Biomass is the renewable resource with the potential to serve as a substitute for fossil fuels. A form of biomass, woody residues, includes woody byproducts such as mill residues, logging residues, and other wood waste. This study estimated the impact of woody residue processing capacity, mill willingness to utilize additional logging residues for electricity production, mill equipment upgrades to facilitate electricity production, and different factors limiting the utilization of logging residues on the utilization of woody residues by mills. Data on the utilization of woody residues were collected via a census mail survey of mills in the southern United States. Data were analyzed using a two-stage least square (2SLS) regression model. Results indicated that average utilization was 91% of available woody residue processing capacity for bioenergy. Woody residue utilization increased with an increase in the processing capacity of woody residues, equipment upgrades, and lower transportation costs. In addition, the study found that there were only a few mills with a large enough processing capacity to utilize woody residues for bioenergy production. Thus, an increased utilization of woody residues will be highly dependent on mills' ability to increase woody residues processing capacity, implement necessary equipment upgrades, and lower transportation and processing costs. Logging residue utilization was relatively limited and had less of an impact on overall woody residue utilization. Findings will assist policy makers and mill managers in making informed decisions about woody residue utilization and identify specific mill factors that might help improve the economic feasibility of using woody biomass for bioenergy purposes. (C) 2017 Elsevier Ltd. All rights reserved.