The Port of Morrow has agreed to sell the Heppner bio-generation plant.

During a special meeting Thursday, commissioners approved a letter of intent to sell the plant to T2 Inc. of Sweet Home for $4 million. The port agreed to keep the opportunity available for 60 days.

Stephen Lawn of T2 said Friday he's committed to a go-no decision within that time.

Gary Neal, the port's general manager, said T2 intends to buy the 10-megawatt capacity bio-fuel electrical generating facility and about 20 acres. Lawn said T2 plans to run the plant at its capacity, employing 12-15 people.

"The last time it ran, it was only running at 6-7 megawatts," he said. "We're not sure why that is."

The proposed sale includes all equipment, fixtures, and improvements, plus a dump truck, fuel handling system, boiler, turbines, electric power infrastructure, water treatment system and the scale north of the Heppner-Lexington Highway.

Neal said T2 could use the scale at its present site until moving it.

The sale includes the right to use water from wells on adjacent property adequate to operate the power plant, he said.

The Heppner plant last operated in 2003, about a decade after Kinzua closed its mill there, Neal said. The port acquired the property and made some improvements, but not in time to catch the last wave of interest in acquiring old power plants.

Now, interest is growing in using biomass for generating power.

"That's what we do is biomass fuel processing," Lawn said. "We felt we could make it work at Heppner."

T2 intends to use forest residuals (waste) and some urban wood, he said, including construction and demolition debris.

The port's letter details that T2 must make power marketing arrangements, and clear hurdles with the state Department of Environmental Quality's air and water quality divisions. It also must have conversations with the Oregon Department of Energy.

Neal hopes T2 will be able to meet all of its objectives within the next 60 days.

"I'm cautiously optimistic," he said Friday. "There are a lot of hoops and a lot of pieces for this deal to come together."

The deal is expected to close within 90 days of completion of all requirements for T2 to begin operating the plant.

Lawn said T2 plans to wheel its power to purchasers through Columbia Basin Cooperative, based in Heppner. He's negotiating with potential customers, he said, and will be negotiating prices.

"We have to go out and find what the market will bear," he said.

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