The project seemed simple enough — build a waste-to-energy plant on the Eastern Shore fueled by poultry manure, keeping it from flushing into and polluting the bay, while creating green jobs and boosting Maryland's fledgling renewable energy industry
But 18 months after it was heralded by Gov. Martin O'Malley, the $75 million project has been stymied after prospective sites and a potential partnership fell through.
Now state officials are weighing giving Green Planet Power Solutions, the California-based company chosen to build the 13.4-megawatt plant, a nearly $35 million subsidy on top of what the state previously agreed to pay for its power. And company officials are hustling to get the project on track.
With just 21/2 years left before Green Planet is supposed to begin supplying that electricity to state offices and university campuses, Coleman Cassel II, the company's founder and CEO, said he is "finalizing negotiations" on a promising new site he declined to identify.
"We know ... the clock is ticking," Cassel said. "We're being very active to ensure that we meet that timeline."
Abigail Hopper, director of the Maryland Energy Administration, said she believes if the company can nail down a site soon there's enough time to get the permits, build the plant, and start producing power by the end of 2016, which is when the contract requires it to start generating electricity.
"It's certainly tight, but it's doable," Hopper said.
The company's lack of progress, however, worries those who hope a manure-burning plant can wean farmers from over-applying chicken waste to their fields.
"It's really important that Maryland gets this right," said Patrick Thompson, president and CEO of EnergyWorks, an Annapolis-based company that has built a smaller power plant fueled by chicken manure in Pennsylvania. "It takes time to go through all this process. We've lost a lot of time getting this project going."
Farms are the source of 1.6 million pounds — or more than half — of all the phosphorus from Maryland getting into the bay each year, according to the Environmental Protection Agency.
The 300 million chickens raised annually in Maryland produce hundreds of thousands of tons of poultry litter, a mixture of the birds' waste and wood shavings. Much of that is spread as fertilizer on Eastern Shore fields that already have more phosphorus in the soil than any crop can use. When it rains, the excess runs off into streams and the bay, feeding algae blooms and fish-suffocating "dead zones."
The O'Malley administration has proposed new regulations that would restrict manure's use as fertilizer. But the rules were pulled back last year after Shore farmers protested that the curbs could drive them out of business. State officials still hope to finalize the rules by year's end, but are waiting for a study of their economic impact. The growers argue the manure is a valuable fertilizer that will be costly to replace, and they also lack options for dealing with the large volume of waste.
"Maryland needs manure-to-energy," said Ann Swanson, executive director of the Chesapeake Bay Commission, a group of state lawmakers from Maryland, Pennsylvania and Virginia that has encouraged development of such technology. The state has to solve its farm phosphorus problem if the bay is to be restored, Swanson said, and a manure-fueled power plant "provides a very viable alternative for that excess manure."
Some question the way the O'Malley administration has gone about promoting one.
Thompson, whose firm built a 3.25-megawatt plant to generate power from the manure of a large egg-laying operation near Gettysburg, said he chose not to bid on the Maryland project. He said he didn't think the six-week notice the state gave in its request for proposals in 2011 was adequate to draw up a credible plan.
Michelle Parker, spokeswoman for the Department of General Services, said the agency extended the bidding window by two weeks and received four other proposals in addition to Green Planet's.
Green Planet was chosen, Hopper said, because its proposal was judged the best, both technically and financially. The company agreed to sell its electricity to the state for 7.95 cents per kilowatt-hour. While well above the average wholesale price for power last year, the rate compares favorably with those earned by other renewable-energy facilities, Hopper said.
Green Planet had never built a power plant before, and it still hasn't. Though its website lists eight projects, Cassel said the one furthest along, a plant in California that would burn rice hulls, is "in the final stages of permitting."
Hopper said Green Planet's lack of experience with manure-to-energy was not that significant, noting that there haven't been many such plants built worldwide.
The company has struggled to get the project underway, however. The first glitch occurred before the contract was awarded, as Cassel said an offer to let him build the plant in Federalsburg was withdrawn shortly after Green Planet submitted its proposal.
Hopper said the company spent months last year trying to forge a partnership with Perdue, the poultry producer for whom many Shore farmers raise birds. The power purchase agreement the state signed with Green Planet said the plant would be located in Salisbury. But Perdue "pulled out," Hopper said.
Green Planet's CEO declined to discuss the Perdue negotiations but said he met with the company recently to discuss getting poultry litter for the power plant. The facility could burn 150,000 to 200,000 tons of litter a year, Cassel said, which observers say would consume the bulk of the poultry manure that may become unusable as fertilizer if the state follows through with its regulations.
Julie DeYoung, a Perdue spokeswoman, said the company does not have an agreement to work with Green Planet, adding that "we continue to explore lots of alternatives for poultry litter."
To help the project along, the O'Malley administration is considering sweetening its deal to buy Green Planet's power, Hopper said. The state may agree to pay the company up to six cents per kilowatt-hour more for its electricity — a subsidy worth $34.8 million over the 15-year contract, she said.
Pledging to pay a higher price likely would make it easier for the company to obtain financing. The funds would come from Exelon, she said. As part of the $1 billion settlement the Chicago-based energy company reached with the state to acquire Constellation Energy, Exelon agreed to help underwrite a poultry-litter-fueled power plant.
Such a subsidy would be a "a bitter pill" for those who chose not to bid under the original terms, said Thompson of EnergyWorks. "That's kind of changing the game after the fact."
Thompson said he thinks the price Green Planet offered the state may be too low to make the project work. His plant was built with $30 million in Pennsylvania state loans and a federal stimulus grant. But the electricity itself isn't enough to turn a profit, he said. He's looking for most of his revenue from selling water-quality and climate-change "credits" for the pollution avoided by his plant, and from selling the phosphorus-rich ash byproduct as an animal-feed additive.
Thompson said he's told Maryland officials he's ready to make them another offer if Green Planet's project falls through.
But Cassel said he's committed and believes his firm has the technical expertise to make it work. His plan involves other revenue streams, including cogeneration of energy from the plant and funneling its carbon-dioxide emissions to greenhouse operations to enrich their plants' growth.
Cassel said he was stirred to try his hand in Maryland after watching the Frontline public-television documentary, "Poisoned Waters," which focused in part on how poultry manure runoff was fouling the bay.
"We thought we had a better gadget," he said. "We thought we could fix it."