Further Evaluation of Organics Management Options v13 (3)

FURTHER EVALUATION OF WESTERN PLACER WASTE MANAGEMENT AUTHORITY

ORGANIC MATERIALS MANAGEMENT OPTIONS

FINAL REPORT MAY 1, 2015

Prepared by:

William J. Dickinson

2436 Professional Drive, Suite 300 Roseville, CA 95661

(916) 641-2734 www.capitolpfg.com

April 16, 2015

Table of Contents

Executive Summary ......................................................................................... ES - 1

1.0 Introduction ..................................................................................................... 1

2.0 Project Approach .............................................................................................. 2

3.0 Source Separation Collection Costs .................................................................. 3

4.0 Feedstock Recovery Methods and Quantity Estimates ...................................... 5

4.1 Digestion Technologies ................................................................................. 6

4.2 Contaminant Removal ................................................................................... 7

4.3 Marketing Requirements ............................................................................... 9

5.0 Potential Recovery Scenarios ......................................................................... 11

6.0 Use of Biogas Produced by Anaerobic Digestion ............................................. 13

7.0 Planning Period .............................................................................................. 14

8.0 Grants and Production Incentives .................................................................. 16

9.0 Permitting ...................................................................................................... 17

10.0 Water Balance .............................................................................................. 18

11.0 Public-Private Partnership Opportunities ..................................................... 19

12.0 Comparative Financial Projections ............................................................... 23

12.1 Options ...................................................................................................... 23

12.2 Assumptions.............................................................................................. 24

12.3 Limitations ................................................................................................ 25

12.4 Conclusions Drawn From Financial Comparison ........................................ 25

12.5 Sensitivity of Assumptions ........................................................................ 27

13.0 Recommendations ........................................................................................ 29

ES - 1 May 1, 2015

Executive Summary In January 2014, Capitol Public Finance Group submitted a report to the Western Placer Waste Management Authority (WPWMA) which evaluated, on a feasibility level, six different options for collecting and managing commercial organic wastes in the WPWMA service area1. Many of the assumptions used to develop the Capitol PFG report were derived from a concurrent engineering review conducted for the WPWMA by HDR.2 The six options were summarized in the following Table:

Table 1

Comparison of Commercial Food Recovery Options

Approach Technology Owner Operator Energy Output

1 Anaerobic

digestion at WPWMA

Clean World Partners WPWMA Contractor

Electrical gen set, power to

grid

2 Anaerobic

digestion at WPWMA

Zero Waste Energy WPWMA Contractor


grid

3 Anaerobic

digestion at CWP site

Clean World Partners

Clean World

Partners


Electricity or CNG

4

Anaerobic digestion at

Pleasant Grove WWTP

Unknown City of Roseville

City of Roseville

CNG for vehicle fuel

5 Composting at Dixon site

Static pile aeration with odor control

Recology Recology None

6 Composting at WPWMA


WPWMA Nortech None

This report is intended to expand upon our previous work, providing details necessary for the WPWMA Board of Directors to make an informed selection of their preferred approach for recovering and utilizing organic materials from the WPWMA waste stream.

The report begins by addressing specific questions posed by the WPWMA, and then uses the answers to update the previous financial analysis. The report concludes with recommendations for meeting short and long-term organic management goals.

1 “Anaerobic Digestion Feasibility Study and Financial Comparison, Western Placer Waste Management Authority, January 2014”. 2 “Feasibility Study of the Beneficial Use of Commercial Food Waste, Western Placer Waste Management Authority, December 30, 2013.”

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ES - 2

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ES - 3

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ES - 4 May 1, 2015

3. Water bath

4. DODA Bio Separator

5. SORDISEP wet separation

6. Mechanical Screening

7. ALMO Densimetric Table

8. OREX® 500 Organics Extrusion Press

9. Optical sorting

In order to develop a strategy for recovering and processing organic materials, it is necessary to understand how the marketability of products (compost, from aerated static pile composting of food waste) and by-products (solid and liquid digestate from AD) change when feedstock and processing methods change. Based on the analysis of our marketing sub-consultant, Alexander Associates, producing a very clean compost product will be necessary to insure that the compost will have a positive value and can be used productively for landscaping or agricultural purposes. Capitol PFG considered several possible combinations of feedstock, AD technologies and contaminant removal systems that could apply to WPWMA mixed waste operations. Our conclusion is that positive-pick hand sorting of large food items from the Container Line provides the best opportunity for recovery of organics from the mixed waste stream given the current configuration of MRF equipment. Other methods are expensive and/or ineffective at removing contaminants to the level needed to produce marketable compost. Because recovery from the Container Line alone would likely not result in a program that is compliant with AB-1826, we recommend that Member and Participating Agencies also institute curbside collection of separated organics from their largest food waste generators.

Subcontractor TSS Consultants has identified several programs that could provide: a) one-time grant funds that can reduce capital costs, or b) subsidies for the production of vehicle fuel, heat or electricity. Most of these programs focus on energy generation from biogas produced through anaerobic digestion of food waste, manure or biomass, and could apply to any of the AD options under consideration. The CalRecycle program focuses on Greenhouse Gas (GHG) reductions, so could potentially fund an AD project or on-site composting3.

For our financial projections Capitol PFG did not assume that any Option would receive grant funding or incentive payments; however, the potential for grants and incentives to influence the comparison of options is discussed in Section 12.5, Sensitivity of Assumptions.

For reasons listed in Section 7.0 of the Report, Capitol PFG has chosen to forecast financial results for the six chosen Options over both seven year and fifteen year Planning Periods. Seven years was chosen for a short term approach that could provide commercial food generators AB 1826 compliance through the year 2022, at which time WPWMA could fully implement a longer term solution. Fifteen years was chosen as the longest reasonable time frame for amortization of new capital investments should the Board prefer to immediately make a long-term commitment. This additional information will allow the WPWMA Board to fully evaluate its policy options.

3 AD grant applications may be more competitive than composting due to greater potential for GHG reductions.

ES - 5 May 1, 2015

Based on new information derived from this study, Capitol PFG has re-defined the original six Options as follows:

1. Clean World Partners AD at WPWMA utilizing a feedstock consisting of food separated at the source by food scrap generators (e.g. restaurants and grocery stores), plus hand-picked food off the MRF Container Line. Food would be processed at the MRF through a DODA Bio Separator before entering the digester, further removing contaminants. Digestate would be mixed with green waste and aerobically composted in windrows in the same manner as currently done with green waste.

2. Zero Waste Energy dry fermentation AD at WPWMA utilizing the same feedstock described in #1 above. Food would not be processed through a DODA Bio Separator. A woody bulking material such as compost screenings would be added at a ratio of 70% food to 30% bulking material. Digestate will be mixed with green waste and aerobically composted in windrows in the same manner as currently done with green waste. Finished compost will be passed through a 3/8” screen to remove any larger contaminants.

3. Anaerobic digestion at the South Sacramento Clean World Partner site utilizing the same feedstock described in #1 above. The food scraps would be transported after contaminant removal and consolidation at the MRF. CWP would utilize their DODA Bio Separator to prepare the food.

4. Anaerobic digestion at the Pleasant Grove Waste Water Treatment Plant utilizing the same feedstock described in #1 above. Food would be processed at the MRF through a DODA Bio Separator and the resulting slurry would be trucked to the treatment plant.

5. Off-site aerated static pile composting utilizing the same feedstock described in #1 above. Food scraps would be consolidated at the MRF and sent to Recology’s composting facility near Dixon.

6. On-site aerated static pile composting of the same feedstock described in #1 above4.

Each of these Options assumes implementation of food scrap collection programs for many of the larger grocery stores, cafeterias and restaurants. If, how and when such programs are implemented would be determined by the Member Agencies based on the needs of their customers. If the Member Agencies do not implement these programs to the extent anticipated, there could be more food available in the residue streams and in the Commercial Food Waste (unless food scrap generators find other ways to dispose of their food waste); however, lower overall recovery of food would be expected.

The Comparative Financial Projections are located in Appendix I. Important assumptions are noted at the bottom of each “Options” worksheet and on the “Assumptions” worksheet. The following are some of the key assumptions applied to all Options:

All of the options will utilize the same feedstock sources and require the same acceptance and pre-processing facilities to remove contaminants from source separated food routes. Based on the previous work of HDR, Capitol PFG has

4 As noted in Section 5.0, it is possible that some amount of mixed paper may be added into this feedstock.

ES - 6 May 1, 2015

estimated the capital cost of pre-processing equipment at $408,434. Options 1 and 4 would require additional pre-processing through a DODA Bio Separator.

All of the options will require an enclosed receiving building with odor controls to accept and store food waste and house pre-processing lines. Based on the previous work of HDR, Capitol PFG has estimated this capital cost at $833,920.

Member Agencies will implement source separation programs targeting high-generation customers, with resulting costs as shown in Table 3. Nortech will remove contaminants from this material to prepare it for AD or composting under each of the Options for an estimated annual cost of $90,6405.

Nortech will recover organics from the Container Line residue to use as feedstock for any of the six Options at an estimated annual cost of $251,5486.

Tables 5 and 6 show combined collection and WPWMA costs for the six Options under consideration. Option 3, “AD at the South Sacramento Clean World Partner Site”, has the lowest average cost per ton of food recovered for both the 7-Year and 15-Year Planning Periods. Option 5, which also involves trucking the pre-processed food waste off site, is the second lowest cost option. These two options have the additional advantage of requiring the least capital investment and the best potential for adapting to changing circumstances.

Table 5

Option Comparison Summary: 15-Year Planning Period

WPWMA and Member Agency Costs Combined

Description Net Capital

Outlay7

Average Annual Cost

For 15 years8

Tons of Food Recovered -

15 years

Average Cost/ Ton

of Food Recovered

1 Clean World Partners AD at WPWMA $ 5,619,951 $1,361,116 52,216 $391

2 Zero Waste Energy AD at WPWMA $ 4,310,666 $1,131,113 52,216 $325

3 Clean World Partners Sacramento AD $ 1,680,166 $945,171 52,216 $272

4 AD at Pleasant Grove WWTP $ 5,481,301 $1,382,063 52,216 $397

5 Jepson Prairie Composting $ 1,680,166 $1,012,364 52,216 $291

6 On-site Composting At WPWMA $ 2,680,145 $1,152,191 52,216 $331

5 Cost assumptions here and in the following bullet are the author’s estimate and were not provided by Nortech. 6 This estimate includes labor, maintenance costs and profit. It does not include any potential incentive payments to Nortech. 7 Includes Recology, Roseville and Lincoln capital outlays for collection equipment. 8 Recology, Roseville and Lincoln collection costs plus WPWMA costs net of revenue from the sale of electricity and finished compost.

ES - 7 May 1, 2015

Table 6




Outlay7

Average Annual Cost For 7 years8

Tons of Food

Recovered - 7 years

Average Cost/ Ton

of Food Recovered

1 Clean World Partners AD at WPWMA $ 5,619,951 $1,662,283

22,447 $518

2 Zero Waste Energy AD at WPWMA $ 4,310,666 $ 1,390,685

22,447 $434

3 Clean World Partners Sacramento AD $ 1,680,166 $979,891

22,447 $306

4 AD at Pleasant Grove WWTP $ 5,481,301 $ 1,664,455

22,447 $519

5 Jepson Prairie Composting $ 1,680,166 $1,042,052

22,447 $325

6 On-site Composting At WPWMA $ 2,680,145 $ 1,250,234

22,447 $390

Curbside collection costs as a proportion of total net costs range between 15% and 28% depending on the Option and Planning Period selected.

To roughly estimate the tipping fee impact of implementing Option 3 with a Seven-Year Planning Period, Capitol PFG has assumed that the WPWMA would recoup all its direct costs by raising the MSW tipping fee, while Member and Participating Agencies would cover all costs associated with curbside collection of organics. Under this assumption, the WPWMA would need to raise the MSW tipping fee by $3.43 per ton. Establishing a subsidized tipping fee for Source Separated Food Waste to incentivize participation would require a slightly higher MSW tipping fee. However, determining an appropriate fee structure to offset costs associated with managing organics is beyond the scope of this project; therefore, Capitol PFG recommends additional study and consultation with Member Agencies before establishing a tipping fee structure that appropriately allocates cost and incentivizes participation in a source-separated commercial organics collection program.

In addition to offering the lowest cost per recovered ton for both the 7-Year and 15-Year Planning Periods and the lowest capital investment by WPWMA, Option 3, “AD at the South Sacramento Clean World Partner Site”, also offers the following advantages:

Permitting, engineering and construction of new facilities would be minimized. The equipment required has been tested and proven effective in similar

circumstances. Many operational challenges presented by the other options are not a concern with

Option 3. These include odor control, digestate management, sewer connection fees, biogas offtake and equipment maintenance.

Negotiation of a contract amendment with Energy 2001 is not necessary, and amendments with Nortech are minimized.

ES - 8 May 1, 2015

The approach allows flexibility for adapting to changing circumstances. Flexibility will be important due to the many unknown factors surrounding the collection, processing, marketing and regulation of organic materials.

Marketing of gas and utilization of digestate would be the responsibility of Clean World Partners.

Clean World Partners is testing pre-processing equipment that could allow the WPWMA to greatly expand the quantity of organic waste recovered. Developing an agreement that allows the inclusion of these materials, if and when the WPWMA is interested, should be easy.

For these reasons, Capitol PFG recommends that the WPWMA proceed with the following actions to pursue Option 3 during the short term planning period, while simultaneously positioning the agency for other possible long-term strategies.

1. Consult with Member Agencies to confirm their interest in pursuing Option 3.

2. Hire an engineering firm to design and manage construction of facilities to accept, process and transfer source separated and positively sorted food waste.

3. Establish a tipping fee for source separated food delivered by Member Agencies or their contractors.

4. Re-evaluate the appropriateness of a reduced tipping fee for Commercial Food Waste and require that all but the most offensive of such loads be processed through the MRF.

5. Obtain commitments from Member Agencies regarding deliveries of source separated food.

6. Negotiate amendments to the existing Agreement with Nortech to positively sort food waste from the Container Line, and to accept, process and transfer source separated and positively sorted food waste.

7. Revise permits and obtain new approvals as needed.

8. Negotiate an agreement with Clean World Partners for the anaerobic digestion of food waste at their South Area Transfer Station facility.

9. Assist Nortech in continued small-scale testing of food waste composting.

10. Maintain contact with the City of Roseville and the South Placer Wastewater Authority regarding their interest and requirements for accepting food waste at the Pleasant Grove Wastewater Treatment Plant. Consider developing a joint grant proposal to reduce capital costs for this Option should these discussions progress in a positive manner.

11. Over the next two years, develop an RFP for MRF and landfill operations that encourages proposals for on-site management of organics such as anaerobic digestion or composting.

________________________________________________________________________ This concludes the Executive Summary. The full report begins on page 1.

