Tuesday, January 21, 2020

CORRECTED: Wednesday PAB Committee Meeting: Biomass Plant Ask for Additional $45M Competes with Housing Requests.

 I incorrectly calculated the increase in the Lakeview Biomass, from the closing date last year. It should be an increase of $95M and 28%--I have made the correction below and regret the error.
The Oregon Private Activity Bond Committee meets on Wednesday to consider 2019 carryover requests and request for 2020 bond cap. 

For 2019 (or a possible 2019 and 2020 combination), an additional request for $45M in PAB allocated bonds for a Lakeview biomass plant is competing with housing requests from Oregon Housing and Community Services and the Portland Housing Bureau.  (The plant would convert biomass forestry waste to aviation fuel).

The Oregon Business Development Department has already approved an additional $20M request from their 2020 allocation for the Lakeview project, so the total additional amount being sought will bring the total bond allocation to this project to $310M, an increase of $65M from the $245M in bonds already allocated. 

Page 62 of the meeting package shows that total projected costs for the plant have increased, in less than a year since bond issuance, from $337M to $432M--an increase of $105M or 31%. from $337M to $432M--an increase of $95M, or 28%. (You likely will need to click on picture below to be able to read).

I calculate the project has also received an additional $72M in other federal grant funds and another $2M from Energy Trust of Oregon so I calculate the total subsidy (including the $65M current ask) as $384M.  

And with the recent renewal of federal biofuel tax credits, using a projection of $1 a gallon would mean an annual $15M in operating subsidy at the 15M gallon annual production target. So, all in, subsidies at the end of 1st year of operation would total $399 Million.

Home Forward has also provided a preview of their projected bond needs for 2020 and beyond as part of the package.

The details of these requests can be found in the Committee meeting package I have posted as a highly recommended read HERE.

(Big thanks to PAB staff in providing these meeting materials quickly). 

Originally created and posted on the Oregon Housing Blog

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