Processing Implementation Plan
December 2001
Recommended by the Processing-Landfilling Committee
Chair: Commissioner Joseph Harris
Members: Commissioner Dennis Hegberg
Sherry Enzler, OEA
Jim Warner, MPCA
Helen Boyer, MCES
Staff support was provided by:
Brad Fields
Zack Hansen
Judy Hunter
Mike Lein
Barry Schade
Carl Michaud
Phil Eckhert
Trudy Richter
Mary Richardson
Kevin Johnson
Processing Implementation Plan
2001
A. History:
In 1985, the Minnesota Legislature adopted a law requiring that all mixed municipal solid waste ("MSW") generated in the seven metropolitan counties that is not recycled must be processed at a resource recovery facility. In response, four metropolitan counties developed and financed three resource recovery facilities: HERC, NRG-Newport and NRG-Elk River. Ramsey and Washington Counties’ contract with NRG-Newport continues until 2007. Anoka and Hennepin Counties’ contract with NRG-Elk River continues until 2009 and Hennepin County’s contract with HERC continues until 2018.
The Regional Solid Waste Master Plan, adopted on December 16, 1998 by the Solid Waste Management Coordinating Board ("SWMCB") and approved by the OEA in 1999, established a principal MSW processing outcome and three intermediate processing outcomes. The principal MSW processing outcome is that, by 2017, the region will process 65% of MSW that has not been reduced or recycled. This Processing Implementation Plan ("Plan") addresses the intermediate outcomes:
(1) by 2000, complete a processing implementation plan;
(2) through 2003, use 100% of the existing processing capacity; and
(3) by 2003, increase processing capacity for the region by 158,500 additional tons per year.
In June 2001, a Citizens Jury met in the Twin Cities to hear testimony on current waste management practices as well as several alternatives for addressing solid waste issues, and developed recommendations for managing the region’s solid waste. The Citizen Jury findings reaffirmed the waste management hierarchy and the role of processing in that hierarchy through the useful life of the existing facilities.
This Plan fulfills the first intermediate outcome by examining current and projected processing in the six-county SWMCB region and by recommending actions that the individual Counties and the SWMCB should take to meet the remaining intermediate processing outcomes. Although SWMCB continues to support the principal MSW processing outcome of processing 65% of MSW in 2017, until additional guidance is received from the Minnesota Legislature following the work of the State Solid Waste Advisory Committee, the Plan will not address this outcome.
The first intermediate processing outcome was to complete this Plan by 2000. The Processing Committee worked to complete the Plan on schedule; however, in late 2000 MSW deliveries declined to processing facilities and additional work on the Plan was required. Due to continued uncertainties regarding MSW deliveries, the Plan is limited to addressing the two remaining intermediate MSW processing outcomes.
The remainder of the Plan is focused on the other two intermediate outcomes:
To determine whether or not 100% of the current metropolitan MSW processing capacity is being utilized annually, the first step was to identify available permitted capacity. There is a total permitted capacity of 1,153,100 tons with three facilities serving the metropolitan area. HERC, at 365,000 tons per year, processes the MSW by combusting on site. NRG Newport, at 400,000 tons per year2, and NRG Elk River, at 388,100 tons per year (excluding waste from non-metro counties) process the MSW into refuse derived fuel ("RDF"). The RDF is then transported for combustion at the Great River Facility in Elk River and Xcel Energy’s Red Wing and Wilmarth facilities. The Counties have the responsibility to deliver the MSW.
Once MSW is delivered, whether or not the Facility processes it may vary based on a variety of considerations. HERC’s capacity is consistently at its permit limit of 365,000 annually. The combustion capacity at Great River Energy and the Xcel Energy facilities fluctuated initially largely due to technical and maintenance issues, but more recently due to shortfalls in MSW deliveries. Notwithstanding these delivery shortfalls, the integrated solid waste management system for the region is often called "combustion limited". When the combustors are not operating at full capacity, the RDF throughput cannot be maximized at NRG’s RDF processing facilities and less MSW is processed into RDF creating more residue for landfilling. Lack of combustion capacity can ultimately limit MSW deliveries to the facilities due to tipping floor constraints. Therefore, to meet the first intermediate goal, the Counties must focus on whether or not 1,154,000 tons of MSW is being delivered to the three facilities.