1 May 1, 2015

1.0 Introduction

In January 2014, Capitol Public Finance Group submitted a report to the Western Placer Waste Management Authority (WPWMA)9 which evaluated, on a feasibility level, six different options for collecting and managing commercial organic wastes in the WPWMA service area. Many of the assumptions used to develop the Capitol PFG report were derived from a concurrent engineering review conducted for the WPWMA by HDR.10 The six options were summarized in the following Table:

Table 1



1 Anaerobic

digestion at WPWMA



grid

2 Anaerobic

digestion at WPWMA



grid

3 Anaerobic



Clean World

Partners


Electricity or CNG

4


Pleasant Grove WWTP


City of Roseville







WPWMA Nortech None

This report is intended to expand upon our previous work, providing details necessary for the WPWMA Board of Directors to make an informed selection of their preferred approach for recovering and utilizing organic materials from the WPWMA waste stream. In order to avoid repetition, this report is written with the assumption that readers will have some familiarity with our previous report, whose Executive Summary is attached as Exhibit A.

The report begins by addressing specific questions posed by the WPWMA, and then incorporates answers to those questions into an updated financial analysis. The report concludes with recommendations for meeting short and long-term organic management goals.

9 “Anaerobic Digestion Feasibility Study and Financial Comparison, Western Placer Waste Management Authority, January 2014”. 10 “Feasibility Study of the Beneficial Use of Commercial Food Waste, Western Placer Waste Management Authority, December 30, 2013.”

2 May 1, 2015

2.0 Project Approach

The consulting team led by Capitol Public Finance Group performed the following tasks to develop this report:

Met with Nortech Waste LLC management to identify technically and financially viable

processing approaches.

Met with a limited number of anaerobic digestion (AD) and processing equipment vendors and reviewed their concept proposals or product literature.

Conferred with representatives of the City of Roseville, City of Lincoln and Recology Auburn Placer to refine cost estimates associated with conducting a commercial food waste source separation collection program.

Planned, coordinated and observed processing tests of the WPWMA MRF residue streams and the commercial food waste delivered to the landfill to develop better estimates of the practical ability to utilize food waste.

Developed spreadsheets to compare the expected financial performance of various options for handling food waste over seven year and fifteen year life cycles.

Talked to technology vendors and operators about their interest in Public/Private Partnership arrangements relating to recovery and use of food waste.

Over the course of several meetings, solicited feedback from the Organics Management Group, consisting of representatives from the Member Agencies, WPWMA staff, Recology Auburn Placer and Nortech.

Investigated grant and other funding opportunities.

Surveyed twenty-eight regional contacts to determine the marketability of compost that utilizes food scraps or digestate as feedstock.

Conferred with five different regulatory agencies regarding permitting and environmental review requirements associated with various processing options.

Completed a water balance analysis to determine impacts associated with options that produce or use water.

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5 May 1, 2015

4.0 Feedstock Recovery Methods and Quantity Estimates

In the previous study, Capitol PFG and HDR considered only the organics collected from commercial establishments that prepare or sell food as potential feedstock. Roughly half of this material is currently delivered to the landfill, while the rest is mixed with other material and processed at the MRF. Based on limited sampling conducted in October-November of 2013, Capitol PFG estimated that 9,386 tons per year (TPY) of organic material was available from commercial food establishments. At the 80% recovery rate estimated by HDR, we projected that 7,509 tons could be recovered.

Because HDR did not identify a specific technology for achieving 80% recovery, Capitol PFG was tasked with working collaboratively with WPWMA and Nortech Waste LLC staff to identify the most technically and financially feasible method for recovering organic materials from the mixed waste stream. Using this preferred method, we were also tasked with identifying capital and operating costs, feedstock quantities and diversion rates for incorporation into the financial projections.

Because there are significant diversion and financial benefits from increasing the amount of feedstock available, for this follow-up work we expanded the possible sources of organic material in mixed waste to include:

Residue from the MRF container lines

The 3/8” to 2 5/8” fraction of residue from the Alternative Daily Cover (ADC) line (“ADC Overs”)

The 3/8” minus fraction of residue from the Alternative Daily Cover (ADC) line (“ADC Fines”)

Mixed paper

Recovery from each of these sources could be accomplished with no rerouting of collection vehicles. As an additional benefit, all of these sources include waste from residential customers.

Based on information from the January 2014 report and subsequent tests conducted by Nortech with Capitol PFG, we now estimate the quantity of available feedstock from mixed waste as shown in Table 4:

The abilsources are remmarketinbelow.

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most non-organic contaminants that remain in the digestate. Unfortunately, the OWS system requires a large investment in equipment, which renders it infeasible unless feedstock quantities are also relatively high. Exhibit B includes information provided by OWS. Capitol PFG also gathered information from International Engineering Services (IES) regarding an AD system based on Induced Bed Reactor technology (see Technical Memorandum included as Exhibit C). This system is less complex than other technologies and the cost estimates provided by IES are the lowest received. The Induced Bed Reactor would likely work best with a feedstock that is relatively free of contaminants. Further review of the technology and firm capabilities would be needed to compare this concept with the AD technologies reviewed by HDR.

4.2 Contaminant Removal As shown in Figure 1, contaminants present in organic streams may be removed at the following points:

Prior to collection, by the waste generator

After collection, before digestion or composting

After digestion, before aerobic composting of the digestate or food

After aerobic composting, before marketing the material

Figure 1 – Food Waste Contaminant Removal Opportunities

Removing contaminants early in the waste collection and processing system is advantageous because:

The capacity of downstream equipment (and its cost) can be reduced

Large contaminants are not chopped up into numerous smaller pieces

Harmful constituents are less likely to dissolve into the liquid digestate

Capitol PFG worked with Nortech and conducted other independent research to evaluate several methods of separating organic materials from contaminants. Each of these alternatives has advantages and disadvantages. Here is a summary of alternatives considered and their applicability.

1. Manual sorting to select organics. Concept: Utilize sorters to hand pick large food scraps such as intact fruits and vegetables to be used for composting or AD. Conclusion: This method was tested on the MRF Container Line residue and resulted

8 May 1, 2015

in a very clean organic stream. Whole fruits and vegetables are heavy, so hand sorting is reasonably efficient where these materials are prevalent. This method is not efficient for the two ADC fractions because the material is too small; based on a single test conducted by Nortech, it also does not appear to be an effective approach to recovering organics from Commercial Food Waste14.

2. Manual sorting to remove contaminants and recyclables. Concept: Utilize

sorters to clean up the feedstock sufficiently to be acceptable for digestion or composting. Conclusion: This may be an effective means to prepare Commercial Food for the ZWE dry fermentation AD process or composting if a post-AD or post-composting clean-up process is also employed. It is not likely to work for any of the MRF residue fractions as the material is too small and highly contaminated. It will also not result in a waste stream sufficiently clean for the CWP or wastewater treatment plant digesters.

3. Water bath. Concept: Run smaller fraction residue streams containing organics into a water bath, where heavy items such as glass and rocks fall to the bottom, plastics and paper float to the surface and are scraped off, and organics remain in the liquid, which can be pumped to an AD system or onto green waste compost. Conclusion: Nortech tested this concept and was not satisfied with the results. Separation was not sufficiently complete and too much extra water was introduced into the wastestream.

4. DODA Bio Separator. Concept: Run feedstock through a DODA Bio Separator (or similar technology) to remove contaminants. Conclusion: In their 2013 report, HDR concluded: “The DODA is efficient at removing larger contaminants, such as cans, plastic bottles, or other packaging, but is less efficient at removing small-sized contaminants such as broken glass, grit, or shredded film plastics.” Nortech reports that their tests of a small DODA unit showed that the DODA did not work well with a highly contaminated feedstock. The DODA pairs best with wet digestion systems (such as Clean World Partners) that accept feedstock in the form of pumpable slurry.

5. SORDISEP wet separation. Concept: Take digestate directly from the OWS digester and utilize wet separation to remove inerts and sand to produce marketable end-products. Conclusion: We were not able to view this process in action as the only operating system is in France. Potential disadvantages include high capital and operating costs and the production of wastewater that must be treated or utilized.

6. Mechanical Screening. Concept: Run finished compost (which may include digestate as feedstock) through screens of progressively smaller sizes to remove contaminants and undigested woody pieces. Conclusion: Although screening is a necessary component of producing finished compost, this method will not be effective at removing small glass shards, small diameter plastic pieces and Styrofoam beads, any of which can greatly decrease the value of compost.

7. ALMO Densimetric Table. Concept: First run finished compost (which may include digestate as feedstock) through a series of trommel screens to remove large contaminants and woody materials. Follow this with processing through the Densimetric Table, which can remove and recover a mixture of glass, rock and ceramic fragments, thereby increasing diversion and improving compost quality.

14 Nortech conducted a manual sorting test of Commercial Food Waste on January 14, 2015. Six sorters recovered only 814 pounds of food from 15.73 incoming tons.

9 May 1, 2015

Conclusion: Under appropriately dry conditions, 99.5% of the glass is removed from the compost15. Separation of glass from the rock and ceramic fragments is not currently feasible using the optical sorting equipment at the WPWMA MRF due to the small size of the shards after screening to ¼”; therefore, glass would not be a revenue source and could only be used on site as road base. CapEx is $2-4 million for all required equipment (installed)16. Nortech would incur additional operating costs from screening and handling materials multiple times.

8. OREX® 500 Organics Extrusion Press17. Concept: Apply high pressure to squeeze an organic paste out of MRF residue and Commercial Food Waste containing high proportions of organic materials. The paste could be used for AD feedstock and the inorganics either landfilled or gasified. This system provides a method for removing organics from MSW with high percentages of inorganic materials. The material first needs to be reduced to a 2”-6” size for best results. It could be used in conjunction with one of the wet AD options as it creates a pumpable feedstock. Conclusion: CapEx for the OREX® 500 and the polishing unit needed to remove small plastics, glass and grit from the organic paste after pressing is $3.4 million, and operating costs for the press and polisher are estimated as $2.75 per ton18. Additional capital expense and processing is necessary to prepare the MSW for the press; however, it may be possible to use some of the existing MRF equipment for this purpose. The potential for chemical or heavy metals contamination is a concern with this approach.

9. Optical sorting. Concept: Use optical sensing technology to identify material types (e.g. paper vs. plastic) passing along a quickly moving belt, then separate material types by using quick blasts of air to push materials into different receptacles. Conclusion: This technology is utilized widely in Europe and to a lesser extent in the USA to address specific waste streams and end product goals. It is more effective when used on relatively homogeneous streams such as those found in single-stream recyclable MRFs. Adding optical systems to the current WPWMA MRF to reduce contamination of organics in some residue streams may be possible, but would likely come at a high capital cost and would be less efficient than if incorporated into a redesign of the entire facility19.

4.3 Marketing Requirements In order to develop a strategy for recovering and processing organic materials, it is necessary to understand how the marketability of products (compost, from aerated static pile composting of food waste) and by-products (solid and liquid digestate from AD) change when feedstock and processing methods change. Alexander Associates was engaged to evaluate the marketability of solid digestate, liquid digestate and compost produced under various circumstances. Their full report is attached as Appendix D, and the main points are summarized as follows:

15 Kevin Brogan, Van Dyk Recycling Solutions, confirmed by Ron Alexander. 16 Kevin Brogan. 17 This technology has been selected by Recology to recover organic material remaining in residential “Black Bin” waste from San Francisco. They will send the “juice” to the East Bay MUD wastewater treatment plant. 18 Emails from David Schneider, Anaergia Vice President of Business Development, Western USA. 19 Evaluation of major MRF design changes is outside the scope of this project.

10 May 1, 2015

Farmers and spreaders are paying $10 to 16 per ton, picked up, for yard trimmings composts that are listed by the Organics Materials Review Institute20 (OMRI), and more for manure-based products (richer in nutrients). Lower quality materials that are not OMRI listed sell for less, and producers may even be required to truck and spread the compost with no compensation.

OMRI will not allow food residuals that are collected in a ‘mixed’ waste stream to be used as a product feedstock, even if the food is very clean. However, a product generated from a source-separated waste stream, such as food residuals from restaurants, may be listable.

Compost contaminated with inert materials that may be introduced through mixed waste processing or poor separation at the source will be difficult to market and have little or no value.

Inert contamination in the compost is unlikely to significantly increase heavy metal and chemical contamination in the finished product.

The liquid digestate produced through the Clean World Partners AD process has not been proven to produce a useful product at a reasonable cost.21

CalRecycle is currently proposing regulations that would consider compost containing over 0.1% by weight of inert contamination as ‘solid waste’.

If WPWMA hopes to utilize any MRF residue as a feedstock, marketing the resulting compost will require significant investment in equipment to remove contaminants.

Based on inspection of compost processed through an ALMO Densimetric Table, it is likely that moderately-contaminated compost could be cleaned up enough to allow its sale, although perhaps not to the highest value markets.

The information provided by Mr. Alexander was used to analyze Potential Recovery Scenarios (Section 5.0) and revise assumptions for the six Organic Recovery Options presented in the Financial Comparison.

20 The Organic Materials Review Institute (OMRI) is an international nonprofit organization that determines which input products are allowed for use in organic production and processing. OMRI Listed® products are allowed for use in certified organic operations under the USDA National Organic Program. 21 This finding is consistent with the previous financial analysis, which assumed disposal of this by-product in the sewers.

11 May 1, 2015

5.0 Potential Recovery Scenarios

Capitol PFG considered several possible combinations of feedstock, AD technologies and contaminant removal systems that could apply to WPWMA mixed waste operations. Our conclusions are as follows:

1. The organic material available from the ADC Fines line consists of small (3/8” or less) particles contaminated with glass, plastics, ceramics and metals that would be difficult to remove. A contaminant removal system would be very expensive and could not be financially justified given the quantity of feedstock available. This material has also tested positive for heavy metals in the past, so could potentially render any resultant compost unmarketable. Given that ADC Fines are currently used as cover at the landfill and therefore do not count as “disposed” material for the State diversion calculations22, it does not appear advantageous to include this material in an AD or composting process.

2. The organic material from the ADC Overs line - in the 3/8” to 2 5/8” size range - is too small to hand sort economically. Approximately 9% of this material is broken glass23, which is very hard on pumps and can render compost unmarketable if present in even small amounts. With stricter compost regulations from both CalRecycle and the State Water Board in the draft stages, it is clear that contaminant removal would be necessary. Any contaminant removal system, pre-AD or post-AD, would be very expensive and could not be financially justified at this time given the small quantity of feedstock available.

3. We did not discover any automated system that would effectively sort the organic

material in the Container Line residue at a reasonable cost; however, the organic material is sufficiently large and intact to manually hand sort. Capitol PFG projects that 1,300 tons per year of uncontaminated food could be recovered by 3.25 full-time equivalent sorters with slight modifications to current operations24.

4. The organic material in the Commercial Food Waste is difficult to recover through

hand sorting due to its size and/or consistency. One approach to organics recovery would be to process this material through the OREX 500 press, perhaps in combination with the ADC Overs. This approach may have merit and could be considered as part of a future MRF redesign and revised operator agreement. Additional engineering review would be necessary to develop cost estimates to determine how the system could be integrated into the existing MRF design. A new waste characterization would also be needed to determine whether enough food is available in commercial loads after instituting source separation programs to justify investment in the OREX. Another approach to recovery would be to process loads categorized as “Commercial Food Waste” (currently sent to the landfill) with all other incoming MRF waste. Processing this material would provide the opportunity to manually recover recyclables (primarily plastic and steel containers and cardboard) plus large organic material that would end up on the Container Line. Although this approach will likely not divert organics to the level possible from the

22 There have been previous attempts to change California law to consider alternative daily cover “disposed”. AB 1594, enacted in 2014, eliminates disposal credit for green waste ADC by 2020. Although AB 1594 did not address ADC from MRF fines, this issue may be raised in the future. 23 Based on test conducted by Nortech and Capitol PFG on October 13, 2014. 24 Based on one test conducted by Nortech and Capitol PFG, November 20, 2014, and subsequent data collected by Nortech.

