It’s a done deal.
The deal is the commitment by U.S. BioEnergy to build Minnesota’s largest ethanol plant near Janesville in return for a $4.5 million loan and up to $1.2 million in property-tax rebates from Waseca County.
“This is a great day for Waseca County,” said Commissioner Richard Androli.
“Our goal is to get this up and running as absolutely soon as possible,” said Kristi Lee, communications director for U.S. Bioenergy.
She estimated the permitting process would be wrapped up in nine to 12 months and that the initial dirt work would begin next year. Lee said the actual construction would take 14-16 months. Using this time table, the company “would start cranking out ethanol sometime in the fall or winter of 2007,” Lee said.
Ron Fagen, owner of Fagen Inc. in Granite Falls, will build the Janesville plant. Fagen is also part owner of U.S. BioEnergy, based in Brookings, S.D.
The plant will be built on about 60 acres just east of Janesville between the existing and the new Highway 14 routes bordered by County Roads 68 and 53. The majority of the land is owned by Kevin Trahms.
The Janesville ethanol plant is expected to employ 40 people above the area median wage and produce 100 million gallons of ethanol a year. The plant will purchase 37 million bushels of corn per a year, most of which is to come from within a 40-mile radius.
Commissioner Wendell Armstrong asked how local people could invest in the company, stating he had received several inquiries. Lee said she couldn’t talk about the investment opportunity at the board meeting but would be happy to meet with individuals.
On Oct. 4 the County Board voted to abate 85 percent of the increase in property taxes that it would normally collect from the ethanol plant from 15 years, 2009 through 2023, with a cap of $1.2 million. The company will still pay property taxes on the land portion during those years.
U.S. BioEnergy had asked for a 100 percent abatement of the property taxes for a total of $1.4 million. The board, however, lowered the percentage and the corresponding total amount so that the county would be reimbursed for $200,000 on necessary road improvements near the site.
U.S. BioEnergy has two plants under construction: a 45-million gallon a year plant in Michigan and a 100-million gallon a year plant in Albert City, Iowa. The Janesville plant will be the third one for this company, she said. Lee noted the company was only 3 months old when it first looked at the Janesville site.
The company plans to build 12 ethanol plants in the Midwest in the next seven years.
Minnesota now has 14 ethanol plants, with the largest in Benson, producing 45 million gallons a year. There are 91 ethanol plants nationwide, concentrated in the Midwest’s grain belt. These plants now produce 1.1 billion gallons of ethanol a year, according to the Renewable Fuels Association.
There are as many as 60 ethanol plants in various planning stages. The rush to construct more ethanol plants is in response to the Energy Policy Act passed by Congress this summer. The 2005 act requires 4 billion gallons of ethanol blended into the nation’s fuel supply by 2006 and 7.5 billion by 2012, providing less than 6 percent of the nation’s transportation fuel.
It’s a done deal.