Instead, just 13 years after it began operation, the Biomass District Heating System is set to be disassembled and sold for parts while taxpayers continue footing the bill for the plant’s construction at a rate of about $181,000 per year for another 12 years.
Board members on Monday voted unanimously in favor of an addendum to the original agreement that will allow Crawford Tech to convert the biomass building to classroom space once the high-pressure steam system has been removed.
With the notable exception of the ongoing debt payments, the move brings to an end a multimillion-dollar effort at alternative energy production.
“I think it’s time to move on,” board President Kevin Merritt said after the meeting. “It was costing us more money to operate the biomass than if we just went back to natural gas.”
While the choice to pursue the biomass did not pay off, Merritt declined to point fingers at his predecessors on the board.
“It’s not a fault of the people that made the decision back when they started it,” he said. “Things just didn’t materialize to what was expected or anticipated from the original agreement. Gas prices were supposed to skyrocket. They never did.”
THE BEST-LAID PLANS...
First conceived 16 years ago, the biomass plant proposal came in direct response to natural gas prices that had remained high for several years before spiking even higher for much of 2008. Looking back, the plan still sounds like a good one, Matt Barnes, a certified energy manager with Erie -based Rabe Environmental systems, suggested in separate presentations to board members at Crawford Central and Crawford Tech earlier this year: Find a cheaper source of fuel and use it to heat the Meadville Area Senior High-Meadville Area Middle School complex, Crawford Tech and the Meadville Area Recreation Complex (MARC).
“It was extremely high,” Barnes said of the cost of natural gas when the plant was being planned, “making the viability of the biomass a good, cost-effective source of energy at the time. I believe the district made a good-faith decision to build and operate the plant but would not have been able to predict the amount that natural gas prices would have dropped over the subsequent years.”
A biomass plant burns renewable and biodegradable energy sources, such as switchgrass or wood chips, to generate heat or electricity, and the possibility of an energy fuel with a stable and relatively low price that was readily available in the region proved appealing to federal and state officials at the time as well.
According to Meadville Tribune reporting at the time, Crawford Central secured $3.6 million in financing for a project that ultimately cost about $3.2 million. The financing included $1.1 million in state and federal grants and a $2.4 million loan from the U.S. Department of Agriculture Rural Development.
After multiple refinancings and years of payments going almost exclusively toward interest, nearly $2.3 million in total debt remains: $2.1 million of the original principal and $230,300 in interest.
Based on a 2008 agreement, payments are split between the three entities that partnered on the biomass project: Crawford Central is responsible for 42 percent; the authority that oversees the MARC, 34 percent; and the Career and Technical Center, 24 percent. However, since at least 2016, Crawford Central has paid the MARC’s share in an agreement reached after the district slashed its annual funding for the facility. Since Crawford Tech receives its funding from Crawford Central, Conneaut and PENNCREST school districts, with the districts splitting the annual budget based on the percentage of students they send to the school, Crawford Central ends up funding nearly 85 percent of the debt payments.
...OFTEN GO AWRY
Board members at the time had no way of knowing it, but when natural gas climbed to $12.69 per 1 million British thermal units (Btu) in June 2008, it was by far the highest price that natural gas would reach for the next 16 years.
As demand plummeted in the wake of the Great Recession, the price fell to $5.82 per 1 million Btu by the end of 2008, according to the U.S. Energy Information Administration, the statistical and analytical agency for the U.S. Department of Energy. Increased production has kept prices low in the years since. In fact, since 2008, the price has climbed over $5 per 1 million Btu in just 21 of 190 months. In the last two years, the monthly average price has fluctuated between $5.53 and $1.49 per 1 million Btu.
In retrospect, the dropoff in price was so steep — and so perfectly timed following the decision to proceed with the biomass — it appears “almost comical,” Crawford Central Business Manager Austin Stofferahn told board members in September.
As the plant neared completion in late 2011, district officials were still projecting that it would save taxpayers $1.5 million over 25 years.
Thirteen years later, the savings estimate seems naive.
Operating the biomass last winter cost at least $61,000 more than heating with natural gas-fueled conventional boilers would have cost, according to a report from Barnes.
Stofferahn’s skepticism regarding savings extended even further.
“I’d almost be willing to bet that the savings were extremely minimal, even from the first year, second year, third year,” he told the board in September. “After that, I’d be willing to bet there was no savings.”
In addition to lower fuel costs, the biomass plant was originally projected to generate its own electricity, which would be used to offset the cost of operating the plant. That never happened, according to Merritt.
According to a presentation on the biomass plant this spring, electricity for the facility cost $32,000 last winter.
