County considers two more manure digester projects

By Kevin O’Brien

Two more renewable energy companies are asking Marathon County for its blessing to finance multi-million dollar manure digesters at dairy farms on the western end of the county.

Representatives from the two companies spoke to members of the Extension, Education and Economic Development Committee (EEEDC) at their March 6 meeting, which resulted in a recommendation for one of the projects to obtain bonds from Wisconsin’s Public Financing Authority (PFA).

Andy Dvoracek, vice president of business development for Amp Americas in Chicago, spoke to the committee about a proposed digester project at Miltrim Farms near Athens, while Mike Hill, CEO of Novilla RNG in Michigan, talked about a similar project that is already underway at Lynn Dairy in the town of Brighton.

In December, the county board approved an initial resolution for the county to issue

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$45 million in tax-exempt bonds for Macquarie Capital to construct an anaerobic digester at Van Der Geest Dairy in the village of Maine. The initial resolution allowed the county to start negotiating with Macquaire on the terms of a conduit borrowing agreement, but it did not commit the county to following through with the proposal.

As a conduit borrower, the county would enable the developers to save money on borrowing costs, but the county itself would not be responsible for paying back the bonds, and the county’s borrowing capacity and credit rating would not be affected.

Dvoracek said Amp Americas is not requesting an initial resolution at this point, but it would like to know by the end of the second quarter (June 30) if the conduit option is available through the county so it can start spending money on the project. Novilla RNG, on the other hand, is not asking the county to serve as a conduit borrower for its digester, but it still needs the county’s permission to seek financing from the PFA.

The PFA, a state agency authorized to issue bonds across the country, has already approved an initial bonding resolution for the digester project at Lynn Dairy (known as Buckhorn RNG), but state law also requires the county to sign off on the PFA’s bonding.

Attorney Lynda Templen, serving as bond counsel for Novilla, said either the county administrator or the county board can approve a PFA bonding request, and Marathon County has decided to have the board vote on those requests.

“This is not an endorsement of the project, it’s not an approval of the project,” she told committee members. “It’s simply a quirky element in the statute.”

Templen said the requirement for county approval was included in the statute at the request of Milwaukee and Dane counties, who wanted the opportunity to serve as conduit bonders before the proposals went to the PFA.

Novilla RNG is seeking up to $25 million in revenue bonds through the PFA, but Hill said his company has already started the project with funds it had on hand. He said 35 construction workers are currently building the digester, which will convert raw methane from cow manure into a biogas that will be injected into a WE Energies pipeline and eventually used as vehicle fuel in California and other areas.

Hill said the Lynn Dairy digester is expected to produce 80,000 mmBtus (Metric Million British Thermal Units) per year, which is the equivalent to 700,000 gallons of gasoline. In terms of its greenhouse gas impact, it will be like taking about 4,900 cars off the road, he said.

When supervisor Stacy Morache expressed concerns about the impact of the digester on neighboring properties’ wells, Hill said his company must follow setback rules that also apply to lagoons. He noted that the manure is temporarily diverted from the lagoons and heated to remove volatile solids.

“If anything, these digester projects help with water quality,” he said. “We get a lot of pathogen kill because it’s in there for three weeks at 101 degrees.”

Hill also noted that Novilla has not received any noise or odor complaints from its other digesters, including one near Berlin, Wis., and their employees are trained to safely handle the gasses produced by the digester process.

Ultimately, the committee voted unanimously to advance Novilla’s proposal to the full board for a vote at its March 19 meeting.

Regarding the proposed digester at Miltrim Farms, Dvoracek described a similar process for converting methane into biogas and then piping it to California, where it can be sold to meet that state’s low-carbon fuel standard.

“In the grand scheme of natural gas volumes, the amount that we produce is not hugely significant,” he said. “However, the carbon abatement level in our gas is significant.”

Dvoracek said 40 construction workers would be needed to build the facility, which will be operated by two highly skilled engineers. He said the digester’s estimated lifespan is between 20 and 30 years, during which time it would generate additional property tax revenue for the county and local governments.

Amp Americas is looking at possibly requesting up to $45 million in tax-exempt bonding through the county, but Dvoracek said the company is not seeking a resolution quite yet.

Committee chairman Rick Seefeldt and others said they would be more comfortable if other committees reviewed the proposal first before making any recommendations, so no action was taken.

Regional ag educators OK’d

The committee voted to endorse a new regional model for UW Extension’s ag educators, which will now be shared with Clark County. Extension director Jeremy Solin said Marathon County will gain a new crops and soils agent, in addition to keeping dairy agent Heather Schlesser and adding a half-time dairy educator.

The new two-county model will not cost the county any more money, so the county board approval was not required.

IN PROGRESS - The photo above from Novilla RNG shows the new Buckhorn RNG manure digester being built at Lynn Dairy in the town of Brighton.