Denver – A Kremmling company plans to face the pine bark beetle disease plaguing the mountain communities of Colorado head-on with a unique business idea that includes taking the dying trees and pressing the wood into pellets for wood stoves. The business has requested funding from the sale of federal tax exempt bonds that are issued by the Colorado Housing and Finance Authority (CHFA).

CHFA approved their request for private activity bond financing recently, the first step in providing the necessary funds for the venture. Confluence Energy, with the support of the Colorado Department of Economic Development, asked for up to $7 million to purchase a manufacturing facility and the necessary equipment for this endeavor. 

Confluence Energy is a consortium of local business and property owners in and around Kremmling, which is at the heart of the beetle kill. The company will use diseased or already-dead timber to press pellets for wood stoves. In addition to providing safe and clean energy for heating homes, harvesting the trees will help protect against forest fires which could decimate the local communities.

Private activity bonds are federal tax exempt bonds that are allocated to states on a per capita basis. The bond proceeds can be used for a number of public purposes, including affordable housing, student loans, and economic development. The governor’s Department of Local Affairs allocates the private activity bonds to entities that have the ability to issue the bonds for those purposes.

“The pine beetle problem is massive in our mountain communities as anyone driving west on I-70 can see,” said CHFA Executive Director Milroy A. Alexander. “Confluence Energy has come up with a way to significantly address the problem creatively, but also effectively. As energy costs continue to rise, people are going to be looking for ways to heat their home less expensively and in ways that are good for the environment. Those involved with this company have come up with an answer where everyone wins. We are excited to play a part in their effort.”

According to Confluence Energy’s CEO, currently around 800,000 households nationally are heating their homes with wood pellets. In addition, some schools and prisons are using the efficient energy source. Pellet stoves, which typically can be used even on so-called no-burn days, are substantially more economical than natural gas or propane heat. The Kremmling site will produce enough wood pellets to meet the heating needs of 30,000 to 40,000 homes. The company is working with local officials in Eagle and Summit counties to use the pellets for some of their energy needs.

Confluence Energy currently employs six, and the company anticipates hiring a minimum of 15 employees once the financing is in place. In addition, the company will be contracting with independent loggers to harvest the trees. As a result, the business will provide a significant economic boost in the area, in addition to addressing the pine beetle problem.

“Thus far there is no permanent solution to the devastation caused by the pine bark beetles, but this is a company that is addressing some of the problems that are a by-product of the beetle kill, and in a way that will provide an economic boost to the community as well,” said Alexander. “This really is a win-win situation.”