buena Vista Biomass 150 Desert View Power 375 Rio Bravo Fresno 180 DTE Stockton 360 Pac.-Ultrapower Chinese Station DTE Woodland Biomass 175 Rio Bravo Rocklin SPI - Lincoln Wadham Energy SPI - Quincy 350 Collins Pine 70 Honey Lake Power 205 SPI - Burney 140 Burney Forest Power 240 Wheelabrator Shasta 425 SPI - Anderson 220 SPI - Standard 90 Roseburg Forest Products 110 DTE Mt. Poso Cogen 400 El Nido Energy 100 Chowchilla Biomass FUEL TONS 6,718,000 In 2000, California had 39 operating biomass power facilities producing 864 MW using 6.7 million tons of biomass waste each year.

Biomass Facilities 2016 5 plants closed and demolished Plant Name Fuel Tons Desert View Power 375 Rio Bravo Fresno 180 DTE Stockton 360 Pac.-Ultrapower Chinese Station 150 DTE Woodland Biomass 175 Rio Bravo Rocklin SPI - Lincoln Wadham Energy SPI - Quincy 350 Collins Pine 70 Plant Name Fuel Tons Honey Lake Power 205 SPI - Burney 140 Burney Forest Power 240 Wheelabrator Shasta 425 SPI - Anderson 220 SPI - Standard 90 Roseburg Forest Products 110 DTE Mt. Poso Cogen 400 El Nido Energy 100 Chowchilla Biomass 4,195,000 Between 2000 and 2016, Five plants were shut down and demolished Another 14 plants were idled during the same time – a loss of another 265 MW and 2.1 million tons of worth of markets. 6 plants shut down in 2015 alone. 5 plants closed and demolished 14 more plants idled 6 plants shut down in 2015 alone.

Biomass Facilities 2020 6 more plants scheduled to close in 2016 Plant Name Fuel Tons Desert View Power 375 DTE Stockton 360 DTE Woodland Biomass 175 SPI - Lincoln 150 Wadham Energy SPI - Quincy 350 SPI - Burney 140 Plant Name Fuel Tons SPI - Anderson 220 SPI - Standard 90 Roseburg Forest Products 110 DTE Mt. Poso Cogen 400 El Nido Energy 100 Chowchilla Biomass 2,745,000 6 more plants scheduled to close in 2016 California will have lost 517 MW of Renewable Biomass Electricity Biomass electricity used to represent 6 % of our renewable portfolio for California Between 2016 and 2020 energy contracts for another 6 plants will expire. All 6 of these plants will likely shut down before the end of 2016 because their contract energy prices will fall by 30%. Thus California will have lost a total of 517 MW of renewable baseload electricity since the turn of the century with capacity to use nearly 4 million tons of wood wastes. Currently biomass represents 6% of our renewable portfolio for California.

What’s in our Waste Stream? Cal Regulations to Increase organics diversion: AB 1826- Organics and AB 341 Commercial Recycling. AB 1594 will eliminate green waste ADC SB 605 requires that 90% of all organics from landfills That’s an additional 3.1 million tons of biomass that will be needed to be recycled by 2025. AUTO Even though all these biomass facilities are shutting their doors, the California Legislature has passed numerous bills that will remove more organics and wood wastes from our landfills. AB 1826 – Organics and AB 341 Commercial Recycling,. AB 1594 will eliminate green waste ADC, SB 605 requires that 90% of all organics from landfills, That’s an additional 3.1 million tons of biomass that will be need to be recycled by 2025.

2015 Mixed C&D Debris 17% For ourselves, wood wastes represented 17% of our mixed Construction and Demolition debris that we recovered in 2015

Show me the wood 75% Of this 17%, ¾ of the materials are marketed to the biomass industry. The remaining products - mulch and soil amendments - are a higher and better use of the wood waste but our markets are seasonally limited. Our customers just don’t purchase mulch or other soil amendments during the winter months.

Composting Wood Waste People have asked me, why don’t we just compost the materials? This is a great question. The best answer to that is ”wood doesn't compost”. Biosolids composting facilities commonly use wood wastes as a bulking material for their operations because it takes wood a year to a year and ½ to completely break down in their system.