12 May 1, 2015

OREX 500 Press, due to the lack of information about the potential to utilize the OREX at the WPWMA MRF, this approach is assumed for the Financial Projections.

5. Consideration was given to digesting highly contaminated feedstock (e.g. ADC Fines

and ADC Overs) and sending the digestate to the landfill without any attempt to compost the remaining organic material. Gas recovery, stabilization of the organic material and odor reduction would be potential benefits of this approach. This concept would potentially work with either the ZWE or OWS technologies, but there is some doubt as to whether this approach would be compliant with AB 1826. In addition, contaminants take up facility capacity, driving up capital and operating costs. It is also possible that the digestate would not be approved for use as daily cover without mechanical or thermal drying and removal of light-weight plastics. Drying consumes energy, is expensive and requires air quality permits that may be difficult to obtain. Losing the ability to utilize ADC Fines for daily cover at the landfill would be a high cost to achieve the benefits cited above.25

6. Paper is a possible feedstock for the OWS AD system and either on-site or off-site

composting. Nortech believes they can produce at least 6,000 tons per year of mixed paper by hand sorting contaminants such as plastic bags and cellophane wrappers out of the residue from the light, two-dimensional residue line. Any remaining contaminants could be removed when screening finished compost26. Paper diverted in this manner would reduce disposal at the landfill and potentially add value in the form of compost or methane gas. As part of an approved small-scale test program, Nortech is mixing paper with food waste to determine impacts to the composting process and product marketability.

7. If the WPWMA wishes to maximize recovery of organics and diversion of materials

from the landfill, the OWS AD system is worth further consideration; however, due to the high capital and operating costs of this technology, and for the reasons listed in Section 7.0 regarding the need to consider a short-term Planning Period, Capitol PFG has not run any financial projections for scenarios that include this technology.

8. The most cost-effective way to manage food waste is to combine a source

separation program that targets high-volume locations with hand-sorting of organic material from the MRF Container Line. Basing a program exclusively on source separation or MRF sorting results in costs that are much higher than a blended approach. Although it is too early to know exactly how the State will enforce AB 1826, we believe this blended approach, in combination with existing green waste recovery programs, will comply.27

25 If MRF fines are ever outlawed as ADC, and it becomes clear that an agency can meet the requirements of AB 1826 while sending all digestate to the landfill, WPWMA may wish to reconsider this option. 26 Unfortunately, this screening method may contaminate the large woody “overs” now productively used on the landfill. 27 This question was posed by Capitol PFG to CalRecycle staff in March 2015. Their response is included as Appendix E.

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6.0 Use of Biogas Produced by Anaerobic Digestion

Under the scenarios included in their study, HDR estimated gas production from an AD process would be 14.3 million cubic feet per year (capable of generating 600,808 kilowatt-hours of electricity per year) for a wet system with feedstock inputs of 3,650 tons per year, and 19.3 million cubic feet per year (capable of generating 814,930 kilowatt-hours of electricity per year) for a dry system with feedstock inputs of 7,509 tons per year of food waste and 3,285 tons per year of green waste or compost screenings. The HDR report assumed that this relatively small amount of gas would be transmitted via pipeline to the existing landfill gas control system for use by the private landfill gas to energy operation (Energy 2001). HDR assumed that no additional capital or operating cost would be incurred from this use of the gas, and that Energy 2001 would pay the WPWMA $0.015 per kilowatt-hour for electricity Energy 2001 generated and sold through the PG&E grid28.

With the revised assumptions on feedstock availability used for this report (3,019 tons per year for all scenarios), gas production is expected to decrease for both the wet and dry AD systems. Less gas production makes it even more difficult to justify the investment needed to consider alternatives to sending the biogas to Energy 2001. Nonetheless, options do exist, including:

1. The raw biogas could be cleaned, compressed and stored for use in natural gas vehicles. This is a relatively expensive option for a small-scale operation without considerable subsidies from government programs. Some programs exist now, but are uncertain moving into the future.

2. The biogas could be directly combusted and used as a heating or cooling source, either on-site or off-site after transmission through a gas pipeline.

3. The biogas could be directed to a combined heat and power (CHP) unit to

generate electricity and heat for on-site use. Electricity generated for use at the MRF, for example, could replace power purchased from PG&E at peak times for costs of up to $0.22/kWh. In addition, such a project could qualify for significant rebates from PG&E through the California Public Utility Commission’s Self Generation Incentive Program. Offsetting these potential revenues is the capital investment in equipment to produce and convey the power to the MRF and the cost of operating and maintaining the system.

4. Microturbines provide another alternative for producing electricity. They are less

efficient than CHP units but have the advantage of producing fewer emissions.

Considering the small amount of gas potentially available and the complications involved in obtaining air quality permits, Capital PFG has retained the original assumption that any biogas produced will be sent to the existing generating system operated by Energy 2001.

28 Based on an offer from Energy 2001 to the WPWMA.

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7.0 Planning Period

In our first study of organic options for the WPMWA, Capitol PFG utilized a twenty-year planning horizon for financial projections, primarily based on the life span of equipment assumed by HDR. Although this was a valid assumption for an initial comparative study, it seems appropriate to reconsider the planning period taking into account the following factors:

1. The landfill and MRF operation agreements with Nortech expire in 2020 unless extended. Changing the current WPWMA MRF processing approach could potentially improve the efficiency of recovering organics. Some of these changes might require a substantial redesign of the facility, which could be beneficial by 2020 in any case due to advances in equipment and methods of recovering other materials (paper, plastics, etc.) over the last ten years. It seems prudent to delay any major capital improvements for processing organics until a fully integrated design is complete.

2. The agreement with Energy 2001 to utilize landfill gas (LFG) expires in 2018 unless extended, and the WPWMA has contracted for preparation of a Landfill Gas Strategic Plan to determine what to do with the LFG after 2018. The choices made by WPWMA for LFG could have an impact on the uses and valuation of biogas produced from AD systems.

3. Management of organics will require renegotiation of agreements with the MRF operator to address responsibilities such as managing an AD or food waste composting facility. It may be beneficial to wait until 2020 to negotiate long term agreements for these new services as part of a larger Request For Proposals to operate the MRF, landfill and biogas utilization system.

4. Changes in the amount and type of organics in the wastestream over the next few years are likely, but difficult to predict. For example, will food waste generators react to the new requirements of AB 1826 by installing on-site equipment such as composters or dehydrators? Will private entrepreneurs provide free collection of separated organics? To what extent will the Member Agencies institute source separation programs, how much participation will they achieve and where will they send the collected materials?

5. Although some larger or more environmentally progressive cities and counties in California have moved forward with food scrap composting or AD, most have waited to see what would be required by law. As a result, there has been little data generated regarding the numerous options available and there is no consensus as to the best approach under different circumstances. This situation will change in the next few years because several facilities were recently put on line or are in the design or construction phases.

6. Regulations implementing AB 1826 will evolve as the five-year phase-in period progresses. In addition, the State has proposed new composting regulations that will impact composting of food and AD digestate mixed with green waste. The composting regulations will not be final for several months. How these regulations define acceptable levels of contamination from physical, chemical and heavy metal contaminants could determine which organic recovery methods are technically feasible and/or economical.

15 May 1, 2015

7. Technological advances in recovery systems for organics will likely make any AD system selected now obsolete before their concrete or steel components wear out, thereby requiring reinvestment over shorter time frames than expected. Other conversion technologies, such as gasification or pyrolysis, could also advance to the point that they influence the selection of options for managing organics.

8. Given additional time, the South Placer Wastewater Authority may establish a tipping fee for food waste at the Pleasant Grove Wastewater Treatment Plant that is competitive to other options under consideration.

9. The WPWMA and its Member Agencies can assist food waste generators in meeting the requirements of AB 1826 without the need for immediate large-scale capital investments. This can be accomplished in the short term by hand sorting organics at the MRF, combined with source separation programs targeting large generators implemented by the Member Agencies. A relatively low capital cost AD or composting system could be installed to process the organics at the MRF, or they could be shipped to other existing or planned facilities in the Sacramento region. Although this short term approach may not meet the WPWMA’s long term goals, it would provide time to observe how the other issues noted above are resolved.

Considering the points raised in items 1-9 above, Capitol PFG has chosen to forecast financial results for the six chosen Options over both seven year and fifteen year Planning Periods. Seven years was chosen for a short term approach that could provide commercial food generators AB 1826 compliance through the year 2022, at which time WPWMA could fully implement a longer term solution29. Fifteen years was chosen as the longest reasonable time frame for amortization of new capital investments should the Board prefer to immediately make a long-term commitment. This additional information will allow the WPWMA Board to fully evaluate its policy options.

29 This assumes a new MRF/Landfill agreement will take effect in 2020 and it will take two years to build and begin operation of a longer term project.

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8.0 Grants and Production Incentives

An analysis of grant and incentive program opportunities relevant to WPWMA’s organic collection and processing options is attached as Appendix F. Subcontractor TSS Consultants has identified several programs that could provide: a) one-time grant funds that can reduce capital costs, or b) subsidies for the production of vehicle fuel, heat or electricity. Most of these programs focus on energy generation from biogas produced through anaerobic digestion of food waste, manure or biomass, and could apply to any of the AD options under consideration. The CalRecycle program focuses on Greenhouse Gas (GHG) reductions, so could potentially fund an AD project or on-site composting30.

Grant programs are often used to fund new technologies that can advance the industry if given an initial “push” into the marketplace. Previous grants have funded new processing equipment for MRFs (e.g. the OREX 500 press), innovative uses of composting (aerated static pile) and new AD technology (Clean World Partners, Zero Waste Energy and OWS AD systems).

Grant programs are typically competitive, with applications for funding far exceeding available funding. For example, in 2014 CalRecycle received requests for over $100 million of funding when they had only $15 million in available funds. Compost as a final product has fewer grant or incentive opportunities than AD. The production of renewable natural gas through AD has the greatest possibility of subsidy and support due to a tradable market for low carbon fuel credits. The bioenergy development community has shifted increasingly towards biofuel production because of the subsidy offered through market-based credit incentives. Unfortunately, the high capital cost of preparing, storing and dispensing compressed natural gas does not favor small producers of biogas.

The HDR report assumed that any gas produced by AD would be commingled with the much larger quantities of landfill gas and utilized in the same manner. Because only a small amount of gas could be generated through AD from the clean organic feedstock available to the WPWMA, this assumption still seems valid. Currently, Energy 2001 uses the landfill gas to generate electricity that is distributed through the PG&E grid. A grant application to produce a small amount of biogas to be used in this manner would likely not be as competitive as projects to produce vehicle fuels.

Of the concepts under consideration, the following might present the best opportunities for significantly reducing costs through grant funding:

An innovative approach to separating food waste from mixed waste and preparing it for off-site AD at the Pleasant Grove Wastewater Treatment Plant. Regional projects that cross agency lines are often favored by granting agencies.

A small-scale AD system located on WPWMA property that shows financial feasibility for feedstock supplies in the 3,000 to 6,000 tons per year range. Proving the feasibility of this technology application would be helpful to many medium-sized agencies seeking compliance with AB 1826.

The potential for grants and incentives to influence the financial comparison of options is discussed in Section 12.5, Sensitivity of Assumptions.

30 AD grant applications may be more competitive than composting due to greater potential for GHG reductions.

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9.0 Permitting

An analysis by TSS Consultants of permitting requirements under various assumptions is included as Appendix G. Capitol PFG used this information to help determine assumptions for the six Organic Recovery Options presented in the Financial Comparison. Key points of the permitting analysis include:

A small AD system with an annual throughput of 8,000 tons per year or less could be relatively easy to permit. A large AD system processing multiple MRF residue streams would be more difficult.

Options 3, 4 and 5, all of which envision transfer of food waste to off-site facilities, would require the fewest changes to WPWMA permits.

Biogas production would lead to the requirement for additional air permits and purchase of offset credits unless the gas is directed to the existing landfill gas system. Scenarios in which large amounts of gas are produced would trigger more stringent requirements.

The liquid digestate produced by wet AD systems (Option 1) contains high concentrations of ammonia, which creates odor concerns and the need for pre-treatment before disposal in the sewer system or use on compost.

An Environmental Impact Report produced by WPWMA in 2003 analyzed the impacts of composting food waste on site using an enclosed or covered aerated static pile system. CUP 1717 and SWFP 31-AA-0001 already allow for this activity so no further analysis would be required. An AD system would likely require further CEQA review.

CalRecycle and the State Water Resources Control Board are both promulgating new regulations for the production and marketing of compost. The new standards will increase requirements for composting all feedstock, including food, digestate and green waste.

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10.0 Water Balance

As required per the Scope of Work, TSS Consultants completed a study of water use and discharge under five different scenarios to determine costs and potential beneficial uses of liquids (Appendix H). Water usage and wastewater production varies greatly between the six Options under consideration. Beneficial uses of wastewater could include application to the green-waste compost produced by Nortech.

Based on this analysis, Option 1 is the only option that would produce a significant amount of excess water that must be utilized or discharged into the sanitary sewer. TSS concludes that there would be sufficient capacity in the existing ponds to hold the liquid digestate from Option 1 under normal circumstances; however, in their Permitting review they also conclude that this digestate contains high concentrations of ammonia and other odor-causing constituents that would require pre-treatment prior to any beneficial use on compost. In addition, according to the Alexander & Associates marketing study, Nortech’s compost could also lose its OMRI designation as “organic” if the liquid digestate was produced from organic materials recovered from mixed waste.

Option 4 would utilize large quantities of water, but the water would be entrained with organic materials trucked to the Pleasant Grove Wastewater Treatment Plant for anaerobic digestion. Excess water would be treated and discharged at the plant.

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11.0 Public-Private Partnership Opportunities

The term “Public Private Partnership”, (aka PPP or 3P) is used to describe various arrangements whereby a government agency and private businesses share financial and operational risk in a project or program that provides a public service or benefit.31 They are common in the waste industry, including at the WPWMA (note the agreements with Nortech and Energy 2001). In addition to the benefit of shared risk, each party to the agreement benefits from the technical abilities and market positioning of the other party. For example, government can provide feedstock guarantees, a developed site, financial stability, bonding capacity, permitting support, grants, and bill collection support. Private companies often provide technical expertise, rolling stock and other equipment, plus responsibility for daily operations. PPPs may also include Design, Build, Operate and Finance (“DBOF”) agreements that start with private ownership and ultimately result in the public agency gaining ownership after a lengthy operational period.

For the management of organic materials, the WPWMA should primarily be interested in the following benefits a private partner can offer:

Technical expertise

Operational experience

Performance guarantees, especially for any commercially untested technology

Risk sharing

The primary tasks involved in carrying out the six Options for the utilization of food waste are as follows:

1. Collecting source separated and mixed Municipal Solid Waste from grocery stores, restaurants and other food scrap generators. [all options] This task should remain a responsibility of the Member Agencies, either directly or through their franchisee.

