A Collaboration Between the Tulalip Tribes and Their Farmer Neighbors Generates Power Back to the Grid

Apr 22, 2011

Seattle Qualco

A Collaboration Between the Tulalip Tribes and Their Farmer Neighbors Generates Power Back to the Grid

An unlikely collaboration in Monroe, Washington between local dairy farmers, the Tulalip tribes, and environmentalists who want to protect the salmon in local rivers has resulted in a groundbreaking effort to create clean energy from farms’ least appealing farm wastes.

The contentious issue was that bio-waste from local dairy operations was creating runoff into local streams, endangering the fish. The farmers, feeling the economic pinch, didn’t want to limit the size of their herds and the tribes wanted to protect their fishing stocks. The result of their discussions was the formation of three-way consortium Qualco Energy and, ultimately, the building of an Olympic-pool-size biomass plant or “digester” to create sustainable energy from animal waste.

Qualco Energy is a clean-energy project that is generating green power from cow manure—and $300,000 in revenue for consortium partners. To help make the project work, Bank of America, which had been the Tulalip tribe’s bank for many years, developed the complex financing to build a biomass plant, or “digester,” using clean renewable energy bonds.

Today, Werkhoven Dairy, a dairy farm run by brothers Andy and Jim, funnels manure from approximately 1,000 cows to the biogas plant, which converts the waste into methane gas. The gas is then burned in a generator, producing enough energy back to the grid to power about 300 homes. The energy is funneled to Puget Sound Energy, generating revenue for the consortium, which plans to use it for habitat restoration projects like river cleanup.

Financing was critical to making the project work. Bank of America worked with the CFO of the tribe to structure the transaction, Tulalip applied for the clean-energy bonds, and the biomass plant went online in December 2008. According to Mel Sheldon, chairman of the Tulalip Tribes, “Bank of America was the first to step up to the plate and work with the Tulalip tribes on our projects. Early on it was a hatchery project, but fast-forwarding to today, it’s the biogas project. Out of this relationship, not only do we have a business relationship, but the bank is working with us to make a better community and help us be stewards of the environment.”

The potential of the project is broad, according to Andy Werkhoven, noting that the plant, even now, could accommodate wastes from three to four additional dairies or add another generator to supply power to 900 more homes. But he sees the project through a bigger lens: “On a national level, I think you’re going to see more people using digestion as a process to create alternative energy because it’s a valuable source.”

The project is a “win-win-win,” providing benefits for the three groups, as well as for the local community and economy. Because of the creation of Qualco, the dairy farmers can grow their herds and increase profitability, and Tulalip will be able to use the revenues from generating electricity to fund restoration projects that will protect the rivers for salmon fishing. As Mel Sheldon, Chairman of Tulalip, puts it, “We like to think that our ancestors are looking down on us and smiling on our good work.”

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