Composting AB 1826: California needs 100 more composting facilities by 2020 Because of AB 1826 California will need 100 more composting facilities by 2020 to achieve their legislative mandates. DO YOU BELIEVE THAT COMPOSTERS WOULD WANT TO COMPOST WOOD? WE JUST DON’T HAVE THE SPACE AND TIME!

Upcycling Wood Waste Particle Board Manufacturing AmPine in Martell There is only 1 particleboard plant left operating in CA – AmPine in Martell.  20 years ago there were 5.  Up until recently, AmPine has been purchasing up to 25% of their feedstock from clean C&D operations.  The other 75% is lumber processing byproducts that come from the forest products industry.  Because of recent and pending biomass plant closures, AmPine is sourcing none of their feedstock from C&D operations.

Biomass Power $.9 - $.12/KWH The reason for the demise of the biomass industry is simple. Biomass power costs 9 -12 cents per KWh, mainly because of the cost to gather, process, and transport their fuel, but also because biomass electricity from older plants doesn’t receive the 2 cent/kWH federal tax credit that solar-produced electricity does.

Solar Energy $.06-$.07/KWH The state has mandated investor owned utilities to purchase at least 33% renewable energy for all their customers by 2020 and at least 50% renewable energy by 2030. This is great news for the 6 biomass power plants with expiring contracts, but the ramp up from 33% to 50% wont start until 2020. For now, these utilities can purchase all the renewable electricity they want at 6-7 cents per KWh or less.

Landfill to Electricity Show landfill photo Believing that biomass power’s only function is to produce electricity is ludicrous. That’s like believing that the only purpose of a landfill is to generate methane and produce electricity. Biomass facilities are critical waste management tools for our industry and should be treated as such. Renewable electricity is just a byproduct of their use.

Tipping Fees DISPOSAL FEE = RECYCLE FEE Other unforeseen consequences to the Biomass Demise is on the pricing of our waste materials and biomass fuel. Tipping fees for materials brought to recycling operations will be steadily increasing until they surpass the cost to just bury everything.

Biomass Fuel $-10/Ton Revenue For now, the average pricing for biomass fuel is $10 per ton, FOB the power plant. By 2020, recyclers will likely need to pay the biomass facilities a tipping fee of up to $10 per ton to drop their material off, not including the cost of the trucking. The thought of getting a source separated wood load brought to your facility will be a thing of the past since there would be no incentive to keep loads clean.

The Trickle Down Effect Increasing illegal dumping Increased open burning There are other side affects to increased tipping fees for wood waste. Diversion rates could drop by as much as 20% Increasing illegal dumping, particularly in rural areas Increased open burning

The Trickle Down Effect Less source-separated wood means landfill diversion rates will decline From 71% (2014 numbers) to 66% 110,000 tons disposed We performed a market study in San Jose. Of the 219,000 estimated tons of fuel per year produced at San Jose facilities I would assume that 1/2 would be from San Jose and most we be used as ADC until the 2020 date or 110,000 tons. Thereafter, if all the tons of biomass were disposed, San Jose’s recycling rate would be reduced from 71% to 66%

California Needs to Support Biomass Julee Malinowski-Ball Executive Director

California Needs to Support Biomass California environmental policies – greenhouse gas goals, organics diversion, open burn bans – increasingly rely on the existing biomass infrastructure Climate change impacts and adaptation strategies, especially in our forests compel growth in the biomass industry Biomass facility closures reverse the State’s environmental progress

Governor Brown Emergency Proclamation October 2015: deal with unprecedented tree mortality Requires CPUC to extend contracts for biomass plants that can use forest fuels Biomass plants: Focus in high hazard zones in the Sierras. To deal with the fire hazard and to protect public safety from the estimated 66 million dead trees, Governor Brown signed Emergency Proclamation that required: the CPUC to do everything it could to extend energy contracts for biomass plants located in the High Hazard Areas with expiring contracts Cal Fire and the US Forest Service to remove the dead and dying trees from the Sierras.

