Auburn -- A special purpose subsidiary of CH Energy Group, Inc., CH-Auburn Energy, LLC, has entered into a 15-year contract to supply the City of Auburn in Cayuga County with a portion of its electricity needs by constructing and operating a three-megawatt electric generating plant in Auburn that will use renewable energy from the municipal landfill and wastewater treatment plant.

CH-Auburn will invest up to $9.75 million in the project, which will include an anaerobic digester to convert wastewater sludge into usable gas for electric generation and the sale of resulting low-cost electricity to the city.

The electric generating plant will provide enough renewable energy to serve 2,500 homes. The contract will provide the city with energy savings and economic development benefits through lower electric rates. At the end of the 15-year contract, the city will have the opportunity to acquire the plant.

The plant is slated for construction next spring, and is anticipated to become operational in late 2008. It will be located adjacent to the municipal wastewater treatment plant and landfill, near a technology and business park.