October 16, 2019
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A competition for your trash has left Maine’s waste landscape fractured

George Danby | BDN
George Danby | BDN

Maine’s solid waste landscape is undergoing profound changes. A competition between two waste-to-energy companies for the trash from more than 180 municipalities has left the solid waste landscape in the region fractured and uncertain.

The region’s primary waste processor, Penobscot Energy Recovery Co., will face a major financial change when its contract to sell electricity at rates above market prices expires in 2018. Faced with this uncertainty, the Municipal Review Committee, an organization that represents the interests of its more than 180 member municipalities in dealings with PERC, decided to look for other options. It chose to work with Maryland-based Fiberight LLC, which plans to build a facility that will recycle waste and produce biogas in Hampden.

Given the region’s limited amount of municipal waste, it is unclear whether the two trash-to-energy operations can both operate successfully.

More than 100 towns have committed an estimated 100,000 tons of trash to the Fiberight project, short of the facility’s original goal of 150,000 tons, according to a Bangor Daily News analysis.

Only 21 towns with about 22,000 tons have decided to remain with PERC, which falls short of the company’s goal of securing at least 50,000 tons. As of noon Thursday, 32 towns with about 24,700 tons of trash in play have not made any commitments, meaning it is unlikely either facility will reach its goal.

Further complicating the situation, many towns went with neither facility, opting to send their trash elsewhere in the state or to Canada. The division among towns in the region over trash disposal has left a great deal of uncertainty about the future of waste management in Maine.

PERC’s uncertainty

Only a handful of towns will continue to send trash to the PERC facility after a contract between MRC member towns and the company expires in March 2018, when a lucrative power-purchase agreement with Emera Maine that has guaranteed PERC above market rates for electricity produced from burning trash ends.

Town officials raised concerns that PERC could no longer operate profitably with the end of the power-purchase agreement, setting up a split that has played out over the spring and summer.

PERC will charge towns a tipping fee of $84.36 per ton of trash for a 15-year contract or $89.57 per ton for a 10-year contract, rates that would change only with the Consumer Price Index. Under this fee model, PERC projects it can operate profitably after 2018.

But that depends on whether it can secure enough waste. PERC’s projection assumes it can take in 210,000 tons of trash annually. With the commitments that have come in as of Thursday, PERC has an estimated 22,055 tons of trash. The Bangor Daily News projects that 24,708 tons of trash remain in play. Even if it secured all that trash, PERC still would be far less than the tonnage it sought to secure.

“We always anticipated that we would be able to realistically get 50,000 to 60,000 tons [from the towns], and the rest was going to come from commercial waste,” said Bob Knudsen, vice president of USA Energy Group, the majority owner of PERC.

With less than anticipated trash tonnage coming from towns, Knudsen said PERC has identified a commercial tonnage “over and above” the original estimate needed to reach the tonnage requirement to continue operating.

PERC has signed contracts with commercial haulers, with others under negotiation, Knudsen said. He declined to specify the amount of tonnage from commercial haulers that PERC has secured, citing confidentiality agreements. In 2014, PERC took in 108,488 tons of trash from commercial sources, according to the Maine Department of Environmental Protection.

Knudsen estimates that depending on the size of the town, commercial trash can comprise up to 50 percent of the municipal waste stream, meaning some of the tonnage committed to Fiberight could be in play because courts have ruled that towns cannot control where commercial trash is hauled. But it is difficult to determine how much of a town’s trash tonnage comes from commercial sources because it is often mixed in with residential trash, making it impossible to track, according to a 2001 study from the Minnesota Office of Environmental Assistance.

“The municipal side is going to represent a smaller portion of our total tonnage than the commercial side,” Knudsen said. “But we always knew that.”

Fiberight’s new technology

More than half the MRC’s member towns have signaled they will send their waste to the Fiberight facility in Hampden.

