Study: Take waste out of waste-to-energy
Shipping out garbage could cut rates and save Kaiser, professors say
Bert Caldwell - Staff writer
A new study suggests Spokane might save money, preserve Kaiser Aluminum Corp. jobs and reduce potentially toxic air emissions by running the waste-to-energy plant strictly to produce electricity and shipping the city's and county's garbage elsewhere.
The 27-page analysis prepared by two Eastern Washington University economics professors says increased revenues from sales of electricity, generated by natural gas instead of garbage, could accelerate repayment of bonds issued to build the plant in 1991, as well as cover conversion costs.
And if power costs come in near average projected levels, the project might be attractive to Kaiser, which has idled two electricity-hungry smelters at Mead and Tacoma.
The incinerator burns about 290,000 tons of city and county garbage annually.
If natural gas is brought to the plant, the garbage would be shipped to a landfill in Klickitat County in south-central Washington.
The gas would be burned in three 43.1-megawatt turbines placed next to the plant, which could be used as a secondary generating unit.
With those bond obligations taken care of, garbage disposal fees -- now among the highest in the Northwest -- could be cut by half, to around $50 per ton, the study says.
"In our view, there is a high probability that creative minds can find a solution that allows lower disposal fees, reduced environmental impacts and desired economic effects that will benefit all interested parties," Tom Trulove and David Bunting wrote in their conclusion.
The $10,000 study was commissioned by The Gallatin Group, a public affairs and strategic planning business, on behalf of several unidentified clients.
Chris Carlson, the group's Spokane-based partner, said copies of the study would be delivered to Spokane City Council members, Spokane County commissioners, Wheelabrator Inc., Kaiser, Avista Corp., and other stakeholders Monday afternoon.
Carlson said Kaiser did not pay for the study, although the company has the kind of electricity requirements gas turbines could satisfy -- if supplemented by supplies from the Bonneville Power Administration.
"BPA has requested the region's aluminum industry to develop its own alternative sources of power," noted a companion white paper prepared by the group.
Kaiser Vice President Pete Forsyth said he was aware of the Gallatin Group study, but had not yet read it.
The company might be willing to help fund a follow-up study more completely assessing the economic issues involved in a conversion, he said.
But he added that electricity from gas turbines must be blended with hydropower to put the cost within reach of smelter operators.
Almost 1,000 workers have been laid off at the Mead smelter, with little hope of returning unless Kaiser can find adequate supplies of cheap power.
Trulove estimated a detailed look at the proposal might take three months and cost about $100,000.
The white paper includes the findings of a survey of public attitudes towards the waste-to-energy plant and possible conversion to gas.
Most -- 55 percent -- of the 400 surveyed have a favorable image of the plant, but 62 percent also believe burning garbage is cheaper than hauling.
That is not so.
Burning waste has always been more expensive than hauling the material to a landfill, the study found, but revenues from electricity sales to Puget Sound Energy favor continued use of the plant.
Those revenues will jump this year, to almost $12.5 million, but so will scheduled bond payments. Still, continued operation of the existing plant has a $4.4 million a year cost advantage over closure, shipping the garbage and losing revenues from Puget.
Installing turbines and getting gas to the site would cost about $105 million. Such expenditures for similar plants are typically paid with 15-year bonds paying 9 percent interest.
How advantageous installing gas turbines might be depends on the cost of gas and what markets will pay for power. A long-term contract with someone like Kaiser would help reduce the risk to the City of Spokane, which issued the existing bonds, and bondholders, the study said.
"Expected prices indicate that the proposed generation station could be successful and certainly merits further study," the study said.
Trulove said connecting the plant site to one of two natural gas pipelines in the area would likely be the most time-consuming task.
But the availability of high-pressure gas near Spokane International Airport might attract other businesses, the study said.
Trulove stressed that the study in no way faults the plant or its operator, Wheelabrator.
Bunting, who did most of the economic analysis of the project, said plant officials gave the Eastern team all the information requested.
"They had no idea what I was doing," he said.
Trulove, a former member of the Northwest Power Planning Council, said he helped round up other information and ran some conclusions by experts in the region.
When information was difficult to get, he said, the study used conservative estimates.
The study did not turn up any issues that made conversion of the plant unfeasible, Trulove said.