Sep 282012

By Naomi Hatch
Catalyst paper has extended the permanent closure of the plant and all operations at the Snowflake mill and the Apache Railway from Sept. 30 to between Oct. 5 and 19, Navajo County Supervisor J.R. DeSpain advised those attending the Sept. 20 Real AZ Corridor meeting.
A letter to the Board of Supervisors dated Sept. 11 stated, “Approximately 282 employees will be affected by the permanent closure of the Snowflake facility,” including those of 172 members of the United Steelworkers International Union, 36 members of the International Brotherhood of Electrical Workers, and at Apache Railway, six members of the Southwest Regional Council of Carpenters along with 54 salaried job positions and 14 hourly job positions.
DeSpain said the investors are setting up procedures for sale and sale of items, but he was not sure if it would be piecemeal or the whole thing. He did acknowledge there was some interest on bidding on the plant.
Ed Ulrich of Snowflake Power, which came on line in 2008, generating 27 megawatts of electricity, noted, “We get certain amenities from Catalyst Paper, so this shutdown does significantly affect us.” He said most likely they will end up with around 24 megawatts of electricity, which they sell directly to Arizona Public Service Co. and Salt River Project.
Snowflake Power has 40 to 50 full-time employees, and will be hiring 10 to 15 employees from Catalyst. Ulrich said that there are between 100 and 150 people affected through subcontractors that benefit the biomass plant.
“A lot of things have to be restructured, reorganized and we have a whole series of systems that have to be re-piped, so we will have some downtime at the power plant,” he said, noting they typically have an outage in October so they will already be shut down to make some of those corrections.
“We plan to purchase land from Catalyst,” said Ulrich noting that they have agreements with Catalyst until June 2013. They will be working up plans to come up with their own water source at that point. “We’re a drop in the bucket of what Catalyst needed.
“Besides the number of employees, we burn 600 tons of woody biomass on a daily basis,” Ulrich continued. “We’re planning on not changing that.” He explained that they are in the process of testing paper sludge to see if that can be used and if so, they would mine that field.
“We worked out the purchase of the land we’re on,” said Ulrich, noting it has been amended through the bankruptcy to allow Snowflake Power to get some of the services until the mill is completely shut down.
“We have a lot of things in the works to get us the water,” he said.
Ulrich also said that tours can be arranged for any group interested in the biomass plant.
Navajo County Governmental Affairs Director Hunter Moore analyzed the press released dated Sept. 17 announcing that Catalyst began the sale process for the Snowflake mill and assets. He said that known interested buyers were provided a summary of what is being sold and must bid on assets by Oct. 1. They will be notified in three days if they qualify and must have additional information by Nov. 1, at which time all applications will be reviewed and buyers selected to take over those assets.
“At this point we know that since the announcement, there’s been at least four interested buyers that I’ve actually be in contact with,” said Moore, noting one of them has fallen out but the other three remain interested.
“The last week we saw a lot of activity at the state level,” said Moore, explaining that the attorney general’s office and the governor’s office were very engaged trying to get standing as a creditor for Catalyst. “They want to let them know they are very serious about the clean up process,” he said.
Moore stated that in the letter to the Board of Supervisors, they said that Apache Railway will not close operations for the foreseeable future.
Taylor Town Manager Eric Duthie noted that APS officials have volunteered to pay their consultant to assist in finding answers to questions frequently asked, including what the impact on the communities will be, and what the impact on the region will be.