Questions remain for towns about whether the Fiberight facility can operate successfully. The proposed trash-to-energy facility has no peer in the U.S., making Maine a testing ground for this emerging technology. A similar process used to create biogas from organic material in trash after recyclables have been sorted out has been used across Europe for years.

As a result, the Fiberight project has secured less waste — about 100,000 tons — than the amount that the MRC sought to secure — 150,000. The size of the Fiberight facility could be shrunk from its planned annual capacity of 180,000 tons to 110,000 tons.

A consultant for the MRC last year conducted an economic analysis that found revenue from tip fees — $12.6 million — would exceed operating costs — about $11 million. But that was based on Fiberight processing 180,000 tons of trash. The MRC has said that the facility still can operate profitably with a reduced capacity.

The central Maine town of Oakland has committed to sending its trash to the Fiberight facility.

After reviewing several options for disposing of its trash, the town found it could realize modest savings from going with Fiberight. With Fiberight, it will cost the town about $77 per ton, including hauling and tipping fee, compared with $77.88 per ton if it sent its trash to the Crossroads Landfill in Norridgewock, according to Oakland Town Manager Gary Bowman.

“We’ve got a chance to break new ground here,” Bowman said. “All the reasons are here for this to work.

“We have to make this move. Maine has been known not to be a leader in new technology,” Bowman added. “Let’s make it happen right here.”

A third option

Along the outer boundary of the MRC territory from Mars Hill to Winthrop, many towns have signaled that they intend to breakaway from the organization once the contract with PERC expires in March 2018 to go with a waste handler closer to home.

Baileyville and Machias, for example, plan to send trash across the U.S.-Canada border to South West Solid Waste Station in Lawrence, New Brunswick.

Other towns still are grappling with the decision, such as Camden, Rockport and Hope, which belong to a four-town waste cooperative, after voters in the towns rejected a recommendation to go with Portland-based ecomaine and the fourth town, Lincolnville, voted to go with the trash-to-energy cooperative.

Trash disposal typically ranks among the top five expenses in most municipal budgets. Unless a town has a pay-as-you-throw program with a high fee bag, there is little aside from property taxes to cover that budget line. Many towns are opting for trash destinations closer to home in a bid to save money on disposal.

Fairfield, Waterville and Winslow plan to send their residents’ trash to Crossroads Landfill, which promises to reduce transportation costs significantly for them.

“The largest expense for trash for communities is how far you have to move it,” Fairfield Town Manager Michelle Flewelling said. “If you can find ways to basically keep your trash local, it cuts your cost substantially.”

Even though Fairfield is negotiating an arrangement with Waste Management, which operates Crossroads Landfill, haulers can take trash wherever it’s cheapest to dispose of it, which could be the landfill in Norridgewock but also PERC or Fiberight.

“We’re just required by law to ensure they have a place to take it,” Flewelling said. “These independent haulers can do with these trash whatever they want to do.”

But there is a problem with landfilling more trash. Under current conditions, Crossroads Landfill will run out of space sometime after 2024, according to the Department of Environmental Protection, a lifespan that could shorten with additional trash being sent there. What the towns will do after this point isn’t certain.

A 2012 law change gives Waste Management the option to seek to expand beyond its current boundaries into any contiguously owned property. Any expansion requires approval from the Department of Environmental Protection. But any move to landfill more trash would violate the state’s waste hierarchy that prioritizes minimizing waste or reusing for beneficial purposes.

“While expansion of the landfill may be a possibility in the future, we do not have a formal plan at this time,” Garrett Trierweiler, a spokesman for Waste Management, said in an email.

As the dust settles, it’s uncertain whether Fiberight or PERC has secured enough commitments to operate viably. That leaves towns, most of which have placed their bets on Fiberight, PERC or a third option, facing yet more uncertainty.

 

Correction: An earlier version of this report should have stated that residents in Lincolnville voted to go with Portland-based trash-to-energy cooperative ecomaine.


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