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Larry Osborne, the general manager of Dinuba Energy, stands on a catwalk or the six-story biomass electrical plant that used to burn waste wood from landfills and agriculture and generate electricity. The plan has been closed just under three years. Photo by David Castellon

published on September 21, 2018 - 1:58 PM
Written by David Castellon

Three years ago, having a conversation inside the six-story Dinuba Energy electrical plant would have been near impossible.

Words would have been drowned out by the sound of steam racing through pipes, circulating the turbines for the massive generator that also would have echoed through this plant northwest of Dinuba.

That’s not the case now, as early October will mark three straight years this plant that used to burn waste wood from landfills and agricultural operations to produce electricity has been silent.

But Larry Osborne, the general manager here, is hoping to change that soon. He’s looking for a manufacturing business to expand or relocate here and agree to get its power from the plant.

Dinuba Energy, in turn, could save that business $8.5-$9 million a year on its energy costs compared to what it would pay getting power from Pacific Gas & Electric, Osborne explained.

But there are conditions, one that “We need a business that will take 12 megawatts of power – 24-7, 365 days a year,” Osborne said.

The other is that by law, the plant is vastly limited in how far it can deliver electricity –just to one or more businesses within its 40-acre property or to businesses on adjoining parcels – not even across the road that runs in front of the biomass electrical plant’s entrance.

And it’s not just electricity, Dinuba Energy also can route some of the steam it generates to run its generator to a tenant or neighboring business for its industrial use.

With such a deal in place, the biomass energy plant could finally get back online, said Osborne, one of four people who now work to maintain the facility, compared to the 25 who used to work there when it was running.

To say the least, the current shutdown isn’t new.

The entire plant was built in 1952, not outside of Dinuba but in Storm Lake, Iowa. Starting in 1983, the building and its equipment were dismantled and moved here after being purchased by a lumber mill that, at the time, was a decades-old fixture in the Dinuba area that used the plant reconstructed in 1985 to provide power for its operation.

The timber company also sold excess power to PG&E through the electric grid.

But the timber company – at that time owned by Sequoia Forest Industries – shut down in 1995 following action by the Clinton Administration that vastly restricted access to trees from federal lands, the source of the mill’s lumber.

For a time, the plant was donated to Fresno State, still providing power to the utility and continuing to do so after a private company, Community Renewable Energy Services, Inc., bought it in 2003.

The company also owns a second biomass energy plant, Madera Power, LLC, east of Firebaugh.

The contract to provide power to PG&E ended in 2012, at which time Madera Power shut down, but the Dinuba plant continued operating by selling electricity to the California Independent System Operator, the quasi-governmental agency that runs California’s electrical grid.

But problems arose after the Dinuba plant shut down in October 2015 to undergo major renovations.

Rates utilities pay for electricity change seasonally – peak-use to low-use times of the year – as well as during shorter periods as little as five minutes, Osborne said.

When Dinuba energy was ready to go back online in January 2016, the price PG&E would pay for its electricity dropped precipitously, from about $75 a megawatt, based on a annual basis, down to around the $45 range, he recounted, adding that the price has since dropped even lower.

“I just checked it a minute ago. It was $26.”

Osborne said the prices paid for biomass-generated power dropped because of the growing availability of cheaper, solar-powered electricity sources.

The new prices were too low to be profitable, which is why the Dinuba plant has remained in mothballs.

The options to get it back online would be either to sell power to PG&E or Southern California Edison, but neither need the energy from the Dinuba plant, so they aren’t likely to raise their purchase rates, Osborne speculated.

That leaves bringing in a business to operate next door.

Osborne said his company has 25 acres available to lease or sell, on the condition the business or businesses buy power from his plant.

He said his company had such a deal in the works.

In November 2017, Arkansas-based Delta Plastics announced it would take part of the property for the plant to recycle irrigation polytube for the agricultural industry, agreeing to buy all the power Dinuba Energy could generate.

The plan was for Community Renewable Energy Services to build the plant on about five acres and have Delta lease it, and Osborn was in the process of lining up builders when a comparable recycling business in the Salinas area came up for sale, and by February the Arkansas business had dropped its plans to come here and instead take over the Salinas plant, Osborne said.

Now he’s looking for a business with comparable energy needs that will stick around here.

That’s not so easy, Osborne said, explaining that “We have looked at canneries, but they have periods where they stop or slow down,” as do packinghouses and many food-manufacturing businesses.

“I talked to a number of them, and we couldn’t make it work.”

An added challenge, he said, is figuring out a way to let people know not only that there’s land available but also the potential cost savings in electricity, Osborne said.

He adding that a California Public Utilities Commission member told him only 43 percent of utility companies’ electric bills actually cover the costs of generating electricity, while the rest covers various fees and mark-ups for profit.


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