Benson working with renewable energy firm to purchase former Fibrominn facility
BENSON — City officials in Benson will be learning soon how much of the former Benson Power biomass facility will be dismantled and removed, but they are hoping that a large portion remains.
The city is supporting a bid by a company in San Francisco, California, to purchase the fuel hall building, along with the administrative building and smaller, ancillary buildings on the campus in Benson.
Brightmark Energy is working with the city of Benson in hopes of converting the site to a refinery to make biogas using animal waste and possibly other organic material as the raw material, according to Rob Wolfington, Benson city manager. The company would supply the biogas to either of two, large-capacity pipelines that are in close proximity to the plant.
The Benson City Council recently approved a letter of intent with the company.
The city committed to providing a $1 million loan to Brightmark Energy toward the purchase of the property it is seeking.
From 2007 until earlier this year, the 55-megawatt plant — once known as Fibrominn — burned turkey litter and wood fiber to produce electricity. Xcel Energy purchased the electricity it produced as part of an agreement with the state allowing it to continue storing spent nuclear fuel at its Prairie Island facility.
Xcel obtained legislative approval last year to purchase and close the plant — by that time known as Benson Power — as a cost savings to its ratepayers. The legislation provides the city of Benson with payments totaling $20 million. The funds are to be used for economic development in compensation for the loss of jobs, economic activity and taxes associated with the operation.
Wolfington said a broker employed by Xcel is currently reviewing bids received to purchase portions of the power facility. It's expected that the company will be able to sell off much of the plant's equipment, such as the motors and equipment used for electrical generation. The structure housing the boiler system, turbine, baghouse and smokestack will likely be dismantled.
If Xcel awards the bid made by Brightmark for the remainder of the campus, the company will go forward with its proposal. Brightmark Energy could invest as much as $250 million at the site and possibly create up to 30 jobs, according to Wolfington.
The company is proposing a two-phase development, the first phase representing an investment of $50 million to $100 million and creating 10 jobs.
The city and Brightmark have been in discussions for about 14 months now. Wolfington, the mayor and the head of the city's economic development agency met previously with company officials in San Francisco.
The city of Benson does not know what other firms may have offered bids for the facility. Wolfington said the city is also open to working with other firms if there are other proposals for taking advantage of the assets at the site.
As part of its agreement with Brightmark, the city of Benson will have first position on the property the company hopes to acquire from Xcel, Wolfington said. If the renewable fuel project does not go forward, the city could call back ownership of the buildings. The property includes a truck wash and truck scale, and the large fuel hall that could be used for warehousing or other uses, he said.
By supplying its gas to a national pipeline network, Wolfington said the company should be eligible for renewable energy credits in California.