Biomass Feasibility Project Final Report - Xcel Energy

Waste Landfill: a contract with a landfill stating and securing the term and charges for disposing
of non-processable biomass from the power facility.
Permits: all permits relating to air quality, water, wastewater, storm water, fuel storage, land use,
fuel processing, construction and operation. Certain permits will be contingent on final tests
during facility start-up prior to a Certificate of Commercial Operation.
Construction Agreement: a fixed-price contract with a reputable, credit-worthy prime
contractor experienced in managing complex energy projects who can assure completion and
specified performance. A letter from the general contractor’s surety company indicating their
willingness to underwrite the surety guarantees for the project will be required.
Technology Agreement: an agreement with a ratable or credit-worthy vendor to supply a
market-tested process technology with full guarantees. The agreement must provide for full
design “Chute-to-Stack” Drawings, specifications and stand-by availability of replacement parts
and components, and such other support needed to keep the facility operatiing at a minimum
level of 85% of capacity.
Operating Agreement: an operating plan that includes the staff experience, the training
regime, and the capital improvement and maintenance budget that assure proper operation of
the new facility. If the operator is to be an entity other than the owner, then the operator should
not only be credit-worthy or ratable but also demonstrate experience in managing multi-fuel
energy facilities.
Supply Agreements: bids from suppliers of key components based on their respective designs
for the project. These will be needed before prime contractors can make firm bids to the Owner
of the overall project. Included, but not limited, in that list of components are the following:
• Turbine Generator
• Air Pollution Control Equipment
• Boiler
• Combustion Equipment
• Cranes
• Fuel Processing and delivery Equipment
• Ash Removal Equipment
• System Controls
Any warranties and guarantees for the supply of these components will need to be reviewed by
owner’s counsel and bond counsel.
Risk Management Assessment: a thorough risk assessment of the of the new facility’s supply,
construction, start-up and operating periods undertaken by the owner and its engineers, risk
managers and prime contractor. A plan for managing the varying degrees of risk should be
developed and reasonable methods of mitigating project risk through insurance or bonding
should be considered.
Labor Agreement: some form of agreement with labor and trade unions that the biomass
energy project will be exempt from any work shut-downs or strikes. An accelerated project
timetable and/or time-limited project financing may require such an agreement.
Finance Plan: a plan of finance, drawn up by the owner and its attorneys, financial advisors,
bond underwriters and feasibility consultants, that includes provisions for revenue flexibility,
supplemental funding and operating and debt reserves. The plan and the structure of any
Identifying Effective Biomass Strategies: Page 163
Quantifying Minnesota’s Resources and Evaluating Future Opportunities