B. Waste Deliveries and Processing in 2000
1. NRG Newport 2000:
In 2000, Ramsey and Washington Counties offered haulers a choice of contracts. A hauler could deliver all of the waste it collects in Ramsey and Washington Counties or could contract to deliver a portion of the waste collected. The contracts had a minimum "floor" and a maximum "ceiling" to assure an accurate number for budgeting purposes.
For comparison purposes, the following indicates the amounts delivered in 1998, 1999 and 2000.
Tons delivered by Ramsey and Washington Counties:
1998: 412,378
1999: 393,228
2000: 395,459
3. HERC in 2000:
HERC received 372,151 tons and processed its permit limit of 365,000 tons.
4. Summary for Processing 100% through 2000:
For comparison purposes, the following charts provide the total delivered to the three processing facilities in 1997, 1998, 1999 as well as 2000. In 1997, a minor shortfall of 2,564 tons to NSP Newport was experienced. In 1999, there was a 1385-ton shortfall at NSP Elk River and in 2000, that processing shortfall grew to 31,767 tons.
|
1997 MSW Processing Data |
||||
|
Delivered to: |
||||
|
From: |
NRG- Newport |
NRG- Elk River |
HERC |
Total |
|
Anoka |
149,511 |
149,511 |
||
|
Carver |
646 |
2,728 |
3,374 |
|
|
Dakota |
15,703 |
763 |
137 |
16,603 |
|
Hennepin |
238,392 |
366,369 |
604,761 |
|
|
Ramsey |
278,656 |
- |
- |
278,656 |
|
Washington |
103,077 |
- |
- |
103,077 |
|
Total Deliveries |
397,436 |
389,312 |
369,234 |
1,155,982 |
|
Metropolitan Facility Capacity |
400,000 |
388,100 |
365,000 |
1,153,100 |
|
1. Data is from the 1997 Certification Reports 2. Hennepin's report was used for HERC deliveries |
||||
|
1998 MSW Processing Data |
||||
|
Delivered To: |
||||
|
From: |
NRG- Newport |
NRG- Elk River |
HERC |
Total |
|
Anoka |
- |
152,358 |
- |
152,358 |
|
Carver |
- |
5,028 |
886 |
5,914 |
|
Dakota |
13,290 |
137 |
763 |
14,190 |
|
Hennepin |
25 |
228,765 |
363,269 |
592,059 |
|
Ramsey |
318,296 |
11 |
- |
318,307 |
|
Washington |
95,075 |
- |
- |
95,075 |
|
Total Deliveries |
426,686 |
386,299 |
364,918 |
1,177,903 |
|
Metropolitan Facility Capacity |
400,000 |
388,100 |
365,000 |
1,153,100 |
|
1. Data is from the 1998 Certification Reports |
||||
|
1999 MSW Processing Data |
||||
|
Delivered To: |
||||
|
FROM: |
NRG- Newport |
NRG- Elk River |
HERC |
Total |
|
Anoka |
- |
154,531 |
- |
154,531 |
|
Carver |
- |
5,241 |
802 |
6,043 |
|
Dakota |
9,526 |
1,427 |
219 |
11,172 |
|
Hennepin |
- |
225,516 |
367,651 |
593,167 |
|
Ramsey |
302,549 |
- |
- |
302,549 |
|
Washington |
90,359 |
- |
- |
90,359 |
|
Total Deliveries |
402,434 |
386,715 |
368,672 |
1,157,821 |
|
Metropolitan Facility Capacity |
400,000 |
388,100 |
365,000 |
1,153,100 |
|
1. Data is from the 1999 Certification Reports |
||||
|
2000 MSW Processing Data |
||||
|
Delivered To: |
||||
|
FROM: |
NRG- Newport |
NRG- Elk River |
HERC |
Total |
|
Anoka |
157,348 |
- |
157,348 |
|
|
Carver |
5,519 |
2,595 |
8,114 |
|
|
Dakota |
7,446 |
1,414 |
665 |
9,525 |
|
Hennepin |
192,014 |
368,891 |
560,905 |
|
|
Ramsey |
304,503 |
304,503 |
||
|
Washington |
90,956 |
38 |
90,994 |
|
|
Total Deliveries |
402,905 |
356,333 |
372,151 |
1,131,389 |
|
Metropolitan Facility Capacity |
400,000 |
388,100 |
365,000 |
1,153,100 |
|
1. Data is from the 2000 Certification Reports |
||||
C. Waste Deliveries and Processing in 2001:
1. NRG Newport 2001:
Ramsey and Washington Counties negotiated waste delivery agreements for 2001 in late 2000. As a result of those negotiations, the Counties anticipated a sharp decline in deliveries, as two large haulers decided to deliver a small portion, rather than all of their waste, to the facility. This was projected to result in 50,000 fewer tons being delivered in 2001 than in 2000.
