Fuels for Schools:

Case Study in 

Darby, Montana

Richard Bergman

Timothy M. Maker

United States

Department of

Agriculture

Forest Service

Forest

Products

Laboratory

General

Technical

Report

FPL–GTR–173
June 2007

Bergman, Richard; Maker, Timothy M. 2007. Fuels for Schools: Case study 

in Darby, Montana. General Technical Report FPL-GTR-173. Madison, 

WI: U.S. Department of Agriculture, Forest Service, Forest Products 

Laboratory. 21 p.

A limited number of free copies of this publication are available to the 

public from the Forest Products Laboratory, One Gifford Pinchot Drive, 

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and employer.

Conversion Table

Multiply by To get

Mass

 lb 0.4536 kg

 ton (U.S.) 0.9072 metric ton

Length

 ft 0.3048 m

 mile 1.609 km

Area

 ft2 0.0929 m2

 acre 4.046 m2

Volume

 gal 3.7854 L

 ft3 0.0283 m3

Power

 Btu/h 0.2931 W joules/s

Energy

 Btu 1,055 joules

Temperature

 Fahrenheit (°F) T ̊C = [T ̊F – 32]/1.8 Celsius (°C)

Abstract

To reduce the risk of catastrophic fires, the USDA Forest 

Service and its partners are developing practical, economic 

uses for forest thinnings from National Forests and state and 

private lands in western states. Because mechanical thinning 

is costly, developing markets for removed wood as fuel for 

community energy applications is one way to support the 

economics of forest management while saving money for 

communities. By installing a wood heating system in the 

public schools in Darby, Montana, the Fuels for Schools 

Program is demonstrating the potential of putting lowquality wood residues to practical use in a rural forestbased community. The wood-fired heating system installed 

in Darby Schools replaced three separate oil-fired systems 

and saved the school district $24,500 of total fuel costs for 

the 2003–2004 year. Because of higher fuel oil prices, total 

fuel cost savings increased to $61,500 in the 2004–2005 

heating season. Heating fuel costs were reduced from 

$0.63 per ft2 per year (last full oil heating season) to $0.36 

and $0.35 per ft2 per year for the 2003–04 and 2004–05 

heating seasons. Adjusting for heating degree days (HDD) 

for the respective heating seasons, the corresponding seasonal fuel costs in $/thousand ft2/HDD were reduced from 

0.068 in 2002–2003 to 0.040, and to 0.040 in the 2003–2004 

and 2004–2005 heating seasons, respectively. In an analysis 

to show actual costs for a school, we found a payback period of 9.8 years based on 2004–2005 heating fuel values. 

The project life was for 20 years, and a desired discount rate 

of 8.0% was specified for determining the before tax net 

present value. 

Keywords: wood chips, Darby, Montana, forest residue, 

school campus wood heating system, FFS, Fuels for Schools

Contents

page

Background..........................................................................1

Introduction..........................................................................1

The Project...........................................................................1

Existing Conditions....................................................2

Project Development..................................................2

Project Components ...................................................2

Project Implementation ..............................................3

Project Costs...............................................................3

Wood System Description....................................................4

General Description....................................................4

Wood Heating System................................................4

Wood Fuel ..................................................................6

First-Year Operation—System Commissioning 

and Operation.......................................................................6

Operational Experience........................................................7

Wood Fuel ..................................................................7

Ash Removal..............................................................7

Fuel Use and Cost ......................................................8

Electrical Consumption and Cost...............................9

Air Emissions and Testing..........................................9

Economic Analysis............................................................. 11

Conclusions........................................................................ 12

Next Steps.......................................................................... 13

References.......................................................................... 13

Appendix A—Seasonal Heating Degree Day Totals

to 2006 ............................................................................... 15

Appendix B—Total Heating Degree Days to 2006 ........... 16

Appendix C—Energy Prices, Supply, and Disposition 

to 2030 ............................................................................... 17

Appendix D—Alternative Project #1................................. 20

Appendix E—Alternative Project #2................................. 21
Background

Wildfire is a concern to the USDA Forest Service and 

surrounding communities. Beginning in 2000, wildfires 

brought to the public’s attention a forest health problem that 

had its beginnings several decades ago. 

The Forest Service estimates that 70 million acres of 

federal land need immediate hazardous fuel reduction, and 

140 million acres nationwide will soon need treatment. At 

the rate of 2.5 million acres a year, it will take more than 

80 years to treat all areas. Thinning forests for fuel reduction 

reduces wildfire hazards but is expensive. The total cost of 

treating all these acres could exceed $100 billion. Developing ways of using forest residues from these treatments is 

vital for rural communities. The Fuels for Schools program 

is one part of this effort.

The Fuels for Schools program began in 2001 after an 

unusually severe wildfire season (2000) in Montana’s Bitterroot Valley. Increasing federal, state, and local interest 

in hazard-reduction logging led to a need for utilizing the 

resultant unmerchantable woody material. Using this woody 

material as fuel to fire boilers for heating systems provides a 

means of accomplishing this purpose. The Fuels for Schools 

program grew out of the recognition that using hazardous 

fuels for heating public facilities like schools was a win–win 

situation for local communities. At the same time, one goal 

of the Fuels for Schools program is to demonstrate that 

wood heating systems can reduce conventional heating fuel 

use by as much as 85% and cut fuel costs by 50% or more. 

The first Fuels for Schools project was instituted by the Forest Service and its local partners in Darby, Montana, one of 

the communities of the Bitterroot Valley most severely affected in the 2000 fire season.

Introduction

The goal of the Fuels for Schools program is demonstrating 

modern, automated, clean-burning, and efficient wood-chip 

heating technology in schools and similar public facilities. 

The intent of the Forest Service is to show that wood heating is a viable and sustainable technology for western states 

and to provide a site in the West where other schools and 

interested parties could visit and see the technology in use. 

The Fuels for Schools program aims to convert the mostly 

unmarketable byproducts of forest thinning and logging into 

low-cost heat for schools. 

In modern biomass heating systems, wood chips are fed 

from a storage bin to a boiler automatically, where high 

combustion temperatures result in a high-efficiency, nearly 

smoke-free burn (a desirable attribute that can be obtained 

by using this highly automated system and modest operating 

labor).

The Project

The following partners helped originate the Fuels for 

Schools concept: 

Bitterroot National Forest, Hamilton, Montana

Bitter Root Resource Conservation & Development 

 (RC&D) Area, Inc., Hamilton, Montana

Technology Marketing Unit, Forest Service, Forest Products 

 Laboratory, Madison, Wisconsin

Forest Service, Regions 1 and 4, Missoula, Montana

The Technology Marketing Unit (TMU) at the Forest Products Laboratory (FPL) in Madison, Wisconsin, enlisted the 

assistance of the Biomass Energy Resource Center (BERC), 

Montpelier, Vermont, a nonprofit organization with extensive experience in school wood heating, to conduct a 

preliminary economic and engineering feasibility study of 

a few school districts in the Bitterroot Valley. One of the 

school districts visited, Darby Schools in the southern part 

of Ravalli County, Montana, was identified as the initial 

demonstration project for the program. The school district 

owns three schools on a single campus in the town of Darby, 

which offered the potential to convert three schools to wood 

heating in a single project.

In this demonstration project, the Forest Service provided all 

the capital costs. These costs included all design and project 

management costs for installing the wood heating system. 

Additional schools and other facilities will compete for federal funding with a maximum federal share of 50% of total 

cost. The Darby School District assumed responsibility for 

operating the system, purchasing fuel, monitoring system 

performance, and hosting visitors to the demonstration project on the school property. 

Fuels for Schools: Case Study 

in Darby, Montana

Richard Bergman, Chemical Engineer

USDA Forest Service, Forest Products Laboratory, Madison, Wisconsin

Timothy M. Maker, Executive Director

Biomass Energy Resource Center, Montpelier, Vermont
General Technical Report FPL–GTR–173

2

Existing Conditions

The three schools comprise 82,000 ft2 of heated space 

(Table 1). Expected heat demand was calculated for the 

three schools based on the size of each school while maintaining an indoor temperature of 70°F with an outside 

design temperature of – 20°F (Manczyk 2001). Prior to the 

installation of the new wood heating system, each of the 

three schools had its own oil-fired steam heating plant 

(fuel oil #2). Annual oil use of the three schools averaged 

47,600 gal at a cost of about $44,000 for the 2002–2003 

school year. In addition, the school used liquid petroleum 

(LP) gas water heaters for the kitchen, lavatories, and locker 

room showers.

The three Darby schools are fairly typical for western Montana in age and condition. Insulation levels are far below 

those of new school construction. The steam-heat distribution systems within the schools were functional but required 

refurbishment. The Darby Elementary school oil-fired boiler 

was almost 40 years old at the initiation of this project (Table 2), and the other two boilers had over 10 years of useful 

projected life left.

Project Development 

The BERC acted as project managers for the design of 

the new wood heating system and the overall construction 

project. BERC, in turn, contracted with a Missoula, Montana, design firm, CTA Architects and Engineers, to provide 

engineering design for the new three-school heating system 

and to provide architectural design for the new central boiler 

house. CTA was responsible for the day-to-day project 

management during construction. BERC had primary 

responsibility for specifying the wood heating system and 

providing the bid documents for selecting the wood-chip 

system. BERC was also responsible for commissioning the 

wood heating system after it was first fired, to ensure that it 

was performing according to specifications.

The first task in system design was to determine the scope of 

the project. The BERC–CTA design team first recommended 

that the old steam heat distribution piping be replaced with 

modern hot water heating. However, this proved too costly, 

and the Forest Service partners decided to retain steam as 

the means for conveying heat from the new central boiler 

facility to each of the three schools. The other key design 

decision was how many of the three schools would be connected to the new wood heating plant at the start and how 

the project would be phased. The partners were able to provide funding so that all three schools would be connected to 

the wood plant from the start. The design team felt it made 

sense to connect all three schools because the most benefit 

from the capital investment in the central wood plant would 

then be realized.

