As published in Toledo Business Journal - January 1, 2019

Independent Barley & Malt’s equipment arriving at the Michigan Hub site

Independent Barley & Malt’s equipment arriving at the Michigan Hub site

Michigan Hub advancing $110M energy park

New facility to be located in the Litchfield Industrial Park

Michigan Hub, LLC, a company whose mission is to drive rural economic development with the assistance of locally produced low-cost energy that reduces the community’s carbon footprint, is developing the former coal-burning Endicott Generating Station into a low-cost energy park in the city of Litchfield at the Litchfield Industrial Park. As it stands today, there has been $6 million invested in the site, but once build out of the plant takes place, as well as build out of its first tenant, the investment in the project will be around $110 million.

According to Glenn Foy, CEO of Michigan Hub, the energy park, which he referred to as an “energy island,” will generate 175 megawatts (MW) of power to industrial tenants located on its 44-acre site, as well as the adjacent industrial facilities and local municipalities.

“The former Endicott facility, which was owned by a public agency in Michigan, decommissioned the coal plant in September 2016. It’s located immediately adjacent to the Litchfield Industrial Center and we went ahead and purchased the site and executed the decommissioning and demolition of the plant with the purposes of then taking the infrastructure and using that to build a natural gas-fired energy park. The initial property is 44 acres, and with that and some of the adjoining land we will acquire, we want to build something to produce low-cost energy and reduce the carbon footprint in the area and for these entities surrounding it,” said Foy. “The coal-fired power plant had tremendous infrastructure and access to the grid. The site has everything that you would work with from an industrial infrastructure perspective. By co-locating these industrial entities and manufacturing entities, we can create jobs locally and in the community. But more importantly, we can provide them with all the utilities. We will provide the steam, the hot water, the cold water, electricity, and so on and so forth. And by doing that, it delivers significant savings to the facilities and reduces the carbon footprint.”

According to Foy, power, heat, and air conditioning represent a large part of industrial employers’ operating expenses. By providing power directly to its tenants and eligible Industrial Park manufacturers, Michigan Hub can eliminate the cost of using the transmission grid. Heat and air conditioning can also be supplied utilizing waste heat from the power generation process, further reducing costs.

According to the Environmental Protection Agency (EPA), Michigan Hub-type power plants reduce energy costs by an estimated 29% and carbon footprint by 47%.

As Foy noted, Michigan Hub plans on acquiring more land, which allows for future growth and expansion. In total, the two adjacent parcels of land that the company is aiming to acquire could up the project to 175 acres. Foy explained that the plant design is modular, so as the company secures tenants, the company can add more modules to the plant and ultimately create more power.

Foy also explained that Michigan Hub is also providing in-state municipal utilities an option to comply with recent State legislation requiring local capacity resources to meet Michigan’s goal of power independence.

“Right now, the plan is to generate 175 megawatts of power, and of that, we are allocating 150 megawatts to the grid. The rest will be used for the ‘behind the meter’ power opportunity and right now that lines up with the folks we are talking to. But like I said, we can scale that up if needed,” said Foy.

Glenn Foy, CEO of Michigan Hub, speaking at the groundbreaking ceremony

Glenn Foy, CEO of Michigan Hub, speaking at the groundbreaking ceremony

The energy park, according to Foy, will also make certain alternative fuels available to facilitate Litchfield Industrial Park’s migration from expensive diesel truck transportation to cleaner, lower-cost CNG (compressed natural gas) and electric vehicles.

“We are going to be constructing a transload facility at the site because there’s easier access that they want there. By having that transload access, we want to provide a further opportunity for manufacturers in the area and lower cost of rail. The benefit is not just lower-cost electricity or heat or steam or waste water treatment or natural gas, it’s really these multi-level elements that can impact the manufacturers to lower their costs including transportation and so on and so forth,” said Foy.

Michigan Hub tenants can receive long-term contracts for reduced cost electricity, process steam, hot and chilled water for facility HVAC, natural gas, and water – all available within a shovel-ready site. The company will utilize clean-burning natural gas or renewable synthetic gas (derived from local agricultural or other commonly available waste) as fuel for the energy production facility.

“The leasing contracts we are looking at now are typically 20-30 years. We are looking at long-term leases as well as relatively certain utility prices that will give them some security,” said Foy.

The first tenant secured for the site is Independent Barley & Malt, Inc. (IB&M), a Michigan corporation established to serve the craft brewing and distilling markets throughout the Midwest. IB&M is developing a state-of-the-art, commercial-scale grain-processing facility that is estimated to cost $55 million. The company is expected to add 50-65 full-time employees.

“The job history here is that the Endicott facility closed and 75 people lost their jobs. With our on-site folks and people running the operations, we now have five back. But as we start to scale up, we will have a big construction effort and jobs for the plants. For the power plant and for our first tenant, we are looking at adding 75-80 jobs, so all those jobs are being replaced. Of course, as additional tenants come on board, there will be more jobs as well,” said Foy.

Foy noted that the former power plant surrounded the town of Litchfield but was owned by five municipalities and couldn’t sell the electricity to Litchfield.

“So you had a power plant in your backyard and no one got to see the benefits of low-cost power. The shift here is that for the first time in 40 years, the power generated here within the community will also be used in the community. From an economic development standpoint, if you generate and use the commodities in the community, it’s a pretty significant economic amplification.”

The City of Litchfield, according to Foy, has around 12,000 people with 2,500 people going in and out of the industrial park.

“We think that this whole idea will benefit the community. The former coal plant shutting down hit the community hard, and so having the ability to take something that was a big negative and convert it into a very positive outcome for the community is very important. And with that, we’ve seen tremendous support from the local community, the region, and even the State of Michigan. We look forward to continuing this progress,” concluded Foy.

 

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