Community Renewable Energy Success Stories: Landfill Gas-to-Energy Projects Webinar (text version)

Below is the text version of the Webinar titled "Community Renewable Energy Success Stories: Landfill Gas-to-Energy Projects," originally presented on July 17, 2012.

Recorded Voice:
The broadcast is now starting. All attendees are in listen-only mode.

Sarah Busche:
Hello, everyone. Good afternoon and welcome to today's webinar. This is sponsored by the U.S. Department of Energy. My name is Sarah Busche, and I'm here with Devin Egan, and we're broadcasting live from the National Renewable Energy Laboratory in Golden, Colorado. We're going to give folks a few more minutes to call in and log on. But during that time, Devin is going to go over some of the logistics to make sure that everyone can hear the webinar just fine. Devin?

Devin Egan:
Good afternoon. First of all, you have two options for how you can hear today's webinar. In the upper right corner of your screen, there's a box that says "audio mode" that will allow you to choose whether or not you want to listen to the webinar through your computer speakers or over the telephone. As a rule, if you can listen to music on your computer, you should be able to hear the webinar. If you have questions during the webinar, use the questions pane in the right-hand box on your screen. There you can type in any question you may have during the question-and-answer segment at the end of today's presentation.

And after today's webinar, you'll be prompted to complete a short survey. Please take a few minutes to submit your answers when the webinar has ended. Today's webinar will also be posted online on the Community Renewable Energy Deployment website. Once the presentation is posted, you'll receive a link to it via e-mail when it's available, but please note that this process can take 7 to 14 days.

With that, I'll turn it back over to Sarah to talk about today's webinar and our overall series.

Sarah Busche:
Great, thank you, Devin. Today's webinar is the first in a series of the Department of Energy's Community Renewable Energy Success Stories. What we call Community Renewable Energy for short is CommRE. So if you hear that today, that's what it means.

Each of our webinars will feature communities that successfully implemented renewable energy technologies. The Community Renewable Energy Deployment, or CommRE, project is a more than $20 million effort funded through the American Recovery and Reinvestment Act of 2009, with the goal of promoting investment in clean energy solutions at the community level and providing real-life examples for other local governments, campuses, and utilities to replicate.

Five community-based renewable energy projects received funding from the Department of Energy through CommRE in Vermont, Wisconsin, Colorado, and California. This webinar series is a part of the broader support for communities provided under this project. Because there are so many communities leading the way in renewable energy, this webinar series will cover projects beyond those that received grants under CommRE. This is an opportunity to learn from their successes so others on the line can help implement projects similarly.

Today's presentation will feature information on the challenges and benefits of developing successful community landfill gas-to-energy projects. Our speakers will present on the Prairie View Recycling and Disposal Facility in Will County, Illinois, and the Perdido Landfill Gas-to-Electricity Project in Escambia County, Florida.

Today's speakers are Dean Olson, who's the project manager for Will County; Paul Pabor, the vice president of renewable energy at Waste Management; and Brent Schneider, engineering and environmental quality manager at Escambia County in the Florida Department of Solid Waste. Without further ado, hopefully everyone's been able to log on just fine. If you have a question, go ahead and put it in and we'll answer it as quickly as we can. And we're going to go ahead and get started with Dean Olson and Paul Pabor right now. Dean?

Dean Olson:
Yes, I appreciate the opportunity to talk about our project. We're very proud of the fact that we've had this partnership with Waste Management for many years. Our landfill has been operating about eight and a half years now. And you'll see a picture of it on the screen there. That's a newly formed cell with liner and transfer trucks in the background, which is about 80% to 90% percent of our incoming waste is from transfer volume. And next slide, please.

[Next slide]
We are located at the Joliet Arsenal and Ammunition Plant, which is 40 miles southwest of Chicago. Our footprint is 223 acres on a 455-acre parcel. We were able to get this parcel from the federal government back in 2002 as part of a re-commissioning of the plant itself. It wasn't needed any longer, so it basically got divvied up into four different uses, one of those being a landfill.

And we are the owner of the property. Waste Management's the operator. We've had a contract since 1997; however, we didn't get that parcel until 2002, as I mentioned before. And we do have a cap, a 23-year life on our landfill, and that's part of that deed from the federal government. Next slide, please.

[Next slide]
As I mentioned just a minute ago, we do have a contract in place with Waste Management since 1997. Now, when that contract was executed, there was a bidding process and such before. But within the contract, there was a gas-to-energy plant clause, and it was pretty brief, but it was always envisioned that the county could make various decisions with that gas. We own the gas in the landfill, so do we want to build the plant ourselves? Did we want to bid it out? Or do we want to just work with Waste Management? We could do any of three of those concepts.

So we did choose to retain the gas rights, which is very valuable in one of these projects. Basically your product that you're selling is the gas. And Waste Management is part of our agreement. It's a host community agreement. Had to install the gas collection system. They actually started getting gas as early as two years into the life of the landfill. And so we kind of knew we had some gas fairly quick, and maybe we could get to that point maybe slightly earlier, but still not seeing the amount of gas that we're seeing now. We own the actual property, but we let Waste Management own the plant, and that's because they need to be able to get the tax credits, and that's a huge part of this whole equation of making this financially viable. Next slide, please.