Project Components

The Darby project has four components:

• Boiler house—Creation of a central building to house 

the new wood-chip boiler and a large-volume wood 

storage bin (Fig. 1)

• Wood heating system—Installation of the wood-chip 

boiler with automated wood-chip handling equipment 

(conveyors and augers) to carry the wood fuel from the 

storage bin to the combustion chamber of the boiler

• Campus heating—Creation of a central heat distribution 

system by connecting the three school buildings to the 

new boiler plant using new buried steam pipes

• Refurbishments and upgrades—Refurbishments to old 

steam heating equipment so that the heat distribution 

system would be brought up to the level of function of 

the new boiler plant

The Forest Service partners and the design team required 

that the new wood system consist of two components: the 

equipment for handling and combusting the wood and the 

building that houses these functions. The new buried pipe 

system (which connects the buildings into one system) is 

considered a modernization improvement to the Darby 

Table 1. Dimensions and heat demand of the 

three Darby schools

School Size (ft2

)

Expected heat demand a, b

(million ×106 Btu/h) 

Elementary 18,180 0.667 

Junior High 20,494 0.750 

High School 43,327 1.59 

Total 82,001 3.0 

a To maintain 70qF at a design outdoor temperature of – 20qF. b Assuming the same insulation factor for all three schools of 

 26.4 at a height of 10 ft.

Table 2. Description of the old oil-fired boilers at the Darby schools (fuel oil #2) 

School Type of boiler 

Fuel consumption

(gal/h)

Size 

(×106

 Btu/h) 

Steady-state 

efficiency 

(%)

Year

installed 

Elementary Cleaver Brooks 16.5 2.0 76–80 1964 

Junior High Kewanee a 8,23.8 2.7 78–84 1990 

High School Kewanee 37.4 4.2 78–84 1992 a This boiler is a low-high firing rate boiler, thus the reason for two numbers listed. High number (high firing 

rate) was used for determining boiler replacement size.
3

Schools campus, and the repairs and upgrades are improvements that are specific to the needs of the particular schools. 

The existing oil boilers were retained in their original locations to serve as backup to the new wood heating plant.

Project Implementation

While CTA was finalizing the engineering design of the mechanical equipment and the architectural design of the new 

boiler house (including the wood fuel storage bin), BERC 

provided technical assistance to the Darby School District 

as they selected the vendor of the wood heating system, using a performance specification approach. The equipment 

required included the wood boiler and combustion 

chamber; all wood fuel handling equipment; the wood system controls; and a pre-fabricated, insulated steel chimney. 

The School District selected by competitive bidding Messersmith Manufacturing, a Bark River, Michigan, firm with 

extensive wood-heating experience, to supply and install the 

wood heating systems.

The Darby School District used a competitive bidding process to select a local firm, Gordon Construction, to carry out 

the general construction project. Gordon was responsible for 

building the boiler house, coordinating the installation of the 

Messersmith wood heating system, installing buried steam 

pipes and new mechanical equipment, and carrying out the 

modernizations to the old heating equipment. Construction 

was carried out from the spring through fall 2003, with the 

new wood system coming on line November 1.

Project Costs

The capital costs of the Darby project fell into two categories: (1) the cost of the complete wood heating system and 

(2) the cost of basic modernization and upgrades to existing 

heating equipment, as detailed below.

Wood Heating System (Fig. 2)

Equipment supplied by manufacturer $230,500

Boiler house and fuel storage bin construction $285,500

Total $516,000

The equipment cost recognizes that Messersmith Manufacturing reduced their bid price by $14,900 as a donation 

to the demonstration project. Other project costs not in this 

summary included $6,000 for testing.

Fuels for Schools: Case Study in Darby, Montana

Figure 1—New Darby School boiler plant. Photo courtesy of Tim Maker, Biomass Energy Resource Center, 

Montpelier, Vermont. Used by permission.

Figure 2—Schematic of boiler plant with new wood heating system. 

Courtesy of Messersmith Manufacturing, Inc., Bark River, Michigan. 

Used by permission.
4

Modernization and upgrades

Buried steam pipes (to create campus system) $ 95,000

Upgrades to existing mechanical equipment $268,000

Total $363,000

The total cost for the demonstration project was $885,000, 

excluding professional fees for design and project management. As part of the modernization and upgrades, steam 

to hot water heat exchangers (installed in each of the three 

buildings) allowed substitution of steam (from the woodfired boiler) for propane to produce domestic hot water. 

Wood System Description

General Description

Modern wood heating systems for use in schools are fully 

automated. No manual labor is associated with fuel deliveries, storing fuel, or transferring the boiler fuel from the storage bin to the point of combustion. These systems minimize 

maintenance staff time, keeping it to less than 1 h daily for 

one person. For the past 20 years, wood chip fuel has proven 

to be a cost-effective alternative to oil, gas, coal, and electricity in many institutional, commercial, and industrial settings (Maker 2004), particularly Vermont schools and other 

public facilities.

The system is designed so that backup boilers, which use 

conventional fuel (oil or gas), take over automatically in 

case of any problem with the wood heating system. The 

backup system is able to provide all the heat needed if the 

wood system is not in use. This wood boiler was sized for 

peak load so that it is able to provide all the required thermal energy needed by the school, except perhaps in the very 

coldest weather, at which time the backup system will make 

up the difference (Fig. 3). 

An important feature of wood heating systems for institutional and commercial buildings is the turndown ratio 

between the maximum energy output rate by the minimum 

output rate at which efficient, smoke-free combustion can 

be sustained. The Darby wood heating system provides 

high, medium, low, and fire maintenance levels of load. It 

is vital for heating systems, such as schools that are operating with varying heating demands, to operate sufficiently at 

extremely low loads. For the Darby wood heating system, 

the maximum turndown ratio is 44:1 at the maintenance firing rate (personal communication, Carl Bielenberg, Better 

World Workshop, East Calais, Vermont, January 17, 2006).

The wood boiler system outputs 3 million Btu/h. Appropriate sizing of the wood boiler was found by calculating heat 

loss at design conditions outlined in Table 1. We anticipated 

that this size would be sufficient to heat the entire threeschool campus, with no assistance from the backup oil 

boilers, except during the very coldest weather. The three 

backup oil burners have a combined peak heating capacity of almost 9 million Btu/h. The existing oil-fired boiler 

equipment was significantly oversized as there is a natural 

tendency to design oil heating plants that are oversized 

(Maker 2004). Grossly oversized wood systems will not 

operate efficiently, will consume too much fuel, and may 

produce smoke in low-load conditions. 

Virtually no odor or visible smoke is produced by modern 

school wood heating systems. The ash, removed from the 

boiler on a regular basis, is nontoxic and can be either landfilled or used as a soil amendment on lawns or fields.

Wood Heating System

The following describes the components and functions of 

the wood heating system installed at the Darby Schools 

campus.

Fuel Storage

The wood fuel storage bin is a below-grade bin (with two 

overhead doors) located within the boiler house, designed 

to accept deliveries from a self-unloading truck that backs 

up to the doors. The Darby bin is approximately 34 ft long, 

16 ft wide, and 9 ft deep, holding about 4,900 ft3 of wood 

General Technical Report FPL–GTR–173

Figure 3—Installation of wood boiler. Photo courtesy of 

Tim Maker, Biomass Energy Resource Center, Montpelier, Vermont. Used by permission.

Figure 4—Empty wood chip bin. Photo courtesy of Rick 

Scheele, Darby, Montana. Used by permission.
5

chips. A full-sized chip van load (using a 40- to 45-ft trailer) 

is about 2,560 ft3 in volume. Therefore, the Darby bin holds 

approximately two full-sized van loads. Three sides of the 

below-grade bin are concrete and one side (supplied by the 

system manufacturer) is constructed of steel (Fig. 4).

Bin Unloading System

The Messersmith system uses a traveling auger that automatically removes fuel from the base of the wood fuel storage bin (Fig. 5). One feature of this system, also common to 

systems of other manufacturers, is that the first fuel into the 

bin is the first removed. In this way, no fuel has a chance to 

stay in the bin for long. Fuel is always moving through the 

bin according to the building’s demand for heat.

Fuel Handling System

This subsystem consists of electric motor-driven belt conveyors, a metering bin, and covered troughs—all designed 

to move the chips automatically from the storage bin to the 

grates in the combustion chamber. Also included is a fire 

suppression system that prevents burnback from the combustion zone into the incoming fuel stream. The metering 

bin is a steel bin with a level sensor that operates to keep 

fuel in the bin at all times. The metering bin separates the 

relatively rapid removal of fuel out of the storage bin from 

the carefully metered flow of fuel to the fire. The metering 

bin is unloaded from the bottom by two augers. A variable 

speed motor drives the metering augers and regulates the 

flow of fuel onto the grates in the combustion chamber that 

depends on system demand (Fig. 6).

Combustion System and Boiler

The Messersmith Industrial Combustion System used in 

Darby is an automated solid-fuel combustion system designed to burn wood chips. The combustion system consists 

of a lined steel combustion chamber, cast iron grates designed especially for particle-wood fuels, and combustion 

air blowers. Fuel flows onto the grates, and the supply of 

both under-fire and over-fire combustion air is metered by 

programmable logic controllers (PLCs) in the manufacturer’s control panel. The heat exchanger is a commercial 

boiler that sits on top of the combustion chamber (Fig. 7). 

Its function is to transfer heat from the hot combustion 

gases to heat water and produce (in the case of Darby) 

low-pressure steam.

Control System

The manufacturer’s control panel houses PLCs, relays, a 

remote dial-in system, and a touch-screen for accessing 

information on the current status and history of the system 

operation. The panel controls all aspects of combustion using inputs from a variety of sensors. There are three stages 

or rates of combustion (low, medium, high), plus a pilot or 

flame-maintenance mode for periods when there is little 

demand for heat (1 min on, 10 min off). The system controls 

automatically cycle the combustion between the various firing rates, depending on the heat load of the schools at any 

time.

