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PUBLIC POWER AGENCY MEETING MINUTES
December 20, 2006
Members Present: John Montone, Chairperson, Timothy C. Lattimore, William Graney, Mike Luksa, Frank DeOrio, Krste Biljanoski, Vijay Mital and Luke Rybarczyk
Members Absent: Robert M. Buschman (at another meeting)
Meeting of the Public Power Agency of December 20, 2006 was called to order by Chairperson John Montone at 4:00 p.m. Member absent as stated above. Motion made by Bill Graney to accept minutes of November 16, 2006 and Mike Luksa seconded. Chairperson introduced new member Luke Rybarczyk.
Chairperson stated that under correspondence he received some information from Power Authority and at the last City Council meeting, the energy conservation that we have been pushing for geothermal at the Fire House was approved. Contractors are on board for all the projects and should start in the spring.
Under old business, ECO Technology, Kamyar will do a final review of the project, make some recommendations to us and how it is going to save and bring revenue into the City and at some point we will make a recommendation to the City Council to move forward with this project.
Kamyar Zadeh of ECO Technology Solutions passed out handouts and gave a presentation on the most recent updates on the progress that have been made since the last meeting. Last time we presented estimates of power production based on what we had available at the time with natural gas numbers, we adjusted those number to more conservative numbers to make sure the approach is a very conservative path. Reviewed the natural gas costs, readjusted savings based on what we are expecting the natural gas costs to be after the project is implemented which is 2008 and beyond to reduce the cost of natural gas from where we are today based on what we forecast the natural gas prices to be. Taking a step by step approach for taking the project in series of steps but to divide it into tasks that are separate and
identifiable and as we go forward try to define steps in each one of those that are measurable and there is measurement associated to let us know how we are doing, where we need to focus our attention, schedule and budget for planning activities. Have not finalized planning budget yet. In process of finalizing the proposal for the Public Power Agency.
Last time we were here, we were using landfill gas estimates that were developed during 1999 used those to estimate how much power we could use. After last meeting we went back to those numbers, got another estimate from Barton & Loguidice, re-estimated the gas and these two curves that you see (slides) the lower and upper end of what they estimate the landfill gas production to be. What we see here is Landfill gas cell #1 which has been producing gas on the downward path, has been producing a lot of gas, Landfill gas cell #2 is being to produce a lot of gas. Gas production from the Landfill is going to grow until the year 2017. To add to the certainty of this we also went out into the field and we looked at the numbers recorded by field staff and this shows you what is measured right
now. There is a difference between these two and the answer to this right now, this is what the gas system can produce this is what we are harvesting, what that tells us is we did not install enough wells in the Landfill to capture all the gas, that is basically what this chart is telling us. John Montone stated that what we are looking here actually is the bottom figure where we are at and it can only get better as we move forward. Kamyar said this is what we are producing right, if we were to install additional piping gas produced will be at 65% collection efficiency which means you are not catching all the gas. At 85% a very efficient landfill gas production will be producing this number (points to chart). Mike Luksa asked if it was worth putting in any more welsl and Kamyar stated that Landfill gas cell #1 is over, Landfill gas cell #2 is brand new, so this is what you are seeing gas production from both of them combined into one
pipeline, it will be increasing going to 2017.
Right now this is what we are measuring and what we are suggesting is essentially, we have some Landfill gas today available and you want to capitalize it, when you turn your incinerator off that natural gas becomes available, to generate electricity and based on what we have right now we can produce 576 kilowatts. Next triple the amount of sludge we bring in and we can produce another megawatt of power, so in a period of two years we go from 576 to 2.7 megawatts.
There are three phases to this project, we are going to turn the incinerator off what do you do with the sludge is stabilize it before you put it into the Landfill. There is some design and engineering involved in that process and once you do that there is going to be a substantial savings because you are not paying the natural gas cost but there is a cost, you are putting that sludge into the Landfill, you are occupying space. When you do cost and revenue these are the figures you get for each phase. Phase I, $838,000 per year is what we estimate at $9 a gallon. This is going to be your savings.
The second one is the Landfill gas, how much money are you going to make if you use the Landfill gas to produce power? This is at 85% efficiency but you are looking at $1,000,000 a year after expenses.
The last part, project three which is implementation of the digester, triple the amount of sludge that is coming in and you turn that sludge into gas and you use the residue to use for Landfill cover. You are looking at $1.8 million a year net revenue for the City. Step 2 is when you take the gas from the Landfill the one that you will not use for the incinerator put it into the generator.
We talked about the gas contract the Wastewater Treatment Facility is purchasing from BOCES under contract, under this contract you cannot buy gas from a third party from a supplier’s prospective. You can but you will breach the contract and you can exit the contract but you will have to pay penalties so it probably is not a good idea to exit at this point. The contract comes up for re-negotiation when they negotiate their supply contract and their supply contract is coming up in April 2007. You have a choice to continue or discontinue their services. It is a good idea to know what your options are if you are buying natural gas so you may want to look at prices from different suppliers.
