Letter to Kenneth Daly, National Grid President for New York

Letter

Today, at the Synergy biodigester in Covington, U.S. Senator Charles E. Schumer called on National Grid to connect the largest dairy biodigester in Western New York to the power grid before the end of the year, so that the job-creating project will not be at risk of losing $2.8 million in federal investments. The biodigester, a co-digestor which produces clean energy from both animal and food waste, must be connected to the grid and online by the end of the year in order to access $2.8 million in federal renewable energy tax credit grants to help defray the project's construction. However, National Grid recently told Synergy they do not expect to connect the biodigester to the grid until March of 2012. Every day of delay in which the plant is not operational compromises Synergy's business plan, prevents it from paying its operating costs, and jeopardizes the viability of planned future local projects. In order to keep the project on track and ensure that Synergy receives the $2.8 million it had planned to receive, Schumer is pushing National Grid to execute the agreed upon timeline and get the plant online before the end of the year so that it can begin producing clean energy for the dairy and Western New York and remain eligible for the federal investment it needs to stay viable.

"We can't let National Grid pull the rug out from underneath this job creating project. Alternative energy development represents one of upstate New York's best opportunities to create jobs, grow local economies and protect our environment, and National Grid must follow through with its commitments to make Synergy's biodigester a success by connecting it to the power grid immediately," Schumer said. "Synergy's biodigester is at the cutting edge of alternative energy in New York and is set to create viable energy for its neighbors in Western New York once connected. National Grid must stop kicking the can down the road, putting Synergy biodigester's jobs and viability, as well as $2.8 million in federal tax credits at risk. I am here today to pledge my continued support in developing this technology and to demand that National Grid honor the timeline and help protect the project and jobs that are set to spin off from this promising and innovative plan."

Schumer was joined by Vice President of CH4 Biogas Lauren Toretta, Synergy Dairy owner John Noble, Wyoming County officials, and the local farming community as he urged National Grid to immediately step up and connect the Synergy biodigester to the power grid, a key piece of Synergy's project that has been overdue for three months. Schumer argued that further delay of this clean energy project puts Synergy at risk of losing $2.8 million in federal renewable energy tax credit grants if the plant is not operational by year's end. In addition, each day that Synergy Dairy biodigester is not fully operational compromises their business plan and jeopardizes future spin-off projects, all of which were originally based on the interconnection being completed in 2011. National Grid now projects that the biodigester will be connected by March 2012 at the earliest, and Schumer stated that the updated timeline is unacceptable. He is pushing National Grid to meet previous time commitments and help protect local projects and the jobs that depend on Synergy's success.

Synergy Dairy's biodigester, the largest dairy biodigester in Western New York, was originally told by National Grid that the interconnection would be completed in 2011. Synergy has now completed installation of the biogas plant, readied the tanks to operational levels, and started generating gas to covert to electricity. Given these steps, Synergy would be ready to start producing clean electricity for the grid on December 1st, if not for National Grid's failure to meet connection deadlines. At the same time, the installation of the biogas plant and usage of the tanks have put Synergy's business plan and it's costs in motion, and the biodigester's viability is predicated on accessing a $2.8 million federal renewable energy tax credit grant by year's end. However, the tax credit can only be applied once the biogas plant is fully operational. Therefore, every day of delay by National Grid not only threatens this projects overall viability, but also subsequent nearby projects planned by the company. Schumer noted that all of these potential repercussions also jeopardize future jobs in the local community.

Once Synergy is finally online, this innovative biogas plant will be the largest energy producing on-farm digester in Western New York, and the first biogas plant in New York designed specifically for co-digestion of manure with food grade organic waste. The biodigester will not only provide the power needed by the 2,000 cow Synergy Dairy, but will create 5-6 new jobs, support the dairy's 30 workers, and produce more than 10,000 megawatt hours of renewable energy annually. This, in turn, will reduce greenhouse gas emissions by the equivalent of 8,500 tons of carbon dioxide per year, control odors on the dairy farm, and create a clean fertilizer byproduct.