Prefabricated Chimney

The 50-ft, free-standing stack (measured from the boiler 

room floor) is insulated to provide good draft. The main job 

of a tall stack is to disperse the combustion gases into the 

prevailing wind stream so that there is no effect on groundlevel air quality or on air quality within the school and 

Fuels for Schools: Case Study in Darby, Montana

Figure 5—Full wood chip bin. Photo courtesy of Nick 

Salmon, CTA Architects Engineers, Missoula, Montana. 

Used by permission.

Figure 6—Wood system fuel handling and 

metering bin. Photo courtesy of Tim Maker, 

Biomass Energy Resource Center, Montpelier, Vermont. Used by permission.
6

surrounding areas. Although not technically part of the 

wood system, it was supplied by the wood system vendor. 

The $30,500 cost of the prefabricated chimney is included 

in the boiler house construction cost.

Air Emission Controls

The Darby system has no emission control devices installed 

between the boiler and the chimney. The boiler system is 

small enough that no state air permit is required. Although 

it would have been possible to include a cyclone or multicyclone particulate control device at additional cost, BERC 

recommended against this because wood-combustion systems of this type that have been previously tested showed 

particulate matter (PM) emissions of 0.12 lb/mm Btu 

(ERL 1996). 

Also, a particulate-control device would have required the 

use of a draft fan, which would have increased the school’s 

electric bills. The results of stack emission testing at Darby 

are presented later in this report showing PM emissions.

Wood Fuel 

Prior to designing the wood system, the Bitter Root RC&D 

Area, Inc., worked with scientists from the University of 

Montana to characterize the likely wood fuels available to 

the Darby project. BERC synthesized these data and produced an expected fuel characterization:

Major species Ponderosa pine (Pinus ponderosa), 

 Douglas Fir (Pseudotsuga spp. Lam.), Lodgepole Pine 

 (Pinus contorta)

Energy content 9,000 Btu/lb of dry wood

Anticipated moisture content 40% (wet basis)

Actual energy content 5,400 Btu/pound of green wood

On BERC’s recommendation, the school purchased uniform 

wood chips as the fuel at the beginning of the first year to 

ensure system performance without too many fuel variables. 

Then, assuming proper system function, the school could 

experiment with wood fuels of different characteristics and 

types. Working from these assumptions, BERC projected 

that annual fuel use would be 593 tons of wood chips, with 

15% of the heat demand met by the backup oil system 

(6,434 gal).

First Year of Operation—System 

Commissioning and Operation

In the first 2 weeks of December 2003, the combustion of 

the new Darby wood system was tested on only the low and 

medium firing rates by the vendor’s technical representative. Because of unusually warm weather during testing, 

the system could not be forced to operate at the high firing 

rate. Combustion testing measured the carbon monoxide 

level in the stack gas with wood fuel at 32.1% moisture 

content (MC, wet basis) with a sample stack temperature of 

300°F to 335°F for all testing performed. BERC staff made 

a commissioning (operational verification) visit to verify the 

steady-state efficiency and functions of the system. Steadystate efficiency refers to the ratio of output energy (heat captured in the boiler fluid) to input energy (energy embodied 

in the wood fuel) when the combustion system is operating 

under design conditions (at the time of the test). Heating 

boilers operate at maximum efficiency when producing their 

rated heat output in Btu/h. Steady-state efficiency at lower 

firing rates is lower than the efficiency at rated capacity, and 

the efficiency at fire maintenance mode is even lower. In addition, steady-state efficiency determinations measure heat 

captured in the boiler fluid (steam) and do not account for 

heat losses in the steam distribution system (between boiler 

and buildings). These losses come into play when calculating seasonal efficiency. 

Combustion efficiency is the efficiency of converting available chemical energy in the fuel to heat, typically in excess 

of 99% in wood combustors, as it measures only the completeness of fuel combustion that occurs in the combustion 

chamber (Bergman and Zerbe 2004). As noted earlier, efficiencies of conversion to usable heat are much lower. Both 

the vendor’s testing and BERC’s testing verified that the 

system’s steady-state efficiency on the two lower firing rates 

(low and medium) was in the 70% to 80% range as required 

per contract specification (Table 3). The vendor measured 

the combustion rate temperature at the flame outlet of the 

combustion chamber at 1650°F and 1995°F for low and 

medium fires, respectively, and wood fuel measured at 

32.1% MCwb (BERC 2004). BERC found that all components of the system were operating properly. 

General Technical Report FPL–GTR–173

Figure 7—Messersmith wood boiler. 

Photo courtesy of Tim Maker, Biomass 

Energy Resource Center, Montpelier, 

Vermont. Used by permission.
7

Based on comments from school maintenance staff during 

commissioning and at the end of the school year, the 

3 million Btu/h wood energy system was fully able to meet 

the heating requirements of the three schools in the coldest 

winter conditions, with no assistance from the backup oil 

boilers during both the 2003–2004 and 2004–2005 heating 

seasons (Coston 2005).

During the first year of operation, the school district incurred no operating expenses for the system other than the 

purchase of fuel and staff time for each school day (up to 

1h daily) as well as each non-school day when temperatures 

were below freezing. Any start-up problems encountered 

during the first school year were handled under the terms of 

the warranty by the vendor, who visited the site monthly.

Operational Experience

Wood Fuel

The school district signed a 1-year contract with a local logger to provide the wood fuel during the first heating season. 

In the first months of operation, clean (no dirt) and uniform 

(matchbook-size) wood chips at less than 35% MC (wet basis) from a local thinning project were supplied. The smalldiameter logs were delimbed using a flail-chain delimber 

prior to chipping, which probably removed some bark. A 

walking floor (self-unloading) trailer provided wood fuel 

delivery, with a capacity of about 14 tons of green fuel. This 

is significantly less capacity than the 25- to 30-ton chip van 

normally used; however, the smaller trailer was easier to use 

on narrow logging roads. The average delivery was 12 tons; 

chips were delivered 53 times over the course of the year. 

Wood fuel for the Darby heating system was primarily 

chipped from small-diameter trees, limbs, tops, and other 

debris left over from logging. Air-dried peelings from a 

post and pole operation were also used. Attempts to use unscreened hog fuel from a logging operation were unsuccessful. This unscreened fuel had oversized wood pieces that 

were not handled well by the bin unloading and fuelconveying equipment commonly bridging the metering bin 

and jamming the auger. Over the course of the year, 63% 

of the fuel supplied was chipped roundwood, 23% logging 

slash, and 14% post and pole residues.

Moisture content in the wood fuel was monitored to show 

the range that the wood heating system could use. During 

the 2003–2004 school year, staff and students measured the 

moisture content of wood fuel on an ongoing basis. Moisture content (wet basis) ranged from 16% to 46% for the 

2003–2004 heating season. Three out of 19 loads tested (out 

of the 53 delivered) were less than 20% moisture and only 

one was greater than 40%. For the 2004–2005 heating seasons, the average MCwb was 38%.

According to fuel delivery records, 75% of the wood fuel 

came from private lands, 21% from federal lands, and 4% 

from state lands. Bitter Root RC&D Area, Inc., concluded 

at least 50% of the wood fuel consumed in the project was 

from fire hazard-reduction operations. 

Ash Removal 

The combustion system does not allow for automatic removal of ash from the combustion chamber. Once a day, a 

maintenance staff person manually rakes the ash to the front 

of the combustion chamber (a 5-min task), and later in the 

day, shovels it out into metal trashcans to cool (10 min). Ash 

is saved and spread on the football field to adjust soil pH.

During the 2003–2004 heating season, approximately 

1,200 lb of ash removed from the wood boiler was far less 

than the 8,000 lb based on expected 1% ash content for softwoods (Arola 1976). For every 12-ton truck loads of wood 

chips at 30% MC (wet basis); ash production appeared to be 

25 lb. Although the means of measuring ash was crude and 

the results of this measurement did not yield reliable data, it 

is clear that ash production was quite low with a calculated 

value of 0.15%. Although this value, 0.15%, falls within 

the typical ranges of 0.1% to 0.5% stated for ash content of 

bark-free wood (Panshin and de Zeeow 1980), this wood 

fuel is not bark-free. Lehmann and Geimer (1974) measured 

ash content in Douglas-fir logging residues and found values 

for bark-free wood from 0.2% to 0.5%; in bark, roughly 

1.3% to 2.5%; in twigs, 2.2%; and in needles, excess of 3%. 

With comminuted wood fuels, Arola reported ash contents 

of 1% and 2% for softwood wood and bark, respectively. 

However, for the Darby Schools’ 2004–2005 heating season, 

755 tons of wood fuel at 38% MC (wet basis) produced 

1,080 gal of ash measured at 45 pounds/ft3, an ash content 

value of 0.69%. Panshin/deZeeuw and Lehmann/Geimer 

values are from samples where effort was taken to prevent 

contamination, whereas Arola’s values reflect an industrial 

environment where airborne dust may be prevalent, which 

fits the situation at Darby. This presents an open question 

requiring additional research on why the ash content values 

are low compared to industry values.

The Bitter Root RC&D Area, Inc., concluded the following 

from their data testing and experience in burning a variety 

of wood residues at Darby:

•	 Fuels were considerably dryer than initially thought.

•	 The fuel supplier, who has some flexibility in what fuels 

he chips and delivers, can exercise some control over 

Fuels for Schools: Case Study in Darby, Montana

Table 3. Steady-state efficiency test 

results 

Test 1 Test 2 Average

Low fire 71.7% 72.5% 72.1% 

Medium fire 77.3% 75.0% 76.1% 

High fire a — — — 

a Steady-state efficiency high firing rates were not 

measured because although it was early December, 

the boiler could not be forced from the medium 

firing to the higher firing rate. 
Table 5. Darby Schools’ year two (2004–2005) fuel and cost savings for heat

 Expected fuel usage (2004–2005) 2004–05 

Oil use 

(gal)

Oil cost 

($)

Oil use

(gal)

Oil cost

($)

Wood use 

(ton)

Wood cost 

($)

Wood/oil

total cost 

($)

Total fuel 

cost savings 

($)

 47,600 88,060 1,900 2,451 755 26,660 29,051 59,009 

LP (estimate) 2,500 

Total savings 61,509

Table 4. Darby Schools’ year one (2003–2004) fuel and cost savings for heat

 Historical usage 2003–04 

Oil use 

(gal)

Oil cost 

($)

Oil use

(gal)

Oil cost

($)

Wood use 

(ton)

Wood cost 

($)

Wood/oil

total cost 

($)

Total fuel 

cost savings 

($)

 47,600 51,884 10,165 11,080 633 18,357 29,437 22,447 

LP (estimate) 2,080 

Total savings 24,527

8

moisture content by checking with a probe-type handheld meter at the chipping site and by mixing fuel types 

in a single load.

