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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
Christopher TaylorHawkins Delafield & Wood LLP
New York, N.Y. 10007(212) 820-9395
