Arizona’s Snowflake, Still Generating Power, Melts to Bankruptcy

Snowflake White Mountain Power, LLC, a biomass power plant in Arizona, recently filed for Chapter 11 bankruptcy protection in effort to avoid having its contract put to rest by the Salt River Project.  The bankruptcy follows some long months of back-and-forth debates between Snowflake White Mountain Power and Salt River Project over both renegotiated agreements and the financially downtrodden history of the power plant itself.

In documents filed with the US Bankruptcy Court, Snowflake White Mountain Power claims it’s roughly $50-$100 million in debt.  At the beginning of last year, the Arizona plant’s original owner, Renegy Holdings, Inc., was given a $12.3 million “tax equity cash infusion” which then made AZ Biomass, LLC its owner.

Renegy still owns 1% of AZ Biomass; CEO Robert Worsley was reported as saying the company’s lender, Greenwood Village, appointed a receiver back in December after Renegy leaned and cried on the bank’s shoulder for assistance.

In explaining why Salt River Project would have decided to end their contract with Snowflake, their spokesperson, Patty Garcia was quoted by Reuters as saying, “At the request of SWMP, SRP made numerous modifications to the agreement over the past several years…modifications included multiple increases in the price SRP paid for energy, the amount of energy SRP was committed to purchase and extending deadlines in the purchase agreement at Snowflake’s request.”  On paper, the bankruptcy seemed the plant’s best option in order to continue producing power for Salt River Project.

Renegy, while maintaining the plant and managing all of its operations, has remained neutral during the dispute.  Since 2008, Snowflake has sold power to both Salt River Project and the Arizona Public Service Company.  The latter was recently reported as saying they’ve noticed nothing different, in terms of its receiving power, since Snowflake’s filing for bankruptcy.

Snowflake’s plant is known for burning wood, pulp and some waste to produce its fuel.  Ultimately, the fuel is responsible for creating 24 megawatts of power.