•	 The computerized combustion controls automatically 

adjust for dry or green fuels.

•	 Higher moisture content (wet basis) values than 50% 

would be required to show moisture content variation 

tolerance in the wood combustor. As of January 2006, 

the highest moisture content found was 46%.

Fuel Use and Cost

Based on the oil consumption history of the three schools, 

BERC estimated that wood fuel consumption would be in 

500 to 700 tons of green fuel each year with an approximate 

average of 600 tons. Part of the difficulty in providing a 

more accurate estimate came from uncertainty about the 

amount of LP gas previously used by the schools for domestic hot water. The new wood system was designed to provide almost all the schools’ space heating as well as steam to 

the previously installed and refurbished domestic hot water 

system (primarily for kitchen use). 

Actual wood consumption in the first school year of operation was 633 green tons (November 1, 2003, through June 1, 

2004), with 10,165 gal backup oil use for the same time. For 

the same period, wood accounted for 73% of fuel costs and 

oil for 27%. In addition, it appears that LP use was reduced 

by 1,500–2,000 gal in the first year of the new system. During the 2003–2004 school year, the school paid delivered 

prices of $29 per ton for wood, $1.09 per gal for oil, and 

$1.04 per gal for LP gas. During the 2004–2005 school year 

(September 1, 2004, to May 31, 2005), wood consumption 

was 755 green tons, and the school paid delivered prices 

of $35 per ton for wood, $1.85 per gal for oil, and 

$1.29 per gal for LP gas. Total fuel costs for the heating 

seasons in 2003–2004 (Table 4) and 2004–2005 (Table 5) 

are shown. Wood consumption was higher than the 

500 to 700 tons expected for a school of this size; a 

clear explanation for this is not known at this time.

The wood heating system did not start operation until November 1 because of administrative contractor delays. For 

this reason and because LP usage history is not confidently 

known, it is difficult to draw definite conclusions from the 

first-year fuel consumption. The second year of operation 

(which was the first full heating season year) was more definitive (Coston 2005). 

In the 2003–2004 heating season, oil use was reduced by 

79%. Of the 10,165 gal of oil used that heating season, 

6,665 gal were used in the 2 months before the wood system 

started operation on November 1, and 3,500 gal were used 

in the following 7 months from November through May. 

As for 2004–2005, the first full heating season (September 

through May) of wood system use, total fuel cost savings of 

was over $60,000 because of higher fuel oil pieces.

A 15-year experience with school wood heating in New 

England has shown that over the course of a full year, the 

typical wood system provides 80% of the school’s heat 

while the oil or other backup system provides 20% 

(Maker 2004). The oil consumption comes from four 

situations: (1) in summer months (also early fall and late 

spring), when the wood boiler is not in operation, (2) when 

the wood system has been shut down because of a problem, 

(3) in any situation when wood is not available and the bin 

is empty, and (4) in very cold weather when the wood boiler 

does not provide enough heat to keep the school warm. 

General Technical Report FPL–GTR–173
9

At Darby, where the wood boiler is able to provide all the 

heat the school needs in the coldest weather, most of the 

annual oil consumption will be from warm months when 

the wood system is shut down. In the first heating season 

of operation, the Darby wood boiler was down for various 

periods while start-up debugging was taking place, but these 

problems were solved by the middle of the winter. Wood 

fuel consumption and square-foot-per-heating degree days 

heating costs were somewhat greater than anticipated.

Adjusting annual fuel costs using heating degree days 

(HDD) is an excellent method for determining accurate 

heating costs from year to year because HDD are independent of the previous year reading. Seasonal HDD is a seasonal cumulative total of daily values, with each daily value 

being the amount by which the mean daily temperature is 

below 65°F (Wikipedia 2006). The lower the temperature 

for a particular day, the higher the heating degree-day number is for that day. A series of seasonal HDD totals at a given 

location gives a relative indication of the total amount of 

energy needed for space heating at that location over a given 

series of heating seasons. Appendix A provides seasonal 

HDD totals for the 1999–2000 though 2005–2006 heating seasons, based on weather data from the nearest station 

maintained by the National Climatic Data Center (NCDC). 

Shorter-term HDD totals can be used to compare relative 

maximum heat load (system) demands over successive heating seasons. Appendix B shows HDD totals over the three 

coldest days in each winter of the 1996–1997 through 

2005–2006 heating seasons (also based on weather data 

from the nearest station maintained by the NCDC). Appendix A indicates that total energy needed for space heating 

over each of the 2003–2004 and 2004–2005 heating seasons 

was slightly less than was needed over the 2002–2003 heating seasons. Appendix B indicates that maximum heat load 

demand was roughly similar over the three heating seasons.

Electrical Consumption and Cost

Electricity use in the building housing the wood-fired boiler 

turned out to be significant. Most of this electrical consumption was by the motors and other components of the wood 

heating system; the remainder of the consumption was by 

the heat distribution system’s pump, lighting, and miscellaneous activities in the building. For November through 

May of the 2003–2004 heating season, metered electricity 

consumption in the boiler building was 13,040 kWh, at a 

unit cost of 6.84¢ per kWh for a total cost of $892. For the 

2004–2005 heating season, (counting the full year from June 

2004 through May 2005) metered electricity consumption 

in the boiler building was 25,400 kWh, at a unit cost of 

8¢ per kWh for a total cost of $2,035 (Coston 2005).

Air Emissions and Testing

As stated previously, the Darby wood system, at 

3.0 mmBtu/h peak output, was not large enough to 

require a permit under Montana air pollution control 

regulations. 

Bitter Root RC&D hired a testing firm, Aspen Consulting 

Engineering (Helena, Montana), to measure emission levels 

from the stack of the wood boiler. The emission components 

tested were particulate matter (PM), nitrogen oxides (NOx), 

and carbon monoxide (CO) (Table 6). Aspen Consulting 

Engineering carried out their tests on April 12 and 13, 2004, 

and reported their findings in a report dated April 20, 2004 

(ACEI 2004). 

The Aspen report gave emissions in units of grains per dry 

standard cubic foot (gr/dscf) and pounds per hour (lb/h) for 

PM; and parts per million (ppm) and pounds per hour (lb/h) 

for NOx and CO. The boiler operated at 75% capacity 

Fuels for Schools: Case Study in Darby, Montana

Table 6. Darby emissions test results and comparisons 

Darby testing PM a NOx b CO c

Grains per dry standard cubic foot (gr/dscf) 0.061 r 0.008 d — — 

Parts per million (ppm) — 57.18 r1.42 127.73 r12.12

lb/h 0.468 r 0.118 0.365 r 0.057 0.499 r 0.111 

lb/106Btu 0.145 r 0.037 0.113 r 0.018 0.155 r 0.034 

 Comparisons (lb/mm/Btu) 

Darby tests (total PM) 0.145 r 0.037 0.113 r 0.018 0.155 r 0.034 

PM10 – 1999 e 0.968 0.165 1.496 

PM10 / Filterable PM -2003 (wet) f 0.29/0.33 0.22 0.60 

PM10 / Filterable PM -2003 (dry) g 0.36/0.40 0.49 0.60 

Messersmith water boiler h 0.12 0.211 0.902 

a

Particulate matter. 

b Nitrogen oxides. 

cCarbon monoxide. 

d 95% confidence intervals. 

e

EPA 1999. 

f

EPA 2003. 

g EPA 2003. 

h ERL 1996. 
10

during all three test runs using wood fuel with a 11.0 ±

0.3% MCwb, MC values substantially lower than was burned 

for either the 2003–2004 (30% MCwb) or the 2004–2005 

(38% MCwb) heating seasons. Also included in the table are 

conversions from pounds per hour (lb/h) to pounds per million Btu input (lb/ mmBtu), a unit commonly used in comparing wood system stack emissions. This last calculation 

was carried out by the Resource Systems Group (White River Junction, Vermont) for BERC (RSG 2001). All emissions 

testing was performed in accordance with Environmental 

Protection Agency (EPA) methods as described in Title 40 

of the Code of Federal Regulations Part 60, Appendix A 

(CFR 1989). The flue gas exhaust rate of 892 ± 119 dscfm 

was used in this analysis for calculating emissions per unit 

time in conjunction with a measure of concentration. For 

example, pounds per hour of particulate were found using 

this exhaust rate data. The Darby emissions results are summarized in Table 6.

Whether using woody biomass or fossil fuels, it is important for environmental concerns to know the cause of air 

emissions and how these emissions compare with U.S. 

Environmental Protection Agency (EPA) guidelines or with 

other heating systems that have been tested in the past. An 

example of poor heating system design was the previous 

green sawdust-fired heating systems installed during the 

1970s at several schools in Salmon, Idaho. During a technology transfer visit in April 2001 to Salmon, Idaho, one of 

the schools was emitting smoke at ground level while school 

was in session. This type of emission problem plus wood 

fuel availability at that time resulted in the Salmon School 

District plan to replace all three of their school wood heating systems with propane. One wood heating system was 

already replaced with propane at that time. Therefore, it is 

critical that accurate air emission data from modern wood 

heating systems such as Darby’s are available for comparison. Table 7 compares the Darby emissions test data to other 

indicators. For comparison purposes, Table 7 shows the 

EPA’s AP-42 emission factors of the 1999 edition (note: 

AP-42 figures are for PM10). The EPA’s AP-42 Section 1.6 

is a standard reference document used by air quality regulators that gives typical emissions compiled, in the case of 

wood boilers. The emission factors of the 1999 edition were 

largely from compiled data on permitted large commercial 

and industrial boilers with no emissions control equipment 

and are based largely on the combustion of green wood 

with moisture contents greater than 20% on a wet basis 

(ERG 2001). From an air regulator’s perspective, the Darby 

wood system is “uncontrolled,” meaning it has no emissions 

control equipment. Data suggest that the Darby wood boiler, 

like other small, stage-firing institutional wood boilers of its 

class, performs much better than many of the older generation of much larger industrial wood boilers (BERC 2003). 

