News

IID Approves 2.5 M Dollars in Competitive Grant for California Ethanol and Power

Industry News | July 21, 2016

Imperial Valley Press, By Staff Writer Edwin Delgado, Thursday, July 21, 2016 1:40 am

On Tuesday the Imperial Irrigation District’s Board of Directors voted to approve a $2.5 million grant from the local entity to help California Ethanol and Power, LLC in the late stages of development to get a step closer to the financial close of the project. CE+P President and Chief Executive Officer David Rubenstein presented the request for $1.1 million during the information portion of a July 12 meeting. On Tuesday, IID Director for Division 1 Matt Dessert said that after meeting with the general manager, legal counsel and the applicants, he suggested granting the requested $1.1 million and also an additional $1.4 million with the condition that those additional funds are used to reimburse the sugar cane growing expenses incurred by some of the local growers. The board voted 4-0 in favor of the grant, Director for Division 4 Stephen Benson recused himself from the discussion. The proposed California Ethanol and Power processing plant will be located at the Keystone Industrial Park and it is expected to produce 66 million gallons of ethanol per year from 55,000 acres of locally grown sugar cane. The plant will also have the capacity of generating up to 50 megawatts of electricity, generate biogas and once it is fully operational it can generate about 300 full-time jobs.
 
“The $1.1 million will pay for various tasks to finalize the financial close, which include independent engineering, credit rating and operational expenses as we work in the final details,” Rubenstein said. “These will be the last development dollars we’ll need.” He told the board that although the goal right now is to get the project financed by Oct. 31, he expects the final close to be done before the end of the year at the latest. He expects the plant to be operational two years after the construction of the facility begins. “We’re in the extremely late stage of development,” Rubenstein said. The next step for the company is to bring in engineering firm Technip to assess the maximum price for the construction of the facility and show that assessment to its investors.
 
Rubenstein said getting the plant built in the Valley was a crucial element of the project due to the agricultural qualities for sugar cane to grow locally. “It’s critical (to have plant in the Valley) we wouldn’t be able to build it anywhere in the state,” Rubenstein said. “The Imperial Valley has proven to be one of the best places to grow sugar cane.” He said studies have shown that they could see a 40 percent yield increase per acre, if they grow the sugarcane in Imperial County. The ethanol produced at the plant will only be for the transportation sector. During his presentation to the IID board July 12, Rubenstein said that the fuel that the plant will produce has a very light carbon footprint, the fuel will have 23 grams of carbon per megajoule compared to 96 grams in gasoline, 80 in Midwest corn ethanol and 45 grams in Brazilian sugar cane. CE+P had also previously received a loan from the Agricultural Benefit Program with Imperial County for acquisition of the land among other activities. Rubenstein said that they will start to grow the first 100 acres of sugar cane this fall and expand as the construction of the facility is underway to expand to the needed 55,000 acres needed, once the plant is operational.
 
When asked by the board about the potential impact on water usage that the sugar cane might create Executive Vice President Agricultural Operations Larry Gilbert said that they expect the crops to use roughly the same amount of water as alfalfa and therefore don’t foresee any significant impacts. If the project comes to fruition the plant would become the first sugarcane to ethanol energy facility in the United States. “We are excited to be part of the Valley and hope to get construction moving forward soon.” Previously IID also granted One World Beef a $2.5 million grant. The beef plant is now expected to be fully operational in the fall.
 
Staff Writer Edwin Delgado can be reached at edelgado@ivpressonline.com