Biomass plant owners may be garnished for failing to pay plant’s builders | SummitDaily.com

Biomass plant owners may be garnished for failing to pay plant’s builders

Randy Wyrick
rwyrick@vaildaily.com

DENVER — The company that built the Gypsum biomass plant wants to garnish plant owner Eagle Valley Clean Energy for failing to pay for the work.

A federal court jury ruled in June that Wellons Inc., an Oregon company, was owed $10.84 million by Dean Rostrom and Kendric Wait's Eagle Valley Clean Energy for building the biomass plant in Gypsum. Neither Rostrom nor Wait, nor any of the companies with which they're involved, have paid Wellons, according to a motion filed Tuesday in Denver Federal District Court.

With interests and costs, Eagle Valley Clean Energy's tab has now run up to $11,491,002.89, according to those documents.

Wellons' Denver-based attorneys for the garnishment case, Darrell G. Waas and Mikaela V. Rivera, are asking that:

The motion is the latest in a line of litigation that stretches back years and includes the plant owners, builders and the town of Gypsum.

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• Rostrom and Wait hand over profit and income statements for all of their companies.

• Wellons be allowed to inspect those records.

• Wellons be allowed to keep that money to cover the money it is owed.

The motion is the latest in a line of litigation that stretches back years and includes the plant owners, builders and the town of Gypsum.

Neither Wass nor Eagle Valley Clean Energy attorney Sarah Baker returned requests for comment.

As part of its financing package to get the plant built, Eagle Valley Clean Energy received $18.5 million in federal funding from the Obama administration's renewable-energy plan, Wellons' attorney Steve Leatham asserted during the nine-day June trial in district court.

Wellons had believed that some of that money would be used to pay the construction bill it was owed, Leatham said.

Instead, the federal money was funneled into companies owned by Rostrom, Wait and family members, Leatham said during the trial.

How it works

The $56 million biomass plant generates 11.5 megawatts of electricity per hour — enough to power 12,000 homes served by Holy Cross Energy. Eagle Valley Clean Energy is an independent power producer, and how much Holy Cross pays for that electricity is "confidential," Holy Cross CEO Del Worley has said.

The Gypsum biomass plant is supposed to burn wood damaged by pine beetles. The fuel burns and creates heat and steam. The steam rises and turns turbines that generate electricity.

Wellons attorney Mike Frasier argued at trial that 20 percent of the biomass plant's fuel is beetle kill. The rest comes from sawmills in Colorado and Wyoming, Frasier said.

The biomass plant had been operating for about a year when a bearing in a conveyor belt failed and started a slow, smoldering fire. The fire was discovered and reported at 4:20 a.m. Dec. 13, 2014.

When firefighters arrived four minutes later, they found that the fire hydrants, owned by Eagle Valley Clean Energy, were delivering only 15 percent of the water they were supposed to — 350 gallons per minute, instead of the 2,250 gallons per minute the 12-inch pipes were designed to carry.

The hydrant's valves had been deliberately closed to a trickle, the fire department's investigation found.

To fight the fire, firefighters from all over the region had to haul water with tanker trucks and run hoses from the American Gypsum wallboard plant next door.

That conveyor belt fire idled the plant for a year. On Thanksgiving Day 2015, Eagle Valley Clean Energy restarted the plant.

Staff Writer Randy Wyrick can be reached at 970-748-2935 or rwyrick@vaildaily.com.