By Murphy Woodhouse for Arizona Daily Star
Last year the county’s Tres Rios Wastewater Reclamation facility produced around 254M cubic feet of so-called biogas, a byproduct of the wastewater treatment process that — if cleaned — could supplant the natural gas consumption of more than 5,000 homes.
However, most of the potentially valuable resource is being burned off at the plant, though the wastewater facility uses as much as it can on site. In recent years, the county pursued deals with several companies to treat and market the methane-rich biogas, proposals that ultimately fell through.
Now some officials say the best way forward is for the county to build the cleaning facility itself and sell the product, which could mean hundreds of thousands of dollars annually for the wastewater department that has been contending with declining usage and revenues. As to potential customers, the county has reached out to UNS Energy Services and considered hiring a third-party marketer that would find natural gas customers. Any deal, as well as how to pay for the new facility, would need the approval of the Board of Supervisors.
In a July memo to wastewater Director Jackson Jenkins, County Administrator Chuck Huckelberry estimated the new biogas cleaning facility could cost about $8M to build. He suggested that debt could be repaid by assessing the utility’s customers a small monthly renewable energy fee. However, he later told the Star that might not be necessary.
“Now that we see the market improving for environmental biogas, it’s quite likely that it will actually make money and pay the capital cost back without any fee increase, and that’s the direction we’re headed,” he said.
In 2014, the Board of Supervisors approved a contract with the companies Anaergia Inc. and Grannus Biagas LLC, which were going to build and operate a treatment facility and sell the gas. The contract called for the county to receive 10 percent of gross revenues, which were estimated to eventually rise to nearly $175K annually, excluding lease payments. Jenkins said a second deal, which was pursued with the company BioFuels Energy, would have brought in closer to $200K.
The county canceled the Anaergia/Grannus contract in early 2015 after the joint venture was unable to find a customer for the cleaned biogas. One possibility was an Apple supplier in Mesa that filed for bankruptcy, according to Jenkins. Negotiations with BioFuels Energy were suspended in July after it became “clear there will not be any significant progress on contracting,” Huckelberry wrote in a memo earlier that month.
Now, the county is hoping to team with Southwest Gas to move the cleaned biogas to a final customer or customers. Jenkins said Southwest is “all in” and has even added a stub to its pipe network near Tres Rios — near West Ina Road and Interstate 10 — to connect to a cleaning facility. Huckelberry said Southwest could potentially transport or purchase the gas, as well as assist with operations, maintenance and marketing, though the “exact responsibilities” are still being discussed.
Jenkins said a request for proposals for the facility will likely be out by the end of the year and construction could begin as soon as next summer.
Read more at Arizona Daily Star.
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