Dairies' manure turned into fuel

MOUNT VERNON — A recent ribbon-cutting for Farm Power's new anaerobic manure digester celebrated a proven green-power technology that proponents say can help dairy farms survive.

During the event, the crowd of about 250, many of them farmers, fell silent in anticipation as Gov. Chris Gregoire stroked some keys on a laptop computer to start the digester.

Within moments, the digester roared into action to the cheers of the crowd.

"The idea of having a second cash crop — and this is what it is, a second cash crop — is exactly what it's going to take to make it possible for these dairy farmers to survive these tough economic times and into the future," Gregoire told the crowd.

Built by Ferndale-based Andgar Corp., the digester turns manure into methane, which fuels an electric generator that produces up to 750 kilowatts of energy — enough electricity to power 500 homes.

The electricity is sold to Puget Sound Energy for 8 cents per kilowatt-hour.

What sets Farm Power's project apart from other manure digesters is its business model, which relies on manure from several farms instead of just one large farm, thus allowing smaller dairies to get into the game.

Founded by brothers Kevin Maas, 33, and Daryl Maas, 31, in 2007, Farm Power funded and operates this new manure digester on 3 acres leased from Skagit County dairy farmer Garritt Kuipers Jr.

Under the arrangement with Kuipers' dairy and the nearby VanderKooy dairy, both dairies will supply the digester with manure.

In exchange, the dairies will be able to use the nutrient-rich, environmentally friendly liquid fertilizer extracted from the manure on their fields. They'll also be able to use a sterile fiber byproduct for bedding.

The digester cost $3.5 million, which Farm Power expects to pay off in six or seven years.

Dairyman Eric VanderKooy told the crowd that his family wanted "to be proactive on environmental issues today."

In Washington state, manure digesters that generate electricity must get a permit from the Northwest Clean Air Agency.

Funding for Farm Power's digester includes a $500,000 grant from the state, a $2.14 million loan from Shorebank Pacific backed by federal Department of Agriculture loan guarantees and $400,000 in cash from investors.

Farm Power's digester also benefited from the federal stimulus package's Renewable Energy Investment Tax Credit. If Farm Power gives up all other federal tax credits, it can get 30 percent of the construction cost back as either a tax credit or cash.

Kevin Maas said the project will produce an average of $500,000 cash flow from operations per year, most of which will go into servicing the debt. Even with no incentives, the project is expected to break even financially.