Governor Brown Emergency Proclamation CPUC March 17, 2016 – CPUC Resolution on Biomass Power Contracts Utilities to purchase up to 80% of their fuel from High Hazard Tree Mortality Zones Contract term - 5 years  or more SCE and PG&E must purchase at least 20 MW each Could keep up to 3 Biomass Facilities operating Start dates as early as Jan 2017 Well now, for the Good News, The PUC is requiring Utilities to purchase 40% to 80% of their fuel from High Hazard Tree Mortality Zone Contract term - 5 years with option to extend to 10 years  Minimum Procurement – Southern Californian Edison and PG&E must purchase at least 20 MW each, 10 MW from SMUD – permission to purchase more Could keep up to 3 Biomass Facilities operating Would start the summer 2016

Governor Brown Emergency Proclamation CPUC No requirements for use of urban wastes Won’t restart idle Facilities Won’t help Facilities in other parts of CA Will displace Urban fuel Bad News No requirements for use of urban wastes Won’t restart idle Facilities Won’t help Facilities in other parts of CA Will displace some urban fuel

Biomass Solutions Legislature CBEA sponsoring AB 2700 by Assembly Member Rudy Salas Require CPUC update the Least Cost Best Fit criteria Consider # Long-term Jobs Created Aims for a Balanced Source of Supply CPUC responded in July with Least Cost Best Fit Order No need for bill moving forward CBEA sponsored AB 2700 by Assembly Member Rudy Salas that asks the CPUC to update the Least Cost Best Fit criteria to take into account the value baseload renewable resources provided towards a more balanced grid.  

What is Least Cost Best Fit? Biomass Solutions What is Least Cost Best Fit? Adopted by the CPUC in 2004 Least cost only Best fit takes into account societal and environmental value of energy Important reform because 5-years of no Biomass Contracts What the Hell is the the Least Cost Best Fit Example.  The Least-Cost, Best-Fit Methodology was adopted by the CPUC in 2004 to guide the IOU’s in deciding how to evaluate bids in their power contracts.  The PUC recognized that there may be other values to an electric provider’s bid besides lowest cost.  Some of the non-cost (Best-Fit) values that can be considered in bid ranking are curtailability, dispatchability, local reliability, environmental stewardship, benefits to low-income or minority constituents, and resource diversity.  CLICK  April 18th at the Assembly Natural Resources Committee. The PUC has made it clear to IOU’s that if they decide to pick a project that is the “Best-Fit” to their needs (for example a project that can be producing full load within 10 minutes of dispatch) the price has to be “reasonably close” to all the other bids.  The CPUC has been accused of only approving new power contracts that are “Least-Cost” while essentially ignoring the “Best-Fit” characteristics of the bid.  Over the last 5 years Biomass facilities have neven been considered the „Best-Fit.“  

Biomass Solutions AB 590 AB 590 (Dahle, 2015) Allocates Greenhouse Gas Reduction Funds (GGRF) for Biomass Cost-Share Program Goals: Maintain the current level of biomass power generation Protect existing resources that contribute to the state’s greenhouse gas goals, jobs and organics diversion GGRF is an appropriate use of funds due to the GHG reductions benefits of biomass Legislator Brian Dahle, tried to help the biomass industry last year by sponsoring AB 590. Legislature adjourned without allocation of any FY 15/16 GGRF $

Biomass Solutions What you can do to help Write and call your Legislators today Support allocating GGRF for Biomass Cost Share Program as outlined in AB 590 (Dahle) Be a part of the long-term solutions conversation CPUC Least Cost Best Fit Reform Biomass compensation for environmental benefit CARB Short Lived Climate Pollutant Strategy should recognize the need for existing biomass infrastructure Biomass procurement requirement Thoughts for discussion: I hope that this is something we can do for California‘s Biomass future. If we don‘t, our Future will be bleak

Biomass Essential For California American Union Elementary School San Joaquin Orchard Since this is already happening now. This is the American Union Elementary School, near Fresno in February Is this what will be happening in the Central Valley come the fall when the next 6 plants close?