Step I is essentially turning the incinerator off, Step II is when you start to implement the 65% Landfill efficiency, Step III is when your efficiency for Landfill reaches 85% and you begin to implement the digester and you have all the plans working together. The numbers you see here are reflections of the timing during the year and this one here (points to chart) assumes that you actually shut down the incinerator in April so $586 to $1,000 of operating income is what you have from starting April 31 to the end of the year. Step II the 65% collection efficiency, you see the assumptions we have made in terms of costs and also revenue. In year 2 you are still putting in some of the material into the Landfill so there is some cost associated with that. Tipping fees remain the same here. Step 3
the digester comes on line, 24-month process depending on when you start the plan; this one assumes that you are at 83% of total capacity.
In project I, identified alternatives and recommendations for modified sludge treatment system. You have to define this program, design it and implement it so you don’t have any breaks in operation, the trucks keep coming in whether you are doing the work or not, have to create a smooth transition. Project II, same approach, have to identify what alternatives, technology-wise, financing-wise, and so forth for the Landfill, design and construct on what the recommendation is and implement the business and operation plan. The business and operational plan deals with this, this is already in place so there is no change in operation or business other than going to this location. Here you are identifying a new task, it requires a new system of thinking, you have to sell energy, have to have service
contracts in place, and every one has to understand what they do, so this becomes part of the operating plan.
How do you turn this into a project, there are 3 different types of activity going on, but in order to convert it into a project you have to define a road map so that as you are doing one you are also preparing for 2, 3 and 4. Step I what we would like to do is we should do project I, we need to stop the incinerator process and implement the business plan, so on and so forth. Also need to do additional engineering for gas system to get to 65% and then to 85%, also need to finish the engineering for project II. It allows you to estimate the cost of the plant over here based on every thing else you have learned along the way. We can estimate this price right now but it is basically cost minus 20%. Where we want to be at the end of this process is minus 10% and also prepares us to go out
to bid. Step 2 is you implement the landfill gas project and once you know what your systems are you complete the design, install the project through initial step when you improve the gas efficiency and move to project II. Step 3, complete the design and install the project. Each gets connected to the other steps. Keep in mind this outline also has to follow the financing of this project, which is important. What we would like to do next, we have finished all the reviews and complete the feasibly analysis and turn in the report. That is a document that everyone has reviewed and agrees to and it becomes our guideline. Step 2-proposal format, what is the scope of work that needs to take place, professional services agreement and project 2 and project 3. What are the key items that we have delivered in this process to make sure this project goes forward successfully and then the approval process, which requires the Power Agency, and the
City Council. These are the steps that we would like to do based on discussions.
John Montone stated that the OCM BOCES contract terminates April 30, 2007 we are paying too much money for that, the electricity end of it ends in 2010, we need get that contract into the hands of our attorney to take a hard look at it. Kamyar stated he reviewed the contract and there are two items you have to keep in mind, one is the contract renews automatically unless you put into motion a process by which you say you don’t want to start on this date or that date. You don’t have control of the price; whatever they negotiate that is the price. Second is the price of the contract, not sure how the pricing structure occurred $11.80 is a substantial amount of money. John suggested that the City Manager write a letter stating we are going to re-negotiate this contract before April
30, 2007.
John Montone handed out Industrial Natural Gas Sales Agreement and we sent all of these contracts and agreements including the hydro to Jeff Ginzer to our attorney that we originally used to put the Local Law together. The agreement you are looking at is basically the way it is set right now. We can purchase natural gas, get the pipe down there to take care of what our needs are and we can negotiate the price. We should look into that pipe instead of just sitting here and saying what the volume of it, we don’t know that, just a spur line off the main pipe line, if it is 100 or 200 foot and the volume is too small, let’s replace it to the bigger one and take that well head price and whatever we can get that gas and we could see that natural gas to Tech Park or any body. They have an
easement across the landfill and if they don’t abide by this agreement basically Nancy put them on default notice, we should send that to Jeff Ginzer but first we need to get Jeff Ginzer on board. Mike Luksa asked if we have access to Nancy’s notes, we do and John stated that Nancy communicated with Chesapeake a few months ago. Tim Lattimore made a motion that we hire Jeff Ginzer, seconded by Luke Rybarczyk, to do energy related issues. All in agreement.
There was much discussion on the hydros and Luke Rybarczyk made a motion that this agency makes a recommendation to Council to get the items fixed at the N. Division Street hydro and Mill Street Hydro and seconded by Mike Luksa. The cost analysis will come from K&R Electric on all the components that need to be replaced. A letter will be sent to Council informing them of this recommendation.
Tim Lattimore made a motion to adjourn, seconded by Bill Graney, meeting adjourned at 5:40 p.m.
Next meeting scheduled for January 24, 2007 at 4:00 p.m.
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