Their gut reaction? It won't be good.
The city and county, longtime partners in the waste-to-energy plant west of Crows Landing, can be expected to oppose a clean energy bill introduced this month by Senate President Pro Tem Kevin de Leon. It would increase the state's investments in green energy, such as solar and wind power, but take away the renewable-energy credits given to the waste burner since 2002.
James Regan, a spokesman for plant operator Covanta Energy, said losing the energy credits would put the facility's "long-term economic viability at risk." With the special status, Covanta can sell the electricity generated by the plant at a premium price, and it allows buyers to claim renewable-energy credits.
City and county staff members are setting up a meeting to sort through the issues and develop a case for justifying the credits. Officials argue that maintaining a viable plant is in everyone's interest in Stanislaus County. "I don't know if it would lose money (without the credits), but it is not good for Covanta's business," said Jocelyn Reed, Modesto's solid-waste manager. "We can't afford to lose something like waste-to-energy."
| Description: Waste-to-energy plant operated through partnership including Covanta Energy Corp., Modesto and Stanislaus County Start of operation: January 1989 Refuse capacity: 800 tons/day Generating capacity: 22.5 megawatts Employees: 43 |
The county, Modesto and other cities receive a 10 percent credit for the garbage diverted from landfills to the plant, which helps them meet the state requirement to reduce landfill wastes by 50 percent.
California is moving toward a 75 percent diversion rate. Without waste-to-energy, local agencies would be faced with reducing their wastestream to landfills by an additional 35 percent through recycling, composting and other alternatives, Reed said.
Regan said he could not say how renewable-energy prices compare with the lower prices of selling energy on the regular market. Before a new contract in 2012, the county and Modesto received 90 percent of the revenue from energy sales and their solid-waste account was losing money because of a contract with Pacific Gas & Electric Co.
The county and Modesto felt they were forced into renewing the contract by the costs of meeting the cap-and-trade laws for addressing climate change. The new 15-year deal gave the energy revenue to Covanta, as well as most of the risk of new emission standards. Covanta also was positioned to assume ownership of the plant.
If the legislation were to remove the renewable-energy credits, the parties would likely talk about other ways to generate revenue. The most obvious and problematic would be charging more for local agencies to deliver waste to the plant.
"I haven't had a chance to pencil it out, but I am sure we would sit down and negotiate with (Covanta)," said Jami Aggers, county director of environmental resources.
The 2012 deal that raised the facility's tipping fee to $39 a ton forced garbage rates higher in the county and its cities, giving the smaller cities more reason to consider sending their waste to landfills that charge less. Another hike in the fee would further strain a solid-waste partnership with the cities.
Turlock City Manager Roy Wasden said he would hope the legislation is amended to retain the renewable-energy credit. "We worry about those kinds of changes," he said.
The city has been sending its garbage to a dump near Merced while diverting close to 60 percent of its waste through recycling and other efforts, Wasden said. "We can meet the 50 percent (diversion rule) without waste-to-energy, and I think most of the cities can meet the diversion requirement," he said. "Obviously, the (waste-burner tipping) rates are of great concern."
If the smaller cities were to leave the solid-waste system, the county and Modesto could be on their own in the waste-to-energy business.
The county will track the proposed legislation, as it does with other state bills every year, many of which are killed or amended by the lawmaking process. If it appears the bill will affect the county, local officials will step up lobbying, attend hearings and rely on support from Central Valley legislators.
Of the three waste-to-energy facilities in California, the Covanta Stanislaus plant is the only one with renewable-energy status. Covanta, a New Jersey company with 46 waste-energy facilities worldwide, operates a Long Beach facility that's not entitled to the credits.
Regan said the European Union has embraced waste-to-energy technology as an alternative to landfills and for reducing greenhouse emissions. He said Stanislaus County was way ahead of the times when its plant was built in the 1980s.
The county and Modesto are obligated to send at least 243,300 tons of garbage to the waste burner every year, of which 125,000 tons comes from Modesto. Heat from the two furnaces produces steam that drives turbines, generating enough power for about 20,000 homes. About 7,600 tons of metal are recycled every year.
Thanks to an elaborate system that scrubs the stack emissions, the process of burning 800 tons of garbage per day is not as dirty as people assume, Reed said. "We are well below the Title 5 standard. What comes out of the stack is cleaner than the air on Interstate 5," she said.
Bee staff writer Ken Carlson can be reached at kcarlson@modbee.com or (209) 578-2321.
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