2. Positively sorting food from mixed waste at the MRF. [all options] This task is best handled by the MRF operator. Adjustments to the Nortech agreement are necessary to include this service.

3. Removal of contaminants from source separated food. [all options] This task could be handled by either the MRF operator or an independent AD or composting operator.

4. Consolidation of food in an enclosed building. [all options] This task could be handled by either the MRF operator or an independent AD or composting operator.

5. Processing in a Doda Bio Separator or similar machine in preparation for wet AD. [Options 1 and 4.] This task could be handled by either the MRF operator or an independent AD or composting operator.

31 Some definitions of PPP only include arrangements whereby the public agency seeking to make a capital investment does not incur any debt. In these cases the PPP borrowing is managed by a private sector “special purpose vehicle” implementing the project. Such definitions distinguish between these arrangements and "shared service delivery" that utilize contracts or franchises to provide services to citizens. The discussion in this section uses the broader definition and does not contemplate the formation of any special purpose vehicle.

20 May 1, 2015

6. Loading and transporting food to a remote location. [Options 3, 4 and 5] Loading

should be handled by Nortech, but transporting could be handled by an independent trucking firm or Nortech. Adjustments to the Nortech agreement are necessary to include this service.

7. Anaerobic digestion on site. [Options 1 and 2] This task could be handled by either the MRF operator or an independent AD operator.

8. Aerated Static Pile Composting on site. [Option 6] This task could be handled by either the MRF operator or an independent composting operator.

9. Processing (to create a marketable product) or disposal of liquid digestate (“liquor”). [Option 1] This task could be handled by either the MRF operator or an independent AD operator.

10. Combining the higher solids digestate with yard waste and aerobically composting to create a marketable product. [Options 1 and 2] This task could be handled by either the MRF operator or an independent AD operator.

11. Utilizing the biogas produced from AD to create and utilize energy. [Options 1 and 2] The current assumption, pending completion of the Landfill Gas Master Plan, is that the biogas would be combined with landfill gas and utilized in the same manner. This would require an amendment to the agreement with Energy 2001.

Several of the tasks noted above could be handled by either the MRF operator or an independent AD equipment vendor. Work could be performed by either party through a simple operations agreement, with the WPWMA owning all buildings and equipment, or through a range of PPP arrangements up to and including DBOF. Advantages with working with an equipment vendor include their in-depth understanding of the AD process and their ability to modify equipment as needed. Their desire to showcase their technology may also lead them to offer the WPWMA a better financial arrangement.

Many vendors have not yet demonstrated their technology commercially in the United States at a required scale or with a specific feedstock, so are eager to build a project close to Sacramento. As one example, Exhibit C includes a preliminary estimate from International Engineering Services (IES) to construct an AD system based on Induced Bed Reactor technology. IES has indicated interest in a DBO arrangement, as have ZWE (Option 2) and OWS.

On the other hand, placing all work conducted on site under the control of a single operator (such as Nortech) greatly simplifies WPWMA’s management of all operations and allows efficiencies that are not possible with multiple operators. The shared use of facilities and the interdependence of feedstock and final product requirements would make it difficult to negotiate and manage agreements with two operators. Complications could include defining responsibilities for each of the following:

Feedstock quality, quantities and timing of deliveries

Use of compost pad or other physical space

Water, sewage and electrical utilities

21 May 1, 2015

Storm water monitoring

On-site traffic

AD digestate and liquor quality

Odor control

Compliance with permit conditions

Service interruptions – either in supply or acceptance of feedstock Due to these anticipated complications, Capitol PFG recommends maintaining one operator for all on-site tasks if a reasonable agreement can be reached. The MRF/landfill operator could sub-contract with an AD technology vendor if they choose, thus retaining the technical expertise of the vendor while insulating WPWMA from the management challenges.

A deal with the MRF operator to take on all of the tasks associated with on-site anaerobic digestion (Options 1 and 2, which have the most complications) could be structured from the following points:

1. Contractor (MRF Operator) shall design, build, operate, finance and own all improvements necessary to:

a. accept food in a new fully enclosed building that includes odor control b. remove contaminants from source separated food c. convey or transport feedstock to the AD equipment d. anaerobically digest the feedstock e. collect and store the biogas for a reasonable time f. process, market or dispose of the liquor (if any) g. combine the higher solids digestate with yard waste and aerobically compost

to create a marketable product

2. At the end of the contract term, ownership of all improvements shall pass to the WPWMA at a defined price32.

3. WPWMA shall pay Contractor a defined fee per ton for all feedstock treated via AD.

4. Contractor shall be entitled to a defined payment for all biogas produced through AD.

5. Contractor shall operate a SCADA system to remotely access the AD system. WPWMA shall have access to continuous flow monitoring information and summary reports of gas quantity and constituents.

6. Contractor shall retain all revenues associated with the sale of liquor, digestate and compost.

7. Contractor may apply for and utilize grant funds or subsidies relating to the construction or operation of the AD facilities, marketing of liquor and digestate, or other opportunities that may arise. WPWMA will cooperate with Contractor if requested to provide information necessary to apply.

32 The price could be as low as $1.00, depending on the WPWMA’s desired contract term, rate setting goals and expectations for the useful life of the facilities.

22 May 1, 2015

8. Contractor shall dispose of any non-organic material at the Western Regional

Sanitary Landfill at no cost.

9. WPWMA and its Member Agencies shall agree to flow control provisions necessary to provide Contractor with assurances regarding the quality and quantity of organic feedstock. A guaranteed minimum volume of source-separated feedstock of a defined quality will likely be necessary.

10. WPWMA shall be responsible for conveying and utilizing biogas stored by Contractor, provided the gas meets defined quality standards.

11. WPWMA shall allow Contractor to utilize a defined area for the new structures at no cost.

12. WPWMA will oversee any necessary environmental review and obtain permit approvals from the Local Enforcement Agent, CalRecycle, the Central Valley Regional Water Quality Control Board, the Placer County Air District and the Placer County Planning Department. Contractor will obtain all other permits.

23 May 1, 2015

12.0 Comparative Financial Projections

12.1 Options Based on new information derived from this study, Capitol PFG has re-defined the original six Options as follows:

1. Clean World Partners AD at WPWMA utilizing a feedstock consisting of food separated at the source by food scrap generators (e.g. restaurants and grocery stores), plus hand-picked food off the MRF Container Line. Food would be processed at the MRF through a DODA Bio Separator before entering the digester, further removing contaminants. Digestate would be mixed with green waste and aerobically composted in windrows in the same manner as currently done with green waste.

2. Zero Waste Energy dry fermentation AD at WPWMA utilizing the same feedstock described in #1 above. Food would not be processed through a DODA Bio Separator. A woody bulking material such as compost screenings would be added at a ratio of 70% food to 30% bulking material. Digestate will be mixed with green waste and aerobically composted in windrows in the same manner as currently done with green waste. Finished compost will be passed through a 3/8” screen to remove any larger contaminants.

3. Anaerobic digestion at the South Sacramento Clean World Partner site utilizing the same feedstock described in #1 above. The food scraps would be transported after contaminant removal and consolidation at the MRF. CWP would utilize their DODA Bio Separator to prepare the food.

4. Anaerobic digestion at the Pleasant Grove Waste Water Treatment Plant utilizing the same feedstock described in #1 above. Food would be processed at the MRF through a DODA Bio Separator and the resulting slurry would be trucked to the treatment plant.

5. Off-site aerated static pile composting utilizing the same feedstock described in #1 above. Food scraps would be consolidated at the MRF and sent to Recology’s composting facility near Dixon.

6. On-site aerated static pile composting of the same feedstock described in #1 above33.

Each of these Options assumes implementation of food scrap collection programs for many of the larger grocery stores, cafeterias and restaurants. If, how and when such programs are implemented would be determined by the Member Agencies based on the needs of their customers. If the Member Agencies do not implement these programs to the extent anticipated, there could be more food available in the residue streams and in the Commercial Food Waste (unless food scrap generators find other ways to dispose of their food waste); however, lower overall recovery of food would be expected.

33 As noted in Section 5.0, it is possible that some amount of mixed paper may be added into this feedstock.

24 May 1, 2015

12.2 Assumptions Important assumptions are noted at the bottom of each “Options” worksheet and on the “Assumptions” worksheet, all located in Appendix J.

The following are some of the key assumptions applied to all Options:

All of the options will utilize the same feedstock sources and require the same acceptance and pre-processing facilities to remove contaminants from source separated food routes. For the year 2016, we assumed there will be 1,813 tons of source-separated feedstock and 1,300 tons recovered from the MRF Container Line. Based on the previous work of HDR, Capitol PFG has estimated the capital cost of pre-processing equipment at $408,434. Options 1 and 4 would require additional pre-processing through a DODA Bio Separator.

All of the options will require an enclosed receiving building with odor controls to accept and store food waste and house pre-processing lines. Based on the previous work of HDR, Capitol PFG has estimated this capital cost at $833,920.

Member Agencies will implement source separation programs targeting high-generation customers, with resulting costs as shown in Table 3. Nortech will remove contaminants from this material to prepare it for AD or composting under each of the Options for an estimated annual cost of $90,64034.

Nortech will recover organics from the Container Line residue to use as feedstock for any of the six Options at an estimated annual cost of $251,54835.

Two different Planning Periods were analyzed for comparative purposes: seven years and fifteen years. The WPWMA Board can determine which analysis best fits their policy considerations.

Amortization periods for the two Planning Periods are as follows: long term – 10 years equipment, 15 years building; short term – 7 years for both building and equipment. Buildings and equipment are assumed to have no residual value at the end of the planning period.

Consistent with the assumptions in the HDR report, biogas produced from AD under Options 1 and 2 will be used to supplement landfill gas for the production of electricity. The royalty to the WPMWA for the electricity will be $0.015 per kilowatt hour.

Grant funds and incentives are not assumed for any option, but are considered in the Sensitivity Analysis section.

WPWMA will finance capital expenditures from reserves. The cost of financing is assumed to be 3.0%, which represents expected lost interest income from investing reserves.

34 Cost assumptions here and in the following bullet are the author’s estimate and were not provided by Nortech. 35 This estimate includes labor, maintenance costs and profit. It does not include any potential incentive payments to Nortech.

25 May 1, 2015

All cost and revenue figures on these spreadsheets are specified in 2014 dollars. Inflation is assumed to have a negligible impact when comparing the six Options in the current economic climate; therefore, there is no adjustment for inflation.

Capital costs include measures to mitigate any new air quality impacts.

The following assumptions are specific to Option 4, “AD at the Pleasant Grove Wastewater Treatment Plant”.

The City of Roseville will build and reserve sufficient digester capacity to accept 25 tons per day of food waste throughout the planning period.

Source-separated food waste will be consolidated at the WPWMA MRF, processed through a Doda Bio Separator to create a slurry, and hauled to the Pleasant Grove WWTP in tanker trucks.

The Kennedy Jenks report entitled “Wastewater Biomethane Procurement Feasibility Study, 25 October 2013”, was used as a basis to develop costs, as was the HDR report.

Following the “second approach” developed in the Kennedy Jenks study (p.17), costs associated with producing a Class B sludge by digestion and thickening have been excluded from the analysis. The South Placer Wastewater Authority Board of Directors and the City of Roseville must ultimately determine how these costs should be assigned if negotiating a tipping fee for digesting WPWMA food waste. If these agencies decide to allocate some or all of the costs of the digester improvements to the food waste project, the tipping fee could increase significantly36.

Capitol PFG has assumed that diversion credit for wastewater treatment plant sludge applied to land will continue throughout the planning period, in spite of concerns that State law will be changed to disallow such credit.

12.3 Limitations

Cost estimates are not based on engineering designs for this site and this specific application, so are useful only for feasibility level cost comparisons.

Feedstock tonnage estimates are based on very limited testing, so may prove inaccurate.

12.4 Conclusions Drawn From Financial Comparison Tables 5 and 6 show combined collection and WPWMA costs for the six Options under consideration. Option 3, “AD at the South Sacramento Clean World Partner Site”, has the lowest average cost per ton of food recovered for both the 7-Year and 15-Year Planning Periods. Option 5, which also involves trucking the pre-processed food waste off site, is the

36 Kennedy-Jenks states in their report that sewage sludge alone may not support the anaerobic digestion process at the Pleasant Grove Treatment Plant, so food waste, FOG and/or sludge from a primary treatment process may be needed to allow anaerobic digestion to function. This may give the City an incentive to set a tip fee that is attractive to the WPWMA.

26 May 1, 2015

second lowest cost option. These two options have the additional advantage of requiring the least capital investment and the best potential for adapting to changing circumstances.

Table 5




Outlay37

Average Annual Cost

For 15 years38

Tons of Food Recovered -

15 years

Average Cost/ Ton

of Food Recovered

1 Clean World Partners AD at WPWMA $ 5,619,951 $1,361,116 52,216 $391

2 Zero Waste Energy AD at WPWMA $ 4,310,666 $1,131,113 52,216 $325

3 Clean World Partners Sacramento AD $ 1,680,166 $945,171 52,216 $272

4 AD at Pleasant Grove WWTP $ 5,481,301 $1,382,063 52,216 $397

5 Jepson Prairie Composting $ 1,680,166 $1,012,364 52,216 $291

6 On-site Composting At WPWMA $ 2,680,145 $1,152,191 52,216 $331

Table 6




Outlay37

Average Annual Cost For 7 years38

Tons of Food

Recovered - 7 years

Average Cost/ Ton

of Food Recovered

1 Clean World Partners AD at WPWMA $ 5,619,951 $1,662,283

22,447 $518

2 Zero Waste Energy AD at WPWMA $ 4,310,666 $ 1,390,685

22,447 $434

3 Clean World Partners Sacramento AD $ 1,680,166 $979,891

22,447 $306

4 AD at Pleasant Grove WWTP $ 5,481,301 $ 1,664,455

22,447 $519

5 Jepson Prairie Composting $ 1,680,166 $1,042,052

22,447 $325

6 On-site Composting At WPWMA $ 2,680,145 $ 1,250,234

22,447 $390

37 Includes Recology, Roseville and Lincoln capital outlays for collection equipment. 38 Recology, Roseville and Lincoln collection costs plus WPWMA costs net of revenue from the sale of electricity and finished compost.

27 May 1, 2015

Curbside collection costs as a proportion of total net costs range between 15% and 28% depending on the Option and Planning Period selected.

To roughly estimate the tipping fee impact of implementing Option 3, Capitol PFG has assumed that the WPWMA would recoup all its direct costs by raising the MSW tipping fee, while Member and Participating Agencies would cover all costs associated with curbside collection of organics. Under this assumption, the WPWMA would need to raise the MSW tipping fee by $3.00 per ton. Establishing a subsidized tipping fee for Source Separated Food Waste to incentivize participation would require a slightly higher MSW tipping fee. However, determining an appropriate fee structure to offset costs associated with managing organics is beyond the scope of this project; therefore, Capitol PFG recommends additional study and consultation with Member Agencies before establishing a tipping fee structure that appropriately allocates cost and incentivizes participation in a source-separated commercial organics collection program.

