A biomass-fired cogeneration plant in the US state of New York could be forced to close within 90 days due to operational losses, local newspaper the Watertown Daily Times reports.

According to Larry Richardson, CEO of the 22 MW Lyonsdale plant’s owner ReEnergy, the plant has been operating at a loss due to a 40% drop in power prices over the past year.

The plant came online in 1992 and was acquired by ReEnergy in 2011.

Richardson said closing the plant, which is fuelled with wood chips, would have a wider economic impact as ReEnergy spends about $6.5 million per year on over 200,000 tonnes of wood chips purchased from the local logging industry.

He told the Watertown Daily Times that his firm is in talks with several state institutions about power purchase agreements that could save the plant. And he noted that the plant could be temporarily reprieved if allowed to up the number of renewable energy credits it sells to the New York State Energy Research and Development Authority (NYSERDA).