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ReEnergy to be awarded 20-year contract to supply biomass power to Fort Drum

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FORT DRUM — The on-site ReEnergy Black River biomass facility will likely supply power to the post for the next 20 years.

The Army intends to award ReEnergy Holdings LLC the contract to supply the post up to 28 megawatts of power. If finalized, the contract will be the largest renewable energy project taken on by the Army to date.

Terms of the contract were not immediately available, but initial estimates place the value of the contract at several million dollars each year.

The Defense Logistics Agency Energy said its notice of intent will allow itself and ReEnergy to “move into the development process, which can ultimately result in a formal contract award.”

ReEnergy took over the 2nd Street Southwest site in March 2012 and spent about $34 million converting the idled coal plant into one that can burn a wide range of wood products and forestry residues. The 60-megawatt plant officially opened last May.

“We’re very pleased to reach this milestone,” said Larry D. Richardson, the company’s CEO. Mr. Richardson said he hoped that the deal could be closed within the next 90 days, but that there was no set timetable for closing the deal.

The company employs more than 100 people between the facility and its forestry collection operations.

When it opened, the company estimated it would purchase about $11 million in wood a year from local logging companies.

U.S. Sen. Charles E. Schumer, D-N.Y., praised the news in a statement about the Army’s planning.

“The Army’s plan to award ReEnergy a 20-year contract is great news for this marquee north country energy company and for Fort Drum, which will now have reliable access to clean, low-cost power for years to come,” he said. “I look forward to working with all relevant entities to see that the Army makes this official, since this deal is so mutually beneficial.”

Sen. Kirsten E. Gillibrand supported the decision, saying national and energy security go hand in hand.

“When we equip Fort Drum with its own source of clean, homegrown energy, we can help the base cut energy costs, cut pollution and cut ties to foreign energy, all while strengthening local businesses like ReEnergy to support local jobs, and help grow the north country’s economy,” she said.

Rep. William L. Owens said he was “pleased the Army continues to recognize the importance of secure, renewable energy to our installations.”

Prior to the contract announcement, the facility had already received a wide range of state and north country support. The company already sells renewable energy credits through the state’s Renewable Portfolio Standard, an initiative to obtain 30 percent of the state’s electricity from renewable sources by 2015. It also had received a payment in lieu of taxes agreement from the town of LeRay, Carthage Central School District and Jefferson County.

The military’s push for renewable energy stems from the 2007 National Defense Authorization Act, which called for 25 percent of the energy used by the Department of Defense to come from renewable sources. The Army also has a goal to supply one gigawatt, or 1,000 megawatts, of renewable energy by 2025.

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