The WTEF, located on a 16-acre site in Brooks, Oregon, was designed and constructed by Ogden Martin Systems, later renamed Covanta Marion, Inc., (Covanta) and began commercial operation in March 1987. The County contracts with Covanta for processing services of MSW at the WTEF. The contract requires the County to deliver a minimum of 145,000 tons of solid waste each year to the WTEF. The WTEF received around 183,000 tons of waste in 2007, which operates it at or near the available capacity of 185,000 tons per year.
The facility reduces the volume of waste by 90 percent, which results in reduced quantities of remaining material that is transported to the NMCDF. The tip fee charged to collection companies delivering waste to the WTEF in FY2008 and FY2009 is $67.45 per ton. Covanta receives a portion of that tip fee which, in FY2008, averaged approximately $46.00 for every ton of waste processed, according to a formula specified in the contract that includes a fee for operation and maintenance, and an additional service fee of approximately $16.00 per ton for waste processed during the year in excess of 145,000 tons per year, and certain pass-through costs. These tip fee figures do not include debt services costs on the bonds for the WTEF
1 Personal Communication with Russ Johnston, Covanta Facility Manager, Marion County
WTEF, August 1, 2008.
2 Personal Communication with Karen Breckenridge, Covanta Business Manager, Marion
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that were retired in October 2008. With the bonds paid off, the financial obligation from the tip fee revenue requirements is eliminated.
Electrical energy sold by the plant, net of internal consumption, averages approximately 465 kilowatt-hour (kWh) per ton of solid waste processed (86,000 MWh per year), and has been sold for approximately $0.065 per kWh to PGE, or about $30 per ton of solid waste. The annual revenue to the County is about $4.2 million per year. In addition to the service fee mentioned above, Covanta receives a small percentage of electricity revenue; Covanta’s share in FY2008 averaged approximately $2.40 per ton.
Ferrous metal recovery from ash residue has averaged approximately 4,000 tons per year, or 2.2 percent of waste deliveries. Revenue from marketing recovered ferrous metal is approximately $300 per ton in FY2009, but will vary depending on market conditions. Completion of Covanta’s implementation of a magnet system to replace the original unit was scheduled for September 2008. The new unit is projected to increase ferrous metal recovery by approximately 1,000 tons per year. Covanta receives a fee for operating the ferrous metal recovery unit and 50 percent of revenues, net of marketing and administrative costs incurred by the County.
The WTEF includes two combustion units rated at 275 tons per day (tpd) each when firing fuel having a heating value of 4,500 Btu/lb. The furnace/boiler systems generate superheated steam that is directed to a turbine-generator unit rated at 13.1 megawatt (MW). Approximately 11 MW is sold on a continuous basis when running at capacity (550 tpd), after in-facility needs are met. Sales of electrical energy are by an agreement with PGE that runs through June 30, 2014. As of mid CY2008, Covanta has yet to commence discussions regarding a contract for the sale of electrical energy after the 2014 end date.
The initial air pollution control system consisted of reverse semi-dry scrubbers, carbon injection, and an air fabric filter baghouse that remove sulfur dioxides (SO2),
nitrogen oxides (NOx), carbon monoxide (CO), hydrochloric acid (HCl), dioxin, volatile organic compounds, lead, cadmium, mercury, and particulates. These are regulated emissions, as is opacity, a function of particulates in the stack gases. This facility was the first WTEF in the U.S. to employ the combined dry scrubber/fabric filter air pollution control system in combination.
The County entered into a Second Amended and Restated Agreement for the Supply and Acceptance of Solid Waste (Agreement) in 1984 with Covanta. The Agreement has since been amended ten times, most recently on March 26, 2008.
Under the Agreement, Covanta is responsible for operation and maintenance of the WTEF, generation of electricity for sale, and processing ash to recover ferrous metal. The County is responsible for running the scalehouse, providing transport and sale of recovered ferrous metals, and transport and disposal of all ash residues. Under the Agreement, the County has guaranteed a minimum waste supply, previously mentioned, to the WTEF and Covanta has provided certain operating and performance guarantees to Marion County.
The Agreement with Covanta extends through September 19, 2014, at which time the Agreement may be extended, revised, or terminated. If the County elected not
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to contract with Covanta after 2014, Covanta could receive waste from other jurisdictions with which to operate the WTEF.
Operational History and System Performance
The operation and environmental impacts of the WTEF have been monitored since its construction. The WTEF has achieved several objectives for the County.
One objective is reduction in waste volume. Available process capacity is 185,000 ton per year, or a daily average of approximately 507 tons per day. Available capacity allows for scheduled and unscheduled outages for maintenance and repair. Covanta conducts two major scheduled outages each year, one week per each boiler unit, or two weeks total for the two boilers, thus maintaining some processing capacity during these outages. However, during these outages, some waste is routed to out-of-County landfills. Scheduled outages reduce capacity less than four percent of the maximum available amount of hours in the year.
