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Thursday, July 17, 2014

Nashua Board of Aldermen to vote on landfill gas contracts

NASHUA – The Finance Committee gave its stamp of approval Wednesday to legal agreements allowing the city to take over the gas collection system at the Four Hills Landfill and hire a renewable energy firm to generate electricity at the site for the next 25 years.

The committee voted to recommend executing a new long-term contract with Pennsylvania-based PPL Renewable Energy. It also recommended terminating the city’s relationship with the company that currently runs the entire gas-to-electricity system. ...

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NASHUA – The Finance Committee gave its stamp of approval Wednesday to legal agreements allowing the city to take over the gas collection system at the Four Hills Landfill and hire a renewable energy firm to generate electricity at the site for the next 25 years.

The committee voted to recommend executing a new long-term contract with Pennsylvania-based PPL Renewable Energy. It also recommended terminating the city’s relationship with the company that currently runs the entire gas-to-electricity system.

A set of contracts executing the change now heads to the Board of Aldermen on Tuesday for final approval.

The deals would put the city in charge of the gas collection wells at the landfill for the first time in decades. The change would give the city more control over the amount of gas that escapes into the air, leading to foul odors in the neighborhoods surrounding the facility.

They also would resolve pending litigation filed against the city last year by Fortistar, the company that currently operates the landfill gas system.

Nashua has been at odds with the company over the last several years regarding how much gas is being collected. Fortistar also has challenged requests to pay for expansions of the gas collection system mandated by the state Department of Environmental
Services.

“We had a lot of odor issues at the landfill, and we had a company that wasn’t willing to work with us to try to minimize the odors,” Nashua Corporation Counsel Stephen Bennett told Finance Committee members Wednesday.

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 faces an August deadline to come up with a new operational plan.

Under a negotiated settlement, the city would end its 30-year contract with Fortistar 10 years early, paying $525,000 to sever the relationship and take ownership of all tangible assets at the landfill.

PPL Renewable Energy would then reimburse the city the full cost of the settlement. It would take over the power-generating side of the operation, acquiring an existing 800-kilowatt engine and all other equipment used to convert gas to electricity.

Nashua would deliver the gas that builds up beneath piles of garbage to PPL and the firm would convert it to electricity and sell it.

PPL would pay taxes to the city, as well as royalties based on how much revenue it earns. When the company first begins operating 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 royalty structure would change once PPL completes its plan to install a 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 Tuesday that 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. The contract with PPL includes two optional five-year extensions, meaning it could ultimately lead to a 35-year agreement with the company.

Bennett said communities that have worked with PPL elsewhere in the country provided the Division of Public Works with positive feedback. And compared with the existing contract with Fortistar, Bennett said the new deal with PPL presents more favorable terms. It guarantees that PPL must abide by agreements negotiated between the city and state and federal agencies to satisfy environmental regulations.

“Fortistar took the position that they were not bound by the agreements that the city made with DES and that they could still operate in the manner that they had been operating,” he said. “That will not happen with PPL.”

The Board of Aldermen is expected to vote on the new agreements at a special meeting Tuesday in the aldermanic chamber at City Hall.

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