Chris Jeffries

Green Star Gasifiers President Chris Jeffries demonstrates a minature version of a gasifier woody biomass system on Oct. 21, 2015 in South Sioux City. City officials have approved the sale of seven acres in the city's Roth Industrial Park for Kentucky-based Green Star to build a 3-megawatt power plant.

SOUTH SIOUX CITY | South Sioux City officials have given final approval to the sale of a 7-acre tract that will become the future site of a $25 million renewable fuels power plant. 

Built by Kentucky-based Green Star Energy Group LLC, the proposed 3-megawatt plant will bring 15 jobs to the community. When up and running, the plant, which would run on wood waste, would provide roughly 8 percent of the electricity for the city's municipal utility.

"We're always looking into ways to lower the electric bill and to boost our economy," city administrator Lance Hedquist said Tuesday. "With this project, we can do both."

Green Star is purchasing the land, located in South Sioux City's Roth Industrial Development Park, from South Sioux City's Community Development Agency for a total of $140,000. The city council approved a development agreement with Green Star at its weekly meeting Monday.

Hedquist said the purchase price will be paid at a rate of $20,000 per year for seven years, with funding coming from tax-increment financing. Tax-increment financing, or TIF, is a finance tool that diverts property tax increases that result from new construction in order to fund economic development. 

Hedquist said construction will likely begin in spring of 2017, with the projected slated for finish by July 1, 2018. 

According to city documents, Green Star will be working with the city to meet the requirements to apply for a $1 million economic development loan to assist with site construction, as well as apply for a $300,000 Community Development Block Grant to help fund infrastructure at the site. 

In the future, Green Star will have the option to purchase 10 more acres of land, also at $20,000 per acre. Hedquist said Green Star has plans to purchase the additional land within the next two years. He declined to say what the land would be used for. 

Earlier this year, Green Star unveiled a smaller power plant, or gasifier, in the city's Scenic Park. The gasifier, fed with wood waste and dead trees from the riverfront park, break down the molecular structure of the wood to create clean electricity with no emissions. The system will be used to power the city-run campground and nearby water treatment plant, helping save the city about $40,000 a year in energy costs.

Hedquist said Green Star also has future plans to relocate its headquarters from Bowling Green, Kentucky, to South Sioux City.

To lower rates for residential and business customers and add more renewable sources of power, the South Sioux City municipal utility has spent the last few years moving to diversify its mix of wholesale power. In January 2015, the city council voted to reduce by 30 percent the power it gets from its longtime partner, Nebraska Public Power District, starting Jan. 1, 2018. The city's contract with the state's largest utility, is scheduled to expire in 2021.

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