“The electric generator — that went offline shortly after it started,” he said. “Nobody ever repaired it.”
OPERATIONAL ISSUES AND MAINTENANCE CONCERNS
Like the savings projections, the original agreement between the school district, the recreation complex and Crawford Tech seems naive from today’s vantage point.
“Biomass has historically been a stable, low-cost energy source and modern equipment to burn biomass for hot water heat is reliable, efficient and clean,” the 2008 agreement stated.
Despite that optimism, reliability has been an issue for Crawford Central’s biomass plant almost from the start. The plant began operating in the winter of 2011-12. By the summer of 2013, Crawford Central was raising taxes and slashing its annual funding to the MARC, largely as the result of state funding cuts to education that resulted from the Great Recession.
Following an outpouring of community concern to save the MARC, Crawford Central slashed but continued its annual funding for the MARC. Doug Lang, one of the leaders of the effort to save the MARC, told The Meadville Tribune at the time, “Now that we’ve stabilized things, we can get on with trying to market the MARC to the community, which should lessen the financial burden on all the community — and figuring out how to make the biomass work right.”
By the middle of the decade, Crawford Central was replacing 10 to 15 of the steel tubes at the heart of the plant due to corrosion each year. In 2021, that number jumped to 40, resulting in $52,000 in repairs.
By the end of last winter, the biomass was no longer being used to heat the MARC due to a ruptured hot water supply line that occurred about a month before the end of the October to April heating season, according to Matt Tarr, director of buildings and grounds for Crawford Central.
In addition, a feasibility study revealed early this year that the biomass boiler’s refractory material, the heat-resistant brick lining in the interior of the boiler, was failing and needed to be replaced. The news came just before the retirement of the longtime district employee who was the only person qualified to operate the plant.
Repairs needed to get the plant running for this fall were estimated at $240,000, but to convert it from high pressure steam to hot water, find appropriate staffing and address other long-term concerns would likely have cost more than $500,000, according to the HHSDR consultants who conducted the study.
The original biomass agreement also called for the formation of a Biomass Operating Committee with members from the board for each of the partner entities. It’s not clear if such a committee ever met, according to Merritt, who was elected to the Crawford Central board in 2019.
THE PARTNERSHIP CONTINUES
While the biomass plant will soon be disassembled, the partnering entities behind its construction continue to work together. Crawford Central still sends students to Crawford Tech, of course, and continues to lease the use of the MARC’s facilities.
The decision to let Crawford Tech use the biomass building for classes will require extensive renovations following the removal of the biomass equipment. It also comes after Crawford Tech earlier this year purchased the former location of Integrity Complete Auto Repair for $545,000 in a move also intended to enable the school to expand its classes. Like their counterparts on the Conneaut and PENNCREST boards, Crawford Central members also approved the Integrity purchase; at the time, Crawford Central members were still determining their plans for the future of the biomass.
Merritt, who chairs the joint committee that oversees Crawford Tech in addition to presiding over the Crawford Central board, said that “ultimately we could probably use both” buildings.
Discussions earlier this year called for the school’s automotive technology and diesel technology classes to be moved to the Integrity location. The biomass building has been touted as a possible location for welding classes.
Crawford Central efforts in recent months to persuade Conneaut and PENNCREST, its partners in the technical school, to pick up an increased share of the biomass debt payments proved unsuccessful.
Recent meetings have suggested a possible fraying of the partnership between the school district and the MARC.
Where the district once contributed as much as $260,000 to the MARC’s budget each year and sent all of its fourth graders to the facility for swim lessons, today it pays $45,000 and has not offered swim lessons in nearly a decade. The addition of the MARC’s share of the biomass debt payments brings the total annual contribution to about $105,000, still well short of what it was paying 15 years ago.
At the school board’s work session last week, several members questioned an agreement that would continue the district’s annual payments to the MARC at the same rate, with Merritt saying he couldn’t support the arrangement and another saying he “actually started laughing” as he read the contract.
Like Merritt and other current Crawford Central board members, Aaron Rekich, the executive director of the MARC, was not involved in the development of the biomass plants and its early years of operation, but he was optimistic about the working relationship between the district and the complex despite what he characterized as recent confusion regarding both the expenses associated with the annual facilities usage agreement and the evolution of the biomass.
“There was an agreement back when this first started that we’re trying to iron out and figure out exactly where the information is. Apparently right now there’s a lot of miscommunication on what happened back when the biomass was made and why they’re paying for the bonds,” Rekich said. “We’ll end up putting something together and talking to (Superintendent) Jenn Galdon about it.”
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