[Next slide]
One of the things that stimulated us building this plant a little quicker was our Department of Energy grant or the stimulus grant. So in June of 2009, we did apply for our $3 million allocation, and as part of that Energy Efficiency and Conservation Block Grant you needed to develop a strategy on how you're going to spend that $3 million, in our case. Well, the county board decided to take $1 million of that $3 million and put it toward this plant and be an investor in renewable energy ourselves.

So what did we do to make sure that happened? We hired someone to basically help us negotiate this contract. So this was done fairly quickly. I mean, the strategy was approved in basically later November 2009. We negotiated the agreement in December and January, and in February we were already getting the – having the county board authorize—the county executive to execute the agreement. Next slide, please.

[Next slide]
So in that agreement, which was signed around April 1, 2010, we did put various milestones, and Waste Management did adhere to those. One of those which was part of the energy grant was to make sure that the money was spent in a timely fashion, so that meant that Waste Management had to buy the engines that we were going to install a little earlier than maybe they would have. But that's what we were purchasing with that money was one of these 1.6-megawatt Cat engines, 3520 engines, and a portion of a fuel skid. So they had to go out and kind of put that money out there. Of course, our money was part of that, too.

So right now we do have three of those 1.6-megawatt Cat engines, and we also have – we're hoping to have eight when we're fully built out, which will probably be 10 to 15 years from now, but maybe sooner. I don't know, depending on how things are going right now, it might be sooner than that.

So what happened? Well, Waste Management did begin construction, after getting all the permitting and everything cleared up, in the fall of 2010. And by the summer of 2011, they basically had the plant built for the most part. The thing that was the hardest was the utility and the hookups, and just keeping them kind of at task, and making sure that they were getting the lines and such put in, ordering the lines, making sure the contractor was doing their job. But we also had to get an easement because we had to go through the industrial park to our cells to be able to hook up to the grid eventually, so we had to negotiate that. I should say that was Waste Management, really, that did that, not the county. But we were part of it, just to make sure it happened. Next slide, please.

[Next slide]
And so after pushing ComEd pretty hard, we were able to commission the plant in 2011, and we've been operational since December of 2011. So we're already powering an equivalent of 3,000 homes, and we're hoping – basically, when you add up all the engines, it comes out to, my understanding is, an equivalent of 8,000 homes, so 1,000 homes per engine, basically.

Of course, we're capturing those greenhouse gases which are a problem, and we are collecting this revenue source now for over 20 years. So you figure, we were able, as an investor, to put $1 million in, which did help Waste Management build this a little faster maybe than they would have, and we're going to collect a revenue source for over 20 years from this investment of $1 million. So right now we're on target to collect almost $450,000.00 this first year, so not bad for the first year in the life of the facility. Next slide, please.

[Next slide]
So in essence, the county is paid for the gas. And Waste Management then generates the electricity and sells it to ComEd or to the grid, in essence, and the excess is flared. We do have actually two flares that we can use. The new engines as we need them are permitted, and that is going to be something we'll talk about in a minute. But we need enough gas to get to the next engine. And at what point do you try to get that air permit, and if you know you're going to need more eventually, do you go for the one engine or for the whole eight? So we're trying to deal with that right now.

So we get these gas payments. They're basically almost guaranteed payments because we know we have the gas; we know it has to go somewhere. So we chose to go that route instead of being just, say, a total stock market type investor and do that route, so we chose to get gas payments on a monthly basis. And then later on, we're hoping that we will be able to share in some of the revenue once energy prices and renewable energy credits, capacity credits, all that type of credits and various financial gain from this, add up to a certain price, then we'll share 50/50 in that revenue with Waste Management.

So this is a public and private partnership. So the county basically just monitors or does project management activities on this. Waste Management has done all the work. We did give the $1 million from the grant, so I did have some little paperwork with that. But other than that, it's all Waste Management, and it's on them. There's a lot of guarantees that we have built into this agreement that really kind of help the county not have much liability. Next slide, please.

[Next slide]
One of the reasons why we are creating a lot of gas right now is because we're recirculating the leachate, which is the liquid that you get from rain or moisture in the garbage, and it drains to the bottom of the landfill, and that is usually pumped out and sent to a treatment plant. Well, instead of all of it going to a treatment plant, about as much as half of it now is allowed to be recirculated and put back into the landfill and make that water waste, helping it decompose faster and creating more gas. And the estimates were about 30% more gas coming out of that waste mass in the landfill.

The other benefits you can get are post-closure care. That is, the waste is decomposed. The gas has already been basically used up. It's already gone out of the landfill, so the impacts are negligible, so there may be some benefits down the road. Of course, there isn't a lot of 30-year post-closure care landfills out there yet. We're still in that phase where we haven't achieved that, so it's hard to say, but it certainly appears there would be some savings there.

Also, because of that decomposition of the waste, we are going to probably obtain some more revenue if we're able to fill that landfill up to its capacity, so that extra million, 2 million cubic yards or tons that we're going to be able to obtain from that, that did help as well.

