Responding to the rural area between Oakdale and Riverbank amid concerns of an agricultural business pursuing green energy, Congressman Jeff Denham and State Senator Tom Berryhill met with the owners and employees to better understand their energy conversion process and hear their frustrations with power conglomerate PG&E. When they were done, the elected officials assured company representatives they would do what they could on both the state and federal levels.
Central Valley Ag Grinding, a privately owned business on Langworth Road, specializes in recycling wood, fruit, food by-product, and agricultural tree nut related products and converting them to other uses such as landscaping products, dairy feed, and everyday household products such as wood pellets and fireplace logs. The company is in a heated dispute with PG&E to convert their biomass byproduct into energy to run their plant and have the excess power sold back to PG&E, far below market value.
Phoenix Energy of San Francisco was contracted by Central Valley Ag Grinding to have a self-sufficient bio-fueled power plant on the facility that generated the byproducts into “clean” electricity. The hold up now for both companies is PG&E’s apparent unwillingness to abide by a $202,000 estimate given last year for a connection to their power lines.
Since the original estimate, PG&E has given different variations of the cost for a “direct transfer trip” that have gotten as high as $1.7 million. The latest was down to $856,000 by the power conglomerate.
“Our financing boat has already sailed,” explained Central Valley Ag Grinding CFO Ryan Hogan on Wednesday, Oct. 17 to Denham and Berryhill at the proposed construction site of the facility’s partially completed power plant. “We had committed to this project and we’re now well into a completed module.”
Phoenix Energy CEO Greg Stangl told the gathered elected representatives and staff members that meetings with PG&E engineers and Phoenix engineers as late as last week had determined that the excess costs now proposed by PG&E were not needed, however on Monday PG&E officials went against the latest agreement.
“We had a good faith number over a year ago,” said Stangl. “It’s all about connecting to the grids. This is not a 50 megawatt facility.”
The plant is expected to only generate 1 megawatt of electricity.
“Their own (PG&E) engineers told them what was needed two years ago,” said Central Valley Ag Grinding co-owner Paul Zonzen. “What changed in the last two years?”
The bio-material that is not used by the company for its recycled products generally consists of woodchips, ground up walnut and almond nutshells, and ground pits from local apricots, peaches, and cherries. The material is “baked” to extract gasses that are filtered and condensed to be burned in an internal combustion engine that generates electricity. The facility is estimating it will only use about 50 percent of the electricity produced and the excess can be sold back to PG&E.
Stangl pointed out that the energy would be sold to PG&E for only 11 cents a kilowatt, yet PG&E charges 23 cents a kilowatt to its rural customers.
“There is no smoke, no ash, no bi-product of this process,” said Stangl. “It’s carbon negative.”
Central Valley Ag Grinding’s other owner, Mike Barry, pointed out that the process also took trucks off the road that would normally be hauling the byproduct to Redding and Merced to be converted there.
“It takes materials from here and uses it for energy here,” said Barry.
“I like that, you’re putting and keeping people at work here,” said Berryhill complimenting the company for “thinking outside the box” and solving many problems at once.
“PG&E is a good friend, but sometimes can be difficult to work with,” said Denham. “We’ll double-team them from a state and federal standpoint.”
PG&E officials were contacted for comment on Oct. 17 and 18 but had not returned calls or messages by press time.