Also, the PM results were less than the average value of 

0.22 lb/mmBtu found in a study completed by ConestogaRovers & Associates on 13 Ethan Allen industrial woodfired boilers and several other wood-fired boilers (Kaminski 

2002). Furthermore, PM emissions of 0.12 lb/mmBtu were 

found in an emission testing study on a Messersmith 

2.2 million Btu per hour hot water boiler fired by wood 

chips (ERL 1996). The PM emissions of the Darby wood 

boiler are similar to those measured by ERL. 

Revisions of the guidelines for AP-42 Wood Residue Combustion in Boilers proposed in July 2001 (ERG 2001) were 

officially adopted in September 2003. The main change 

in these revisions for wood-fired boilers with no emission 

control is a new filterable PM emission factor of 0.33 and 

0.40 lb/mmBtu (less than the PM10 emission factors for the 

AP-42 1999 edition) that was established for both wet and 

dry woods, respectively. The stated filterable PM emission 

factors in the 2003 edition are more than twice the measured 

total PM emissions of 0.145 lb/mmBtu given off by the 

Darby wood-fired boiler. Also, new NOx and CO emission 

factors were determined and are listed as 0.22 lb/mmBtu 

and 0.60 lb/mmBtu, respectively, with a different CO emission factor of 0.17 lb/mmBtu listed just for fluidized bed 

combustors (NOx Emission Factor is the same regardless of 

wood combustor type). In Darby’s case, NOx and CO emissions were 0.113 and 0.155 lb/mmBtu, respectively, which 

fell within the new specifications listed regardless of type of 

wood fuel or type of combustor. In conclusion, the newest 

AP-42 emission data regarding dry fuel (<20% MCwb) fits 

better with the Darby case for analyzing emissions since the 

General Technical Report FPL–GTR–173

Table 7. Darby emissions test results and comparisons 

Comparisons (lb/green tond

)

PM a NOx b CO c

Darby tests (total PM) 1.25 r 0.32 1.22 r 0.16 1.67 r 0.29 

Slash pile burn e 12.0 b 3.5 c 73.9 b

Wild fire f 17.0 b 4.0 b 140 b

a Particulate matter. 

b

 Nitrogen oxides 

cCarbon monoxide. 

d Assumes wood fuel energy content of 10.8 million Btu/green ton 

 (40% MCwb) and a boiler efficiency of 80%. e EC/R Incorporated 2002. 

f

McNeil Technologies 2003. 
11

stack test for Darby wood heating system used wood fuel 

with a 11.0 ± 0.3% MCwb The wood fuel tested was 

drier than any wood fuel used over the 2003–2004 

and 2004–2005 heating seasons.

A wildfire or a slash pile burn is large-scale combustion 

process that consumes various ages, types, and quantity of 

trees. These processes are a significant source of pollutants 

that should be considered when showing the differences 

between what happens in a controlled environment versus 

an uncontrolled environment. Table 7 gives comparative 

figures to show how the Darby system emissions compare 

to emissions into the atmosphere from open burning of slash 

piled up with a bulldozer and to emissions from a wildfire. 

Sulfur oxide emissions were not measured in this case, although wood has substantially less sulfur than does fuel oil 

(Patterson 1990). Air emissions from wildfires are made up of 

tiny particles, gases, and water vapor. Water vapor makes up the 

majority of smoke, but the remainder includes carbon monoxide, carbon dioxide, nitrogen oxide, formaldehyde, benzene, and 

other irritant compounds, toxics, and small particles. Known 

health effects from smoke exposure can range from burning 

eyes, runny nose, and bronchitis to congestive heart failure and 

emphysema. It is not uncommon for western communities located within the “wildland urban interface” to experience extended 

periods of time where smoke from forest fires causes air quality 

to exceed the EPA National Ambient Air Quality Standards and 

pose health hazards. The main conclusion from Table 7 is that 

wood-fired boilers, although not devoid of emissions, produce 

far fewer emissions than do slash burning or wildfires, and not 

just because they consume less wood.

Economic Analysis

The Darby Schools project was intended by the Forest Service and its local partners to be a working demonstration of 

school wood heating technology for the western states. 

The Darby wood energy system, as reported, cost $556,000, 

including $230,500 in vendor-supplied equipment and 

$285,500 in building construction. Wood heating systems 

for institutions cost typically two to three times the capital costs of oil heating systems mainly because they have 

complex fuel handling and fuel storage requirements and 

typically more operation and maintenance (O & M) costs. 

In this case, fuel costs are separate from O & M costs to 

illustrate the differences for oil heat and wood heat. What 

allows wood heating systems to compete in the marketplace 

is low-cost fuel ($ per million Btu). To support the demonstration project, the Forest Service also elected to invest an 

additional $363,000 in heating infrastructure improvements 

to the three schools. Based on the fuel costs between wood 

and fuel oil, Darby’s heating system was expected to reduce 

fuel costs by $30,000 annually in the first few years after 

construction, but over twice that amount was determined for 

the 2004–2005 heating season. First year fuel savings were 

about $25,000, but the wood system did not start operation until part way through the heating season. For Darby 

Schools, the fuel cost savings represented a net budget 

reduction because there were no finance payments for the 

school district. 

The simple payback of the $556,000 investment in the wood 

energy system (energy project cost divided by annual fuel 

cost savings) is 18.5 years, assuming that fuel oil prices 

remain steady at the 2003–2004 heating season value 

of $1.09 per gal. Fuel oil prices were on the average 

$1.85 per gal for the 2004–2005 heating season, which 

doubled the fuel cost savings. Thus, the adjusted simple 

payback is now 9.8 years. Simple payback estimates are 

sensitive to anticipated fuel oil prices.

One extremely important question is whether other schools 

in the western states can implement wood heating projects 

since other schools (unlike Darby) will have to shoulder 

much more of the capital cost. For other school wood heating projects, where the wood system will be financed by 

the local school district (perhaps with some form of state 

or federal aid), it is necessary to use a more realistic way 

of assessing each project’s cost effectiveness. Life-cycle 

cost analysis is a more rigorous tool for doing this than the 

simple payback method. 

All costs of operating the system are projected for 20 years 

using annual price inflation factors, for both the proposed 

project and for an alternative scenario. The complete operating cost over the life of the proposed system is considered 

and compared with the life-cycle cost of the alternative 

scenario in today’s dollars. This analysis accounts for future 

changes in energy prices and inflation through a sensitivity 

analysis (Appendix C). This is particularly important for 

wood energy projects because wood residues are expected 

to maintain low, stable prices over time (EEA 2000). Longterm maintenance costs are well-known based on the empirical data gathered in the last 20 years for the Vermont Wood 

Heating Program (Maker 2004) where over 30 schools are 

heated by wood. We expect that operating and maintenance 

costs will significantly increase over time because of fuel 

handling and storage requirements and refractory replacements; these costs were summed and annualized over the 

life of the boiler. Although for the 2004–2005 heating season, maintenance costs were 50% of the old three-boiler oil 

system at Darby, Montana (Coston 2005), additional operating costs such as electricity and monitoring of boiler operation were added to the variable costs of operating the wood 

fuel system. The wood-fired boiler is checked twice daily 

during the school week and once daily on non-school days if 

the outside temperature is below 32°F. The (three) oil-fired 

boilers are available for backup operation if needed.

Net present value (NPV) is a valuation method based on discounted cash flows. The NPV is calculated by discounting 

a series of future cash flows, and summing the discounted 

amounts and the initial investment (a negative amount). 

It is a time-consuming process, but not difficult using 

spreadsheet programs. If the NPV method results in a 

Fuels for Schools: Case Study in Darby, Montana
12

General Technical Report FPL–GTR–173

positive amount, this indicates that the project is more economically favorable than the alternative project with which 

it is being compared. Although this method is widely used 

for making investment decisions, a disadvantage of NPV is 

that it does not account for flexibility or uncertainty after the 

decision. A sensitivity analysis was done to show the potential NPVs given a set of conditions and shown in Table 8.

The following hypothetical calculations are based on the 

Darby Case except that the school district is assumed to 

receive no subsidy of any kind—the district is assumed to 

raise all capital needed for the project. The financial analysis is based on incorporating a wood heating system in a 

school without any outside financial assistance so school 

administrators can see the actual cost. It is vital to find the 

incremental costs of the new wood heating system and the 

alternative for completing a NPV analysis. The incremental 

cost is the difference in the initial cost between any two 

alternative projects. In this alternative, the oldest (1964) 

oil-fired boiler in the elementary schools was replaced by a 

new oil boiler, and the existing mechanical equipment was 

also upgraded. We compared this system to a new wood 

heating system similar to Darby’s. The other campus heating 

system received no outside financial assistance; we found a 

before-tax NPV of $83,700. Incremental costs of $555,900 

were calculated for this case with a desired discount rate of 

8%. A positive cash flow occurred by Year 1 due mostly to 

large price increases in the backup fuel (fuel oil #2) used for 

the calculations over the life of project. Oil prices went from 

$0.92 per gal in 2002–2003 to $1.29 per gal in 2003–2004, 

$1.85 per gal in 2004–2005, to a December 2005 value of 

$2.20 per gal. Future fuel oil prices contain large amounts of 

uncertainty although the calculations allowed for 1% to 5% 

increases annually from the 2005–2006 heating season. The 

main assumptions were no grants, school paid for the wood 

energy system, and the one fuel oil boiler would be replaced 

with a boiler of the same capacity. Also, after 20 years, the 

salvage values of the two systems would be of equal value. 

