“We own the biomass facility, the old coal facility and about 7,200 acres surrounding this area,” said Brad Worsley, referring to Novo Star Sawmill as he gave an update to members of the Real AZ Development Council April 9.
“We were the original builders of the biomass plant,” he said, noting they came in way, way over budget and lost the business. In 2013 they were able to repurchase the business due to Catalyst’s bankruptcy.
They brought several Catalyst people to work for them, and over the last 18 months they have run the facility as well as it has ever been run.
“It’s making money,” said Worsley, who noted that he had a growing concern that they would not be competitive, potentially due to roof top solar.
Arizona is a state that is viable for solar, that has competitive power pricing, but the issue is that you have to find storage, and to add storage makes it more expensive. He said that today solar is produced and put on the grid. Storage is coal and nuclear facilities.
“The (solar) tax credits expire in 2016,” said Worsley. “The price for solar has come down so far there will be no reason to continue tax credits.”
Forty percent of the biomass facility’s costs lie in fuel, raw materials.
“I do not have an abundant source of byproduct,” he said. “I live in a world where I have to go push cedar, grind cedar and haul cedar, and all that cost is mine. I don’t share with anybody. My cost is well over double what other people get to buy their raw material for.”
“So how do I become competitive?” he asked the group.
The firm is taking steps to become more competitive. “We’ve decided to move the Eagar sawmill, which is very successful, and locate it in Snowflake,” said Worsley, noting that the hope is to cut 100,000 board feet a day, Monday through Friday, with half of that going to biomass. They will start that process in December.
“The biggest challenge we have is keeping in logs, making sure logs are always there and plentiful,” he said. Most of their logs come from the Four Forest Restoration Initiative (4FRI) project.
The second challenge is people. He said that they have been in operation for three days and had half to 30 percent of the workforce quit.
They put out as much as 50 to 60 pieces of green, wet lumber per minute. “It is good hard work,” he said. “I would imagine we are going to have a pretty regular turnover.” He noted that the biomass facility offers some of the highest paying jobs in the area, but, generally, the sawmill pays lower wages.
“We’re very excited. It’s in the ground, its running, we’re making lumber,” said Worsley.