In addition, unscheduled outages occur for repair, typically single item problems, such as one boiler tube leaking, that require shutting down one boiler for a period of time of a few hours to a couple of days. Unscheduled outages are annually reported to ODEQ, in compliance with the WTEF’s solid waste facility permit requirements. During calendar year 2007, unscheduled outages were approximately two percent of the total amount of hours available in the year.
Another objective is generating electricity for use in running the WTEF and selling the balance to PGE. Sales to PGE, discussed previously in this subsection, indicate that this objective is being met.
Compatibility of WTEF with Existing System
The County disposed of more than 247,000 tons per year of MSW in CY2007 (see Table 2-11) and sent approximately 171,000 tons per year of this amount to the WTEF for combustion. The WTEF will continue to serve as a primary component in Marion County’s waste management system.
The WTEF receives solid waste delivered from local collection trucks and transfer trailers, stores it in a totally enclosed area of the facility, including a below-grade concrete-lined pit, and combusts in two furnace/boiler units. Thermal energy produced from combustion is converted to steam in boilers, and steam is used to produce electricity. The WTEF combusts waste in an unprocessed form; that is, materials are not removed from delivered loads and neither is the waste processed mechanically prior to combusting it. The types and quantities of materials directly entering the WTEF affect its performance and facility planning needs. Certain waste components have a higher heating value (HHV) because of their elemental composition. It is possible that removal of certain components for recycling could affect the energy output of the WTEF.
Information from other jurisdictions that have a WTEF and recycling programs indicates that removal of combustible components, such as paper, is somewhat balanced by the removal of noncombustible or inert material such as metal and glass. Over the past years, quantities of materials removed from the waste stream
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have reached more than 50 percent (see Table 2-11). Much of this material includes yard waste, wood waste, paper, and plastics, each of which is combustible; therefore, each contributes to the HHV of mixed waste. However, Covanta reports that the HHV of solid waste processed varied only nominally around an average of 4,600 British Thermal Units (BTUs) per pound during this period. It should be noted that for the five-year period prior to development of the 2002 update of the County’s SWMP, Covanta reported an average HHV of waste of 4,500 Btu per pound. Therefore, increasing recycling rates in the service area has had only a minor impact on the WTEF operation.
Future Availability of WTEF
The WTEF will have operated for 27 years when the Agreement expires in 2014. However, with regular maintenance and appropriate major component replacement, the WTEF can serve the County to 2014 and longer. Covanta has conducted a variety of life-extending repair or replacement projects over the last several years, including, within the last two to three years:
• Adding an overlay of Inconel to waterwall (boiler) tubes, a metal alloy to minimize corrosion and erosion on tube surfaces impinged by combustion gases, an ongoing project,
• Replacing bottom one third of the baghouse, the system that removes particulate from combustion gases prior to exhausting them to the atmosphere,
• Replacing part of the superheater section of the boiler, the section of boiler tubes that combustion gases impinge upon, and
• Replacing the bottom of lime quench reactor, a component of the acid gas scrubber system.
Additional replacement/repairs may be needed in or before 2014 to ensure high performance is maintained after 2014.
Air Quality3
Another objective of the WTEF is meeting requirements of its Clean Air Act Title V air emission permit, issued by ODEQ. The facility has met its performance operating requirements each year since 1987. The WTEF has a continuous monitoring system for CO, O2, NOx, SO2, HCl, and opacity, as well as other controls, meters, and
monitors, including radiation detection equipment.
In May 1998, the air pollution control system was retrofitted with a nitrogen oxide (NOx) control system and a mercury control system. This was installed to comply with the 1990 Clean Air Act amendments, including the 1996 U.S. EPA “maximum achievable control technology (MACT)” standards for large municipal waste combustion units that burn more than 250 tons per day of MSW. The WTEF can be retrofitted with additional systems if emission standards are revised beyond existing technology capabilities or if controls on additional emissions are required due to new regulations.
3 Personal Communication with Kelly Champion, Covanta Environmental Manager, Marion
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Within the last ten years, ODEQ issued one Notice of Non-Compliance citation to the WTEF, for a delayed reporting of an emission excursion, an event when emission levels higher than normal operating levels occur. Emissions excursions are allowed for up to 3 hours per event and a total of 15 hours per year for only carbon monoxide during boiler shutdown, startup, or a malfunction such as a boiler steam tube leak. Such events occur during unscheduled and scheduled outages previously discussed. Covanta reports such events to ODEQ in compliance with its permit requirements.
During the WTEF’s operating life, Covanta has never received a Notice of Violation from ODEQ.
Greenhouse Gas Reduction and Carbon Footprint4
The Solid Waste Industry is well aware of the role it plays in reducing Greenhouse Gas (GHG) emissions and the carbon footprint it produces. General purpose landfills have been identified in several states including Oregon as a significant contributor of GHG. Likewise, WTEF contribute to carbon emissions even with extensive air handling controls. In many cases, the industry is working to reduce the carbon footprint or to purchase offsets.