We performed one other analysis to show how different 

decisions produce different NPVs. In the second alternative 

(Appendix E), the oldest (1964) boiler was removed from 

service, the existing mechanical systems were upgraded, 

and the elementary school was connected to one of the other 

boilers. This system was compared to the new wood heating system just like in the first project. The NPV was found 

to be $115,000, which is higher than the first alternative. In 

conclusion, wood heat has an economic advantage over two 

different oil heat scenarios, which demonstrates the potential 

for other schools converting to wood heat given the right 

circumstances.

Conclusions

Wood system is a success from the perspective of Darby 

Schools. Heating fuels bills have been reduced by more 

than 50% in 2003–2004 and 75% in 2004–2005. The Darby 

Schools fully realized fuel savings, without incurring any 

capital costs, inasmuch as a $900,000 total subsidy was 

provided from three different sources ($879,000 by the Forest Service, $15,000 by the vendor, and $6,000 in waived 

commissioning costs). Primarily because of appreciable 

escalation in fossil fuel costs since 2004, NPV analysis indicates that the wood-fueled boiler project would have been 

financially viable over a forward-looking 20-year period 

without the subsidy provided. The school has experienced 

no problems with the fuel delivery truck traffic, smoke odor, 

or noise. The wood system is largely invisible to the casual 

observer.

Wood heating system saved money on fuel costs. Based 

on total square footage of the three schools on the Darby 

campus and heating degree days (HDD) for the three respective seasons, the corresponding $/thousand ft2/HDD heating 

fuel costs were reduced from 0.068 in the 2002–2003 

heating season, and to 0.040 in the 2003–2004 and the 

2004–2005 heating seasons, respectively.

Wood heating system worked without problems on most 

forest fuel types. The system was able to easily handle and 

burn fuels of different types and different moisture content 

levels. With the exception of hog fuel (with a high percentage of oversized pieces), the wood system ran continuously 

on the available fuels with few problems. Steady-state efficiencies (fuel input to heat output efficiency) were generally 

72% to 78% for this type of wood boiler, which includes 

both combustion and boiler efficiencies.

Table 8. Sensitivity analysis to show the potential net present values given a set of conditions 

Initial 

rates (%)

Max 

WFER (%)

Max 

FOER (%) 

Max WSO & 

MER (%) 

Max DDR

(%)

General inflation 2.0 2.0 2.0 2.0 2.0 

Wood fuel escalation rate (WFER) 2.0 5.5 2.0 2.0 2.0 

Fuel oil escalation rate (FOER) a 1.3 1.3 – 0.3 1.3 1.3 

Wood system O & M escalation rate (WSO & 

MER) 4.0 4.0 4.0 12.8 45.0

Net present value (NPV) — 0 0 0 0 

Desired discount rate (DDR) 8.0 8.0 8.0 8.0 9.9

a

 AEO 2006. 
13

Fuels for Schools: Case Study in Darby, Montana

Installation cost of wood system was high. Overall project 

costs in the range of $500,000 can be supported for large 

schools (well over 100,000 ft2), with high heating bills 

(> $75,000). Other schools, particularly small schools in 

rural areas, may find the capital cost to be too high to be 

supported by fuel savings. In Darby’s case, installing a 

wood heating campus system compared with replacing the 

oldest oil-fired boiler, a before-tax NVP of $83,600 was 

found. The calculation did not include any outside funding.

Selection of schools that need costly upgrades to existing 

systems increases overall project costs; wood heating will 

be most cost effective in new school construction projects. Overall project costs will be reduced, compared with 

adding wood heat to existing facilities (e.g., Darby), because 

there would be no expensive retrofit costs and the overhead 

costs of the new building construction project would not be 

increased much. In either case, a fossil fuel back-up system is installed or left in place as part of the whole heating 

system. We recommend that the Fuels for Schools program 

undertakes a wood heating system as part of a new school 

construction project to document cost savings compared 

with retrofitting a wood system into an existing facility.

At Darby, wood fuel consumption and per-square-foot 

heating costs were somewhat greater than anticipated. 

For the second heating season (first full season), 755 tons 

were consumed, which is over 55 tons more than the 

600–700 tons expected based on past fuel oil usage. It is 

not clear why this is so. The energy content of the wood fuel 

may have been less than was expected. Leaks in the steam 

system may have increased fuel consumption. The use of 

steam instead of hot water to distribute heat to the buildings 

may have resulted in more heat wasted to the boiler room 

and greater losses from the buried piping. 

Next Steps

State foresters in the Forest Service five-state Northern and 

Intermountain Regions (Montana, Idaho, North Dakota, Nevada, and Utah) will administer the Fuels for Schools program, and the U.S. Congress has responded to the need by 

providing funding for grant assistance. Based on the success 

of the Darby project, three other sites in Montana are operating (Victor, Phillipsburg, and Thompson Falls). Outside 

of Montana, the first public school in the region to install a 

Fuels for Schools wood energy system was in Ely, Nevada 

(February 2005). Council Public Schools in Council, Idaho, 

installed their wood energy system in September 2005. 

Other sites in Forest Service Northern and Intermountain 

Regions under construction or in design include five other 

sites in Montana (Troy, Kalispell, Dillon, Townsend, and 

Lewistown), one in Bismarck, North Dakota, one in Carson 

City, Nevada, and one in Kellog, Idaho.

Although assisting public schools is the primary focus of the 

Fuels for Schools program, other public buildings are also 

eligible for assistance and are expected to play an expanded 

role in the future. Recently the partners in this effort—Forest Service in Montana, Idaho, Nevada, North Dakota, Utah, 

and the Bitter Root Resource RC&D—have completed over 

20 studies on the feasibility of installing forest biomass-fired 

heating systems. About half the sites studied have the qualities desired for demonstration purposes.

In general terms, the Fuels for Schools grant program is 

based on a 50/50 cost-share between the program and the 

institution. Based on an initial financial analysis, each facility should be able to repay the indebtedness for its share of 

the capital cost out of fuel cost savings over a period no longer than 10 years. An institution with a completed feasibility 

study showing favorable economics can submit a project 

proposal for grant assistance to their state forester.

Besides Montana, Idaho, and Nevada, North Dakota plans 

on establishing at least one Fuels for Schools wood energy 

project by the end of 2005. The applicant schools and other 

facilities will compete for federal funding with a maximum 

federal share of 50% of total cost. In Utah, the state forester 

has a memorandum of understanding with the Utah Division 

of Energy to complete a statewide assessment of potential 

school conversions. When the assessment is completed, the 

State of Utah will look at developing a Fuels for Schools 

program.

References

AEO. 2006. Annual energy outlook 2006. Energy Information Administration. Washington, D.C.: U.S. Department of 

Energy. http://www.eia.doe.gov/oiaf/aeo/pdf/earlyrelease.

pdf.

Arola, R.A. 1976. Wood fuels–how do they stack up? In: 

Proceedings, Energy and the Wood Products Industry. Madison, Wisconsin: Forest Products Research Society. 34–45.

ACEI. 2004. Particulate matter, nitrogen oxides, and carbon 

monoxide source test report. Bitter Root RC&D Area, Inc. 

Helena, Montana: Aspen Consulting Engineering, Inc. p. 8.

Bergman, R.; Zerbe, J. 2004. Primer on wood biomass for 

energy. Madison, WI: U.S. Department of Agriculture, Forest Service, Forest Products Laboratory, Technology Marketing Unit. June 2004. 8 p. http://www.fpl.fs.fed.us/tmu/

pdf/primer_on_wood_biomass_for_energy.pdf.

BERC. 2004. Darby schools wood energy system monitoring report, with assistance from the Bitter Root RC&D for 

U.S. Forest Service. Montpelier, Vermont: Biomass Energy 

Resource Center.

BERC. 2003. Air emissions from modern wood energy 

systems. Montpelier, Vermont: Biomass Energy Resource 

Center. 
14

General Technical Report FPL–GTR–173

CFR. 1989. EPA Method 1, Sample and velocity traverses 

for stationary sources. In: Code of Federal Regulations, 

Title 40, Part 60, Appendix A. Washington, D.C.: U.S. 

Government Printing Office. 181–206.

Coston, T. 2005. Darby FFS second season monitoring report. http://www.fuelsforschools.org/pdf/Darby_FFS_Monitoring_Rpt_2004-2005.pdf.

EC/R Incorporated. 2002. AP 42 Section 13.1 Wildfires 

and prescribed burning-related information. Prepared for 

Thompson G. Pace, D205-01. Research Triangle Park, 

North Carolina: U.S. Environmental Protection Agency. 

EEA. 2000. Final feasibility study central wood heating 

system for Belchertown Schools. Calais, Vermont: Energy 

Efficiency Associates. http://www.nrbp.org/pdfs/pub22.pdf.

EPA. 1999. Compilation of air pollutant emission factors, 

AP-42, Fifth Edition, Volume I: Stationary point and area 

sources: External combustion sources, wood residue combustion boilers. Final section. Table 1.6-1: Bark and wet 

wood mechanical collector, filterable PM 10. Washington, 

D.C.: U.S. Environmental Protection Agency. 

EPA. 2003. AP 42, Fifth Edition, Volume I Chapter 1: External combustion sources 1.6. Wood residue combustion in 

boilers update 2003, September: Wet wood (greater than 20 

%MCwb) with no emissions control. Table 1.6-1. Washington, D.C.: U.S. Environmental Protection Agency. 

http://www.epa.gov/ttn/chief/ap42/ch01/final/c01s06.pdf.

ERG. 2001. Background document report on revisions to 

5th edition. AP-42 Section 1.6 Wood residue combustion in 

boiler. Prepared for U.S. Environmental Protection Agency. 

Lexington, MA: Eastern Research Group.

