MIRA waste-to-energy deal faces major obstacles


TwitterFacebookCopy LinkPrintEmail

Caught between tipping fees that could reach $140 a ton, and Hartford’s likely refusal to agree to 30 more years of hosting the state’s largest waste incinerator, a deal to avoid trucking a significant portion of Connecticut’s waste out of state appears on the brink of failure.

A term sheet signed last week by MIRA’s board of directors and the plant’s would-be operator Sacyr Rooney Recovery Team sketched the outlines of a deal that would leave the 50-member towns paying as much as $140 per ton to dispose of solid waste compared to the current $85. 

The term sheet requires $333 million to renovate the antiquated, former coal plant at the waste-to-energy Hartford facility. 

Thomas Kirk, President of Connecticut’s largest regional trash authority, said its member towns would likely be unable to shoulder the high cost of renovating Hartford’s waste-to-energy plant without additional support from the state or other credits.

Such financial support is not likely, however, according to Tom Swarr, an environmental manager and lecturer, ad-hoc member of the Materials Innovation Recycling Authority (MIRA) and resident of Hartford.

“The bottom line is, if the towns balk will the state step in and finance the project,” Swarr said. “This is a state that can’t even agree on financing transportation systems. It’s unlikely. Nobody is going to step up and care, until the garbage stays at the end of the driveway.” 

MIRA’s 50 member towns — which include Hartford, as well as towns in the lower Connecticut River Valley, including Lyme, Old Lyme, Essex, Old Saybrook, Killingworth, Chester, Deep River — will need to approve the agreement in order for the deal to move forward. These towns are not mandated to stay part of MIRA either, they could join other regional trash authorities or make an agreement with a private hauler. 

“Hartford’s city council probably won’t approve that agreement. They’ve made it clear that they would not support it and the Mayor has said the same thing,” said Edith Pestana, the administrator for the Department of Energy and Environmental Protection’s Environmental Justice Program. “The city doesn’t want the incinerator anymore because of truck traffic, because of emissions, it’s a health issue for residents.” 

Kirk said that he thinks MIRA and the deal will be able to survive even if the City of Hartford doesn’t sign on.

“Municipal participation is at the discretion of the various towns and the project does not require Hartford’s participation,” he wrote in an email. “Hartford is welcome to participate and is anticipated to receive host payments from the project but the city’s participation is not necessary.”

What would be environmental justice?

According to Pestana, Hartford has wanted MIRA’s waste-to-energy site closed for more than 25 years. 

“This site has been a bone of contention since before I began at DEEP,” Pestana said. “No town wants an incinerator. I don’t care how you sugarcoat it.” 

Currently, MIRA accepts garbage from 49 surrounding towns, including many affluent communities, into a low-income city populated mostly by minorities and people of color. 

“In Hartford there isn’t anybody that wants the plant to be rebuilt. That’s great, but what do we do with our trash,” Swarr said. “It not an environmental justice solution to let the people deal with their trash, but the entire city is hoping that the project fails.” 

If Hartford — which produces 80,000 tons of garbage each year — refuses to sign a 30-year agreement with MIRA to allow the plant to be refurbished and continue operating — the fees for other towns will increase even more, making it impossible for any town to sign onto the plan.

“The plant is well past it’s design life. If Hartford doesn’t sign on it would start a death spiral for MIRA,” Swarr said. “The reality is you are heading toward building a transfer station and shipping trash out-of-state.” 

According to Swarr, that would mean shipping the state’s garbage to low-income communities with landfills or incinerators in other states —  substituting one environmental justice community for another.

“Wherever it goes, it will end up in an Environmental Justice community,” Swarr said. 

Although there is vocal pressure to keep waste management solutions in-state, Connecticut does not mandate an in-state solution. 

“It’s a very difficult situation, a very frustrating situation,” Pestana said. “We should within our borders be handling, treating the waste that we generate.” 

Even if the trash were to remain in-state, it is unlikely that a new facility could be constructed in less than ten years, Swarr said. 

“What do we do if this project doesn’t go forward? If we build anywhere different we run into the zoning issues and it will likely be a 10-year process. In the meantime, what do you do?” Swarr said. “ As much as Hartford is against it, you aren’t going to site anything else in less than 10 to 15 years. Nobody wants a trash facility.” 

Unsustainable fees

Kirk, president of MIRA, said that tipping fees on towns are unlikely to ever actually get this high because the towns currently in MIRA simply wouldn’t sign onto it. The deal that MIRA is discussing for renovating the plant would require member towns to recommit to using MIRA for their disposal services.

“Clearly $140 a ton is a very high price compared to what the towns have been paying,” Kirk said, “and frankly what they could pay if they use alternative disposal sites. The alternative is not going to one of the private facilities [in Connecticut]; they’re full. The alternative is to haul it out of state, to landfills out of state.” 