In addition, in late December 2000 and for a few months in early 2001, another hauler began diverting almost all of its waste from Newport. This action spurred the Counties to reexamine a number of solid waste policy issues and both County Boards have taken steps to redesign parts of the solid waste system. Currently 345,000-367,000 tons of MSW are estimated for delivery in 2001.
2. NRG Elk River 2001:
In the first quarter of 2001, there was a shortfall in MSW deliveries. Although sufficient MSW quantities returned to the facility in April, the overall capacity available in 2001 at NRG Elk River has been reduced because GRE, for technical reasons, is more "combustion limited" than usual. The availability of Unit #3 (50% of GRE’s capacity) has been limited in 2001 primarily due to boiler tube leaks which have resulted from tube erosion. The tube leaks are being studied by GRE but the 2001 budget has been adjusted from 305,000 to 275,000. During this same time frame, NRG has not increased deliveries to Xcel Energy Wilmarth facility but has reduced production through diversions, lower yields resulting in higher residue amounts, and transferring MSW from the facility floor to a landfill.
3. HERC 2001:
It is anticipated that HERC will continue to process at its permit limit of 365,000 in 2001.
4. Summary for Processing 100% through 2001:
Projected shortfalls in processing for 2001 are 33,000-55,000 at NRG Newport; and 30,000 at NRG Elk River. For NRG Newport, the shortfall is due to delivery shortfalls. For Elk River, a large portion of the shortfall is due to technical problems at GRE. There are no projected shortfalls for HERC in 2001.
D. Prospects for Meeting 100% of Current Processing Capacity in 2002
1. NRG Newport 2002:
NRG, Ramsey and Washington Counties amended their service agreements to allow NRG to market unused facility capacity. The counties are currently negotiating waste delivery contracts for 2002.
2. NRG Elk River 2002:
Hennepin County anticipates delivering 215,000 tons to NRG Elk River which is approximately 30,000 below its maximum annual contract capacity not including allowable diversions of 11,000 tons. Anoka County has contracted with haulers for four years for the County’s weekly contract capacity of 3,000 tons. GRE has set its combustion capacity at its Elk River Station at 295,000 RDF tons in 2002. This budget is slightly reduced from previous years due to a scheduled turbine overhaul on one of the boilers, but greater than the availability experienced at the facility in 2000 and 2001.
3. HERC 2002:
It is anticipated the HERC will operate at full capacity of 365,000.
