Unit 6.2: Community Digester Business and Ownership Models

Existing and proposed community digesters use many different ownership models, each of which has costs and benefits.  Many community digesters are privately owned, commonly with a mix of partnerships between developers and local feedstock producers, cooperatives or other parties. Likewise, many public and municipal organizations have developed or are expanding existing wastewater treatment operations into multiple feedstock operations.  The following subsections will describe the features of these different community digester ownership and business models.

Cooperative Ownership

Cooperative ownership models for business development have long played an important role in supporting local economies (UWCC, 2012).  As renewable energy development has grown, financing cooperative ownership projects has also increased. Broadly defined, cooperative ownership refers to a voluntary partnership of individuals that jointly own and democratically control a shared asset or enterprise.

As discussed earlier in this module, cooperative approaches to anaerobic digestion projects could be deployed in order to increase the number of operational projects in the US. Although the majority of currently operating agricultural anaerobic digestion projects are owned by individual farms or companies, there are approximately 12 centralized or regional projects that receive feedstocks from multiple locations to be processed at a central location (EPA, 2010). One of the most well-known community anaerobic digestion projects is the Hooley digester located at the Port of Tillamook Bay in Oregon. The Hooley digester collects manure from approximately 4,000 cows from multiple farms. This project is discussed in greater detail in the Appendix Community Digester Case Studies.

Agricultural based anaerobic digestion projects, specifically dairy projects, have two types of cooperative models that could be utilized to increase the number of project installations.

• The first would be for a group of dairy farmers with common needs to form a separate cooperative entity that would help support the development of individual projects at the farm but the cooperative would share common tools and assets.

• The second model would be for an existing dairy cooperative to provide anaerobic digester system support as a service to their members.

According to a 2009 publication from the USDA Rural Development, either of these models could harness cooperative power to improve contract negotiation for energy purchase agreements or tipping fees for organic waste. Cooperative structures can also leverage technical assistance support from the equipment or other system support equipment suppliers (USDA, 2009). Dairy cooperative models could also help to market products, including energy, digested solids and aggregate carbon credits.

There are many existing cooperatives currently in the US. Another option for cooperative ownership of anaerobic digestion projects would be to use existing cooperatives to implement future anaerobic digestion projects. These groups could work with existing membership to identify if there is a group of agricultural producers or industry members who are interested in making an investment in a central anaerobic digestion project. Existing cooperatives or associations can also provide information to interested parties on legal requirements for forming a cooperative and offer assistance when setting up an operating structure and procedures.

Existing cooperatives have been partners in community digester projects through various mechanisms.  The Fremont Community Digester, mentioned previously, is privately owned by Novi Energy but a local farmer’s coop has an equity investment in the project.  Foremost Foods, a farmer-owned dairy cooperative based in Baraboo, WI is the co-owner of Richland Center Renewable Energy (RCRE), a proposed wastewater treatment facility with anaerobic digesters that will convert high-strength cheese processing wastes into biogas for a 1.7 megawatt generator. The other owner of RCRE, Schreiber Foods, based in Green Bay, WI, is the world’s largest employee-owned dairy company, resulting in a very diverse extended ownership structure for the RCRE anaerobic digester.  High-strength wastes from the two organization’s dairy plants in Richland Center, WI, will be pumped to the anaerobic digester, which also has the capacity to process manure from a local farm.  A total of $22 million in Wisconsin tax credits was awarded to this project in July, 2012 from two economic development authorities to create an estimated 60 to 75 manufacturing jobs and alleviate significant wastewater treatment issues in Richland Center (WHEDA, 2009).

Rural electric cooperatives are another type of cooperative organization that can play a very important role in supporting members and customers in the development of electricity based anaerobic digestion projects. One example is the Dairyland Power Cooperative, a rural electric cooperative headquartered in LaCrosse, WI, which began a program over a decade ago to work with local farmers and community members who were interested in developing anaerobic digestion projects.

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