(Host) Some dairy farmers who make electricity from cow waste are losing money on the manure as well as on the milk.
So after talks with farmers and their political allies, Central Vermont Public Service Corporation has agreed to pay more for what it calls "Cow Power."
VPR’s John Dillon has more:
(Dillon) The process of making electricity from cow manure involves a methane digester that mimics – on a giant scale – what happens inside a cow.
Bacteria break down the waste product, and instead of methane gas escaping from the bovine, the gas is captured and burned to generate electricity.
But the problem for the first of the cow power producers is that they’re paid partly on a price that’s pegged to the wholesale for electricity. Farmers also get a premium that’s paid for by utility customers who sign up for the cow power.
But as regional power price tumbled over the last year, farmers got less money. Bill Rowell runs a large dairy farm in Sheldon.
(Rowell) "We’d like to see the industry move forward, be paid fairly. We don’t need to be overpaid. We can at times work for nothing to sustain ourselves through a slump, but we can’t work for less than nothing."
(Dillon) Rowell and two other farms were the pioneers of the Cow Power program. They invested in methane digesters and generators to turn the gas into electricity.
When electricity prices were high, the cow power sales brought some additional money to the farm operations. That changed dramatically when prices fell. Steve Costello is a spokesman for Central Vermont Public Service.
(Costello) "This year the market price of energy in New England has plummeted because of the drop in the natural gas price. So farms that previously have been getting as high as 11 or 11.5 cents a kilowatt hour at times, have been receiving 3 or 3.5 cents, and that’s just not a workable number."
(Dillon) The farmers worked with CVPS to come up with both temporary and long-term help. In the short term, the farmers will get some money from the utility’s renewable development fund. And Costello said that power sale contracts are being renegotiated to help farmers cover their costs in the long term.
(Costello) "What we’re really looking for is a price that will take those highs and lows out and give them a more stable price."
(Dillon) The farmers asked Lieutenant Governor Brian Dubie, and New Haven Representative Chris Bray to help with the negotiations. Bray said the decline in power prices came just as farmers saw milk checks drop to their lowest level in three decades.
(Bray) "It’s such a double-whammy. There they were, losing money on the milk they were making. And the power, which was supposed to be an additional revenue stream to the farm, it started losing money as well."
(Dillon) Bill Rowell, the farmer from Sheldon, said a price of about 16 cents a kilowatt hour would cover a farmer’s costs and provide enough incentive to invest in renewable energy.
That’s also the price that the Public Service Board set recently for electricity generated by farm methane.
For VPR News, I’m John Dillon in Montpelier.