That cost stands in stark contrast to a recently negotiated 10-year contract with Wheelabrator in Lisbon, that will charge the 12 member towns in the Southeastern Connecticut Regional Resource Recovery Authority about $59 per ton starting in 2021. SCRRRA members include East Lyme, Griswold, Groton, Ledyard, Montville, New London, North Stonington, Norwich, Preston, Sprague, Stonington and Waterford.

The difference between the term sheet and what towns are willing to pay makes for “an inconsistency there that has to be resolved somehow,” Kirk said. “There’s a number of ways to do it… renewable energy credits, state help or bonding. There are ways or means or methods, but it’s probably incorrect or naive to expect the plant could get built or operate at a tipping fee at well over $100.”

Looking at comparable projects that have been completed elsewhere in the country, Kirk said there are three ways to close that price gap. One way would be to negotiate some kind of renewable energy credit. This would require the state to expand renewable energy credits to publicly-owned waste-to-energy facilities, much as wind and solar are subsidized, Kirk said.

The state could issue a general obligation bond to cover the costliest capital expenses for renovating the plan, with some combination of the state and towns repaying the expenses, Kirk said.

As a third option, Kirk suggested, some of MIRA’s towns could negotiate a wholesale agreement for electricity using power generated by the plant, thereby ensuring a consistent price for the electricity generated by the plant.

At the moment, MIRA is trying to figure out what member towns are willing to accept in terms of tipping fees, a necessary step before deciding how to cover the cost gap.

The state has also directed MIRA to at least formally offer the high tipping price to towns, as required by state statute, if only to demonstrate that the towns cannot bear the costs as presented.

“The first step is to document the member town’s appetite for participation,” Kirk said, “at this [over $100 per ton] price, I it expect to be zero. But more importantly [we’re looking at their appetite] at a price that makes sense.”

He continued, Are the towns going to “continue to use the public sector alternative at a competitive price? I’m expecting the answer to be yes, and we need that along with how much more revenue the project needs in order to compete.” 

Driving the cost

Kirk said that the primary challenge facing waste-to-energy plants today is a dramatic drop in wholesale electricity prices over the past 10 years, driven in part by the proliferation of natural gas.

“The actual energy that we generate [at waste-to-energy plants], and used to get paid as much as 12 cents per kilowatt for, now pays for about 3 cents,” Kirk said. “And that dramatic reduction in revenue is why it costs so much more to dispose waste at a trash-to-energy plant than it has in the past. The energy we make isn’t worth as much and to meet those costs of operation we end up having to charge more with the tipping fee.”

Private waste-to-energy plants are facing that same challenge, Kirk said. But MIRA’s plant in Hartford has an additional challenge: the plant is older than the state’s other waste-to-energy plants in the state and uses a more dated technique for turning trash into power. The Hartford plant was originally a coal plant operated by Hartford Light and was converted to waste-to-energy about 30 years ago.

The MIRA plant is “uses a technology called refuse-derived fuel, which is not one that is in favor today and would not be one that would be chosen if we were to build a plant from scratch,” Kirk said. More recently, plants have switched to a technique called mass burn that can burn larger masses of trash and requires significantly less sorting, shredding, and shaping of the trash before it’s burned.

The difference in cost between the two methods, at a plant like MIRA’s, would be about 14 to 15 million dollars per year and MIRA’s renovated plant would be still be using the older method, although the plant would update its emissions-regulating systems and other equipment, Kirk said.

Constructing a new facility using a mass-burn system would likely cost between $500 million and $600 million instead of the $333 million to renovate the old one, said Kirk.

“There were real good, financially valid reasons to developed a refuse-derived fuel facility back in the 70s,” Kirk said, “but now it’s a higher cost because of the need to prepare the fuel, to size it and shred it to the acceptable parameters before you burn it.”

Kirk said that officials at MIRA had hoped for a more advanced solution, but that no businesses had submitted bids, or been willing to shoulder the risk of new technologies at a commercial scale. 

If the renovation deal is to succeed, Kirk said definitive terms would have to be agreed upon by the October, 2020 and that work on the renovation would likely begin shortly thereafter. As part of future negotiations, he said that he expects MIRA to push for lower costs with Sacyr Rooney and for Sacyr Rooney to see that it could need to take on a higher risk to make the deal work.

“There’s a number of different solutions to the problems now and I can’t imagine the state wants to take a major step backwards and bury all of its waste again,” Kirk said. “That would be a major tragedy.”

Connecticut currently leads the nation on trash disposal and energy, Kirk said. “It’s nice to be the leader on something and this is the bright spot. I’m optimistic that we’ll find a solution that works for the state and for the residents… There are a couple paths to get there we just have to figure out what paths are most palatable to the various stakeholders.”

Note: This story was edited to include Kirk’s statement that the program will have the capacity even if the City of Hartford doesn’t participate.