Wood Pallet Recycler Socked with High Electric Costs

A Nebraska pallet recycler is being forced to stop shredding some pallets due to a sharp increase in electricity.

Stewart Trucking & Pallets, a Lincoln, Neb., pallet recycling company, is having to discontinue its shredding of some undersized pallets and wood waste due to a steep jump in the cost of electricity used by the company.

Tom Stewart, owner of the company, says that the electrical costs jumped from around $500 a month to more than $2,000. The cost increase has eliminated any financial incentive for the company to run its grinder for some of the pallets. At the present electric costs it is less expensive to landfill the pallets rather than grind them into animal bedding, he points out.

Stewart estimates that the company was grinding around 600 tons per year of wood for mulch to be used for animal bedding. The company began grinding the wood waste and undersized pallets around seven years ago. He estimates that he has invested around $300,000 to do the grinding.

One option that was considered and then discarded was using a diesel machine, although the cost and return on investment could not be justified.

With the sharp increase by Lincoln Electric System, the public utility in charge of setting the rates, the company will begin landfilling the wood waste and scrap pallets, starting Feb. 1.

According to a local press report Stewart Trucking exceeded the 100 killowatt per month level one time, resulting in the jump in the service rate.

However, the company will continue to refurbish and recycle the standard 48-inch by 40-inch wood pallets, in the local area. Stewart estimates the company sells around 7,000 pallets a month.