Long Term Food Waste Co-Digestion PPP Case Study · Long Term Food Waste Co-Digestion PPP Case Study John Buonocore, PE Rahway Valley Sewerage Authority Chief Engineer/ Assistant

Long Term Food WasteCo-Digestion PPP Case Study

John Buonocore, PERahway Valley Sewerage Authority

Chief Engineer/Assistant Superintendent

Christopher TaylorHawkins Delafield & Wood LLP

RVSA Special Counsel

1 – Introduction to Rahway Valley Sewerage Authority

2 – Background and Genesis of the Project

3 – Highlights From the Agreement and Scope of Work

4 – Legal/Contractual Challenges and Considerations

5 – Current Project Operational Status and Lessons Learned

Presentation Overview

RAHWAY VALLEY SEWERAGE AUTHORITY WASTEWATER

TREATMENT FACILITY

1050 East Hazelwood AvenueRahway, NJ 07065

Average Flow: 25-30 MGDPeak Wet Weather Flow: 105 MGD

11 Member Municipalities and 4 customer municipalities

More than 250,000 residents and 3,500 industrial and commercial customers

Total Service Area = 49 square mile area

• Objective was to lower electricity costs, decrease dependency on the electrical grid, lower carbon footprint, benefit financially and utilize existing infrastructure

• Three existing anaerobic digesters with approximately 30% unused capacity

- Target for food waste to use 20-25%

• Existing cogeneration facility oversized

- Previously produced enough digester gas for 1 engine to run 8hours a day (22% of average daily electrical demand)

- Goal is for one engine to run 24 hours a day on digester gas (66% of demand)

Motivation and Objectives for Co-Digestion of Food Waste

• Allowed for extended contract beyond 5 years

• Guarantee of long term supply and tip rate before committing the finances for a receiving station

• Steady supply of consistent material without a dedicated marketing effort

• Shift siting and technology risk to partner

• Protection against expected market changes in the future

• Partner to help optimize the digester operation and share in the operational risks

Reasons for Moving Forward with aPublic Private Partnership (“PPP”)

• 10 year initial phase, with a possible 10 additional years

• Waste Management designed and built a new receiving and feed in station, financed by the Authority

• Waste Management is responsible for securing the inbound organics to their CORe facility in Elizabeth, NJ and processing the material into a Specified Feedstock Slurry

• Feedstock is trucked to the Authority and stored in the new feed in station

• Authority is responsible for the overall operation of the Feed-In Station and the digesters

Agreement with Waste Management

Allowed for a Specific Feedstock Quality

New Feed Station

Agreement included a design build requirement for a new feed station utilizing an existing gravity thickener

New Feed Station – Scope of Work

1. The interior of the tank required minor structural repair and was coated to protect the concrete from corrosion

2. New jet mixing system included

New Feed Station – Scope of Work (Cont.)

3. A new truck offloading station was included with integrated controls

New Feed Station – Scope of Work (Cont.)

4. New interior piping and pumping system including rebuilding one existing Moyno pump and installing a new peristaltic hose pump.

Legal and ContractualChallenges and Considerations

Performance Guarantees Built into the Agreement

Guaranteed design-build price and schedule

Minimum delivery commitment at guaranteed price

Maximum solids production based on percent increase over

historical trend

Odor guarantee

On-going optimization /coordination between parties

Key Protections for Both Parties

Only “Specified Feedstock” can be delivered

Four-Year ramp up period

Authority right to suspend deliveries

Specified performance guarantees / damages

Termination rights / “off-ramps”

Design build delivery

Miscellaneous Challenges During Negotiations

Authorities right for a convenience termination

Design-build pricing and working with EIT funding

Maintenance requirements and responsibilities

Third party waste suppliers

Sharing of Renewable Energy Certificate revenues

Security for Performance

Parent Company Guarantee

Performance Bonds

Letter of Credit

Current Project Operation Statusand Lessons Learned

Current Contract Status

Fully executed as of January 20, 2017

Completed commissioning of the Feed in Station in April of 2018

Began receiving Feedstock in May of 2018 at a rate of ~5,000

gallons per day

Commercial Operations Date occurred on August 1, 2018 at a

rate of ~7,000 gallons per day

Currently in Contract Year 2 with a delivery guarantee of ~14,000

gallons per day

Current Operational Status

Digester operation has acclimated to the new Feedstock

Initial clogging issues have been elevated through process

SOP changes.

Initial gas measurements indicate a significant increase in

digester gas production

Lessons Learned

Best to pump Feedstock at 5 – 12 % Solids

Continuous pumping is preferred over batch pumping

Important to flush lines when shutting down for even a

short period

Preferable to have a dedicated separate feed line to

transport the Feedstock to the digester

Separate odor control system for Feedstock handling would

be beneficial

Questions / Contact Information

John Buonocore, PERahway Valley Sewerage Authority

Rahway, N.J. 07065(732) 388-0868

[email protected]

Christopher TaylorHawkins Delafield & Wood LLP

New York, N.Y. 10007(212) 820-9395

[email protected]