So what did the plant cost? Getting back to the actual gas-to-energy plant. Over $9 million. Originally, it was estimated at about $7.2 million, but most of those overruns, my understanding, had to do with the utility and having to pay for them to kind of get the job done within the timeframes that we wanted Waste Management to have this thing ready to go. Next slide, please.

[Next slide]
So what did we learn from this? Well, we are very glad that we selected an experienced contractor such as Waste Management. We're glad that we have the same firm managing the gas system and the plant because that is so crucial to making sure that everything is operating in-sync. So we want to make sure that communication is good. There is a little bit of hazard with this stuff. We want to make sure that it's handled properly.

Also, we want to make sure this is a long-term agreement that both sides are pleased with. So we asked them – we looked at their side as well. We want to make sure that, as we put these engines in, it's got some flexibility. Right now this agreement goes through the fourth engine. We're on the – obviously, we have three engines. We're looking at putting that fourth one in before too long. And then engines five through eight, we will be sitting down and talking, making sure that we have an agreement that everyone's happy with, and so I think then both sides will continue to benefit from. Next slide, please.

[Next slide]
So why did we become partners with Waste Management? Well, I think the track record was very good with the county and Waste Management. Very, very few complaints in the eight and a half years we've had that landfill in operation, so that helps a lot. Also, the Department of Energy agreement did make a difference. That's why we did this contract a little sooner than we would've, so that helped a lot, too. So if you can find a revenue source, a way to get that stimulated or get your contractor to do it a little faster, that's important.

And the county board, they saw the benefits here. I mean, here, we can be in the energy market, create some energy, set an example, and also make some money that we can use, and we are trying to make sure that that's used for energy purposes down the road, too, for the county's efforts.

And we're able to work very well together. I mean, Waste Management was constantly in communication with us, letting us know what the problems were, what we needed to deal with, if they needed any assistance as far as making sure that I call the EPA or I call the folks at ComEd or anybody that needed some little nudge. That was critical. So the deadlines also helped. Make sure you have some deadlines in your agreements. Of course, there are some things you can't control, such as the utility, but still, you need to have something there to keep your contractor motivated and keep that project moving. Next slide, please.

[Next slide]
So Waste Management, because they had the financial means to do it, they paid the utility a premium to make sure that they were more responsive and just dealt with this project very seriously and made sure that they built a plant and had it hooked up to the grid within the deadlines. And I'll just give you the deadline. We did get pretty close. It was December 31, 2011; it got commissioned December 9, so we were about three weeks out. But it was all that pushing and just prodding from Waste Management's part, too, that made the difference.

Now, you also have to make sure that you build in time for your air and your land permits. The land permit, in this case, was necessary because we had to do a significant modification permit to our landfill permit, to accommodate this facility. The air permit had to be upgraded because, even though you're using the gas, there is more gas that's coming out of landfill, and so you have to account for that, so to speak. And there are a lot of other approvals, such as building permits and health department permits and things like that. And I'll let Paul maybe speak briefly about that. Do you want to say a few words, Paul, on what you need to get these things built ultimately?

Paul Pabor:
Sure. Sarah, how many minutes do we have?

Sarah Busche:
You've got about ten.

Paul Pabor:
Okay. When we develop a project, we look at an initial size of and a number of engines to install, and that's based on proven flows, the existing flows that we're seeing from the site. And then we also provide for near-term expansions based on the flow curve, the waste rate, and the planned wellfield construction at the site. So at this project, we knew we had enough for two engines. We looked at the timing of construction and agreed that by the time the plant was commissioned, we should have enough for three engines. And so that was built into the contract and built into the initial construction.

So we submitted an air application for three engines, and I think the main – every air application, of course, is different depending on the state you're in, the EPA region, the nature of the landfill, and the constraints on the zones that you're in as far as air permitting. So we initially applied for three engines, and working with the Illinois EPA, we determined with them that it would be more expedient if we resubmitted using two engines and limiting our emissions to 80% of the major source thresholds. We then resubmitted for another, third engine, which required public notice and went through without any constraints.

And so I think the main takeaway here, again, is working with your state agency on the permitting, developing a strategy, tying that to the size of the plant. In some cases, you may have a developer on your landfill who actually has a separate air permit from the landfill. In Waste Management's case, all of these have to be embedded in the landfill air permit because we're under common control with the plant and the landfill, so the strategy for the air permit for the plant has to take into consideration your future emissions and your future plans at the entire landfill.

A few comments on the interconnect. It's real important to start these things early, and we felt like we did. We had a scoping meeting as soon as it was apparent that we were going to be able to come to terms with the county on the landfill gas sale agreement. It took about 10 months to get a final study from ComEd, and that final study, the estimate came in at 1.5 to 2.2 million. And as Dean said, we went through an easement negotiation after that. That final study report was received in December of 2010. We had already started the groundbreaking at the plant, so there's got to be some urgency on wrapping that up. The plant was ready in the summer of 2011, late summer. Utility connection was done several months after that, so we did slide in under the contractual milestone requirement.