ERL. 1996. Wood-chip-fired furnaces testing project air 

emissions testing and public health impacts analysis. Prepared for the Coalition of Northeastern Governors. Gasoline 

and Diesel Fuel Update. 2005. Bloomfield, CT: Environmental Risk Limited. http://tonto.eia.doe.gov/oog/info/gdu/

gasdiesel.asp. 

Kaminski, P.; Taylor, F.; Reusing, G.; Law, S.; MacRae, J. 

2002. Industrial wood-fired boiler optimization and emissions compliance—Compliance should be based upon what 

makes sense for the environment and the economy. Pollution Engineering 34(4):28–33.

Lehman, W.; Geimer, R. 1974. Properties of structural particleboards from Douglas-fir residues. Forest Products Journal 

24(10):17–25.

Maker, Timothy. 2004. Wood-chip heating systems: A 

guide for institutional and commercial biomass installations 

(Second revision). Originally prepared for The Coalition 

of Northeastern Governors Policy Research Center, Washington, D.C., 1994. Revised by Biomass Energy Resource 

Center, Montpelier, Vermont, with funding from the U.S. 

Forest Service.

Manczyk, H., 2001. Optimal boiler size and its relationship 

to seasonal efficiency. http://www.energy.rochester.edu/efficiency/optimal_boiler_size.pdf.

McNeil Technologies, Inc. 2003. Feasibility study for a biomass energy system at the South Lake Tahoe High School. 

Prepared for Lake Tahoe Unified School District, South 

Lake Tahoe, CA. 

Panshin, A.J.; de Zeeuw, C. 1980. Textbook of wood technology. 4th ed. New York: McGraw–Hill. 73­–75.

Patterson, D.W.; Zinn G.W. 1990. Wood residues as an energy resource part I: a review of technologies. Bulletin 703 

Agricultural and Forestry Research Station, West Virginia 

University.

RSG. 2001. An evaluation of air pollution control technologies for small wood-fired boiler. White River Junction, VT: 

Resource Systems Group, Inc. 

http://www.rsginc.com/pdf/R_Wood_Bact_Sept_2001.pdf.

Wikipedia. 2006. Heating degree days. 

http://en.wikipedia.org/wiki/Heating_degree_day.
15

Fuels for Schools: Case Study in Darby, Montana

Appendix A—Seasonal Heating Degree Day Totals to 2006

Adapted from the Weather Underground, History for Butte, Montana http://www.wunderground.com/history/airport/

KBTM/2000/1/1/MonthlyHistory.html

Table A1. Seasonal heating degree day totals for the 1999–2000 through 2005–2006 heating seasons, 

based on weather data from the nearest station maintained by the National Climatic Data Center 

 Monthly heating degree days for Butte, Montana, heating seasons a

Month 1999–2000 2000–01 2001–02 2002–03 2003–04 2004–05 2005–06 Average for 

1971–2000

June 314 177 319 252 304 312 353 278 

July 134 66 106 62 45 103 78 129 

August 63 30 52 217 55 164 147 165 

September 445 414 275 387 380 458 412 410 

October 664 726 735 947 655 732 644 748 

November 803 1460 972 1130 1288 1058 1124 1137 

December 1328 1570 1428 1295 1372 1200 1517 1464 

January 1328 1558 1396 1297 1472 1338 1082 1471 

February 809 1420 1235 1349 1256 1076 1300 1199 

March — 1054 1314 1022 862 1015 1060 1077 

April — 859 865 785 715 814 712 781 

May 483 499 586 560 582 556 496 540 

Total 6371b

 9833 9283 9303 8986 8826 8429 9399 

a Located 130 miles from Darby, Montana—nearest location 

b Incomplete data for year. 
16

General Technical Report FPL–GTR–173

Appendix B—Total Heating Degree Days to 2006

Figure B1. Total heating degree days for the three coldest days in each winter of the 

1996–1997 through 2005–2006 heating seasons. 

Reference: Weather Underground. History for Butte, Montana. http://www.wunderground.com/history/airport/

KBTM/2005/12/19/DailyHistory.html
17

Fuels for Schools: Case Study in Darby, Montana

Appendix C—Energy Prices, Supply, and Disposition to 2030

The complete operating cost over the life of the proposed system is considered and compared with the life-cycle cost of 

the alternative scenario in today’s dollars (Table 1). This analysis accounts for future changes in energy prices and inflation 

through a sensitivity analysis.

Annual Energy Outlook 2006 (Early Release)

Release Date: December 12, 2005

Next Release Date: December 2006

Table C1. Energy Prices, 1980–2030 (2004 dollars per million Btu) 

Crude oil 

(Imported)

Natural

gas Crude oil 

(Imported) Natural gas Coal Electricity (Baseline—2003) 

1995 3.600 1.774 1.038 23.73 67% 37% 

1996 4.245 2.438 1.001 23.19 79% 50% 

1997 3.938 2.564 0.966 22.78 73% 53% 

1998 2.705 2.132 0.926 22.17 50% 44% 

1999 3.402 2.360 0.873 21.52 63% 49% 

2000 5.351 3.886 0.862 21.60 100% 80% 

2001 4.685 4.107 0.882 22.68 87% 85% 

2002 4.563 2.985 0.904 21.98 85% 62% 

2003 5.366 4.831 0.889 22.21 100% 100% 

2004 6.766 5.329 0.973 22.18 126% 110% 

2005 9.353 7.394 1.037 24.44 174% 153% 

2006 9.883 6.650 1.050 24.07 184% 138% 

2007 9.301 5.956 1.066 22.92 173% 123% 

2008 8.746 5.607 1.071 22.14 163% 116% 

2009 8.385 5.188 1.069 21.76 156% 107% 

2010 7.908 4.880 1.088 21.43 147% 101% 

2011 7.917 4.642 1.054 21.06 148% 96% 

2012 7.968 4.584 1.043 20.92 148% 95% 

2013 7.922 4.659 1.029 21.14 148% 96% 

2014 7.843 4.569 1.012 21.07 146% 95% 

2015 7.992 4.389 1.008 20.87 149% 91% 

2016 8.060 4.332 1.004 20.89 150% 90% 

2017 8.078 4.397 1.002 20.93 151% 91% 

2018 8.234 4.569 1.001 21.05 153% 95% 

2019 8.089 4.709 1.000 21.25 151% 97% 

2020 8.478 4.756 1.003 21.23 158% 98% 

2021 8.450 4.887 1.001 21.38 157% 101% 

2022 8.780 4.967 1.005 21.43 164% 103% 

2023 8.886 5.037 1.013 21.39 166% 104% 

2024 8.706 5.150 1.021 21.52 162% 107% 

2025 9.044 5.275 1.032 21.69 169% 109% 

2026 9.165 5.353 1.043 21.70 171% 111% 

2027 9.316 5.449 1.051 21.76 174% 113% 

2028 9.422 5.506 1.067 21.75 176% 114% 

2029 9.487 5.584 1.077 21.79 177% 116% 

2030 9.526 5.747 1.085 22.00 178% 119% 
18

General Technical Report FPL–GTR–173

Release date: December 2005

Next release date: December 2006

(full report available February 2006)

Table C2. Total energy supply and disposition in the Annual Energy Outlook 2006 (AEO 2006)

reference case: summary, 2003–2030 released by the Department of Energy's Energy Information 

Agency 

Energy and economic factors 2003 2004 2010 2015 2020 2025 2030 

Average 

annual change, 

2004–2030

Primary energy production (quadrillion Btu) 

 Petroleum 14.40 13.93 14.83 14.94 14.41 13.17 12.25 – 0.5% 

 Dry natural gas 19.63 19.02 19.13 20.97 22.09 21.80 21.45 0.5% 

 Coal 22.12 22.86 25.78 25.73 27.30 30.61 34.10 1.6% 

 Nuclear power 7.96 8.23 8.44 8.66 9.09 9.09 9.09 0.4% 

 Renewable energy 5.69 5.74 7.08 7.43 8.00 8.61 9.02 1.8% 

 Other 0.72 0.64 2.16 2.85 3.16 3.32 3.44 6.7% 

 Total 70.52 70.42 77.42 80.58 84.05 86.59 89.36 0.9% 

Net imports (quadrillion Btu) 

 Petroleum 24.19 25.88 26.22 28.02 30.39 33.11 36.49 1.3% 

 Natural gas 3.39 3.49 4.45 5.23 5.15 5.50 5.72 1.9% 

 Coal/other (– indicates export) – 0.45 – 0.42 – 0.58 0.20 0.90 1.54 2.02 NA 

 Total 27.13 28.95 30.09 33.44 36.44 40.15 44.23 1.6% 

Consumption (quadrillion Btu) 

 Petroleum products 38.96 40.08 43.14 45.69 48.14 50.57 53.58 1.1% 

 Natural gas 23.04 23.07 24.04 26.67 27.70 27.78 27.66 0.7% 

 Coal 22.38 22.53 25.09 25.66 27.65 30.89 34.49 1.7% 

 Nuclear power 7.96 8.23 8.44 8.66 9.09 9.09 9.09 0.4% 

 Renewable energy 5.70 5.74 7.08 7.43 8.00 8.61 9.02 1.8% 

 Other 0.02 0.04 0.07 0.08 0.05 0.05 0.05 0.9% 

 Total 98.05 99.68 107.87 114.18 120.63 126.99 133.88 1.1% 

Petroleum (million barrels per day) 

 Domestic crude production 5.69 5.42 5.88 5.84 5.55 4.99 4.57 – 0.7% 

 Other domestic production 3.10 3.21 3.99 4.50 4.90 5.45 5.84 2.3% 

 Net imports 11.25 12.11 12.33 13.23 14.42 15.68 17.24 1.4% 

 Consumption 20.05 20.76 22.17 23.53 24.81 26.05 27.57 1.1% 

Natural gas (trillion cubic feet) 

