After nearly two years in the works, the plan to repurpose a byproduct gas from Englewood’s and Littleton’s wastewater-treatment plant to reduce pollution and potentially make millions in profit …
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This story has been updated to reflect a new meeting date for the vote on the plan.
After nearly two years in the works, the plan to repurpose a byproduct gas from Englewood’s and Littleton’s wastewater-treatment plant to reduce pollution and potentially make millions in profit heads for a vote on final approval this month.
Englewood City Councilmembers Laurett Barrentine and Rita Russell remained skeptics in mid-July, fearing costs would fall on Englewood residents if a crucial underpinning of the proposal doesn’t go according to plan.
“We have a fiduciary responsibility,” said Russell, adding she doesn’t want taxpayers to end up footing the bill for costs of the plan.
City Manager Eric Keck, at the July 19 joint meeting between Littleton’s and Englewood’s city councils, said the cities’ investment in the project would still be repaid, even if a federal policy that allows the biogas to make profit in the energy market ends. But, officials said, the program ending soon is an unlikely scenario.
Here are the ins and outs of the plan, ahead of the Aug. 20 vote to either finalize it or deny it.
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 plant currently flares more than 5,000 metric tons of greenhouse gas into the atmosphere annually, Keck 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.
One Littleton official once called the project “in essence, a form of gambling.”
“We would be taking on a high level of risk with citizens’ money,” said Doug Clark, a former Littleton councilmember, in October.
Councilmembers in Englewood have raised concern 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 previous city council — before the November election — cleared some initial hurdles for the project, but it still faced the snag of whether Littleton and Englewood should pay for the project themselves or partner with a private company and share the profit.
The plan could make about $12 million in profit to be split by both cities over 10 years if they proceed without a private company, according to Keck. The cities have opted to cash-finance the project themselves if it’s ultimately approved.
The cities would put the fuel in pipelines owned by Xcel Energy, and the project as a whole would cost about $7.4 million to pull off — a cost split essentially 50/50 between Littleton and Englewood. After about 4 1/2 to 7 years, though, it would pay for itself, according to a presentation at the July 19 meeting, and the profits would accumulate after that. The range in the payback period depends on fluctuation in the value of RINs, according to the presentation.
As of around January, Englewood had nearly $6 million in its sewer reserves, and Littleton’s sewer reserves exceed $20 million. Profit from the project would ultimately be reinvested in the wastewater plant.
The cities’ decision to pay for the project on their own allows for the most control and financial gain but would saddle 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,” Keck 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.
Englewood and Littleton could sell the biogas in other ways in that case, wastewater-plant leadership has said. The cities could sell gas to fuel fleets of vehicles, for example.
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.”
Any utility-rate increases that occur in the future would not be driven by the project, Keck said.
“Utility rates will most likely increase due to the new permit requirements stipulated by the Colorado Department of Public Health and Environment to meet nutrient-removal levels,” Keck said.
Any profit on the project will be used for future projects at the plant, Keck said.
Englewood City Council will vote Aug. 20 on four measures to approve agreements for Xcel Energy, for construction, for RIN-brokering services and for engineering services during construction.
In October, Clark in Littleton — who at that time was still on city council — was hesitant about the plan because of a use tax that both cities would pay on the project. Because Englewood would be paying itself the tax, Littleton would end up shouldering more than half the project’s cost. Littleton has moved forward anyway and agreed to the cost, Keck said.
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