I think a takeaway from this, and a lesson learned that we have from bidding on third-party landfills: If you own a landfill and you want to go out to bid for developers to build a power plant, it is very helpful if the landfill owner, whether it's city, county, or private, goes out and gets an interconnect study before they distribute an RFP for a power plant, because for one thing, that puts all the developers' bids on equal footing. They're not guessing at interconnect costs and technical requirements. And secondly, it really pushes the development forward, so if you end up having a multi-month study from the utility, that's already in-hand before you get going.

And then one other hurdle we had in this project was pricing. Illinois is a deregulated state, but it's been very slow to develop retail energy providers to give a competitive nature to wholesale pricing. So we are on the real-time pricing from ComEd. When we started looking at the project in 2009, prices were around $50.00. After the contract was signed in 2010, these prices had dropped to the high $30s per megawatt-hour. And then at startup, the prices had dropped to the low $30s per megawatt-hour, and so far in 2012, they've been at $27 per megawatt-hour.

In a deregulated market, the retail energy providers, including ComEd, are sometimes reluctant to sign long-term deals because they don't know what their demand is going to be over the long term. So we're still looking at options there on pricing.

Renewable energy credits are significantly down in Illinois. And we wouldn't want to sign a long-term deal right now anyway at what we look at the bottom of the market. So we are looking at options. We look at this project, regardless of the energy pricing, as a continuing partnership with the county and fulfilling contractual obligations with the county and also understanding that we do take Section 45 tax credits from the energy that's sold.

Dean Olson:
Thanks, Paul.

Paul Pabor:
Dean, I'll leave that back to you if you need to wrap things up.

Dean Olson:
Sure, sure. Could you switch to the next slide?

[Next slide]
Well, I want to also say that, so far, so good. Definitely a positive long-term relationship with Waste Management, eight and a half years and going strong, and I expect to be 20 more years of the same. Our agreement has got, what, about 18 years left on it or so since it was signed, so I expect that relationship to sustain for the long term. Again, we didn't use any of our money, so it was a really great experience. I can't say enough. I mean, we're getting some energy created here from something that is due to something that is a greenhouse gas, and we're also making some money out of it, so I think it's a win-win-win all the way around. So could you go to the next slide, please?

[Next slide]
And we have definitely received some recognition from this project. And granted, it is another gas energy project, but I think the way we did this, I think it is going to benefit both sides for the long term. The county has something they can be proud of now, and we're looking at possibly other renewable energy projects, either on that landfill or other landfills around the county, with this revenue that we're getting. So it is the beginning of renewable energy projects in Will County. So we're using it for environmental education, and we're just hoping that we can kind of keep this ball rolling in the far-distant future. So with our energy plan that was just passed – could you go to the next slide, please?

[Next slide]
Last month, and we do have a lot of projects on tap that we plan to execute within the next year and a half, so using these funds from this facility as one source. So that's all I have as far as my presentation goes.

Sarah Busche:
Thank you, Dean and Paul, for giving us a great overview of the project. We had a number of questions come in, and we're going to do a few of them right now, and then I'll save some of the rest for the general Q&A at the end of the webinar. So Aiden has asked: Has the cost effectiveness of capturing, transporting, and selling excess gas to other plants been investigated?

Dean Olson:
We did not look at that, because Waste Management—when we were talking to them, my understanding—and you can reiterate, Paul, on this—the electric market seemed to make a lot more sense than trying to go the natural gas market way. And the natural gas market is quite low. Electricity isn't great either, but natural gas is very low. Paul, would you want to say more, 'cause you're definitely more of a market guy than I am?

Paul Pabor:
Yeah, we've seen the same thing. I'm not sure which direction that question was headed. It sounded like possibly sending it to other applications, whether it's energy or pipelines. And at this site, we have built the project to accommodate a fourth engine without a lot of increasing costs, so I think bringing it somewhere else would be less cost-effective than just using it on site. And typically, eight or 10 miles is a reasonable distance for piping landfill gas to another project. And there's not much around this landfill at this point in time, so I think the best application and most efficient would be using it on site.

Dean Olson:
Where we're located is—it's just being redeveloped, so the industrial park hasn't really taken form. There's one tenant, which—and they're not going to use much there. If it was fully developed, maybe it'd be a better option or something to look at more seriously.

Sarah Busche:
Okay, well, thank you. We've got time for one more question, and Paul, this one was directed toward you. Can you talk about why the cost of interconnection was so expensive? And this was asked by Mark.

Paul Pabor:
I don't have a lot of technical details on that interconnection. It did go over three miles, and it was a 34-kV interconnect, which drives up the cost a little bit above just a very local distribution line interconnect. And when you put in an interconnect, you're pretty much at the mercy of the interconnect line owner as to what his costs are going to be. So typically, the utility will estimate the cost and give you the cost, and if you want to do the project, that's what you gotta pay. In this case it was, I think, a combination of the distance to the interconnect and the voltage level.

Sarah Busche:
Great, thank you, Paul. So we're going to move on to Brent to talk about the project in Escambia County. And please continue to ask questions, and we'll have a general Q&A after Brent's specific Q&A. So Brent, are you ready?