12.5 Sensitivity of Assumptions Because the financial analysis depends on many assumptions, it is important to understand how the outcomes change with different assumptions or conditions. Testing of some of the key assumptions led to the following results.

Our analysis assumes that new organic feedstock will consist of 1,813 tons of source separated food and 1,300 tons of food recovered from the MRF Container Line. Doubling the tons per year of feedstock while holding costs constant lowers the cost per ton of all Options, but does not change their relative ranking.

The base assumption is that no Options would receive grants or incentives. As discussed in Section 8.0, AD projects have the best potential for grant funding. For the 15-Year Planning Period, a $1.5 million grant for Option 2 (ZWE AD) or a $3.5 million grant for Option 1 (CWP AD) would be required to equal the cost per recovered ton of the lowest cost option (Option 3). For the short-term (seven-year) Planning Period, these grant amounts must increase to $2.5 million and $4.2 million, respectively, to equal the cost per recovered ton of Option 3. Grant allocations at these levels do not seem likely given previous grant support for these technologies at other California locations.

The base assumption is that electricity produced from biogas would have a value to the WPWMA of only $0.015 per KWh. Due to the small amount of gas produced, raising this value within a reasonable range (up to $0.127/KWh, which is the initial tariff price under SB 1122) would have very little impact on the analysis.

For Option 4, “AD at Pleasant Grove Wastewater Treatment Plant”, the following question might be asked: “If we were to assume that the City of Roseville would charge a tipping fee to cover their costs at the treatment plant, and the costs to the WPWMA for preparing the food slurry and transporting it remain as predicted, what tipping fee would the City need to charge to reduce WPWMA costs to equal Option

28 May 1, 2015

3?” Per our analysis, that cost would be $9.00 per ton39 for the 15-year Planning Period.

For Options 3 and 5, which involve hauling organics off-site for processing, the tipping fee charged by Clean World Partners and Recology, respectively, are key factors in the overall cost. A valid question here is: “To what level would Clean World Partners need to raise their tipping fee (from the proposed $34/ton) to make the Average Cost Per Ton of Food Recovered equivalent to the lowest cost on-site option?” The answer is: $86/ton for the 15-Year Planning Period and $118/ton for the 7-year Planning Period. WPWMA can mitigate concerns about increasing tipping fee costs by entering into an agreement with a defined fee for a specified length of time.

39 This Option may be of particular interest to granting agencies. If the WPWMA were to receive a grant of $1 million to reduce capital costs for Option 4, the tipping fee could be increased to $37 per ton for the 15-year Planning Period, which is probably a more realistic level to cover City costs at the WWTP.

29 May 1, 2015

13.0 Recommendations

In addition to offering the lowest cost per recovered ton for both the 7-Year and 15-Year Planning Periods and the lowest capital investment by WPWMA, Option 3, “AD at the South Sacramento Clean World Partner Site”, also offers the following advantages:

Permitting, engineering and construction of new facilities is minimized. The equipment required has been tested and proven effective in similar

circumstances. Many operational challenges presented by the other options are not a concern with

Option 3. These include odor control, digestate management, sewer connection fees, biogas offtake and equipment maintenance.

Negotiation of a contract amendment with Energy 2001 is not necessary, and amendments with Nortech are minimized.

The approach allows flexibility for adapting to changing circumstances. Flexibility will be important due to the many unknown factors surrounding the collection, processing, marketing and regulation of organic materials.

Marketing of gas and utilization of digestate would be the responsibility of Clean World Partners.

Clean World Partners is testing pre-processing equipment that could allow the WPWMA to greatly expand the quantity of organic waste recovered. Developing an agreement that allows the inclusion of these materials, if and when the WPWMA is interested, should be easy.

For these reasons, Capitol PFG recommends that the WPWMA proceed with the following actions to pursue Option 3 during the short term planning period, while simultaneously positioning the agency for other possible long-term strategies.

1. Consult with Member Agencies to confirm their interest in pursuing Option 3.

2. Hire an engineering firm to design and manage construction of facilities to accept, process and transfer source separated and positively sorted food waste.

3. Establish a tipping fee for source separated food delivered by Member Agencies or their contractors.

4. Re-evaluate the appropriateness of a reduced tipping fee for Commercial Food Waste and require that all but the most offensive of such loads be processed through the MRF.

5. Obtain commitments from Member Agencies regarding deliveries of source separated food.

6. Negotiate amendments to the existing Agreement with Nortech to positively sort food waste from the Container Line, and to accept, process and transfer source separated and positively sorted food waste.

7. Revise permits and obtain new approvals as needed.

8. Negotiate an agreement with Clean World Partners for the anaerobic digestion of food waste at their South Area Transfer Station facility.

9. Assist Nortech in continued small-scale testing of food waste composting.

30 May 1, 2015

10. Maintain contact with the City of Roseville and the South Placer Wastewater

Authority regarding their interest and requirements for accepting food waste at the Pleasant Grove Wastewater Treatment Plant. Consider developing a joint grant proposal to reduce capital costs for this Option should these discussions progress in a positive manner.

11. Over the next two years, develop an RFP for MRF and landfill operations that encourages proposals for on-site management of organics such as anaerobic digestion or composting.

APPENDIX A

ANAEROBIC DIGESTION FEASIBILITY STUDY AND FINANCIAL COMPARISON

WESTERN PLACER WASTE MANAGEMENT AUTHORITY

FINAL REPORT JANUARY 2014

Prepared by:

2436 Professional Drive, Suite 300 Roseville, CA 95661

(916) 641-2734 www.capitolpfg.com

- 1 - January 2014

Executive Summary

The purpose of this study and report is to assist the WPWMA in deciding the best approach for recovering and utilizing food waste. Factors considered when evaluating options include financial performance, contractual obligations, funding opportunities and partnership potential. This report should be reviewed in conjunction with the HDR report entitled “Feasibility Study of the Beneficial use of Commercial Food Waste”, which focuses on technical feasibility. Each study compares the six options summarized in Table 7 (reproduced below).

Table 7



1 Anaerobic

digestion at WPWMA



grid

2 Anaerobic

digestion at WPWMA



grid

3 Anaerobic



Clean World

Partners


Electricity or CNG

4


Pleasant Grove WWTP


City of Roseville







WPWMA Nortech None

WPWMA staff, in cooperation with Member Agency staff, has identified what they would like to achieve while productively using food waste. These goals are important to understand and weigh when considering the available options for food waste.

• Comply with state regulations requiring commercial waste diversion programs

• Divert material from landfilling to move toward achievement of the 75% statewide diversion goal and prolong landfill life

- 2 - January 2014

• Create useful outputs such as energy and compost

• Remove odor-producing constituents from the landfill

• Minimize impacts to neighbors Other potential benefits of utilizing food waste include:

• Greenhouse gas reductions – achieved by lessening methane surface emissions and producing compressed natural gas (CNG) fuels or electricity to replace fossil fuels

• Environmental leadership Understanding the quality and quantity of food waste realistically available to the WPWMA is a crucial first step in evaluating alternatives. Although there are studies available that develop factors such as percentage of food waste by waste stream or type of facility, or pounds per year per person, Capitol PFG chose not to rely solely on such studies because the results vary significantly depending on location and methodology. Instead, we worked with the Organics Management Group (OMG), established by WPMWA staff, to develop data specific to the WPWMA wastestream for comparison to other studies. Due to a lack of data regarding tons of waste disposed from food-producing commercial accounts, it was not possible to simply sample a discrete group of waste, determine its food content and apply that percentage to a known tonnage. Instead, it was necessary to develop food generation factors expressed as “pounds of food per pound of subscribed service” for several different types of food generators. This was accomplished over a seven-week testing period as described in Appendix A. We then applied those factors to each customer’s subscribed service from lists provided by Recology, the City of Roseville and the City of Lincoln. Table 2 of the report shows the results of this analysis1.

1 The category “Plaza” refers to mixed-use commercial centers whose tenants dump their wastes into shared bins.

- 3 - January 2014

Table 2

Based on comparisons to other California studies, it appears that our study of the WPWMA commercial waste stream has yielded a fairly conservative estimate of food available. Each technology option presented in this report has a different sensitivity to contamination, which influences the quantity of feedstock available and diversion possible. For the purpose of comparing the six basic options with the information now available, HDR has determined that the Clean World Partners Anaerobic Digestion options and the Pleasant Grove WWTP Digester option could only work with very clean source-separated materials that undergo processing through a wet separation system (such as the Doda mixer used by Clean World Partners at their Sacramento facility). Material of sufficient quality for these options is not available from mixed waste processing because of small contaminants that harm equipment, increase solids removal requirements and reduce the energy content of the feedstock. Taking several factors into consideration, Capitol PFG has projected annual food recovery from source separation at 3,656 tons as shown in Table 3. New investment in equipment and changes in garbage collection routes will be necessary if the WPWMA selects an option that requires collection of source separated food waste. Expected costs for Recology, Roseville and Lincoln are summarized in Table 6 and included in the financial comparison as annual expenses totaling $1,099,123 for Options 1, 3 and 4. HDR has determined that the Zero Waste Energy Anaerobic Digestion, Jepson Prairie Composting and WPWMA Composting options can handle a more contaminated wastestream derived from limited sorting of food-rich loads on a new processing line at the MRF. HDR

- 4 - January 2014

believes this contaminated material could be digested or composted, then cleaned up afterwards to yield a marketable soil amendment and achieve an 80% recovery of food2. If the WPWMA chooses to recover all food from mixed loads of food-rich commercial waste, Capitol PFG has projected annual food recovery at 7,509 tons as shown in Table 4. To achieve this level of diversion by exclusively processing mixed waste, it is assumed that all the Member and Participating Agencies will collect and deliver commercial mixed food-rich loads separately from other mixed waste. The WPWMA must also select the appropriate technology and invest in the necessary sorting and processing equipment. Spreadsheets developed to compare the six options are attached as Exhibit B. Based on the assumptions utilized for this feasibility level analysis (described fully in the report) the options compare as shown in Table 8, reprinted below.

Table 8

Option 2, Zero Waste Energy AD at WPWMA, shows the lowest average annual cost per ton of food recovered, followed relatively closely by Options 5 and 6, which both involve composting. The common thread among these three options is the assumption that the feedstock will come from processing food-rich mixed waste. The collection costs associated with source separation, and the limitation on anticipated food recovery through that approach, combine to make Options 1, 3 and 4 less attractive by this metric. Option 2 also has the lowest annual operating cost (average annual cost minus amortized capital expense).

2 Although HDR provided estimates of capital costs and diversion for mixed waste processing of food waste as part of their feasibility analysis of technologies, their estimates are conceptual in nature; a specific process was not identified for this study.

- 5 - January 2014

Options 3 and 5 have the advantage of requiring the lowest capital outlay for, respectively, a source separation approach and a mixed waste approach. Capitol PFG estimated costs for Option 4, anaerobic digestion at the Pleasant Grove Wastewater Treatment Plant, as though WPWMA had responsibility and control over all aspects of the project. In reality, the City of Roseville will be responsible for building the project at their plant, and they may view the allocation of costs very differently. Several financing alternatives are discussed in this report. Because WPWMA is holding $15 million in Operating Fund reserves and staff is currently projecting increases in these reserves for the next twenty years, financing through reserves appears to be a viable and low-cost approach. Reducing capital costs through various grant and incentive programs is a possibility for some of the six options. The WPWMA has long-term agreements that may require re-negotiation depending on the food waste options pursued by the WPWMA. These include the MRF and landfill operations agreements, the flow control agreements, and the Landfill Gas Cogeneration Lease Agreement. WPWMA can benefit through close cooperation with existing contractors, businesses and other public agencies as it works to develop a food waste diversion and energy production program. Some of the more important opportunities are with Nortech Waste LLC, Energy 2001, anaerobic digestion (AD) technology vendors, developers of CNG fueling stations, the City of Roseville and the South Placer Wastewater Authority, and businesses that would provide additional feedstock for an AD system and/or use the electricity, CNG or heat from an AD system directly in an industrial or commercial operation. AD projects offer several advantages over composting options. These include production of clean energy, marketing of end products, reduced air emissions, and better access to grants, incentives and partnership opportunities. The options requiring separation of food by the generators (Options 1, 3 and 4) will result in additional cost and effort for the restaurants, food stores, etc. Depending on your point of view, this is either an unnecessary burden on private industry or a good way to encourage waste prevention. Most business owners are more likely to view it as a burden.

Recommendations

Given that work performed by HDR, Kennedy-Jenks and Capitol PFG was all based on feasibility level information, further study is recommended before the WPWMA makes a final decision regarding future handling of food and other organic materials. Hopefully this study has provided enough information to allow the WPWMA to reduce the options under consideration and facilitate a more in-depth analysis moving forward. Capitol PFG

- 6 - January 2014

recommends the following steps if the WPWMA has an interest in continuing to evaluate one or more of the six options:

1. Working with Nortech, develop a specific plan to separate and process food from a food-rich mixed waste stream. Based on this plan, obtain a more definitive estimate of the cost to reach food recovery levels ranging from 40% to 80%.

2. Gather more information regarding the current and projected marketability of compost that uses food scraps or AD digestate as feedstock. If Option 1 is still under consideration, similar research is needed into the marketability or disposal cost of the liquid byproduct generated by this process.

3. Conduct one more test of food content by generator (similar to the Week 7 test) during the spring of 2014.

4. Discuss permitting and environmental review requirements with the Placer County Air District, Placer County Health Department and other relevant agencies.

5. Further investigate grants or private investment from technology vendors as a way

to reduce the capital cost of the three AD options. Begin gathering information necessary to submit grant proposals and determine what else might be needed.

6. Initiate discussions with the South Placer Wastewater Authority and the City of

Roseville regarding the potential for food digestion at the Pleasant Grove Wastewater Treatment Plant. If possible, obtain a formal offer to process material of a defined quantity, quality and consistency at a defined cost. Re-evaluate the cost to collect, produce and deliver material that meets these criteria.

7. Further investigate the potential for long-term revenues from various State and

Federal incentive programs aimed at promoting air emission reductions and renewable energy (e.g. Low Carbon Fuel Standard, RFS2 RINS, carbon credits and RECs). This may require hiring a firm that specializes in this field.

8. Develop a more definitive strategy for using biogas generated from an on-site AD

project in conjunction with landfill gas.

9. Determine the interests of the Member and Participating Agencies in committing waste flow to insure a sufficient wastestream to support development of an appropriate project.

10. Investigate the feasibility of recruiting businesses to locate on WPWMA property that would provide additional feedstock for an AD system and/or use the electricity, CNG or heat from an AD system directly in an industrial or commercial operation. A small

- 7 - January 2014

brewery or food processing facility would fit this profile because they create large amounts of organic waste and they use heat in their processes.

11. After gathering the information detailed above, re-evaluate the remaining options for investment in anaerobic digestion and composting facilities.