 Production 19.11 18.52 18.65 20.44 21.52 21.24 20.90 0.5% 

 Net imports 3.29 3.40 4.35 5.10 5.02 5.37 5.57 1.9% 

 Consumption 22.34 22.41 23.35 25.91 26.92 26.99 26.86 0.7% 

Coal (million short tons) 

 Production 1,083 1,125 1,261 1,272 1,355 1,530 1,703 1.6% 

 Net imports – 18 – 21 – 26 5 36 63 83 NA 

 Consumption 1,095 1,104 1,233 1,276 1,390 1,592 1,784 1.9% 

Prices (2004 dollars) 

 Imported low-sulfur light crude oil 

 (dollars per barrel) 31.72 40.49 47.29 47.79 50.70 54.08 56.97 1.3% 

 Imported crude oil (dollars per barrel) 28.46 35.99 43.99 43.00 44.99 47.99 49.99 1.3% 

 Domestic natural gas at wellhead 

 (dollars per thousand cubic feet) 5.08 5.49 5.03 4.52 4.90 5.43 5.92 0.3% 

 Domestic coal at minemouth 

 (dollars per short ton) 18.40 20.07 22.23 20.39 20.20 20.63 21.73 0.3% 
19

Energy and economic factors 2003 2004 2010 2015 2020 2025 2030 

Average 

annual change, 

2004–2030

 Average electricity price 

 (cents per kilowatt hour) 7.6 7.6 7.3 7.1 7.2 7.4 7.5 0.0% 

Economic indicators 

 Real gross domestic product 

 (billion 2000 U.S. dollars) 10,321 10,756 13,043 15,082 17,541 20,123 23,112 3.0% 

 GDP chain-type price index 

 (index, 2000 = 1.000) 1.063 1.091 1.235 1.398 1.597 1.818 2.048 2.5% 

 Real disposable personal income 

 (billion 2000 U.S. dollars) 7,742 8,004 9,622 11,058 13,057 15,182 17,562 3.1% 

 Value of manufacturing shipments 

 (billion 2000 U.S. dollars) 5,378 5,643 6,355 7,036 7,778 8,589 9,578 2.1% 

Energy intensity 

(thousand Btu per 2000 dollar of GDP) 9.51 9.27 8.28 7.58 6.88 6.32 5.80 – 1.8% 

Carbon dioxide emissions 

(million metric tons) 5,815 5,919 6,365 6,718 7,119 7,587 8,115 1.2% 

Reference: Energy Information Administration, Official Energy Statistics from the U.S. Government 

http://www.eia.doe.gov/oiaf/aeo/table1.html 

Fuels for Schools: Case Study in Darby, Montana
20

General Technical Report FPL–GTR–173

Appendix D–Alternative Project #1

In this alternative, the oldest (1964) oil-fired boiler in the elementary schools was replaced by a new oil boiler, and the 

existing mechanical equipment was also upgraded. We compared this system to a new wood heating system similar to 

Darby’s. The main assumptions were no grants, school paid for the wood energy system, and the one fuel oil boiler would be 

replaced with a boiler of the same capacity.

Before-tax net present value: $83,600

Table D1—Fuel oil and wood heat systems compared 

Year

Fuel oil system 

costs 

Wood fuel 

cost 

Annual fuel cost 

savings

Fuel oil

O & M costs 

Wood fuel 

O & M costs 

Wood fuel 

fixed costs 

Annual O & M

cost savings 

Before-tax

 U.S. dollars 

0 $344,000 $900,000 — — — — — $(556,000) 

1 $51,440 $29,437 $22,003 $1,684 $4,892 $400 $(3,608) $18,395 

2 $87,306 $29,051 $58,255 $1,718 $5,998 $408 $(4,689) $53,566 

3 $103,823 $29,632 $74,191 $1,752 $6,238 $416 $(4,902) $69,289 

4 $105,173 $30,225 $74,948 $1,787 $6,488 $424 $(5,125) $69,823 

5 $106,540 $30,829 $75,711 $1,823 $6,747 $433 $(5,358) $70,353 

6 $107,925 $31,446 $76,479 $1,859 $7,017 $442 $(5,600) $70,880 

7 $109,328 $32,075 $77,253 $1,896 $7,298 $450 $(5,852) $71,401 

8 $110,749 $32,716 $78,033 $1,934 $7,590 $459 $(6,115) $71,918 

9 $112,189 $33,370 $78,819 $1,973 $7,893 $469 $(6,389) $72,430 

10 $113,647 $34,038 $79,610 $2,013 $8,209 $478 $(6,675) $72,935 

11 $115,125 $34,719 $80,406 $2,053 $8,538 $488 $(6,972) $73,434 

12 $116,622 $35,413 $81,209 $2,094 $8,879 $497 $(7,283) $73,926 

13 $118,138 $36,121 $82,016 $2,136 $9,234 $507 $(7,606) $74,411 

14 $119,673 $36,844 $82,830 $2,178 $9,604 $517 $(7,943) $74,887 

15 $121,229 $37,581 $83,649 $2,222 $9,988 $528 $(8,294) $75,355 

16 $122,805 $38,332 $84,473 $2,266 $10,387 $538 $(8,659) $75,814 

17 $124,402 $39,099 $85,303 $2,312 $10,803 $549 $(9,040) $76,263 

18 $126,019 $39,881 $86,138 $2,358 $11,235 $560 $(9,437) $76,701 

19 $127,657 $40,678 $86,979 $2,405 $11,684 $571 $(9,850) $77,128 

20 $129,317 $41,492 $87,825 $2,453 $12,152 $583 $(10,281) $77,544 

Table D2—Positive cash flow 

Year Heating season

General

inflation 

Fossil fuel 

cost escalation

Wood boiler 

 O & M cost 

escalation 

Wood fuel 

cost escalation

Fuel oil 

consumption

reduction

Real 

discount

rate

1 2003–04 2.0% — 4.0% — — — 

2 2004–05 — 1.3% — 2.0% — — 

3 2005–06 — — — — 99% 8.0% 

Years 1, 2, and 3 are known. 

After Year 3, estimates are shown based on following values.

Years 1, 2, and 3 are known.

After year 3, estimates are shown based on the values shown in Table 2.
21

Fuels for Schools: Case Study in Darby, Montana

Appendix E–Alternative Project #2

In this alternative, the oldest (1964) boiler was removed from service, the existing mechanical systems were upgraded, and 

the elementary school was connected to one of the other boilers. This system was compared to the new wood heating system.

Before-tax net present value: $115,000

Table E1—Fuel oil and wood heat systems compared 

Year

Fuel oil system 

costs 

Wood fuel 

cost 

Annual fuel cost 

savings

Fuel oil

O & M costs 

Wood fuel 

O & M costs 

Wood fuel 

fixed costs 

Annual O & M

cost savings 

Before-tax

 U.S. dollars 

0 $ 369,000 $ 900,000 — — — — — $ (531,000) 

1 $51,884 $ 29,437 $ 22,447 $ 1,684 $ 4,892 $400 $(3,608) $ 18,839 

2 $88,060 $ 29,051 $ 59,009 $ 1,718 $ 5,998 $408 $(4,689) $ 54,320 

3 $ 104,720 $ 29,632 $ 75,088 $ 1,752 $ 6,238 $416 $(4,902) $ 70,186 

4 $ 106,081 $ 30,225 $ 75,857 $ 1,787 $ 6,488 $424 $(5,125) $ 70,731 

5 $ 107,460 $ 30,829 $ 76,631 $ 1,823 $ 6,747 $433 $(5,358) $ 71,274 

6 $ 108,857 $ 31,446 $ 77,412 $ 1,859 $ 7,017 $442 $(5,600) $ 71,812 

7 $ 110,273 $ 32,075 $ 78,198 $ 1,896 $ 7,298 $450 $(5,852) $ 72,346 

8 $ 111,706 $ 32,716 $ 78,990 $ 1,934 $ 7,590 $459 $(6,115) $ 72,875 

9 $ 113,158 $ 33,370 $ 79,788 $ 1,973 $ 7,893 $469 $(6,389) $ 73,399 

10 $ 114,629 $ 34,038 $ 80,591 $ 2,013 $ 8,209 $478 $(6,675) $ 73,917 

11 $ 116,120 $ 34,719 $ 81,401 $ 2,053 $ 8,538 $488 $(6,972) $ 74,428 

12 $ 117,629 $ 35,413 $ 82,216 $ 2,094 $ 8,879 $497 $(7,283) $ 74,933 

13 $ 119,158 $ 36,121 $ 83,037 $ 2,136 $ 9,234 $507 $(7,606) $ 75,431 

14 $ 120,707 $ 36,844 $ 83,864 $ 2,178 $ 9,604 $517 $(7,943) $ 75,921 

15 $ 122,276 $ 37,581 $ 84,696 $ 2,222 $ 9,988 $528 $(8,294) $ 76,402 

16 $ 123,866 $ 38,332 $ 85,534 $ 2,266 $ 10,387 $538 $(8,659) $ 76,875 

17 $ 125,476 $ 39,099 $ 86,378 $ 2,312 $ 10,803 $549 $(9,040) $ 77,337 

18 $ 127,108 $ 39,881 $ 87,227 $ 2,358 $ 11,235 $560 $(9,437) $ 77,790 

19 $ 128,760 $ 40,678 $ 88,082 $ 2,405 $ 11,684 $571 $(9,850) $ 78,231 

20 $ 130,434 $ 41,492 $ 88,942 $ 2,453 $ 12,152 $583 $(10,281) $ 78,661 

Table E2—Positive cash flow 

Year Heating season

General

inflation 

Fossil fuel 

cost escalation

Wood boiler 

 O & M cost 

escalation 

Wood fuel 

cost escalation

Fuel oil 

consumption

reduction

Real 

discount

rate

1 2003–04 2.0% — 4.0% — — — 

2 2004–05 — 1.3% — 2.0% — — 

3 2005–06 — — — — 99% 8.0% 

Years 1, 2, and 3 are known. 

After Year 3, estimates are shown based on following values.

Years 1, 2, and 3 are known.

After year 3, estimates are shown based on the values shown in Table 2.