Brent Schneider:
I also appreciate the opportunity to present today and highlight our project. Our project's titled Perdido Landfill Gas-to-Electricity. And today I'm going to give you an overview of the project. I'll be discussing our motivation for pursuing this specific technology. I'll be discussing challenges in the development of the project. And then finally I'll hit on some of the project's successes. There are some similarities with our project to the first presentation, so I'll discuss some of those. I also would like to perhaps highlight some unique aspects to our project. Next slide, please.

[Next slide]
Just a quick geography lesson. Escambia County, for those of you that don't know, is the most western county in Florida. The Perdido Landfill serves approximately 300,000 residents, including the city of Pensacola. And notably, we are only one of two landfill-derived energy projects in the Florida panhandle, and we're quite proud of that. Next slide, please.

[Next slide]
Escambia County is not new to landfill gas-to-energy. I'd like to give you a project background. This predates the landfill gas electricity project that we currently have ongoing now, but it tells a lot about the history and how we came to our current project, but this is a direct-use project where we pipe landfill gas directly to an end user. And the aerial here shows the facility on the lower left, which is the Perdido landfill, and then to the right is International Paper, a worldwide paper production company. And they were located seven miles from our facility, so at the time the economics turned out to be a beneficial project. So in 1997 we started piping to IP, for their boiler use, our landfill gas. Next slide, please.

[Next slide]
So the landfill gas from Perdido landfill fueled one of five boilers at IP. This project was independently developed, and it involved a third-party vendor where they had a contract with the county to manage the wellfield at the Perdido Landfill. And at the same time, they had a contract with IP, and their contract with IP was performance-based. They're paid on the amount of gas that was delivered to the plant, whereas their contract with us was just a gas rights compensation. They compensated the county about $75,000 a year for the gas rights. Next slide, please.

[Next slide]
Some of the challenges with that project – IP, the paper mill, had sufficient fuel from the other boilers, so demand for the landfill gas fell off at IP, and it really caused a domino effect. The firm that was managing our wellfield, since they weren't able to deliver as much landfill gas to the mill, they were losing revenue. And as a result, they spent less effort and money on managing the landfill gas collection system. So Escambia County experienced consequences from a compliance standpoint. We had surface and boundary emissions increase, and we were at risk of being out of compliance with our air permit.

We did our best to push them to take measures to implement additional controls, but they were reluctant to do so since the revenue source had been drastically decreased. Part of the issue was that the contract, in hindsight, was probably too ambiguous in terms of the responsibilities of environmental compliance. Next slide, please.

[Next slide]
The county at the time decided to terminate the contract with the third-party vendor, and there was a clause in there that allowed that to happen. So with our lessons learned, the county was really ready to move on and to move forward with a clean slate and a project that would be beneficial not just from an economical standpoint but, most importantly, from an environmental compliance standpoint.

So we went out and we solicited proposals for a new landfill gas-to-energy project in 2009, and we initially explored all the various technologies and systems available, and that included high-Btu projects, electricity projects, and direct-use projects. And after reviewing all the options, we spent quite a bit of time evaluating the pluses and minuses of all the technologies, the expenses, the environmental considerations. And so we determined that landfill gas electricity technology was going to be the best option for the county. The proposal we received for landfill gas electricity offered a steady revenue. It was a proven technology, and we were pleased with the proposed revenue, as I mentioned. Next slide, please.

[Next slide]
Where this project is a bit unique from the first project is that this was a partnership with Escambia County and the utility, and that utility is Gulf Power. They're owned by Southern Company. They're a large utility in the Southeast.

And I'll get into the finances, but just to mention, a contract stipulation was that we produce 1,200 SCFM, which is a unit of measurement for flow rate for the landfill gas. That seemed to fit in with what we were producing in our gas curves at the time. The initial proposal called for 3.2 megawatts of electrical generation with a build-out of 6.4, so we had the ability to double our production as landfill gas became available.

The fourth bullet – DOE EECBG grant funds enabled the county to make expensive wellfield upgrades. I should say also, to make a distinction from the first project, all of our grant funds actually went to upgrading the wellfield and increasing the collection system, increasing the landfill gas wells and optimizing the spacing, and then also the conveyance system, which I'll also get into a bit more.

Also, another attractive feature of this project was that Gulf Power was willing to fund the cost of the plant entirely on their own. And the cost of that plant was in the range of $6 million. And then finally, the county received compensation from Gulf Power for MMBtu. And just to kind of summarize, the county was responsible for the cost associated with the wellfield, and then Gulf Power paid for the plant itself, and the DOE fund went to the county to make those upgrades. Next slide, please.

[Next slide]
So we received approximately $900,000.00 to install new header line, laterals, and gas wells. We installed approximately 38 new vertical wells. The image on that slide shows the installation of those wells, as well as the header line. Had several thousand feet of new header line and laterals. The grant funds also included the cost of the blower and flare system, and then the transmission line to the Gulf Power plant. Next slide, please.

[Next slide]
The 1,200 SCFM is important, again, because there was a contract stipulation. We had to provide Gulf Power with that minimum flow rate. And the DOE grant money, by improving our collection and conveyance system, really helped us to achieve that minimum flow rate. And as a matter of fact, we've been meeting or exceeding that flow rate.

