Plant sold off piecemeal at auction

By Holly Jessen | November 15, 2010
Posted Nov. 16, 2010

Only the anaerobic digester will be completed and operated at the site of the former Renova Energy ethanol plant in Heyburn, Idaho. Everything else, from ethanol plant equipment to office furniture, was sold off piece by piece at auction Nov. 10.

The goal had been to find a buyer to purchase the plant and get it up and running, but that didn't happen. "There were lots of potential purchasers but nobody could ever come up with the money," said James Macdonald, attorney for the liquidating trustee.

Construction on Renova Energy Idaho LLC, a 20 MMgy plant, was suspended in late 2007 after the project's price tag reportedly grew from $45 million to $60 million. Renova Energy Inc., the ethanol plant's former parent company, filed for Chapter 11 bankruptcy in 2008. Renova Energy, an ethanol marketer, and Wyoming Ethanol LLC, a 12 Mmgy ethanol plant owned by Renova, emerged from bankruptcy and are operating today, according to Terry Oldfield, CEO of Renova Energy/Wyoming Ethanol.

The partially constructed plant had 85 percent of the ethanol plant equipment on site. Only 10 percent of the equipment had been installed, meaning much of it was still packaged in crates. Some items sold for scrap value while others fetched a higher price. "[The centrifuges] actually sold at the original purchase price, amazingly," Macdonald said.

The anaerobic digester, which was 98 percent complete, was sold to a buyer who wants to operate it. Macdonald was unable to name the buyer and didn't know what the future operational plans were. "We're just trying to get it sold and get the highest return for creditors possible," he said.

Although the overall results of the auction haven't been calculated, the money won't go very far. "It's not going to result in any meaningful distribution to creditors," he said.

First in line for the money is a group of creditors that lent money to the estate to cover the costs of administration of the bankruptcy. Next to be paid are the taxes from Minidoka County and the city of Hayburn as well as land-lease payments owed to the city of Burley. Finally, the remaining money will be divided up among the creditors, depending on what they were owed.

NOTE: Sentence added in third paragraph to clarify that Renova Energy emerged from bankruptcy.