Spiritwood, ND, Energy Park needs $1 million to connect loop to BNSF line
The Spiritwood Energy Park Association has until March 31 to raise $1 million to connect its rail loop to the BNSF main line. SEPA is a partnership between the Jamestown/Stutsman Development Corp. and Great River Energy. SEPA built the rail loop ...
The Spiritwood Energy Park Association has until March 31 to raise $1 million to connect its rail loop to the BNSF main line.
SEPA is a partnership between the Jamestown/Stutsman Development Corp. and Great River Energy. SEPA built the rail loop last summer to provide rail access to Dakota Spirit AgEnergy and the SEPA industrial park. At this point, the rail loop is a circular track around the SEPA industrial park, but does not connect to any other rail lines.
"We built the loop with a preliminary proposal (from BNSF) from about two years ago for a switch at about $500,000," said Greg Ridderbusch, a member of the SEPA Board of Directors, at the board's special meeting Dec. 22. "What changed in the last two years is the rail situation (in North Dakota) is more congested. It is a product of the success of the state."
Ridderbusch, who presented the same information to the JSDC Executive Committee Dec. 22, said SEPA was notified by BNSF in November that it would require an automated switch to connect the SEPA rail loop to its main line at a cost of $1.5 million. This switch would be controlled from a BNSF control center at Fort Worth, Texas, Ridderbusch said. It is part of automation to improve capacity of the BNSF mainline through eastern North Dakota.
"This is not a SEPA thing but applies to any shipper," he said. "They are asking us to pay for our hardware to hook up to our loop."
SEPA has already paid the $500,000 to BNSF as a down payment, Ridderbusch said. BNSF has agreed to install the original manual switch between its main line and the SEPA loop by March 31. The automated switch would be installed sometime later in 2015.
But BNSF trains will not utilize the manual switch and move railcars onto the SEPA loop until the remaining $1 million cost of the automated switch is paid.
"The other $1 million must be paid by March 31," Ridderbusch said. "They don't serve you if you don't pay them."
Dakota Spirit AgEnergy
The SEPA rail loop provides rail access to the Dakota Spirit AgEnergy plant which is in the final stages of construction. Plant operations are expected to begin in April. The plant will utilize rail cars to bring in corn and ship ethanol.
The SEPA Board of Directors assigned JSDC CEO Connie Ova to explore opportunities for raising the funds. This assignment was also authorized by the JSDC Executive Committee, which could hold a special meeting next week to review financing options for the $1 million.
Pursuing federal grants or state energy impact funds would likely take too long to meet the deadlines, Ova said. Ridderbusch said any funding from GRE would require the approval of its member cooperatives, which would also take too long to meet deadlines.
"We have to make a decision by Jan. 1 to chase this thing," said Al Christianson, SEPA board member representing GRE. "If it's a month from now you are too late."
Mark Klose, member of the JSDC Executive Committee, said the JSDC would likely have to cover the expense.
"The option I hear is we have to come up with a million bucks to make this thing work," he said.
Currently, JSDC owns 70 percent of SEPA. If it makes an additional investment of $1 million, its share of ownership would increase to 75 percent based on the percentage of money it has invested in the project.
The SEPA rail loop had an original cost estimate of $7.5 million. Change orders, including an increase in loop capacity to handle two unit trains at the same time, raised the final cost to $10 million, which includes the $500,000 down payment on the switch.
The additional $1 million will raise the final cost of the loop to $11 million. The SEPA industrial park is home to Dakota Spirit AgEnergy and includes about 400 acres of additional property for future industrial development.