Our methane is extremely rich. It's 54% to 56%, which is outstanding. Typically, other facilities would be in the range of 50%. We have two 3520 Caterpillar engines. And as I mentioned previously, we have the capacity to build out to four engines.

The plant has been operating at 98% efficiency. In other words, that's the percentage of time that the plants are actually up and running and producing electricity, so that is something we're very pleased with. And we're currently expanding our gas collection system, and we have plans to add an additional engine, a third engine, on-line in the near future. Next slide, please.

[Next slide]
Again, this is a unique county-utility partnership where, typically, you would have a third-party developer come in and they would develop the plant, they would own the plant and sell to a utility, but in this situation we work directly with the utility, and so far it's been a very beneficial arrangement.

Similar to the Will County project, we have a firm that manages the gas collection system as well as the plant, so this firm Gulf Power hired to operate their plant. And at the same time, Escambia County hired this firm to manage the wellfield, and they're paid by Gulf Power based on—it's an incentive contract, so the more gas they can provide to the plant, the more revenue they see, so they obviously have an incentive to increase production in the gas collection system.

An important lesson we learned from our first project and our first contract was to really emphasize environmental compliance. And we took our lessons learned from that project, and we included stronger contract language that required the operator to adhere to our Title V permitting. And so far, we've done a much better job of staying in compliance, and we've improved the emissions situation that we had with the first project. Next slide, please.

[Next slide]
Project successes. First and foremost would be achieving environmental compliance, improving our control system, reducing our methane emissions. We have a source of renewable energy for years to come. Our gas production curves have us projected well into the future and positioned to add those additional units as the additional gas becomes available. What I didn't mention earlier was, each one of those 3520 Caterpillar engines requires 600 or so SCFM, depending on the percent methane. So that is the magic number. Once the county produces another 600 SCFM for a certain period of time, then we'll be in a position to add that third engine.

The revenue that the county has received from sale of landfill gas has been better than expected. We're paid on an MMBtu rate versus a megawatt-hour rate like the first project, and our rate is $2.47 per MMBtu, with an escalation of 3% per year. And that is quite exceptional. We haven't seen any other compensation rate like that anywhere around, so we're very pleased with that. 2011 was the first full year that we had the engines up and running, and the county received $750,000 approximately, in revenue for 2011.

Aside from the environmental and the financial benefits of this project, it's been a really positive community partnership with Gulf Power, Escambia County, and then also the third-party firm that operates both facilities. We've received several LMOP awards and SWANA awards, and have done a lot of really positive publicity for this project in this area. Next slide, please.

[Next slide]
Just wanted to leave you with this picture of landfill gas flares. It's not something we like to see being in the waste energy business, 'cause it means lost revenue, but it's a nice graphic nonetheless. And that concludes my presentation. I'll open it up for questions.

Sarah Busche:
Brent, thank you so much, and it actually leads in quite nicely to a question that Hantuyu asked: Why did Escambia choose to develop renewable energy projects? What made this preferable to flaring?

Brent Schneider:
Well, the landfill has been in operation since the 1980s, and just in recent history, I'd say mid to late '90s, we had the gas available to where it made sense to explore these landfill gas-to-energy technologies. So the first project, as I mentioned, financially it didn't turn out to be the best project for the county. And we took all those lessons learned and continued to get educated on the different systems out there, and in 2009 we had even more gas available and we were able to get funding, and explored landfill gas electricity, and it turned out to be a really win-win project for the county and Gulf Power.

Sarah Busche:
Great. And then Thomas asks: What level of NOx and CO emissions is the project seeing, and is there any post-combustion exhaust treatment?

Brent Schneider:
I don't know the technical details of the Gulf Power system and the details of the Caterpillar engines. I know those engines are quite robust and they can handle high levels of NOx and SOx. But yeah, I'd have to ask Gulf Power about that.

Sarah Busche:
That was a difficult question. So we have another one from Sue Bode: Did the project receive any other financial incentives other than the one you mentioned from the Department of Energy? And if so, from who and under what program?

Brent Schneider:
No, the only funds we received for this project were the Energy Efficiency and Conservation Block Grant. And the county as a whole received $3 million, and that $3 million was split into three separate projects that the county had looked at at the time. One was the landfill gas electricity; we had a geothermal project; and then updates to HVAC at some of the county administration offices. But the county was just successful in receiving those DOE grants, and fortunately, we're allowed to use those to really improve our gas collection system.

Sarah Busche:
Thank you. And one more question for you, and then I'll open it up to some more questions for everyone else. Kelly asks: Do you have any suggestions for other county or city governments that are looking to partner with utilities in a similar type of renewable energy project?

Brent Schneider:
Well, it can probably start with casual conversation with utilities. A lot of it depends on where you are in the country. For example, Florida currently does not have a Renewable Portfolio Standard, which means they're – utilities in Florida, at the time, are not mandated to have a certain percentage of renewable energy in their portfolio. Now, in 2009, legislation was coming through that looked like it would've required utilities to have a certain percentage in their portfolio, but that since has gone away. Not to say things won't change in the future.

