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Dairies Go Green with Digesters by Carol Ryan Dumas Capital Press, July 15, 2010

PUC approves agreement between developer and Idaho Power

BUHL, Idaho -- Three digester projects on dairies in Idaho's Magic Valley have qualified for 15-year contracts to sell their electricity to Idaho Power under the Public Utility Regulatory Policies Act.

The law requires electric utilities to offer to buy power produced by qualifying small power producers or cogenerators to promote greater use of renewable energy.

The projects are the 4-megawatt Rock Creek Dairy project near Filer, the 2-megawatt Swager Farms Dairy project near Buhl and the 2-megawatt Double B Dairy project near Murtaugh.

While the developer of all three projects, New Energy based in Middleton, Idaho, holds the contracts to sell the electricity to Idaho Power, the dairies have other reasons for having the digesters installed.

"I wanted to be more green and take better care of the environment," said Dean Swager, owner of the 3,500-cow Swager Farms Dairy.

His investment in the project and his vested interest in the power sales are still in negotiations, he said. But he estimated the project, not yet fully funded, will require an $11 million investment.

His motivation is to have clean water going into his lagoons, as opposed to barn water, reduce odor and have a more manageable form of phosphorous, he said.

"The dairy industry would like to have all their phosphorous in a dry form. That way you can measure it more effectively," he said. "When you put it out (land apply) in liquid form, not only does it smell, it becomes more difficult to measure how much you put on."

Rick Onaindia, CFO of Bettencourt Dairies, which owns 13 milking facilities including the Rock Creek complex and Double B, said the company owns no interest in the contract with Idaho Power or the electricity sales. But like Swager, he said the intent is for better phosphorous management.

"We have two digesters in place today, and they worked out great for us," he said.

The digesters are bringing benefits by providing phosphorous in a better form for land application, mitigating odor, providing solids for use as a better bedding material, and reducing operating costs, he said.

The digesters take about eight months to build. The Rock Creek project, which includes three dairies with about 9,000 cows total, is further in development than Double B, and could get on the power grid by next summer, he said. Double B Dairy also contains about 9,000 cows.

Developer New Energy has been in operation about 18 months and is owned by sisters Laura Knothe and Leslie White. Knothe said she could not comment on the specifics of the projects at this time but would be happy to at a later date. She did say one project was scheduled to come on line in 2011 and the other two in 2012.

For all three projects, the rate in the first year is $75.65 per megawatt-hour and gradually increases over the 15 years of the contracts to $128.31 per megawatt-hour, Idaho PUC stated in a press release.