Schumer noted that Synergy's biodigester is a critical local project, and noted that he helped secure a $750,000 grant for the Wyoming County Industrial Development Agency (IDA) earlier this year to help Synergy complete the plant and partner with Cornell University and Rochester Institute of Technology to evaluate and report on the performance and environmental benefits of the project. The grant was awarded through a National Grid program and while the utility has been supportive of this project up to this point, Schumer is now concerned about this commitment based on the extensive delay in connecting the biodigester to the grid. Schumer urged National Grid to take action before year's end, to ensure that the Synergy biodigester project is not at risk of losing $2.8 million in renewable energy tax credits that will help ensure the project's success.

Biodigesters convert organic wastes into a nutrient rich fertilizer and biogas, a renewable source of electrical and heat energy. Biodigesters help families and farmers by providing a cheap source of fuel, preventing environmental pollution from runoff from animal pens, and reducing diseases caused by the use of untreated manure as fertilizer. Families living in rural communities throughout New York could convert animal and vegetable waste into energy thereby reducing their cost of living. In addition to lowering costs, families or organizations that own biodigesters could use them to produce revenue by selling excess electricity generated back to the grid. The project sponsor, Synergy LLC, is a partnership between the Synergy Dairy and CH4 Biogas, a renewable energy development company.

Schumer added, "Developing new forms of renewable energy must be a major priority for New York as well as our country, and everyone, from the federal government to private companies like National Grid, must play a role in helping farmers build biodigesters in every corner of the state to make that happen."

A copy of Senator Schumer's letter to Kenneth Daly, National Grid President for New York appears below:

Dear Mr. Daly,

I am contacting you about my serious concerns that time is running out for National Grid to connect the innovative Synergy Biodigestor in Covington, NY to the electrical grid. Specifically, unless National Grid completes its required work to prepare the company's electrical substation and finalize the grid interconnection by December 31,2011, the viability of this critical economic development project will needlessly be in jeopardy.

In August 2010, National Grid signed an agreement with Synergy LLC requiring the utility to complete the interconnect work within a 40 week period. Moreover Synergy paid $430,000 to National Grid in December 2010 to cover the cost of this work which today remains unfinished. While I appreciate that National Grid has been supportive of this project and worked in concert with Synergy over the past year, National Grid's most recent determination that it will not schedule the interconnect completion until March of 2012 is confounding.

Based on the expectation that the interconnection would be completed by year's end, Synergy has now completed installation of the biogas plant, the tanks are at operational levels and are generating gas, and would otherwise be ready to start producing "green" electricity for the grid on December 1st. Moreover, Synergy's business plan, and indeed its viability is predicated on accessing a $2.8 million federal renewable energy tax credit grant by year's end. However, the tax credit can only be applied once the biogas plant is operational. Thus every day of delay by National Grid not only threatens this projects overall viability, but also subsequent projects planned by the company. This jeopardizes future jobs in the local community and the promise of a stronger New York dairy industry.

Once online, this innovative biogas plant will be the largest energy producing on-farm digester in New York, and the first biogas plant in New York designed specifically for co-digestion of manure with food grade organic waste. It will not only provide the power needed by the 2,000 cow Synergy Dairy, but will support the dairy's 30 workers and produce more than 10,000 megawatt hours of renewable energy annually. This, in turn, will reduce greenhouse gas emissions by the equivalent of 8,500 tons of carbon dioxide per year, control odors on the dairy, and create a clean fertilizer byproduct.

I appreciate that National Grid has supported this project, and indeed awarded a $700,000 to the Wyoming County Industrial Development Agency (IDA) earlier this year to help Synergy complete the plant and partner with Cornell University and Rochester Institute of Technology to evaluate and report on the performance and environmental benefits of the project. To leverage that investment and ensure the project's success, National Grid needs to mobilize now.

Wyoming County has repeatedly distinguished itself as a pioneer in the development of renewable energy. To build on that foundation I ask that National Grid move full steam ahead to complete its interconnect work by December 31st. I appreciate your consideration of this request and look forward to your response. Please feel free to contact my Washington DC office at 202-224-6542.

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