April 15, 2008 — Renegy Holdings Inc., an entrepreneurial energy company based in Temple, Ariz., has big plans. The company makes no bones about its intention to become the leading biomass to electricity power producer in North America. The pursuit of that lofty goal brought Scott Higginson, the company’s senior vice president, to Susanville to meet with the Lassen County Air Pollution Control District at its Tuesday, April 8 meeting.

Higginson told the board his company is very confident it can refurbish and operate the biomass generator left idle when Sierra Pacific Industries closed its mill in Susanville in 2004.

Renegy seeks to build or retrofit biomass plants “from Maine to California,” Higginson told the board. It also has three projects working in British Columbia. He said the company planned to announce it had acquired the rights to another plant in California within the next seven days.

That announcement came the next day, much sooner than Higginson expected.

On Thursday, April 10, Renegy announced it had signed a nonbinding letter of intent for the acquisition of an idle 18-megawatt biomass power plant located in Ione, Calif. for $5.4 million. The company also owns a 24-MW plant near Snowflake, Ariz. that is scheduled to begin operating during the second quarter of 2008, and the plant in Susanville, Calif. that has the potential to be restarted by the end of 2008.

Higginson said the company purchased the Susanville power plant and the land under its footprint for $1.3 million and planned to spend $5-6 million dollars to improve the plant. It also has leased 40-acres around the facility.

The plant is one of three facilities operating under at Title V permits in Lassen County. Title V permits regulate air quality and the type and amount of emissions plants may legally release into the atmosphere.

According to the United States Environmental Protection Agency, “Most title V permits are issued by local agencies … However, the U.S. EPA also issues title V permits to sources in Indian country and in other situations, as needed.”

The permit for the SPI plant expires at the end of the year, but Renegy will be allowed to operate under the old permit while it works to secure a new permit.

Higginson said the first step was filing for a name change with state regulators, and the company expected to make that filing last week.

Acquiring the SPI plant was part of the company’s growth strategy, Higginson said.

“We want to part of the community,” he said. “We want to be a good neighbor.”

While SPI operated the plant to suit the power needs of the mill — including frequent start ups and shut downs — Higginson said Renegy plans to run the plant “24-7” and sell the power to electrical companies under long-term contracts.

With the state of California requiring electrical companies to purchase larger and larger shares of the power they sell to come from renewable resources, Higginson said Renegy should have no problem finding customers to purchase the power the plant generates.

While other power plants in the area have complained of a shortage of wood to burn to boil the water that turns into steam that drives the turbines that generate the electricity, Higginson said Renegy’s “vertical integration” allowed the company to have a reliable supply of wood chips to burn.

Higginson said he didn’t want to criticize the way other power companies operated, but he said Renegy doesn’t wait for someone to come to its plants with a load of chips.

“We have our own people in the woods,” Higginson said. “We believe there is sufficient fuel in this region.”