Covanta is a member of the California Climate Action Registry (CCAR), a private non- profit organization formed by the State of California. The California Registry serves as a voluntary GHG registry to protect and promote early actions to reduce GHG emissions by organizations. The California Registry provides leadership on climate change by developing and promoting credible, accurate, and consistent GHG reporting standards and tools for organizations to measure, monitor, third-party verify and reduce their GHG emissions consistently across industry sectors and geographical borders. In 2008, more than 300 private corporations, institutions, environmental organizations, and local governments were members.
Covanta has reported to CCAR and had verified GHG emissions from process (waste burning) and other facility activities for 2005 through 2007 for the company’s waste- to- energy facilities located within California. The company has not had a reason to report GHG values for air emissions from its Oregon facilities to ODEQ, but with its experience in California the company is capable of developing reports for its Oregon facilities when that requirement occurs.
Covanta also is a participant in the Western Climate Initiative (WCI), a collaboration launched in February 2007 by the Governors of Arizona, California, New Mexico, Oregon and Washington to develop regional strategies to address climate change. Covanta’s participation in these two groups is for the purpose of identifying and implementing emissions reporting capability according to accepted protocols as each of the member states and provinces in which the company operates facilities commences a reporting requirement.
4 Personal Communication with Jeff Hahn, Covanta Environmental Manager, Marion County
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The company also has experience in developing life cycle carbon footprint analyses for its facilities, including life cycle analyses for generation of electricity using alternatives beyond WTEF. In these analyses, the carbon footprint of electricity generated by the electric utility company that has foregone generation due to Covanta’s WTEF is developed using the local utility company’s current fuel mix. This method presents a more realistic estimate of emission trade-offs occurring within the region of each WTEF.
Potential WTEF Availability after 2014
Covanta Energy, a unit of Covanta Holding Corporation (Covanta Holding), a New York Stock Exchange company, owns, through a local subsidiary company Covanta Marion Inc., the Marion County WTEF. This is one of 38 such facilities the company operates in the U.S. and other countries. Covanta Energy also operates other types of energy-generating facilities. Covanta Holdings Corporation reported revenue for the 12 months ending December 31, 2008 of $1.66 billion and net income of $139 million, both unaudited.5
The WTEF has had several major projects to extend system life; however, additional projects will likely be required in 2014. Covanta intends to present those needs as part of a capital structure proposal for service to the County beyond 2014, the current contract period.
Covanta expects to commence discussions with the County prior to 2014 regarding availability of the WTEF after 2014; however, as of September 2008, these discussions have not formally started. Although Covanta has expressed an interest in continuing its service to the County, Covanta also has stated an objective of continuing operation of the WTEF, by obtaining waste deliveries from other sources, if it cannot reach agreement for continued deliveries from County-controlled sources. One advantage of the County’s continued use of the WTEF is that the bonds have been retired. Only capital to replace components and make facility modifications will be needed. This advantage might be reduced by system replacement costs that will be needed in 2014, including costs to remove existing elements and acquisition and installation costs of equipment that are higher than original due to general cost escalation factors over years since the facility was originally constructed.
Another consideration is electricity sales after June 30, 2014, and projected revenues under a new or renewed agreement with PGE. In its Power Purchase Information (Schedule 201), PGE offers rates that escalate in time. A fixed price option for 2014 ranges from $54 to $82 per MWh, according to the time of year and time of day. Market-based (non-fixed) rates are tied to the price of natural gas. Rates in Schedule 201 are the starting point for negotiated rates for facilities providing more than 10 MW to PGE. PGE has expressed a willingness to continue purchasing electrical energy generated by the WTEF beyond 2014. In 2007, PGE updated its Schedule 202, guidelines and procedures for developing a negotiated power purchase agreement with the Company. The term of such an agreement may have up to 20 years. Covanta would be expected to meet the requirements of the
5 Covanta Holdings. “Fourth Quarter and Full Year Results.”
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Schedule 202 process, primarily based on its history of selling power for the life of the WTEF and that the updated Schedule 202 complies with the federal law known as the Public Utility Regulatory Policy Act of 1978 (PURPA), a law that was in effect at the time of development of the original electrical energy sales agreement.6,7 It may
be feasible to sell power to a buyer other than PGE. In this case, there would likely be a “wheeling” charge to distribute the power to such buyer.
In 2008, PGE does not pay Covanta for any renewable energy credits or other similar credits. Oregon law has excluded WTEF from eligibility for this type of credit.
PGE has some flexibility in purchasing electrical energy from other generators such as the WTEF, as generally prescribed by the Oregon Utilities Commission. Also, Covanta could consider responding to Request for Proposals (RFPs) that PGE expects to issue over each of the next several years for purchase of power from facilities qualifying under the PURPA law. PGE also would entertain purchasing power from the WTEF under a “non-QF” sales agreement, whereby the procedures and requirements would not be totally limited by the PURPA law.