Koda Energy urges EPA to process eRIN applications

By Erin Voegele | January 22, 2019

Shakopee, Minnesota-based Koda Energy LLC is urging the U.S. EPA to promptly process applications to allow biomass power facilities to participate in the Renewable Fuel Standard program by generating e-renewable identification numbers (eRINs).

On Jan. 21, Stacy Cook, president of Koda Energy, send a letter to Acting EPA Administrator Andrew Wheeler asking him to take action to allow biomass power facilities to generate eRINs under the RFS.

In his letter, Cook noted Koda Energy is a biomass-fueled combined-heat-and-power plant that is jointly owned by the Shakopee Mdewakanton Sioux Community, a federally recognized Indian tribe, and Rahr Corp., a family-owned producer and distributor of malt and brewing products for the beer, distilling and win making industries.

“Since 2009 Koda Energy has been offering a practical solution for processing vast amounts of wood and agricultural byproduct wastes that are accumulating in the community and surrounding areas,” Cook wrote in the letter. “Due to uncertain power purchase contracts and other economic influences that are out of our control, our facility may be approaching imminent shutdown. The ability to participate in the RFS program will help our facility remain open, continuing to provide these much needed benefits.”

According to Cook, the Koda Energy facility is a key economic contributor to its region. In addition to providing thermal energy for malting barley that is used in beer production and helping businesses and communities manage waste wood and grain byproducts, he said the facility currently contributes approximately $17 million each year to the local economy in the form of jobs, fuel purchases, contractors and equipment.

Within the letter, Cook notes that Koda Energy’s sources of biomass include clean waste wood from storms, disease, tree trimmings and recycling operations. This includes some of the urban wood waste created by removing trees in the region that are diseased by the emerald ash borer. The facility also takes in waste grain hulls and dust from grain milling and malting operations. Each year, the plant combusts approximately 180,000 tons of grain byproducts and wood waste. According to Cook, there is expected be a rapid expansion of diseased ash trees in Minnesota over the next several years. He said Koda Energy is a willing partner in helping to convert that glut of woody waste by converting it into renewable energy—but cautioned that the company must be able to survive financially to aid in that effort.

“In the state of Minnesota, several biomass power facilities have recently been shut down, idled, repowered, or dismantled,” Cook wrote. As a result, he said several hundred thousand tons of biomass waste material is being left to decay and hundreds of jobs are being loss. Cook said the primary reason for these plant shutdowns in financial in nature. “Biomass power does not receive a revenue stream from the production tax credit, and therefore cannot sell electricity into the public grid for less than the cost of producing the energy,” he wrote, noting that biomass energy needs a level playing field to complete, survive and thrive.

Congress agreed that the electricity generated from renewable sources should be eligible to participate in the RFS program 11 years ago, and the EPA approved the use of electricity under the RFS program four years ago. However, Cook said the agency has, to date, failed to act on this approval by processing applications from renewable electricity producers seeking to participate in the RFS.

According to Cook, Koda Energy intends to seek certification under the RRFS. “It is essential to the financial well-being of Koda Energy LLC that this program be extended to our plant and it is only fair that biomass power plants be entitled to benefit from the RFS program on equal footing with other generators of renewable energy, such as wind and solar,” he wrote.

The Biomass Power Association has issued a statement in support of Cook’s letter, calling on the EPA to begin processing eRIN applications. “Congress gave biomass power the right to generate RINs through the RFS program 11 years ago, and the EPA approved this plan in 2014,” said Bob Cleaves, president and CEO of BPA. “Yet the EPA still hasn’t processed even one application for electric RIN generation. It’s time for the EPA to honor its commitment to enable this biomass power facility in Minnesota, and others that contribute to rural communities across America, to participate in the RFS.”

A full copy of the letter can be downloaded from BPA’s website.