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Posted on  

November 26, 2002

Monroe ethanol plant to get part of $3 million state grant

By Melissa McCord/Associated Press

Two Wisconsin ethanol plants are poised to divide nearly $3 million in state grants next year, but the incentive program's future beyond then is in doubt because of budget problems.

Companies producing at least 10 million gallons of ethanol a year can apply for the state incentives between Jan. 1 and March 1.

Only two companies in Wisconsin are currently eligible, Ace Ethanol in Stanley and Badger State Ethanol in Monroe, said Joseph Tregoning, the state's agriculture development administrator.

Both plants, which started making ethanol this year, plan to apply for the money, company managers say. Lawmakers included the money in the state budget signed into law last summer.

The program is meant to spur ethanol production in the state, but its future is uncertain after the first round of incentives is distributed because legislators face a $2.6 billion deficit in the 2003-2005 budget period, Tregoning said. Lawmakers will start work on that budget early next year.

"In this day and age with the budget problems, who knows where its future lies," he said.

The loss of the incentive program would hurt Badger Ethanol financially after next year but would not jeopardize the plant's production, general manager Gary Kramer said.

If the state does away with the program, "we're just going to have to sharpen our pencil and move forward without it," he said.

People invested in both Badger State and Ace Ethanol with the expectation the plants would receive state money, the companies' managers said. Ethanol plants cost millions of dollars to build, and banks often are wary of issuing loans for them.

"Once they run for a few years, they can become self-sufficient," said Terry Kulesa, Ace Ethanol's general manager.

Six other groups of investors are trying to build plants in Wisconsin, but a few have run into local opposition, mostly over environmental and property value concerns.

Ethanol, often derived from corn, is an additive that raises the oxygen content in gasoline to create a cleaner-burning fuel. Supporters of ethanol plants say they help farmers suffering from low market prices earn more money.

Robert Lahn fears an ethanol plant proposed for a site a half mile from his Augusta home will bring down property values and create odor and noise problems.

He and his brother visited Ace Ethanol, where he said they found the air smelled like yeast and trucks created noise going to and from the plant.

"When I moved to this town, it was a quiet place," said Lahn, who retired to the small Eau Claire County city from the Milwaukee area in 1989. "There's nice fresh air here and no noise problem."

Stonic Energy, which had proposed building an ethanol plant in Menomonie but failed to get the needed permits, is looking at the Augusta site and another one in western Wisconsin.



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