Companies are high on the hog.

• Position: Triad

Beginning this year, state law mandates that public utilities generate a portion of their power with swine and poultry waste, which can be converted to methane that fuels turbines. At the same time, companies are looking for ways to reduce their greenhouse-gas emissions, which lead to global warming. Cavanaugh & Associates PA, a Winston-Salem engineering firm, believes it has developed an answer to both problems.

In 2006--as the General Assembly was mulling over a bill, which it passed a year later, that would require utilities to use renewable energy--Duke University's Nicholas School of the Environment asked Cavanaugh to design a swine-waste system that would generate electricity while protecting the environment. Construction began in 2010 at Loyd Ray Farms, a 9,000-hog operation on about 150 acres near Yadkinville, and was completed last May The system collects about 80,000 gallons of waste a day in an oxygen-free digester. Bacteria convert organic material into methane, which is trapped under a plastic cover. A compressor pushes the biogas into a generator, which powers the system and half the farm. So far, energy generation is exceeding expectations.

Loyd Ray Farms benefits by getting free electricity, but the construction costs are too expensive--about $800,000--for most farmers. What makes it feasible on a larger scale is the advantages it affords big business. Although Duke University and U.S. Department of Agriculture grants paid for most of it, Duke Energy Corp. kicked in $117,500, plus $30,000 a year for operations and maintenance. In return, the Charlotte-based utility earns credit toward its renewable-and swine-energy requirements.

Another attribute of the Loyd Ray Farms system is that the combustion of methane to create electricity...