ESCANABA – The latest buyer interested in purchasing Escanaba’s power plant views the investment as a great opportunity for success, said a company representative at the Escanaba City Council’s joint meeting with the Electrical Advisory Committee on Wednesday.

“We see a high probability of success here,” commented Jason Sharp, chief financial officer for Sterling Energy Group Inc., which recently offered the city $250,000 to buy the plant property and equipment.

Sharp presented background information on the company during Wednesday’s meeting, also explaining SEG’s plans for the power plant property.

SEG – headquartered in Gary, Ind. – buys coal-fired plants which no longer have a useful life and retrofits them into biomass-fueled facilities, Sharp told council and EAC members.

Among SEG’s investments, the company owns a biomass plant in Niagara Falls, N.Y., which was converted to burn the renewable fuel of slash, the leftover waste products from forest harvests.

Sharp said SEG would retrofit the Escanaba plant to burn an estimated 200,000 tons of biomass a year, consisting of more than 80 percent forest slash and “C&D” wood – a mulch made from construction and demolition debris containing less than 1 percent glue.

The company would also consider burning ground railroad ties as less than 20 percent of its fuel as allowed by air quality permits.

Sharp said the project would be environmentally-friendly, which the company anticipates would be supported by others.

“We see a great opportunity for everybody involved,” he said.

In addition to the $250,000 purchase of the property, SEG also offered to post a $200,000 non-refundable deposit to pay the city’s past legal bills and additional legal fees to complete the sales transaction.

Employees currently working at the plant would be hired on with the new company, Sharp said, adding Assistant Plant Superintendent Charles Detiege would stay on board as project manager.

Detiege is president of Escanaba Green Energy (EGE), which has been trying for more than three years to secure $36.5 million to buy the plant for $1.6 million and convert the building to burn biomass.

In January, the city was forced to void the pending contract with EGE because of council action requesting the Mid-continent Independent System Operator to allow the plant to shut down.

For the past three years, MISO has denied Escanaba’s annual request to suspend operations at the plant and therefore has been reimbursing the city to keep the facility operating on stand-by mode to be available on the region’s power grid.

MISO’s reimbursements in lieu of the suspension will cease in June, but the city hopes the agency will keep paying for the continued operation of the plant while the building heads towards retirement.

In order to file for the retirement request, council had to first void the pending sale based on the city’s agreement with EGE.

When the Daily Press questioned Sharp later about SEG’s plans, he said the company would “absolutely” employ the plant personnel already there. SEG also anticipates creating additional permanent jobs after the facility is retrofitted to burn biomass, employing a total of about 28 workers total, he said.

About 50-100 workers would be employed during the construction process to convert the plant at an anticipated cost of $40 million, he added.

Sharp explained SEG has been seriously looking to purchase the facility for the past few months. The company is attracted to the site for various reasons, he said.

The logistics to bring in fuel is good because of the truck, rail and ship access to the property, he said. Wood is available in Michigan, he said, adding Michigan is a state which values renewable energy.

SEG would request tax exemption status from the Michigan Strategic Fund, then seek tax-exempt bonds which apply to the burning of renewable fuel and the biomass conversion, he said. SEG would also look for any additional financial incentives, as well as government support from local, county and state entities, he said.

During Wednesday’s meeting, Sharp said Escanaba’s current plans to retire the plant would not impact the sale. Damage caused by the Feb. 2 explosion at the power plant’s substation would also not impact the offer SEG made to the city prior to the widespread blackouts, he said.

Escanaba’s power plant has been up for sale for several years because of the high costs to operate the aging coal-fueled facility. The city has been buying power – at a lower cost than self-generation – from an energy supplier for the past three years.