E. Maximizing Deliveries. Steps Counties Have Taken:
Since many interstate waste designation ordinances were found unconstitutional by various courts pursuant to the Commerce Clause in the early 1990s, the four SWMCB Counties under "put or pay" contracts for waste processing have subsidized the tipping fees for MSW deliveries to the processing facilities. The subsidy approach is consistent with the U.S. Supreme Court’s Carbone decision. These subsidies allow haulers to participate in the processing system by minimizing the negative financial impact of this more expensive waste management option. There have also been substantial changes in the hauling industry over the past several years. MSW collection is extremely competitive. The Counties have been hesitant to reduce the level of subsidies, which would increase the facility tipping fees. Interviews in 2000 with haulers for Ramsey and Washington Counties indicated that a tipping fee increase would force several haulers to increase prices to customers or move waste to out of state landfills. Dakota and Carver Counties have also subsidized haulers under contract to deliver waste to processing facilities. Counties have continuing concerns with the increasing level of subsidies and use of public funds required.
|
Processing Subsidies (Service Fees) |
||||
|
County |
1999 Subsidy |
2000 Subsidy |
Budgeted 2001 Subsidy |
Estimated 2002 Subsidy |
|
Anoka |
$3,626,616 |
$4,000,000 |
$4,500,000 |
$5,000,000 |
|
Carver |
$171,130 |
$175,000 |
$250,000 |
$250,000 |
|
Dakota |
$63,880 |
$63,688 |
$1,300,000 |
$1,300,000 |
|
Hennepin |
$11,024,302 |
$11,300,000 |
$13,000,000 |
$15,300,000 |
|
Ramsey |
$6,649,775 |
$8,000,000 |
$9,200,000 |
$11,460,000 |
|
Washington |
$2,459,506 |
$3,000,000 |
$3,200,000 |
$4,240,000 |
|
Total |
$23,995,209 |
$26,475,000 |
$31,450,000 |
$37,550,250 |
Within the last few years, the Counties have attempted to set a competitive tipping fee for haulers that contract to deliver MSW to Elk River, Newport and HERC. However, the Counties are concerned that increasing subsidies creates a disincentive to reduce and recycle. The former SKB composting facility in Dakota County, now owned by NRG Processing Solutions, LLC, ("NRG PS") has privately set its tipping fee.
|
Beginning 2001 County Established Tipping Fees, Processing Fees and Costs |
||||
|
Facility |
Contracted/Adjusted Hauler Tip Fees |
Tip Fee without Contract |
Estimated Average Per Ton Processing Cost |
Estimated Average Per Ton Subsidy |
|
Elk River |
||||
|
Anoka MSW |
$38.75 |
$68 |
$68 |
$29.25 |
|
Newport |
||||
|
Ramsey MSW |
$38 |
$67 |
$68 |
$30 |
|
Washington MSW |
$38 |
$67 |
$68 |
$30 |
|
Dakota MSW |
$55 |
$67 |
$68 |
$12 |
|
Hennepin System |
||||
|
Hennepin MSW |
$39 |
$60 |
$60 |
$21 |
|
Dakota MSW |
$52 |
$64 |
$60 |
$12 |
|
Carver MSW |
$45 |
$64 |
$61 |
$16 |
|
NRG PS Facility Dakota Carver |
Varies |
$45 |
$55 |
$12 |
F. The State’s Contribution; Processing Payment:
The 2001 Legislature enacted a $5 per ton processing payment to reduce tipping fees. The tipping fees at the various facilities are a function of subsidies, capital, operations and maintenance expenses. The processing payment program has been funded for the 2001-2002 biennium and is to continue for the next biennium, sunseting in 2004. Each County is intending to utilize the state processing payment as follows:
G. Conclusion:
Even with increasing amounts of MSW available and increasing subsidies from the County and State governments, some of the Counties continue to experience waste shortfalls. Increases in waste deliveries are unlikely so long as haulers that own landfills and transfer stations continue to deliver the MSW they collect to their own landfills, despite state law and the region’s goal of fully utilizing existing MSW processing capacity.
H. County Recommendations for Utilizing 100% of Current Capacity:
It is recommended that each of the six SWMCB Counties keep in mind a regional approach to maximize available capacity and minimize costs and adopt the following County specific strategies to meet the first intermediate goal of processing 1,153,100 tons per year.
