BY CHELYEN DAVIS
RICHMOND
--A Senate committee has killed Sen. Richard Stuart's bill related to using wood byproducts to create electricity.On a 10 to 4 vote, the Senate Agriculture, Conservation and Natural Resources committee voted down the bill, which would have lifted a state-imposed cap on the amount of wood chips and other lumber waste that power companies can burn for fuel and count toward a "renewable portfolio standard."
Utilities can burn green wood chips, sawdust and other wood waste to help create energy, but under the cap, they get renewable energy credits only for burning up to 1.5 million tons.
Paper mills also use the chips and other wood waste.
Stuart and supporters of his bill said it would encourage utilities to use a renewable energy source, plus provide more business for sawmill operators and others whose business creates the wood chips.
It can be cost-prohibitive for sawmill operators to deliver wood byproducts to paper mills--if the paper mill is far away, it can cost more to transport the wood chips than the sawmill operators are paid for the product.
According to Stuart, though, state law doesn't allow sawmill operators to burn or dispose of the wood chips.
During lengthy testimony before the committee last week, Stuart's bill was backed by some sawmill operators and environmental groups.
"Anything that increases in-state opportunities for renewable energy sources is a good thing," said Ken Hutcheson, representing the Virginia Alternative and Renewable Energy Association.
Opponents, including paper mills, said there's nothing in the law that prevents power companies from using as much biomass as they like--the cap is only on how much they get environmental credit for.
They said the cap was the result of contentious negotiations between all sides just two years ago, and that increasing competition between paper mills and power companies for wood byproducts would put paper mills at a disadvantage in the world market.
"We're competing with a paper mill in China," said a lobbyist for Smurfit-Stone, a paper company. "There are a lot of jobs at stake here."
Sen. Don McEachin, D-Richmond, who was a member of a study committee on the issue last year, said at no time did Dominion power or American Electric Power testify about needing to lift the cap.
Sen. John Watkins, R-Chesterfield, said he was involved in the original cap negotiations, and that Dominion and AEP are the only companies likely to benefit from it. He said those companies haven't reached the cap yet in their usage of wood byproducts.
Watkins also said Stuart's bill could lead to higher rates for customers of Dominion and AEP, which would pass on to customers the costs of building new facilities to burn biomass.
Stuart argued that companies won't invest in alternative energy unless there's a financial incentive.
"It helps us to stop importing electricity by using what we have," he said. "All we're asking is that we open this thing up so we can see real investment in biomass."
Chelyen Davis: 540/368-5028
Email: cdavis@freelancestar.com