APPENDIX B

1

THE DRANCO TECHNOLOGY: A UNIQUE DIGESTION TECHNOLOGY FOR

SOLID ORGANIC WASTE

Organic Waste Systems nv

Luc De Baere ( [email protected] ) Accelerated Landfill Degradation The Dranco digestion technology is a digestion technology that was developed by studying and optimizing the spontaneous ‘dry’ digestion that takes place in a landfill. Municipal solid waste is dumped in a landfill, containing a sizeable amount of biodegradable waste. During a limited period, oxygen is present so that decomposition occurs by means of aerobic bacteria. This may cause an accumulation of acids and an increase in temperature. After several weeks or months, depending on the rate of filling and depth of the waste, the oxygen has been consumed and decomposition subsequently has to take place under anaerobic conditions and at the rather ‘dry’ conditions in terms of fermentation that exist inside a landfill. Anaerobic bacteria take over the role of the aerobic bacteria at total solids concentrations of 50% or more in the waste that has been dumped in the landfill. Biogas or what is called landfill gas is being produced during this stage. Anaerobic decomposition in a landfill is uncontrolled and very slow. Biogas production in the landfill may occur for about 20 to 50 years, and even longer depending on the moisture present in the landfill. The Dranco technology was developed by optimising the digestion parameters of the “dry” and “static” anaerobic digestion that takes place in a landfill. At first, batch experiments were carried out which allowed the digestion process to be essentially completed in 2 to 5 years. Subsequent improvements led to batch digestion times of 6 months, then 3 months until a digestion time of 2 to 3 weeks was made possible by using a continuous process. Once this was reached, a totally new design of digester needed to be conceived which could handle an incoming feedstock of more than 40% total solids, as such “dry” digesters did not exist at the time. Basic digestion scheme The basic scheme for a Dranco digester is as follows: 1) The organic fraction must be reduced in size to less than 40 mm. For the treatment of

municipal solid waste, this means that large components such as plastics and textiles must be screened off or reduced in size by means of a shredder. Ferrous and non-ferrous metals can be recovered for recycling purposes. Stones, glass and hard plastics should be eliminated as much as possible, but efficiencies of 50 to 80% or even less are

2

sufficient in most cases. The Dranco process can handle high concentrations of pollutants and non-degradables in the organic fraction sent to the digester, but removal of these components may reduce energy consumption and abrasion. The cleaner the feedstock, the less complicated the pretreatment.

2) The pretreated organic fraction of less than 40mm in size is subsequently mixed with a large amount of digested residue coming from the digester. The mixing ratio is usually around 1 ton of feedstock with 6 to 8 ton of digested residue. This takes place in the mixing part of the feeding pump. A small amount of steam is added to the mixture in order to raise the temperature to 35 – 40°C for mes ophilic operation and to 50 - 55°C for thermophilic operation.

Figure 1: Basic Dranco process scheme 3) The preheated mixture of fresh organics and digested residue is then pumped to the top

of the digester through feeding tubes. These feeding tubes cut through the cone in the bottom of the digester and reach to about 1m distance from the roof inside the digester. The material is pushed out of the feeding pipes and flows into the upper part of the digesting mass in the digester. The internal feeding tubes have a diameter of about 1m in order to minimize friction and energy consumption during pumping. The distance and height over which the material is pumped, is also minimized through the internal feeding, while the weight on top of the roof is also greatly reduced in comparison to feeding through the top of the roof by using external feeding pipes.

4) Once the material enters into the main body of the digester, it takes about two to four days depending on the feeding rate to reach the bottom of the digester. The digesting mass descends through the digester by gravity only. No mixing equipment or gas injection is needed in the inner part of the digester. Biogas rises and exits the digester through the roof and flows towards the gas storage and treatment.

5) The digested residue is extracted from the bottom of the digester by means of screws hanging underneath the conical outlet. The largest part of the extracted material is recycled in the process and screwed to the mixing part of the pump for mixing in with the fresh incoming feedstock. The remaining part is deviated towards further treatment. The average retention time in the digester is around 20 days with a pass-through time every 2 to 4 days.

3

Figure 2: View of a Dranco digester with internal f eeding tubes and with feeding pump under the digestion tank Advantages of the Dranco digestion The patented Dranco process has a few significant advantages over conventional “wet” and other “dry” digestion systems. 1) High-rate ‘dry’ digestion

The Dranco process can operate at total solids concentrations of up to 45 to 50% going into the digester, and with total solids concentrations up to 40% for the digested residue coming out of the digester. These very concentrated operating conditions are possible because the mass moves in a vertical direction through the digester, i.e. from top to bottom. Digestion systems, in which the digesting mass moves horizontally through the digester, require a higher level of flowability. They operate at total solids concentrations that are about 10 percentage points less than the Dranco system. They are also typically equipped with mixers or gas injection nozzles to move the material forward. This is not needed in high solids vertical digestion. Such a high concentration of solids also allows for high biogas production rates. In full-scale plants, biogas production rates of up to 10 m³ of biogas per m³ of active digester volume per day can be maintained as annual averages for organic feedstocks. This minimizes the required volume needed and as a consequence the number of digesters. A single digester of 3 150 m³ of total volume can treat 50 000 ton per year of organic waste, yielding 7.4 million m³ of biogas containing 55% of methane. Conversion of all the biogas in internal combustion engines yields 9 to 10 million kWh per year.

4

2) No scum or settling in the tank Operation at a sufficiently high dry matter content prevents scum formation or settling of heavies in the bottom of the digester. Heavy particles less than 40 mm, such as sand, as well as any remaining glass and stones passing through the screen of 40 mm can be handled. Concentrations up to 22% of glass have been found in the digested residue of mixed waste. The heavy components present in the waste cannot sink through the concentrated mass in the digester, nor can light materials, such as wood, styrofoam etc. float.

3) Minimal heat requirements

The temperature of the digester is maintained by injecting steam in the mixing part of the digester. The heat requirements are kept to an absolute minimum because only the incoming fresh feed needs to be heated up to the operating temperature. Heat losses are minimal in the digester because of the high solids concentration that greatly reduces convection losses. The digester therefore only needs to be insulated in order to maintain the temperature in the digester for several days without slowing down the biological process. High solids digesters operating at high loading rates can actually be observed to rise in temperature due to the exothermal energy released during anaerobic decomposition. This amount of exothermal energy will be rather limited to a couple of degrees Celsius but nonetheless measurable. No danger exists for overheating however, as is the case in aerobic decomposition of organics.

4) Thermophilic operation

As is the case with most dry fermentation systems, the Dranco process can easily be operated under thermophilic temperatures. Thermophilic operation typically yields a higher production per ton of waste treated and can reach significantly higher loading rates. An added benefit to operating in the 50°-tem perature level is the fact that human pathogens are killed off at these temperatures, thereby improving hygienisation and kill-off of weed seeds.

Energy from organic solids in practice

The Dranco technology has been applied to a wide range of substrates. These vary from rather wet wastes such as mainly restaurant and food waste, to dewatered sludges, source separated organics with or without the addition of non-recyclable paper/cardboard to organics produced in the pretreatment of mixed municipal or residual waste (after removal of recyclables and often also after separate collection of the clean compostable fraction).

1) Source separated organics at the facility of IGEAN in Brecht, Belgium

The largest Dranco facility was built in Brecht, Belgium, and has been functioning for 10 years. The plant was designed for a capacity of 42 500 ton per year, but was able to reach a capacity of more than 50 000 ton per year after the first 3 years. The incoming feedstock is composed out of source separated organics, such as garden, kitchen and food waste and to which also diapers and non-recyclable paper or cardboard can be added. This plant was built for the intermunicipality of IGEAN, an association of 26 municipalities around the city of Antwerp, who owns and operates the plant. On the same site, another older Dranco facility was revamped, which is treating an additional 20 000 ton per year, so that a total of 70 000 ton per year can be treated on the site. The source separated organics are first sent to slowly rotating homogenizing drums with a retention time of 4 to 6 hours in total. The material is screened and the organics which pass through the sieve of 40 mm are sent to the digester after ferrous metals are removed by means of an overband magnet. The organics are digested in a digester of 3150 m³ of volume, and which has a height of 25 m and a diameter of 15m. During 2006,

5

7 million m³ of biogas were produced and consumed in three gas engines with an electrical power output of 625 kW each. The net electrical production amounted to 9.1 million kWh, enough to provide power to up to 2 500 homes. The gas engines operated during 97% of the time during the year. The digested residue is dewatered by means of a screw press to a dry matter concentration of at least 45%, and is composted aerobically for a period of 2 to 3 weeks. During the first week of aeration, temperatures of more than 60° are reached so that any remaining pathogens are killed off. The dewatered cake is converted to a well-stabilized compost during this period, which can be used in agricultural applications. The plant produces 20 000 ton of compost, meeting the Flemish regulations for high quality soil amendment. The excess wastewater is centrifuged and sent to the wastewater treatment plant on site, designed to treat the wastewater from both digestion plants and from the adjacent landfill and green waste open-air composting plant.

Figure 3: Dranco installation Brecht (I & II), Belg ium

2002 2003 2004 2005 2006 2007 2008 2009FEEDSTOCK (T/Y) - BIOWASTE 45 394 45 691 51 229 52 946 52 943 46 750 43 813 42 757 - OTHER 966 1 776 2 525 2 126 2 030 1 446 2 161 2 262

TOTAL 46 360 47 467 53 754 55 072 54 973 48 196 45 974 45 019

PRODUCTION OF BIOGAS - M³ BIOGAS (IN MILLIONS) 5.8 6.0 6.9 6.9 7.0 5.8 5.6 6.0 - M³ BIOGAS/TON INCOMING 125 126 128 125 127 120 121 133 - M³ BIOGAS/M³r/DAY 6.8 7.2 7.4 7.2 7.6 6.1 6.0 6.3

Table 1: Digestion results of the Brecht-II plant

6

2) Residual waste digestion The Dranco process is well suited for the treatment of highly contaminated organic fractions derived from the pretreatment of mixed or residual household solid waste. Residual waste is pretreated in order to recover recyclable components, such as ferrous and non-ferrous metals but also for any paper or plastics that can be removed from the residual waste for recycling or minimization of the further disposal costs. The Dranco process is ideal for partial stream digestion due to its very high total solids concentration in the digested residue. This is the process whereby only a fraction of 50 to 70% of the total organic fraction is actually digested, while the remaining 50 to 35% is bypassed and is not subjected to anaerobic decomposition. The digested residue is then intensively mixed with the non-digested organics. The dry matter concentration of 45% in the resulting mixture of the two fractions allows for efficient aeration and rapid aerobic decomposition. The energy for reaching high temperatures and for drying during the aerobic phase is mainly provided by the fraction that was not digested. Partial stream digestion avoids the costly need for dewatering and wastewater treatment. A plant treating 100 000 ton per year of residual solid waste is recovering recyclables and producing burnable fractions. About 28 000 ton per year of organics are diverted to digestion, to which also about 7 000 ton per year of non-digested dewatered sewage sludge is added. No wastewater is produced at the plant.

COMPOST OR LANDFILL

METALSRDF

CO2WATER

WATER

UP TO 70 %

BIOGAS

MSW OR YARD / FOOD WASTE

DRY SORTING

MIXER ANAEROBIC DIGESTION

AEROBIC COMPOSTING

DRYING

Figure 4: Partial stream digestion

7

Figure 5: Flow scheme Pohlsche Heide using partial stream digestion In case fullstream digestion is used, as described in Figure 6, then a wet posttreatment process can be applied to the digested residue. About 50 to 60% of the volatile solids, representing the easily degradable and often wet and sticky organic components of the waste are already converted to biogas in the digester. This results in a digested residue that can be easily separated by means of screens and other wet separation equipment, as developed in the Sordisep process. Sand, fibers and inerts can be recovered and cleaned in order to produce marketable endproducts. This increases landfill diversion up to 85% and recovery of materials out of mixed waste to 50%. Figure 6: Sordisep for maximum recovery of recyclab les and landfill diversion

FEEDINGPUMP

STEAMGENERATOR

MIXING UNIT

Biogas

DRANCODIGESTER

2.260 m³

Steam

DOSING UNIT

Sewage sludge

GAS STORAGE GAS COOLING

GAS BLOWERS

GAS ENGINE

RTO

Existingflare

SILOXANE-ADSORBER

Process water

Municipal solid waste

NITENSIVECOMPOSTING

COMPOSTING Landfill

ROTATING SIEVE(60/300 mm)

ROTATING SIEVE(60/300 mm)

MAGNETMAGNET

Fraction< 60 mm

Fraction60-300 mm

Fraction> 300 mm

Landfill

AIR SEPARATOR

NON-FERROUSSEPARATOR

To intermediatestorage

Lightparts

Heavy-parts

SHREDDERSHREDDER

MAGNETMAGNET

BALLISTICSEPARATORBALLISTIC

SEPARATOR

Inertmaterials

Industrial waste

SHREDDERSHREDDER

To intermediate storage

MAGNETMAGNET

TOTAL ENERGYPLANT

SHREDDER

8

3) Energy crops The Dranco technology is ideally suited for the digestion of energy crops such as corn. Corn (maize) is harvested with a dry matter content of around 32% and is chopped during the harvesting to a size of less than 20 mm. This means that the total plant as harvested can be fed to a Dranco digester without any further pretreatment or even any addition of water. The corn can be stored as silage during the winter months and gradually fed to the digester. The digested residue from corn digestion is extracted at a solids content of 20 % and can either be dewatered or simply returned to the fields, on which the energy crop was grown. Compared to ethanol or biodiesel, the net energy yielded per hectare is significantly higher. For biodiesel, for every ton of fossil fuel consumed in the production, about 2 ton of renewable fuel is produced, while this amounts to 2.5 to 3 for ethanol plants. Biogas from corn can yield 6 to 8 ton of renewable fuel per hectare for every ton of fossil fuel put into the crop growing, harvesting etc. Figure 7: Flow scheme of DRANCO-FARM plant for the digestion of energy crops in Nüstedt (Germany) CONCLUSION The Dranco technology is unique because of the vert ical design, the high solids concentration and the absence of mixing inside the digester. This permits small digester volumes and the operation of a plant witho ut excess wastewater production. 24 DRANCO plants have been constructed, treating a wide range of feedstocks: source separated organics (with and without non-rec yclable paper/cardboard), mixed waste organics, residual waste organics, sewage slu dge, … Even energy crops, such as corn, can be efficiently digested at a high rate and will provide a source of renewable energy for the future .

Biogas

GAS STORAGE

ENGINE/ GENERATOR Electricity (1.000 kW)

Heat (950 kW)

DRANCO-FARM

DIGESTER

1.200 m³

EXTRACTION PUMP STORAGE To field

Heat-exchanger

Inactive

residue

Digestate

DOSING UNIT

DOSING SCREW

MIXER /FEEDING PUMP

Energy crops (& manure)

3

2

1

1 2 33

21.200 5.800 15.400Ton/jaar

APPENDIX C

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Technical Memorandum To: Will Dickinson Date: January 14, 2015 Capitol Public Finance Group From: Larry Buckle, P.E. International Engineering Services RE: Responses to Questions about IBR Digester System The Western Placer Waste Management Authority (WPWMA) has hired a consulting team to assess and recommend technology options for processing organic materials in the WPWMA service area. This memorandum addressed questions posed by Will Dickinson, consultant to WPWMA regarding the IBR Anaerobic Digester System. The following information is based on a maximum of 15,000 tons per year (tpy) of organic material input (feedstock). This feedstock has been described by Mr. Dickinson as: a) 5,000 tons per year as an initial phase for the first seven years and b) 15,000 tons per year, thereafter, of source-separated and/or positively sorted food scraps containing less than 5% contamination (contaminants may include glass, fibers, metals, rock, plastics, wood, etc.). The IBR Digester platform is well suited for this feedstock, and can easily handle the 5% contamination due to the digesterʼs concentric bottom, which allows heavy materials (i.e. – sand and glass) to settle out and be removed from the IBR while on-line with no process disruption. Responses are shown in bold font below.