Anoka:
Ramsey:
Washington:
Dakota:
Carver:
Hennepin:
I. SWMCB: Recommended Next Steps for Utilizing 100% of Current Capacity:
It is recommended that the SWMCB take the following steps
A. Overview:
By 2003, the end of a five year planning period, there will be significantly more waste available for processing than there is capacity at the three facilities. When developing the Plan, the SWMCB determined that although the region hoped to maintain a processing level of 65% for all waste not recycled or reused, it was unlikely that such a goal could be achieved in 2003. Instead, the Plan sets an additional processing goal in the amount of 158,500 tons by 2003. To address increasing processing capacity by 158,500 tons, a technical study was completed to evaluate whether or not changes could be made at existing waste-to-energy facilities to meet this 2003 goal. A second technical study also was completed to evaluate source separated composting options to meet the increased capacity goal. In addition, Hennepin County continued to work on eliminating the permit cap placed on processing at HERC.
B. Technical Evaluation of Waste-to-Energy Facilities:
A "Regional System Technical Evaluation," dated March 13, 2000, was prepared by The Barlow Group. Consistent with past findings, the study determined the existing waste processing system is primarily constrained by limited combustion capacity. The Barlow Group suggested improvements to the existing RDF combustors that could result in 100,000 tons of additional MSW processing. This is possible without adding an additional processing line at the Newport Facility.
The Barlow Group also confirmed that in the event HERC’s permit cap is lifted, an additional 42,000 tons of MSW can be processed annually. During the 2000 legislative session, initial steps were taken by Hennepin County to lift the permit cap on HERC. For purposes of the intermediate goal, this Plan will assume that additional 42,000 tons of annual capacity will become available by 2003.
Regarding technical improvements to the RDF facilities, it is the opinion of The Barlow Group that all such technical improvements are in the best interests of NRG, Great River Energy and NSP.
C. Technical Evaluation of Source Separated Composting:
Assuming the improvements outlined by The Barlow Group occur and HERC’s permit cap is lifted, only 14,000 additional tons of processing capacity must be identified to meet the 2003 goal. To identify this additional capacity, a "Technical Review for Processing Source Separated Materials at Existing Facilities," dated July 18, 2000, was prepared for the SWMCB by DSM Environmental Services, Inc. According to the study, the NRG Processing Composting Facility (referred to in the report as the SKB facility) presents the most immediate opportunity to process source separated organic wastes if such wastes can be directed to the NRG PS Facility.
The technical modifications and costs associated with the other two composting facilities reviewed, Wright County and East Central Solid Waste Commission, excluded them from further consideration for meeting the intermediate 2003 processing goal. NRG Processing can currently accept and process 10,000 tons of organic waste and has recently proposed adding more capacity. DSM identified organic wastes being delivered to transfer stations which may provide sufficient quantities of organic rich loads to supply to the Composting Facility. A pilot project was also recommended to verify the Composting Facility’s capability to expand.
Theoretically, NRG’s acquisition of the SKB Composting Facility should result in a more regional approach for processing MSW if the NRG system is utilized to divert MSW suitable for source separated organic composting. NRG PS is in the process of submitting a permit to the MPCA for 450 tons per day processing and transfer for processing capacity. Dakota County, as owner of the facility site, is a co-permittee.
D. Eliminating HERC’s Permit Limitation:
During the 2000 legislature, a permit cap limiting processing to 365,000 tons at HERC was eliminated. As noted earlier, this would allow for 42,000 more tons of processing. The County is continuing to work with HERC so that HERC can modify its permits with the Minnesota Pollution Control Agency and the City of Minneapolis which currently limit the amount of waste processed at HERC.
Anoka:
Hennepin:
Dakota:
Carver:
Ramsey:
Washington:
F. SWMCB: Recommended Next Steps for Increasing Processing by 158,500:
Many uncertainties in waste deliveries remain system-wide regardless of the level of subsidy and these uncertainties have been heightened by the consolidation of the hauling community. As a result, it is difficult to plan for increased processing capacity. The long term future of waste processing is questionable without increased state support. The Processing Committee may consider revisiting and modifying this Plan following the work of the State Solid Waste Advisory Committee, any amendments to the Waste Management Act and any additional state assistance identified during the 2002 legislative session.