Section 107-080; Res. 28-06; Providing that the City Water and Light Department and Public Works Department jointly operate a renewable fuels project using landfill gas


Council Bill No. R 28-06

     A RESOLUTION

providing that the City Water and Light Department and Public Works Department jointly operate a renewable fuels project using landfill gas.

    WHEREAS, the City Public Works Department operates a sanitary landfill and manages the gases produced by the landfill; and

    WHEREAS, the City Water and Light Department generates electricity from multiple fuels.

NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF COLUMBIA, MISSOURI, AS FOLLOWS:

    SECTION 1.    The Water and Light Department and Public Works Department shall jointly operate a renewable fuels project using landfill gas substantially as set out in the terms and conditions below:

1.    The goal of this project shall be to maximize the economic and beneficial use of landfill gas produced at the Columbia landfill, while maintaining compliance with all regulations and laws governing the ownership and operation of the landfill.  The Public Works Department shall develop and maintain the gas supply and construct new wells and piping as needed to economically maximize the amounts of gas produced.  The Water and Light Department shall maximize the economic production of electricity from the gas and share the value of the production with the Public Works Department.

2.    Both Departments shall take appropriate steps to maximize the economic extraction of landfill gas of sufficient quality to generate electricity and shall invest in the appropriate machinery and infrastructure to do so; however, the overriding principle of this endeavor is to produce gas and electricity while remaining in compliance at all times with the laws and regulations governing the operation of sanitary landfills.

3.    It is the goal of this project to produce, within 26 months of the adoption of this resolution, at least 15 MMBTU per hour (at 500 BTU/ft 3).  Upon depletion of the gas supply such that is becomes uneconomic to harvest sufficient quantities of gas, or through failure of the generation facility to economically produce electricity or otherwise use the gas in an economic fashion, this project shall end.

4.    The Public Works Department shall exercise control over all constructed buildings, gas handling equipment (including conditioning equipment and flare), as well as any site improvements made at the Renewable Fuels Facility.  The Water and Light Department shall have control of any generation related equipment including generators, heat disposal and heat reclamation equipment, electric switchgear and distribution equipment, and related hardware.

5.    The Water and Light Department shall make fee payments to the Public Works Department representing a share of the profits of using the landfill gas.  Payments will be made on a monthly basis via inter-departmental transfer from Water and Light operations fund to Public Works Solid Waste Utility fund.  Fees will be based on the metered electrical output of the generators.  A schedule for the fees will be set at the following rate (whichever is higher):

a.    $6 per Megawatt Hour, or     
b.    $6 per Megawatt Hour plus 50% of the difference between $43 per Megawatt Hour and the Market Value for Renewable Electricity.

    The Market Value of Renewable Electricity will be established once per year by the report that the Water and Light Department is required to submit to Council (by city ordinance), or by an independent published index (should an index be found that is agreeable to both departments).  In either case the Market Value of Renewable Electricity shall include the value of both energy and capacity (power that is available during peak conditions) in its determination.

6.    The Public Works Department shall assume the following responsibilities:

    a.    Operate and maintain the gas wells and pipeline infrastructure to reliably harvest and deliver 500 BTU/ft 3 landfill gas to the Renewable Fuels Facility;

    b.    Construct and invest in new gas wells to economically maximize the amounts of gas produced;

    c.    Construct and invest in new gas extraction infrastructure to control gas migration as necessary and otherwise improve gas quality for delivery to the Renewable Fuels Facility;

    d.    Provide a site at the landfill suitable for a Renewable Fuels Facility;

    e.    Allow access to the site on a round-the-clock as need basis to Water and Light personnel or Water and Light sub-contractors;

    f.    Provide, and pay for, a building permit for the Renewable Fuels Facility based on a permitable design developed by the Water and Light Department;

    g.    Apply for all necessary air permits for the project, including construction permit and operating air permits and all annual air permit submittals thereafter. Costs incurred with outside vendors for permit applications associated with the Renewable Fuels Facility shall be paid by the Water and Light Department; and

    h.    Make available to Water and Light Department any and all equipment currently used in the blower building, including blower, flare, all operational controls, and the building itself.  This consignment will take place at the point in construction that the existing blower/flare system is significantly modified and the gas is redirected to the new system.

7.    The Water and Light Department shall have the following responsibilities:

    a.    Provide a site and building plan of the Renewable Fuels Facility to Public Works for purposes of acquiring a building permit;

    b.    Construct and operate a Renewable Fuels Facility that will include all equipment necessary to provide vacuum to the pipeline system, condition the gas, use the gas to produce electricity, and interconnection equipment to transfer the electrical production into the electric distribution system;  

    c.    Installing and operating a by-pass flare system to combust any gas that is not used to generate electricity.  The equipment to combust excess gas will either use the existing flare or new equipment, depending on operational needs.  The Water and Light Department will maintain the by-pass combustion equipment throughout the life of the project;

    d.    Finance all costs relating to engineering, design, construction, operation, and repair of the Renewable Fuels Facility including site preparation, building construction, generation equipment, and infrastructure connections to electric distribution system;

    e.    Administer the design and construction of the Renewable Fuels Facility; and

    f.    Oversee the operations and maintenance of the Renewable Fuels Facility, including maintaining records pertinent to electrical production and gas destruction for regulatory purposes.

8.    The date certain for transferring gas management from Public Works to Water and Light will occur on the day that construction of the Renewable Fuels Facility alters the gas path, directing it from the existing flare system into the new pathway as designed.  At that point, the Water and Light Department will assume all responsibilities of the current compressor/flare system including payment for electricity used by the above equipment.  At all times the Public Works Department will be responsible for gas management within the landfill footprint and any gas that may migrate from the footprint.  The Water and Light Department will manage the gas at the point the gas enters the existing blower building.
9.    The Renewable Fuels Project is a cooperative effort between Columbia Water and Light and Columbia Public Works.  As such, all signage and advertising will recognize both parties.

10.    Both Departments will actively work on developing utilization of the excess gas and  secondary uses of the gas and energy by-products.  Revenue from such developments shall be shared equally by the Public Works Department and the Water and Light Department.  Capturing waste heat, for example, and selling it to a third party would only be accomplished as a partnership between both departments. The Public Works Department retains the right to use any excess gas (gas that is not used in electrical generation) for its internal use at the landfill site, with no fee charged for such use.

11.    Financial incentives, such as Federal Tax Incentives or equivalent remunerative measures, that may be garnered through the Renewable Fuels Project shall fall to the department administering that portion of the project.  Specifically, a grant or special financial incentive that is directed at the development of new gas wells or piping would be directed to the Public Works Department who will receive all such benefits. Other tax incentives, such as the Production Tax Credit that is directed at producing electricity from landfill gas, would be received by the Water and Light Department.

12.    The overall supervision of this project shall rest with the City Manager who shall have the authority to make adjustments to the program that may be necessary for its success and to resolve any differences that may occur between the Departments.  If, for any reason, the project becomes untenable due to compliance requirements or the project become impractical or uneconomical, the City Manager shall recommend changes or that the project be terminated.

    ADOPTED this 6th day of February, 2006.