California Biomass Firms Sue Federal Government For $22 Million

Two California biomass facilities that use agricultural waste to generate electricity claim the federal government owes them about $22 million. The plaintiffs — Ampersand Chowchilla Biomass and Merced Power — claim the U.S. Treasury Department is wrongly withholding funds from an economic stimulus program that helps pay for renewable energy projects. Each company invested more […]

Two California biomass facilities that use agricultural waste to generate electricity claim the federal government owes them about $22 million. The plaintiffs — Ampersand Chowchilla Biomass and Merced Power — claim the U.S. Treasury Department is wrongly withholding funds from an economic stimulus program that helps pay for renewable energy projects.

Each company invested more than $40 million to build facilities in Chowchilla and Merced that rely on boilers and turbines to produce energy from agricultural byproducts, such as orchard trimmings and nutshells, as well as other sources of waste. The facilities became operational in 2011 and applied to the Treasury Department for reimbursements of 30 percent of the project costs, which were available through the 2009 American Recovery and Reinvestment Act.

Instead of providing each company with the full amount, roughly $12 million apiece, the government only reimbursed each of them for about $1 million, the complaint said. The Treasury Department refused to pay the full 30 percent because it claimed the facilities were in service prior to 2009, the complaint said.

The plaintiffs claim this conclusion is erroneous because neither facility had obtained the proper permits and other requirements until 2011, with the facilities only operating on a test basis prior to that time. The complaint demands payment of the full $12 million for each company, minus the $1 million they’ve already received.

From Capital Press: http://www.capitalpress.com/California/20140916/biomass-firms-sue-feds-for-22-million

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