Sherburne officials to ask Great River Energy for more time and larger counties nearby to commit to waste tonnage
Sherburne County Commissioners on Oct. 15 reviewed Great River Energy’s latest revision of the Elk River Resource Recovery Project, which includes a two-year bridge to make a final binding decision.
Commissioners, however, concluded at their work session they need more time to make a decision — for at least two reasons. They need to further vet the risks and they need to get Hennepin and Anoka counties back to the table and talking about a commitment.
“We’re out of our league,” Commissioner Felix Schmiessing said. “We’re not the lug nut that holds this together. I don’t think we’re in a position to do it.”
For the garbage burning operation to be successful there’s need for 305-320,000 tons of municipal solid waste annually to make the venture worthwhile.
Anoka County has pulled back from the discussions, noting that without Hennepin County committing a certain amount of waste for a certain amount of time there’s no way they can even consider the most recent proposal, according to Anoka County Administrator Jerry Soma.
Sherburne County officials haven’t given up hope on getting to two biggest public players back to the table, but time is not on their side.
“Time is the biggest concern,” Dolan said.
Great River Energy’s board of directors voted on July 12 to pursue a parallel path of either selling the Elk River Resource Recovery Project to Anoka, Hennepin and Sherburne counties or closing the doors of the operation. Great River Energy intends to terminate its operation by mid-January 2019, allowing for proper notification to haulers.
The Resource Recovery Project keeps municipal waste out of landfills, employs about 85 people and contributes to the county’s tax base.
GRE has a Nov. 15 deadline for counties to formally agree to purchase the operation. This would trigger GRE to cancel a closure notice sent to haulers.
On the heels of that is a deadline calling for the counties and Great River Energy to reach a final purchase and initial operations agreements.
The latest proposal by GRE stipulates it would operate the facilities through Dec. 31, 2020, through a two-year purchase and transition agreement.
For $1 ownership of Energy Recovery Station, Resource Processing Plant and the Becker Ash Landfill would be transferred over time. GRE would create a limited liability corporation to transition employees for seamless continued operations and maintenance.
The other big carrots are that GRE would retain responsibility for the Energy Recovery Station’s closure at a cost of $4.5 million and employee severance of $4 million until Dec. 31, 2020, in the event a deal wasn’t reached.
GRE would also enter into a two-year power purchase agreement with the county for $29/MWh to manage MISO market risk (estimated at $860,000 a year over market value).
The Elk River firm and the county would agree to a two-year transition agreement to manage, operate and maintain the facilities with a variable management fee of $1 million to $2.5 million.
In the event the operation is wildly successful, GRE would like to share in the profits.
County officials suggest this would be fine, but one of the first hurdles it presents is there’s no guarantee that 305 to 320,000 tons of waste would be brought to be processed. This is what is needed for the project to cash flow under county ownership.
Hennepin County has sent is excess trash, which averages about 60,000 to 70,000 tons annually to the facility, and they are willing to continue doing that, according to Dave McNary, the assistant director of environmental and energy services for Hennepin County. Sherburne officials say they are looking for a firm commitment.Without one, Anoka County stepped away from the negotiating table.
“We feel that some of the issues that caused us to not be interested have not been resolved,” Soma said.
Dave Lucas said Great River Energy’s intent of the two-year transition is to provide the time needed to look at waste assurances and complete an analysis of public ownership.
This could also be a bridge to private ownership as there are talks in the background of a company having interest in the facility to do some work with trash and creating energy in other ways. Such endeavors would take several years to flesh out, officials said.
The idea of a bridge provided little comfort to commissioners, including Barb Burandt, who expressed concern that closure of the operation would result in the landfill in Elk River filling up much sooner and the loss of good jobs by her constituents. She said it was her hope that the county could carefully move forward to see if this is a viable option.
“I would like us to look seriously at this,” she said. “Our alternatives are not great.”
Commissioner Tim Dolan said the fact that this is about the handling of trash and not just another business is the only reason this is being considered.
“If we can’t nail down some commitment from the largest players, it would all seem like a moot point,” Dolan said, later questioning if a two-year bridge is worth it.
Sherburne County Administrator Steve Taylor said the county needs to nail down or eliminate the risks as much as possible.
Sherburne County Attorney Kathleen Heaney said from her perspective time is needed to assess legal aspects, financial aspects and technical aspects. The first step, she said, is deciding how much it would cost to assess those things, which are much higher if there are not partners to share those costs.
“Those cost money,” Sherburne County Chairwoman Lisa Fobbe said.
Fobbe asked if they could seek a three-month extension, which she heard is problematic because haulers have to have proper notice and their contracts end at a specified time.
“My interpretation is this can’t be wrapped in 30 days,” Dolan said.
Schmiessing and others agreed.
“We’re not the deal maker,” he said. “It’s Hennepin County and Anoka County.”
Fobbe said she does not want to expand the landfill.
“This is about more than Great River Energy,” she said. “It’s about the landfill and our own backyard.”
Lucas said news of the situation is out, and he’s heard from many outside forces they would like to see Great River Energy’s Elk River Resource Recovery Project saved by government, including a coalition south of the cities that has been looking at building their own plant to deal with waste.
Lucas said one reason there’s interest is no one wants the next landfill to be sited in their community.
Fobbe and Dolan have served on a joint committee that was formed to examine questions, unresolved issues and financial considerations before actually weighing a decision on public ownership. Anoka and Hennepin counties have backed away from this joint effort.