Oak Creek Oak Creek long has relied on local power sources to heat its homes. After a long history with coal, the town is turning its eyes toward biomass - Northwest Colorado's newest plentiful natural resource, thanks to the pine-beetle epidemic sweeping through forests across the American West.
With the cost of propane choking local pocketbooks, the Oak Creek Town Board quietly began exploring other energy options in recent months and is poised to become the first biomass-heated municipality in the country.
With energy costs escalating and showing no sign of slowing down, "we're losing our shirts on propane," Mayor Pro-Tem Angie Krall said.
In talks last week with pellet producer Confluence Energy, based out of Kremmling, and the town's current electric provider, it became clear exactly how feasible such a switch would be.
For a district biomass heating system such as what Oak Creek is considering, the cost savings over propane mean the project would pay for itself in less than four years. If the town quickly moves to get plans drawn up and the proper financing channels in place, the system could be up and running in time for the first cold snap of the winter of 2009-10.
"It's how the small town
solves the energy crisis," Confluence Energy President Mark Mathis said.
The hard sell
The hardest and most expensive part of converting Oak Creek to biomass electricity would be constructing the lines that bring heat to the homes, Krall said.
A biomass boiler house, only a 500-square-foot facility, is estimated to cost $1.2 million to $1.5 million. Lines to send the power, brought through a closed-loop piping system where the heat is pulled out of hot water by individual homes and businesses, would cost in the neighborhood of $5 million, though more detailed plans would need to be drawn up for a closer estimation of the figure.
Figuring in a total cost of $6 million for installation, a biomass district heating system would recover that cost completely in less than four years versus propane, Mathis said.
"That's so fundable it's
scary," he said.
Although such systems are used widely in Europe and for American campuses such as universities and large commercial sites, Oak Creek would be the first town in the U.S. to undertake such a project, Mathis said. Because the town owns its own utility that is free from the restrictions of TABOR, Oak Creek also could get there much more quickly than most other municipalities, Mathis said.
"It saves you a whole bunch of money, a whole bunch of legal issues and a whole bunch of time and energy," Mathis said.
Oak Creek, which is one of roughly a dozen Colorado towns to own its own power grid, is a member
of the Municipal Energy Association of Nebraska. For energy needs above Oak Creek's hydroelectric power allocation from the Western Area Power Administration - which is currently 18 percent - Oak Creek is bound to purchase from MEAN through 2041.
The green in green power
The power Oak Creek currently buys from MEAN mostly comes from coal, with small percentages from natural gas, diesel and nuclear power. And the town's electric supplier is interested in partnering on the project, not just because it's the right thing to do for the environment but because cost savings can be shared across the board, as well, said Billy Cutsor, a resource planning engineer with MEAN.
"If it's going to be good and economical for Oak Creek, it's going to be good and economical for MEAN members," Cutsor said.
Biomass pellets and chips are considered very environmentally safe - as clean or cleaner than natural gas - and they're considered carbon neutral since burning them generates no more carbon dioxide than if the trees they came from decomposed naturally, Mathis said.
"Whether we use beetle kill as a fuel source or not, it's going to release that carbon into the air," Mathis said.
The Town Board is not just looking altruistically at green power - the financials of the project also tip such a large-scale project in Oak Creek's favor. In addition to out-of-pocket savings on utility bills for residents and businesses, the town can profit from the project by generating beyond its need.
"We're taking care of the people, but we're helping out the general fund, too," Krall said.
Mathis estimated Oak Creek spends at least $2 million a year on propane to heat its homes and businesses. Biomass pellets would decrease that cost to about $500,000.
"That doesn't even cover carbon credits, tax incentives," Mathis said. "It's just dollars to dollars, straight savings."
MEAN would be able to buy back power produced with biomass in Oak Creek and distribute that energy to its other members, and it has agreed to have a representative sit in on an upcoming feasibility study.
"It's not an impossible task to do this," Cutsor said. "We're here to help."
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