Thursday, November 27, 2014
My Account  | Login
Nashua;33.0;http://forecast.weather.gov/images/wtf/small/nsn.png;2014-11-27 00:30:17
Wednesday, July 16, 2014

Board of Public Works approves contract with firm to run electricity-generating system at Nashua landfill

NASHUA – City officials moved one step closer Tuesday to signing a long-term contract with a Pennsylvania-based renewable energy firm to run the electricity-generating system at the Four Hills Landfill.

The Board of Public Works voted to enter into a 25-year contract with PPL Renewable Energy, a subsidiary of PPL Corp. with energy projects at 25 sites across the mid-Atlantic. ...

Sign up to continue

Print subscriber?    Sign up for Full Access!

Please sign up for as low as 36 cents per day to continue viewing our website.

Digital subscribers receive

  • Unlimited access to all stories from nashuatelegraph.com on your computer, tablet or smart phone.
  • Access nashuatelegraph.com, view our digital edition or use our Full Access apps.
  • Get more information at nashuatelegraph.com/fullaccess
Sign up or Login

NASHUA – City officials moved one step closer Tuesday to signing a long-term contract with a Pennsylvania-based renewable energy firm to run the electricity-generating system at the Four Hills Landfill.

The Board of Public Works voted to enter into a 25-year contract with PPL Renewable Energy, a subsidiary of PPL Corp. with energy projects at 25 sites across the mid-Atlantic.

The deal – which will go before the Finance Committee on Wednesday night – would bring major changes to the oversight of the power-generating system at the landfill.

It would put the city in charge of the gas collection wells at the facility for the first time in decades, while also bringing in a new contractor to run the system that converts the gas to electricity.

Nashua is seeking to replace the company that currently provides both of those services, Fortistar Methane Group, after engaging in a series of legal challenges with the company late last year.

Dueling lawsuits filed by Fortistar and the city are on hold in federal court while Nashua investigates its options for running the landfill gas system. The city is facing an August deadline to come up with a new operational plan.

For years, Fortistar has been responsible for collecting gas that wafts up through the piles of garbage at the landfill and using a large engine to convert it to electricity.

The city’s relationship with the company has been rocky over the last several years because of disputes regarding how much gas is escaping into neighborhoods around the landfill, bringing with it foul odors. Fortistar also has challenged requests by the city to pay for expansions of the gas collection system mandated by the state Department of Environmental Services.

The proposal on the table would allow Nashua to terminate its existing agreement with Fortistar and take over the entire gas collection and power-
generating system for a fee of $525,000. PPL would foot the bill, and in turn, it would become the owner of the power facility at the landfill, which is equipped with an aging 800-kilowatt engine.

Going forward, PPL would be responsible for generating electricity and the city would be responsible for delivering gas from the wells at the landfill. PPL would pay royalties to the city based on how much net revenue it brings in each year by selling the electricity on the open market.

When the company first begins operating the site with the existing engine, it would pay up to 7.5 percent of its annual adjusted gross revenue to the city if that figure tops $500,000. The share would drop to 2.5 percent if revenues are between $250,000 and $500,000, and would stay at zero percent until revenues reach at least $250,000.

The royalty structure would change once PPL completes its plan to install a new, more powerful 1,600-kilowatt engine. The city stands to earn up to 15 percent on the adjusted gross revenue if the figure exceeds $1.25 million in a year.

Division of Public Works Director Lisa Fauteux said the company’s early estimates indicate it could generate in the range of $1.2 million per year with the new engine in place. At that level, it would be required to pay the city 7.5 percent in royalties, or approximately $90,000 per year.

The company hopes to have the new engine in place within the first three years of taking over the power facility, although the process relies on securing permits from the DES.

PPL also will pay taxes to the city based on the value of their electrical generation system. That equates to roughly $12,000 to $15,000 per year on the existing equipment. The figure is expected to rise once a new system is in place. However, Nashua Corporation Counsel Stephen Bennett said the tax payments will be subtracted from the city’s royalties.

The contract with PPL includes two optional five-year extensions, meaning it could ultimately lead to a 35-year agreement with the company.

Discussing the proposal Tuesday, Bennett said the new contract presents more favorable terms than the existing agreement with Fortistar because it guarantees that PPL has a requirement to abide by agreements negotiated between the city and state and federal agencies to satisfy environmental regulations.

It also underscores the fact that the city is operating the system in order to reduce odors around the landfill, rather than increase profits for a private company.

“We have, in this one, made it quite clear that first and foremost while we will try to get them as much of the gas as we can, our first priority is odor,” Bennett said.

PPL Renewable Energy owns and operates projects generating a combined 64 megawatts of electricity, including a gas collection system at the Colebrook landfill that uses a single engine to produce 0.8 megawatts of power. PPL’s portfolio also includes solar, wind and gas projects in Pennsylvania, New Jersey and Vermont.

If the contract with PPL is approved by the Finance Committee, it is expected to go before the full Board of Aldermen before the end of the month to finalize the arrangements ahead of the August court deadline.

Jim Haddadin can be reached at 594-6589 or jhaddadin@nashuatelegraph.com. Also, follow Haddadin on Twitter (@Telegraph_JimH).