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HALL – A small sawmill that hoped to sell surplus electricity from its steam generators has instead put the generators up for sale.

Eagle Stud Mill in Hall was one of eight businesses that worked with NorthWestern Energy in 2009 to explore turning waste sawdust into power. But even its leftovers couldn’t compete with the low market price of natural gas-derived electricity.

“Power’s going for about 6 cents a kilowatt-hour, and we needed 12 to 14 cents to make it work,” mill owner Joe Brooke said on Friday. “When we were running the stud mill, the generators supplied the power for the planer, which was about a third of the cost for electricity. But then we were running the boiler, and we had to have somebody on the boiler all the time. When stud prices went to hell, we couldn’t afford to operate it.”

The Hall mill had employed upward of 60 people for decades making two-by-four studs, but switched to a six-to-eight man post-and-pole operation in 2009. The roundwood production didn’t need the steam or electricity.

The Montana Legislature required NorthWestern Energy to get 15 percent of its energy supply from renewable sources by 2015. Three years ago, the utility started working with timber producers to see if lumber waste could be competitive. The Hall mill was the only one with a steam-powered electrical generator already in place.

“The feasibility study did not pencil out,” spokeswoman Claudia Rapkoch said. “Now wind power is making up much of the renewable requirement.”

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The Forest Business Network is marketing the two Hall generators for Eagle Stud. FBN owner Craig Rawlings said several mills continue to explore the idea, but reduced industrial power needs may keep electricity cheap for a long time.

“That’s a tough nut to crack,” Rawlings said. “You need three things on a biomass generation plant – what’s the feed stock cost, what’s the capital cost and what’s the power purchase deal? With Smurfit out of the picture, that lowered the value of feed stock, but the other two aren’t working.”

Smurfit-Stone Container Corp.’s pulp mill in Frenchtown used most of the region’s sawdust and other waste wood for its paper production. When it shut down in 2010, mill owners scrambled to find other outlets for their leftovers. Power production seemed like a likely profit-maker.

In addition to Eagle Stud, Seeley Lake’s Pyramid Mountain Lumber, RY Timber’s mills in Livingston and Townsend, Plum Creek Timber Co.’s Columbia Falls plant, Sun Mountain’s Deer Lodge mill, the Tricon Timber mill in St. Regis and F.H. Stoltze Land and Lumber’s mill in Columbia Falls all participated in the study.

Of those, Rawlings said Pyramid and Sun Mountain still are exploring their options, while Stoltze is going forward with its own 2.5-megawatt generator next month. But none of them are expecting to participate in the renewable energy market.

Eagle Stud has its two generators for sale for $140,000. It also has another 400-kilowatt steam engine for sale at $6,500 for rebuilding or spare parts.

“We’ve had some ticklers from Alaska and one guy from Idaho came by to look at them last Friday,” Brooke said. “We can always scrap them. I think there’s quite a bit of value in the copper. They’ve got to be pretty old, but they’re made to last forever.”

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