After nearly two years, the long-discussed plan to repurpose a byproduct gas from Englewood and Littleton's wastewater-treatment plant to reduce pollution and potentially make millions in profit …
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After a purification process of the biogas at the sewage-treatment plant, Littleton and Englewood will put the fuel in pipelines owned by Xcel Energy, and the project as a whole will cost about $7.4 million to pull off — a cost split essentially 50/50 between the cities.
After about 4 1/2 to 7 years, though, it would pay for itself, according to a presentation at a July 19 joint meeting between Littleton's and Englewood's city councils, and the profits would accumulate after that. The range in the payback period depends on fluctuation in the value of RINs, or “renewable identification numbers.” A federal program allows for selling those renewable energy credits, which are assigned to batches of renewable fuel that are sold in the energy market.
Profit from the project would ultimately be reinvested in the wastewater plant.
The cities' decision to pay for the project on their own — rather than partnering with a private company and sharing the profit — allows for the most control and financial gain but saddles them with higher financial risk. But the RIN program is unlikely to be changed because “it is so entwined with the current oil and gas as well as agricultural community,” said Eric Keck, Englewood's city manager.
Englewood and Littleton could sell the biogas in other ways if the RIN program did change, wastewater-plant leadership has said.
“If the RINs were to go away, the plant would continue to be paid for (by) the natural gas at market rates, which the (federal) Energy Information Administration predicts will climb due to fossil-fuel costs as well as demand for natural gas,” Keck said.
The project's overall goal isn't for the profit, Keck said at the meeting.
“That's icing on the cake,” Keck said. “The main driver is for us to be environmentally sustainable and not continue to put out the greenhouse gases.”
After nearly two years, the long-discussed plan to repurpose a byproduct gas from Englewood and Littleton's wastewater-treatment plant to reduce pollution and potentially make millions in profit cleared its final hurdles at Englewood City Council.
Englewood City Councilmembers Laurett Barrentine and Rita Russell raised the fear that utility rates would increase due to spending on the project at the Aug. 20 city council meeting. Any rate increase would not be caused by the biogas plan, City Manager Eric Keck said.
Still, not every Englewood councilmember was on board with some uncertainties in the plan.
Here are the ins and outs of how it would work.
At the core of the plan is the South Platte Water Renewal Partners plant — formerly the Littleton/Englewood Wastewater Treatment Plant — which purifies water that gets flushed down toilets and drains from showers, sinks, washing machines and so on.
The treatment produces the byproduct called biogas, some of which is burned for heating within the wastewater-plant system. The rest gets “flared” in a waste-gas burner — the plan would reduce that pollution rate by nearly 6,900 metric tons of gas, the equivalent of taking 15,000 cars off the road every year, city staff said.
A factor in the plan's ability to bring in profit is a federal program that allows for selling renewable energy credits, called RINs, or “renewable identification numbers.” RINs are assigned to batches of renewable fuel that are sold in the energy market.
Councilmembers in Englewood have raised concern of the risk that the federal government might change policy on RINs. The Renewable Fuel Standard, a program that requires refineries to blend ethanol and other biofuels into the nation's fuel supply or buy credits from those who make such renewable fuels, began under President George W. Bush. It currently extends until 2022.
Keck said that “2022 is the date that the U.S. Department of Energy, the (Environmental Protection Agency) and the (wastewater plant) RIN broker are all indicating that the RINs will be around through at a minimum.”
The plan could make about $12 million in profit to be split by both cities over 10 years, according to Keck.
Construction and development of the project would likely end around fall 2019, according to city staff. The EPA would need to evaluate the biogas project, though, which would take another five months, staff added. Revenue from the project would begin around February 2020.
Councilmember Dave Cuesta was uneasy about the timeline and the possibility it could take longer if the EPA finds issues. Blair Corning, presenting for city staff at the meeting, said it's unlikely an issue would come up that pushes the date further out.
Rates in spotlight
Russell expressed worry that residents would get a utility-rate increase due to spending on the plan, a concern Barrentine echoed.
If a rate increase is put forward related to wastewater, it will be not be due to the biogas project, Keck said.
Discharge-permit requirements from the Colorado Department of Public Health and Environment are what will drive the need for rate increases over the next several years, Keck added. The requirement to remove more nitrogen and phosphorous will require more spending, and maintenance needs at the plant are also what may cause any future rate increase, Keck said.
The components of the biogas plan passed Englewood's council over the “no” votes of Russell, Barrentine and Cuesta.
During public comment at the Aug. 20 meeting, resident Coween Dickerson said Englewood shouldn't spend on biogas until it addresses problems with its storm drainage, a concern raised in the wake of the July 24 flood that displaced several and took one woman's life.
But money from specific funds in the budget, like the wastewater fund, cannot be transferred to other funds like the stormwater fund under budget rules, Keck said.
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