1. A list and brief description of the buildings and equipment needed to accept, clean, process, size, digest, store, convey or de-water feedstock, biogas and solid and liquid digestate.

Please note: this preliminary estimate is based on a facility and equipment that is initially sized to process a throughput of 15,000 tpy with exception of the number IBR Digester units (3 units for 5,000 tpy & 6 units for 15,000 tpy) - which can be added to the platform as the feedstock tonnage increases. The table on the page that follows contains the key components of an IBR digester system.

2

WPWMA 15,000 tpy IBR Anaerobic Digestion System

Building & Receiving Pit 1 Pre-fabricated steel building: 50ʼx50ʼ with 16ʼ side walls clear on concrete slab

Major Equipment:

1. Conveyor Transfers feedstock from Receiving Pit to Feed Hopper

2. Feed Hopper / Lift Loads organic feedstock into Turbo Separator

3. Turbo Separator Unit Provides size reduction and contaminant removal

4. Pump #1 Transfers feedstock from Turbo Separator to Holding Tank

5. Holding Tank Provides uniform mixing and feedstock adjustment to optimum solids-to-liquid ratio

6. Pump #2 Transfers feedstock from Holding Tank to Heat Exchanger & IBR Digesters

7. Heat Exchanger Raises feedstock temperature to optimize digestion

8. IBR Digesters Convert volatile organic material into biogas and a biologically stable digestate

9. Biogas Conditioning Unit Removes Carbon Dioxide, sulfurous compounds and water vapor from biogas

10. Biosolids Dewatering Unit Separates digestate into solid (soil amendment) and liquid (nutrient water) components

11. Non-potable Make-up Water System

A portion of non-potable water derived from the dewatering process is re-circulated into the digestion process via the Holding Tank; the remaining liquid is disposed through off-site uses

12. Hot Water System Moves hot water through Heat Exchanger to maintain IBR system temperatures

2. Expected life of all equipment.

25 Years 3. A conservative cost estimate for each of the listed capital components. See the table that follows for a cost breakdown for all major system components.

3

WPWMA IBR Digester System Component Cost ($) Building on slab with Receiving Pit $250,000 Major Equipment: 1. Conveyor from Receiving Pit to Feed Hopper $50,000

2. Feed Hopper/Lift 3. Pump - Separator to Holding Tank 4. Turbo Separator Unit - Total of 2,3 & 4

$350,000

5. Holding Tank 6. Pump-Holding Tank to Heat Exchanger $30,000

7. Heat Exchanger - Total of 6 & 7 $100,000 8. IBR Digesters including non-potable make-up & hot water systems 5,000 tpy = first 3 IBR Units $600,000

15,000 tpy = 3 additional IBR Units $400,000 9. Biogas Conditioning Unit $100,000 10. Biosolids Dewatering Unit $250,000

Subtotal of Capital Components – 5,000 tpy capacity $1,730,000 Subtotal of Capital Components – 15,000 tpy capacity $2,130,000 Design & Construction Services – 5,000 tpy $400,000 Additional design & const. cost for 15,000 tpy capacity $200,000

Contingency (10%) – based on 5,000 tpy $213,000 Additional contingency cost for 15,000 tpy $60,000

Planning Level Estimate* – 5,000 tpy $2,343,000

Total additional cost for 15,000 tpy capacity $660,000 Total Planning Level Estimate* – 15,000 tpy $3,003,000

* Estimate does not include factor for inflation, nor costs for site development, permitting, prevailing wage etc.

4. Estimated annual operation and maintenance costs, including staffing requirements and replacement parts. Staffing will be 1 full time equivalent. Operation and maintenance will be $100 per day or $37,000/year for both 5,000 & 15,000 tpy facilities. Note the pumps and Turbo Separator are expected to bear the brunt of the wear and tear of the operations. As a result they will have parts that will routinely need to be replaced. This cost is included in the estimate above.

4

5. A description of: output from the AD system; processes or equipment needed to de-water and produce end products; and potential uses of any end products. Assume the biogas will be utilized in the existing LFG IC engines. The WPWMA will consider using digestate in the existing aerobic composting process if appropriate.

• Output from AD system: 1.) biogas, 2.) liquid & solid digestate • Equipment needed to dewater & produce end products:

o Solids – Mechanical dewatering screw press o Liquids – None required

• Potential use of end products: o Solids – Soil amendments & compost additive (fertilizer)* o Liquid – Holding Tank make-up water & compost additive (moisture / nutrients)* o Biogas – conversion to electricity in existing LFG IC engines

*Note: Utilizing the IBR digestate for composting is the most appropriate end use for this material. Otherwise, the expense of dewatering the digestate and disposal of the non-potable water must be included in the budget. 6. A mass balance diagram showing inputs and outputs, including water or any additives. See the attached mass balance / process-flow diagram showing inputs and outputs. Summary of the 5,000 tpy system is included below:

A) 5,000 tons/yr feedstock is reduced to 4,750 tons/yr feedstock & 250 tons/yr residual after contaminant removal step (Turbo Separator)

B) 4,750 tons/yr feedstock + 1,675 tons/yr make-up water &12,073 tons/yr digestate return water is loaded into the Holding Tank and pumped into the IBR digesters

C) The IBR digesters produce 740 tons/yr biogas and 17,078 tons/yr digestate. The digestate can be separated into 518 tons/yr solids & 16,560 tons/yr non-potable water (12,073 tons of which are returned to the Holding Tank)

Summary of the 15,000 tpy system is included below:

D) 15,000 tons/yr feedstock is reduced to 14,250 tons/yr feedstock & 750 tons/yr residual E) 14,250 tons/yr feedstock + 5,025 tons/yr make-up water & 36,237 tons/yr digestate return

water is loaded into the Holding Tank and pumped into the IBR digesters F) The IBR digesters produce 2,200 tons/yr biogas, 51,237 tons/yr digestate that can be

separated into 1,555 tons/yr solids & 49,682 tons/yr non-potable digestate water (36,237 tons of which are returned to the Holding Tank)

Biogas is assumed to consist of 65% Methane, 500-1,000 ppm Sulfurous Compounds & the remainder as Carbon Dioxide.

5

7. A simple energy balance diagram. An energy balance is included for both 5,000tpy and 15,000tpy below. 1. Energy balance based on 5,000 tpy of feedstock converted into 740 tons/yr of biogas Calculated as follows: Gross energy = 15,400 MBTU1/yr Methane = 4,500,000 KWH/yr LFG IC engine conversion @26% efficiency => 1,200,000 KWH/yr – Electric & 3,300,000 KWH/yr – Heat (11,400 MBTU) Parasitic Load = 34,000 KWH/yr – Electric &

410,000 KWH/yr – Heat (1,400 MBTU) Net Energy available for other uses = 1,100,000 KWH/yr – Electric & 2,900,000 KWH/yr – Heat (10,000 MBTU) 2. Energy balance based on 15,000 tpy of feedstock converted into 2,200 tons/yr of biogas Calculated as follows: Gross energy = 46,200 MBTU/yr Methane = 13,600,000 KWH/yr LFG IC engine conversion @26% efficiency => 3,500,000 KWH/yr – Electric & 10,000,000 KWH/yr – Heat (34,200 MBTU) Parasitic load = 34,000 KWH/yr – Electric & 820,000 KWH/yr – Heat (2,800 MBTU) Net Energy available for other uses = 3,500,000 KWH/yr – Electric & 9,200,000 KWH/yr – Heat (31,400 MBTU) Note: this energy balance is based on 65% methane content. 8. A process flow diagram. See attached. 9. Potential odor or other environmental impacts and mitigations. No new significant impacts will occur at the existing WPWMA site operations. The odors from the process will be a function of the delivery frequency of the food waste material that is currently being delivered at the project site. The potential odor from the process is not expected to differ significantly from that which is currently anticipated at the site. If needed, and at additional cost, a foul air scrubber and/or bio-filtration system can be added to the receiving building. Other potential environmental impacts include insignificant increases in expected truck traffic and noise within the project site and during construction. 1 MBTU = Million BTU (e.g., value*1,000,000)

6

10. Expected characteristics of the biogas produced. The expected characteristics of the biogas is 65% Methane, 500-1,000 ppm Sulfurous Compounds, & the balance as Carbon Dioxide. 11. If possible, a description of the corporate entity that could deliver, set up and provide operational assistance for the system you propose. International Engineering Services (IES) will provide the technical expertise and local representation for the WPWMA IBR Anaerobic Digestion System project. Located in Sacramento, CA, IES will provide the team necessary to design, build, and deliver a successful project for the WPWMA. IES has established a commitment from exp Global, Inc. to be a part of the project team. exp provides professional, technical and strategic engineering consulting services to the worldʼs built and natural environments in six key consulting practice areas: buildings, earth & environment, energy, industrial, infrastructure, and sustainability. Together, IES and exp will provide a complete IBR digester system and operational assistance to the WPWMA. 12. Any interest this corporate entity may have in setting up a demonstration project at the WMWPA site and what conditions might be attached to the project. Yes, IES and exp are interested in setting up a demonstration IBR system at the WPWMA site. The costs for a demonstration would be on the order of magnitude of the costs associated with the 5,000 ton per year facility. With the exception of the number of IBR units, the remainder of facility components would still be sized for effective operations for 15,000 tpy of feedstock. The project team would be interested in an arrangement where the team will design, build, and operate the WPWMA IBR digester until the performance of the system has been successfully demonstrated at steady state. After such time, the WPWMA would be expected to purchase the WPWMA IBR digester system.

APPENDIX D

Organic Recycled Product Manufacturing and Market

Research Project

Prepared for: Capitol PFG and

Western Placer Waste Management Authority

Prepared by:

R. Alexander Associates, Inc.

1212 Eastham Drive Apex, North Carolina, United States 27502

919-367-8350 www.alexassoc.net

February 26, 2015

1 Introduction

Capitol PFG (Capitol) is evaluating organics management options for the Western Placer Waste Management Authority (WPWMA), located in northern California. Various anaerobic digestion (AD) and composting options are being considered. Six (6) processing options will be considered; each of which will generate products that may include a finished compost, a liquid digestate fertilizer or a solid digestate that will require further composting prior to marketing. R. Alexander Associates, Inc. (RAA), possessing unique experience in compost and AD digestate product and market development, as well as a familiarity with the California marketplace, has prepared the following report to assist in these efforts.

2 Methodology/Objectives

In order to complete the work effort, RAA completed the following tasks:

Facility Tour – completed a tour of the current WPWMA composting facility (operated by Nortech), identifying feedstock characteristics and processing methods,

Completed Start-up Meeting - Met with Capital's project team to discuss processing options and potential products developed,

Honed options and products - Worked with Capital project team to hone 6 processing options and product types, and estimate potential product volumes,

Preliminary Market Research – Contacted various potential end users to gather relevant marketing data. This task also included completing a:

- Population and distance analysis, and

- Professional end user demographics,

Memo Report – Completed a project report.

At the onset and throughout the research tasks, RAA interfaced with Capital staff to hone potential organic waste processing methods and estimate potential product volumes. RAA then completed preliminary market research which considered potential regional horticultural, agricultural, and environmental markets. Market research databases were accessed by RAA, and information from these databases was provided to Capital under separate cover. Appendix A provides the list of companies surveyed.

3 Current Facility and Product

RAA had the opportunity to tour the WPWMA composting facility in Roseville, which is operated by Nortech under contract for them. Although not outlined as a task in the original proposal, RAA toured both the composting facility and MRF in order to evaluate the quality of the current yard trimmings feedstocks, and potential food waste feedstocks. The yard trimmings being processed were 'pretty' clean, as was the finished compost product. The facility appeared to be a well-run windrow composting facility. It appears the organics derived from the MRF will likely be highly contaminated with paper, as well as non-compostable inert contaminants (e.g., film and hard plastic, glass, metals, rocks, etc.). The composting facility processes approximately 50,000 tons of feedstock annually at their Roseville composting facility. The feedstock is almost entirely yard trimmings, however a small amount of source-

separated food residuals are being processed as part of a pilot project. The facility is enrolled in the US Composting Council's Seal of Testing Assurance program. The current compost product being manufactured appears to be of high quality; and is marketed primarily to the agricultural industry and soils product packagers.

4 Processing Option and Potential Products

Capital developed a series of processing options, that with RAA assistance, also developed product concepts and estimated production volumes. Four of the technologies are characterized as AD, 3 of which are high solids systems, and 2 use composting as the only processing method. All 3 high solids AD systems would compost the material post AD, to allow for stabilization, as would the low solids AD system.

Table 1 - Technology Options and Feedstock Characteristics

Processing Technology Food Sources

Expected Contam.

Level Feedstock

Volume Separation Technology

Additional Processing

Products / Expected Volumes

1.Clean World

Partners

(clean feedstock)

Low solids AD and

composting Restaurants, hand picked from MSW

3% or less by wt.

4,460 TPY food

(plus yard waste for composting)

DODA Bio Separator, & hand

Dewater liquid

digestate, use of

windrow composting

916 TPY digestate, 317,000 gallons/yr.

(plus yard waste compost w/food)

2. ZWE SmartFerms

(clean

feedstock) High solids

AD

Restaurants, hand picked from MSW + woody bulking agent

screened from compost Estimated

at 8%

4,460 TPY food, 1,942 TPY of

compost screenings

(plus yard waste

for AD)

Hand sort contaminants, as

necessary this would be a positive sort, not

removing contaminants

Windrow compost after AD, screen at

3/8"

5284 TPY digestate pre-compost, 3,170

t/a compost

3. ZWE SmartFerms

(clean & dirty

feedstock) High solids

AD

Restaurants, hand picked from MSW + MSW MRF residue

(ADC) + woody bulking agent screened from

compost Up to 49%

12182 TPY food (includes 3,722 TPY of compost

screenings)

(plus yard waste for AD)

ALMO Densimetric Table the ALMO is a back end screening of

compost. Pre-AD would be combination of hand

and machine sorting Screen at

3/8"

10,447 TPY digestate pre-

compost, 6,268 t/a compost

4. OWS

(clean & dirty feedstock)

High solids AD

Restaurants, hand picked from MSW + MSW MRF residue

(ADC) + woody bulking agent screened from

compost + paper from MSW Up to 49%

21,940 TPY of combined feedstocks




3/8"

20,039 TPY digestate (of which 11,380 TPY is inert) pre-compost, 12,023

t/a compost (a lot more lost in screening)

5. ASP

Composting

(clean feedstock)

ASP Composting

Restaurants, handpicked from MSW,

plus waste paper Under 5%

5,460 TPY food

(plus yard waste for composting) No

Screen at 3/8"

Estimate 13,650 t/a pre-composting, 8190 t/a compost

6. ASP Composting

(clean & dirty

feedstock) ASP

Composting

Restaurants, handpicked from MSW + MSW MRF residue

(ADC) Up to 42%

14,160 TPY food (plus yard waste for composting)




3/8"

Estimate 35,400 t/a pre-composting,

21,240 t/a compost

It should be noted that all six options derive food waste from a ‘mixed’ waste stream and several of the options would plan on processing feedstocks that are rather high in inert contamination. History has shown that the ‘dirtier’ the feedstocks, the more expensive it is to process and more difficult it is to produce a 'clean' product (if possible at all). This is important because composts contaminated with inerts often possesses little to no value, and cannot be marketed to most 'high value' markets (e.g., garden

centers, packaging). Further, it will not likely be allowed for sale within certified organic agriculture. Food separated from a mixed waste feedstock is not allowed as a feedstock for use in organic agriculture. It should be noted, however, that regardless of the inert contamination content of the compost, this is unlikely to heavily impact the content of heavy metals and other chemical contaminants in the finished product.

