Palo Alto could save millions by building a waste-to-energy plant in the Baylands, according to a new analysis that is likely to further stoke one of the city's hottest debates.
The analysis, which the City Council will discuss Monday night, is being heralded as welcome news by proponents of the proposed anaerobic digestion plant -- a facility that would process compost and produce electricity. In November, city voters will decide whether to make a 10-acre site at the 126-acre Byxbee Park, located in the Baylands, available for such a facility.
The debate over the city's composting options was prompted by the imminent closure of the city's landfill, which includes a composting operation. The conversion of the landfill to parkland means the city would have to ship its yard trimmings and food waste to Gilroy or San Jose. A coalition called the Palo Alto Green Energy and Compost Initiative, led by former Mayor Peter Drekmeier, has been lobbying the council to build the new plant and keep composting local.
The revised analysis, performed by the Massachusetts firm Alternative Resources, Inc., compared the costs of building the new plant versus shipping local food and yard waste elsewhere. Its draft report concluded that "several of the lower cost AD (anaerobic digestion) technology cases are less costly or competitive with export options." This is particularly true for the option that involves processing yard trimmings, food scraps and biosolids in a dry anaerobic digester at the landfill site. Other local options include building a more expensive "wet" anaerobic digester at the site of the Regional Water Quality Control Plant.
The new analysis shows that the cheapest local alternative would cost the city about $58.6 million over 20 years. The analysis also includes a "high-cost range" of $201 million for this alternative, though this range is viewed as unrealistic and based on much larger facilities than the one that would be built in Palo Alto.
"It is likely that the lower cost options would provide a suitable system for the city with the quantities of food scraps and yard trimmings available in the city," the report states. "The higher cost systems typically become more economically competitive when larger quantities of these materials are available."
The various export alternatives, meanwhile, have price tags ranging from $77.5 million to $139.5 million, according to the report. These options entail shipping local food scraps and yard trimmings to other facilities while keeping the processing of sewage waste local. The city currently incinerates its biosolids, a source of embarrassment to a city that takes pride in being green. The export options include continuing to burn biosolids in a new incinerator or processing them in a wet-anaerobic digestion facility.
Drekmeier called the new financial projections "very positive for anaerobic digestion," particularly if the facility is publicly owned and the city doesn't charge rent for the site. He noted that under the report's best case scenario, the city's tipping fees would be $69 per ton in the first year and $32 per ton in year 20 if a dry anaerobic digester were built. By contrast, the cheapest export option would entail a tipping fee of $97 in the first year and $121 in year 20. Drekmeier said this amounts to potential savings of about $30 million over 20 years.
These numbers, however, are based on a number of assumptions that may not materialize. For one, the scenario that makes the strongest economical case for a local plant assumes public ownership of a new plant (a proposition that the report admits is risky), public financing and a 15 percent grant for construction of the new facility. It also now includes a "carbon adder" (a $20 addition for each ton of carbon dioxide emitted) and a 15 percent "contingency" for exports. Both the carbon adder and the contingency fee make exporting less attractive in the consultant's economic model.
Furthermore, the report claims that a "public model," while cheaper, comes with its own risks and challenges. The consultant recommends handing over operations (and risks) of a new plant to a private company.
The private options, the report states, are "the most advantageous means to provide for development of an AD technology facility as they place financing, design, build and operational responsibility on the private company as well as the responsibilities of ownership."
Hiring a private company to run the facility would raise the tipping fees in year 20 of the plant's operation to either $50 or $73 per ton, depending on such factors as rent and contingency fees. While the "public model" projects a cost of $58.6 million for the cheapest anaerobic-digestion option, the cost for a private option would range from about $72 million to $96.2 million.
The numbers in the new report are unlikely to sway opponents of the new facility, including prominent conservationists Emily Renzel, Tom Jordan and Enid Pearson. Opponents of Drekmeier's initiative have persistently argued against building a new waste facility at Byxbee Park, characterizing this proposal a betrayal of the city's promise to its voters to add the land to the park.
The council will consider the new results and discuss the city's next steps Monday night at its meeting in City Hall, 250 Hamilton Ave.