So depending on where you are in the country, you might be in a state that needs that renewable energy as part of the portfolio, so those utilities are going to be probably more driven to explore these technologies. Landfill gas-to-energy is one of the cheapest forms of renewable energy, so it is very attractive to utilities. But I would say a conversation with the utilities and maybe a feeling for what their intent is, if they are required to look at renewable projects, or maybe they're a utility that is just looking for cheaper sources of energy. So I think it depends on where you're located and then also the particular utilities that you're dealing with.

Sarah Busche:
Thank you, Brent. That's a really good suggestion to check out the Renewable Portfolio Standards that apply to the utility you might be interested in partnering with. For those of you who might not be familiar with it, there's a website called DSIRE. It's the Database of State Incentives for Renewables and Efficiency. And you can access it at www.dsireusa.org and quickly find the information about what renewable energy can be used for a state to meet their RPS goal.

So Brent, thank you so much for the presentation on Escambia's project. I'm going to ask a few more questions, and I'll go back and forth between all three presenters.

Sarah Busche:
Okay. Great, thanks. So we have a number of questions still coming in. Paul, I have one for you from Casey: Are you familiar with a cost-effective scrubber for landfill gas-to-CNG at small sites? She's currently flaring landfill gas at the project that she's talking about but would like to convert to transportation fuel for the city's CNG fleet. Paul, are you still there?

Paul Pabor:
Yes. I can pass along that there's a company who's given numerous presentations at LMOP and SWANA conferences. They have a couple of active landfill gas-to-CNG projects in operation. The company name is Cornerstone, and I think you can probably get a contact off the LMOP, the Landfill Methane Outreach Program site, on the EPA website. There are a few other companies that we've been approached by on landfill gas-to-CNG. The Cornerstone unit is targeted at very small flows, but I think you can put multiple units together.

Sarah Busche:
Great. Thank you so much, Paul. Here's another question for the Waste Management project. Gwendolyn asks if there was public concern about the amount of profit that the private company might earn. Dean, I think this might be for you.

Dean Olson:
Yeah, sure. Sure. Yes, there was a little bit of concern. Paul had to do a little comparison. Of course, as I'm hearing the Florida project, of course, it goes through my head, "How does this stack up to that?" and "What is our rate versus theirs?" But yeah, they wanted to see how it stacked up against others.

Now, one thing with our project is—again, I'm going to reiterate—we didn't spend one cent of our own money. So we don't have any responsibility for the gas. We didn't have any responsibility for building the landfill. We don't have all the performance bonds, liability is on Waste Management, including the carbon emissions too, which is part of this.

So if you look at that part of it, where there's really nothing that the county's putting in, no investment of our own dollars, it does make it a little bit different. But even so, Paul did give a couple other examples that were —he tried to make them as parallel as possible, but of course, they're all a little different. And we weren't at the highest, but we weren't at the lowest. We were fair to midland, as they say. Wouldn't you say so, Paul? Our project is fairly well compensated, but you're not going to break the bank with this project, right?

Paul Pabor:
Yeah, and I would say there was intense interest on making sure that this project was fair to both parties. And our company has been on both sides of this equation. We do have third-party developers on our landfills, and some of these contracts go back eight or 10 years and were given a fixed rate for the landfill gas, which is very often pretty low in today's market. And so we've been on that side of the equation too, and we want to make sure this is fair for the county. And I think the combination of a price paid for the gas, and then if renewable energy credits or energy prices go way up, the county shares in that. So I think all in all, what we were able to present to the county commissioners persuaded them that this is a fair price. And as Dean said, compared to other projects that we've been involved with, it was pretty much in the middle.

Sarah Busche:
Good, good, good, good to hear. Brent, I have a question for you from Heather: Is the underground piping vertical or horizontal, and what factors are considered when determining the orientation of the perforated piping?

Brent Schneider:
Starting off with the first part of that question, the header system and the lateral system, that's all subgrade, as well as the transmission line to the plant. And then secondly, the question about perforation I'm assuming means the perforations in the vertical wells. Rule of thumb is, you have solid pipes 20 feet below grade, and then below that is perforated pipe. And you do that such that you don't draw in oxygen through those wells, and you have an oxygen barrier near the surface. So if that answers that question.

Sarah Busche:
Hopefully it did. Thank you. So this question is for anyone who wants to jump on and answer. Paul asks: Can a renewable collection system be retrofitted at any landfill site, retired site, or must it be considered at the start of a new landfill?

Paul Pabor:
A gas collection system—this is Paul Pabor—gas collection system is typically installed during the active part of the landfill. So by the time you close the landfill, it's already installed. You can go in at a landfill that does not have a collection system and put one in, but there is quite a bit of risk involved with that. First of all, you're not assured that if you spend a few hundred thousand dollars putting in a collection system that you're going to get enough gas to support a renewable energy project. And secondly, once you do put the system in, you're pretty much committed to maintenance and compliance costs for the rest of the post-closure period related to that system, so there is some risk involved there. If it doesn't have one, you may be able to pick up some greenhouse gas credits as a voluntary destruction of methane. But it's a significant amount of money and a whole lot of uncertainties on what you're going to get.

Brent Schneider:
I would add to that –

Sarah Busche:
Thank you, Paul.

Sarah Busche:
Go ahead, Brent.

Brent Schneider:
Yeah, I would say an important first step is knowing how much waste you have in place, and then also, if you don't have a collection system installed, what is your—if you're a new facility, what is your potential to produce gas and then plan accordingly? If you're not installing a system for energy purposes and you're large enough, more than likely you'll be required to per NSPS instead. So kind of knowing what your potential is as a facility to produce gas.

Sarah Busche:
Thank you, Brent and Paul, for giving such a good answer to that question. Dean, this one is for you, I think. Can you please elaborate on the gas-to-energy tax credits which made your project financially viable for a commercial partner?

Dean Olson:
Well, we actually cannot get the tax credits. Waste Management gets those credits. However, the way we structured this was, we have what's called a ground lease. We get a minimal payment for leasing the land underneath the plant to Waste Management, and then they own the facility, and then they can have the ability to operate it.

But Waste Management gets—they have a right to all the credits. However, when they reach a certain level, then we will start sharing in those credits. And so every month when they give us a statement, they have to at least explain, if there isn't any renewable energy credits or capacity credits, which are the ones that apply to this project right now, if there isn't any, why isn't there any? They didn't sell any; they didn't get any. The tax credits are their own, so they don't play into this agreement. It's explicit in the agreement that we can't get involved with that because we're the government.

Paul Pabor:
Yeah, and this is Paul. The Section 45 tax credits are $11.00 per megawatt-hour, so whatever we sell to ComEd in units of megawatt-hours, we can claim on our tax return as a company $11.00 for each megawatt-hour. So it goes for a period of 10 years after the plant is started up, and the tax credit rule expires at the end of 2013, at the moment, under current law. And so unless that deadline is extended, you need to get your project in place and operational before the end of 2013 in order to claim the credits.

Sarah Busche:
Thank you. I have one final question, and I'm going to ask this to both of you, so Brent, if you want to go first, and then I'll have Dean and Paul answer it. The question comes from Maggie, and she asks, in either of the projects, if there was pushback from the residents in the nearby areas, and if so, how was it dealt with?

Dean Olson:
Well, this is Dean. There was absolutely none. We did have a county board member that was concerned, which they were a little misguided about the leachate recirculation portion, because we had that approved at the same exact time as the agreement was approved. So that played in—even though we knew it could be controversial to try to do it that way, it needed to be done because that was going to give us that extra gas to get to that third and then fourth engine.

But as far as residents, we had a handful of complaints a few months back, and Waste Management spend immediately the $10,000 to buy the valve and correct the problem, so that was gone in a matter of a week or two. And so we haven't had any real issues with the residents. We're kind of in a landlocked area. We even had to get an easement to get our road to get out of the middle of this old arsenal. So the nearest resident is almost a mile away, and there's only a handful there, so we don't have a lot of potential people that would complain.

Brent Schneider:
This is Brent. I don't know of any public opposition to this project as well. We worked diligently with our public information office, as well as Gulf Power's, and put a lot of educational material out there, and it was publicized in the local newspaper. And so citizens were educated and informed on what we were doing, and it was overwhelmingly successful. But yeah, I think the education is important, and —leave it that.

Paul Pabor:
This is Paul. We've got 70 power plants on landfills that we own and operate, and overwhelmingly these are great opportunities during either groundbreakings or grand openings, and we did this at Prairie View, to open up not only a plant, but the landfill, and show the public what we're doing with respect to environmental control and now green energy. And there are times when there are noise issues or other concerns that people may bring up on emissions, but I think that's normal. These are essentially industrial facilities that are making power, but there are technical solutions to those types of issues that do come up. In fact, there was a study. It's a little dated now, but a study that showed that the one thing that could swing a person's perception and opinion on a landfill from negative to positive or from negative to at least neutral is putting in a power plant, because they can see that there's some value coming from the waste that's being put in the landfill.

Sarah Busche:
Well, thank you, all three of you, for answering that question. Working in the renewable energy industry, it's always good to hear that opposition is minimal or that there's even a lot of support for these types of projects. So I want to thank all three of you for your presentations and for giving us such a wonderful overview of the two different projects, the one in Will County and the one in Escambia. And I also want to remind everyone that this information, the webinar itself and the slides, will be posted up on the CommRE website. You'll receive an e-mail as soon as it's up, so you can go directly to it then. And I thank everyone on the phone for participating in today's webinar. Please be sure to complete the survey, and we hope you're able to join us for the next CommRE webinar, which will be on August 21 and will focus on financing community renewable energy projects. Have a great afternoon.

[End of Audio]
One of the reasons why we are creating a lot of gas right now is because we're recirculating the leachate, which is the liquid that you get from rain or moisture in the garbage, and it drains to the bottom of the landfill, and that is usually pumped out and sent to a treatment plant. Well, instead of all of it going to a treatment plant, about as much as half of it now is allowed to be recirculated and put back into the landfill and make that water waste, helping it decompose faster and creating more gas. And the estimates were about 30% more gas coming out of that waste mass in the landfill.