4.1 Realistic Product Scenarios and Process Considerations Based on the 6 scenarios listed in Table 1, the WPWMA would likely continue to compost the majority of its yard trimmings separated from the food residuals. Then, enough of the woody fraction or ‘whole’ yard trimmings would be added to the food residuals (where necessary) to further process it through high solids AD and/or composting. Therefore, in all of these scenarios, the WPWMA would now manufacture 2 different composts; one with and one without food residuals added. The major differences in the scenarios is the volume of yard trimmings and food residuals compost being generated, as well as the level of inert contamination. In none of the scenarios is a large volume of yard trimmings and food residuals compost generated. This is probably beneficial as it will require a much greater effort to manufacture and market this product (because of managing inert contamination).

Whether adding the food residuals or the liquor from the low solids AD system to the yard trimmings, it is unlikely that any of the resulting products will be able to be OMRI Listed, disallowing their usage on certified organic farms. This is because OMRI will not allow food residuals that are collected in a ‘mixed’ waste stream to be used as a product feedstock. However, a product generated from a source-separated waste stream, such as food residuals from restaurants, may be Listable. It should be noted that many paper products (especially those that are colored), as well as waxed cardboard materials are not allowable feedstocks in OMRI Listed composts. Knowing this, it is likely that none of the composts generated through the six process scenarios will be allowable for use in organic farming production. It should be noted that this feedstock-based rule holds true regardless of how well contaminants are removed from it following the composting process.

Finally, Clean World, a provider of a low solids AD technology being operated in the Sacramento area, was contacted. Although they were producing a nutrient fortified liquid fertilizer (3-3-3 N-P-K) from their liquid digestate, they are no longer doing so because it required a ‘very intensive process’. Further, there was not ‘great interest in the product’, possibly because it was not OMRI Listed. They are currently trying to market the unfortified digestate liquid (0.5-0.2-0.2 N-P-K) as a compost tea. They are in the second season of trials with farmers with this product. Since a liquid fertilizer derived from AD liquid was deemed as currently implausible, additional research was not completed.

Based on past experience, preliminary research gathered during this study and regional competition, it is somewhat unlikely for the WPWMA to expect much, if any income from the sales of a unfortified liquid digestate (scenario 1) or an inert contaminated compost. An inert contaminated compost could be produced in any of the 6 scenarios, depending on how contaminated the feedstock is and how well screening is done post composting. One regional composter interviewed during the project even stated that they have to pay for the hauling of their dirty food residuals compost to farmers to get them to accept it.

5 The Market Area

Placer County is included in the Sacramento-Roseville-Arden-Arcade, CA Metropolitan Statistical Area (MSA). It is located in both the Sacramento Valley and Sierra Nevada regions, in what is known as the Gold Country. It stretches from the suburbs of Sacramento to Lake Tahoe and the Nevada border. The region contains 7 counties; these are Sacramento, Yolo, El Dorado, Placer, Sutter, Yuba, and Nevada counties in California, and Douglas County in Nevada. A 2009 estimate placed the population of the MSA at 2,458,355. Historically, gold mining was a major industry through the 1880s, but gradually the

residents turned to farming the fertile foothill soil, harvesting timber and working for the Southern Pacific Railroad. (modified from Wikipedia 2015) Roseville, where the current composting facility is located, is a northern Sacramento suburb; it is located within the Sacramento-Roseville-Arden-Arcade, CA Metropolitan Statistical Area and is probably close enough to the Bay Area region to ship to its north side cities and suburbs. That stated, a significant number of competing composters exist in the Bay Area.

As illustrated in the Tables below, larger population bases exist within a feasible trucking distance of the Roseville composting facility, and with it, a large number of horticultural businesses. Further, a substantial agricultural industry (both traditional and certified organic) also exists within a truckable distance.

Table 2 - Population and Distance Analysis

City County Distance

(Miles)Drive Time

(Hours: Minutes)City

Population County

Population Roseville Placer 118,788 348,432

Sacramento Sacramento 20 0:22 466,488 1,418,788 Marysville Yuba 36 0:40 12,072 72,155Placerville El Dorado 37 0:44 10,389 181,058 Yuba City Sutter 38 0:43 64,925 94,737 Grass Valley Nevada 40 0:47 12,860 98,764Stockton San Joaquin 66 1:07 291,707 685,306 Vallejo Solano 75 1:12 115,942 413,344 Napa Napa 76 1:18 76,915 136,484Martinez Contra Costa 79 1:16 35,824 1,049,025 Concord Contra Costa 85 1:21 122,067 1,049,025 Berkeley Alameda 95 1:33 112,580 1,510,271South Lake Tahoe El Dorado 96 1:54 21,403 181,058Petaluma Sonoma 99 1:41 57,941 483,878San Rafael Marin 100 1:37 57,713 252,409 Santa Rosa Sonoma 108 1:58 167,815 483,878Loyalton Sierra 120 2:10 769 3,240San Mateo San Mateo 123 2:06 97,207 718,451Totals* 1,843,405 7,953,771* duplicate counties are only counted once 2010 census data OUT OF STATE* Carson City Carson City 126 2:26 55,274 55,274Reno, NV Washoe 116 2:00 231,027 429,908

Both potential ‘value’ and ‘volume’ based markets exist within the market region. In general, value markets require a higher quality compost and will pay more for it. Often, ‘volume’ markets such as mine reclamation sites and agriculture can use much larger volumes of compost, when they are ready to use it, but they typically pay less for it. In the case of agriculture, the composter may even quote the product on a delivered and spread basis, there as they manage transportation and application. Although preliminary research suggests that agriculture will use compost containing some contamination, they are unlikely to pay for it. Further, it should be noted that much of the compost manufactured from the Bay Area is used by farmers in the Central Valley (and compost is manufactured in the Central Valley).

Table 3 - Market Demographics ‘Value Markets’*

Table 4 - Market Demographics ‘Volume Markets’*

COUNTIES Farms Stone

Natural Mining

Companies Sub-

Totals Totals 9 26 2 37 475

Alameda 12 14 1 27 481 Contra Costa 9 3 5 17 151 El Dorado 6 5 0 11 254 Marin 3 2 0 5 149 Napa 12 3 4 19 147 Nevada 6 2 4 12 235 Placer 48 16 5 69 532 Sacramento 124 8 0 132 426 San Joaquin 25 3 1 29 224 Solano 39 8 1 48 445 Sonoma 40 0 0 40 78 Sutter 8 0 1 9 46 Yuba 341 90 24 455 3643

Totals *Infogroup™ PowerFinder® USA ONE v15.1 DVD

The agricultural statistics in Table 5 identify substantial regional agricultural acreage, and although much of the land is planted in lower value crops, substantial vegetable acreage also exits. These higher value crops are more likely to use compost, but also have higher standards for compost. The ‘Statistical Review of California’s Organic Agriculture, 2005-2009’ also identifies 150 organic certified farms in the Cascade-Sierra region, operating on 60,873 acres, which includes Amador, Calaveras, El Dorado, Lassen, Modoc, Nevada, Placer, Plumas, Shasta, Sierra, Siskiyou and Trinity counties.

COUNTIES Landscape Designers

Landscape Contractors

Retail / Whsl.Nurseries

Golf Courses BULK MATERIALS

Sub-Totals

Ldsp. Eqpt.

/ Supply Topsoil Mulches Garden Centers

Alameda 102 233 15 36 16 8 1 27 438 Contra Costa 77 277 8 43 20 16 0 13 454

El Dorado 16 72 3 11 16 8 0 8 134

Marin 78 124 1 9 15 5 6 5 243

Napa 34 71 8 12 11 4 0 4 144

Nevada 25 68 1 20 9 2 0 3 128

Placer 36 117 7 33 17 8 0 5 223

Sacramento 58 297 8 40 29 12 0 19 463

San Joaquin 31 172 15 23 28 12 0 13 294 Solano 20 126 2 13 18 8 0 8 195

Sonoma 82 186 33 27 36 13 0 20 397

Sutter 1 25 1 2 5 0 0 4 38

Yuba 0 24 1 3 5 1 0 3 37

Totals 560 1792 103 272 225 97 7 132 3188

Table 5 – Regional Agricultural Statistics

Amador Colusa El

Dorado Napa Nevada Placer Sacra- mento

San Joaquin Sierra Solano Sonoma Sutter Yolo Yuba

Farms Number 479 814 1,268 1,638 690 1,488 1,393 3,624 50 890 3,429 1,263 983 828Land in Farms Acres 163,482 474,092 107,080 223,246 70,167 132,221 328,593 737,503 28,782 358,225 530,895 359,802 479,858 160,898Farms by Size

1 to 9 Acres 70 64 393 624 209 624 534 875 0 232 1,315 193 146 20410 to 49 Acres 193 190 610 572 332 592 454 1,449 4 320 1,167 450 311 317

50 to179 Acres 118 137 186 253 91 165 153 691 23 145 518 260 204 139180 to 499 Acres 53 204 59 103 32 68 127 297 15 85 246 189 147 98500 to 999 Acres 19 115 5 35 15 25 47 156 0 41 74 89 69 37

1,000 Acres or more 26 104 15 51 11 14 78 156 8 67 109 82 106 33Total cropland Farms 236 743 794 1,546 314 726 810 3,083 29 638 2,691 1,165 832 483

Acres 15,593 298,996 15,275 66,184 7,301 50,334 133,628 492,032 6,236 154,937 134,418 274,439 311,307 71,009Harvested cropland Farms 189 661 645 1,503 218 487 583 2,843 21 506 2,386 1,055 682 377

Acres 7,457 276,588 5,930 51,860 2,621 21,990 113,315 444,670 2,412 120,410 91,197 241,597 258,261 62,510Crops Harvested Corn for grain Farms 1 23 3 1 64 90 29 4 18 38 1 Acres (D) 5,796 3 (D) 22,433 48,684 9,109 (D) 10,169 11,348 (D)Corn for silage Farms 1 2 1 37 166 4 6 2 5 Acres (D) (D) (D) 7,033 41,041 920 718 (D) 732Wheat for grain, all Farms 1 69 2 2 38 77 48 1 72 114 3 Acres (D) 18,598 (D) (D) 8,009 15,007 21,378 (D) 15,202 35,612 (D)

Winter wheat Farms 1 67 2 2 37 61 44 1 65 111 Acres (D) 18,218 (D) (D) (D) 12,914 20,716 (D) 14,234 34,848

Spring wheat Farms 2 2 2 9 4 7 2 Acres (D) (D) (D) 1,478 662 (D) (D)

Durum wheat Farms 1 9 1 3 Acres (D) 615 (D) (D) Oats for grain Farms 1 4 26 4 10 5 9 1 Acres (D) 200 1,615 198 1,968 421 769 (D)Barley for grain Farms 3 6 8 Acres 425 350 2,641 Sorghum for grain Farms 7 8 2 6 5 Acres 916 1,460 960 841Sorghum for silage Farms 1 7 Acres (D) 931 Dry edible beans Farms 18 1 23 12 2 20 10 Acres 4,523 4 (D) 2,794 3,669 (D) 5,912 1,628Cotton, all Farms 6 10 3 Acres 849 Forage Farms 15 66 14 20 28 54 231 461 19 164 130 75 197 31 Acres 2,930 17,295 697 890 1,787 7,654 27,809 92,750 2,406 47,279 18,430 9,581 70,636 2,824Rice Farms 365 26 15 21 1 222 69 102 Acres 147,817 9,313 5,114 4,323 (D) 99,284 29,675 33,399Sugarbeets Farms 3 1 Acres 625 (D) Vegetables Farms 6 22 70 22 41 65 63 181 50 172 36 96 25 Acres 6 18,960 88 29 62 121 5,534 69,433 12,147 919 17,924 48,924 86

Potatoes Farms 5 3 2 1 2 2 4 Acres 1 1 (D) (D) (D) (D)

Sweet Potatoes Farms 2 1 Acres (D)Land in Orchards Farms 164 314 494 1,464 125 296 231 2,334 2 308 2,061 782 402 248 Acres 3,975 52,442 3,954 50,533 548 1,525 28,785 187,613 (D) 18,264 68,425 68,021 34,483 24,082

(D) Data not provided to avoid disclosing data for individual farms. Source: 2007 Census of Agriculture, USDA, National Agricultural Statistics Service

Finally, conversations with the EPA Region 9 Office and data provided from the California Department of Conservation (2000 estimates), there 47,000 abandoned mine land sites in California. And, a large percentage of them are in the Sierra-Nevada Region. These sites could potentially use an inert contaminated compost in their reclamation processes, and EPA Region 9 is currently sponsoring research using biosolids compost in reclamation. Although, this is a positive occurrence, history has shown that these sites are unwilling to pay for the materials (compost and biosolids) used in reclamation.

6 Research Findings

The data within this section was obtained through the market research activities, and will be discussed in three subsections: End-User Demographics (and Contact), Compost Experience, and Opportunity/Value. As part of this task, RAA not only contacted potential end users and competitors, but also those with knowledge and impact on the marketplace.

6.1 End-User Demographics As mentioned earlier, the Sacramento-Roseville-Arden-Arcade, CA Metropolitan Statistical Area has a large urban population which is being serviced by a moderately sized lawn/garden industry. Since these ornamental end-users typically pay the greatest price for compost products, they were the focus of the market research, as were the companies that service them (composters, soil blenders, resellers). These companies are tuned into the marketplace and its needs. Some agricultural and environmental applications were also investigated as potential end use markets for inert contaminated product. During the market research, 7 composters / AD companies were surveyed, as were 8 soil blenders. It should be noted that several of the composters market within both the lawn/garden and agricultural industries, as well as in the environmental sector (focusing on storm water management applications and erosion control).

6.2 Compost Experience An extensive amount of experience exists within the region regarding compost and compost use. 100 percent of the lawn/garden companies contacted during the project stated that they were familiar with compost and its benefits, with the majority of these businesses stating that they have used or are currently using compost. As mentioned earlier, compost has become a staple in the regional soil blending industry, with the compost being less expensive than the mineral soil to purchase (e.g., sandy loam soil, or sand). In general, the soil blenders use compost as a main ingredient in most of their blended soils. This high penetration rate is considered by RAA to be a characteristic of a somewhat mature market area. The high familiarity and usage rate is a very beneficial market characteristic for WPWMA (and other composters) because much of the market has already been educated about compost. Of the companies indicating that they are currently using compost, the overwhelming majority purchase it in bulk form. This existing market experience with bulk compost means that WPWMA does not have to educate the market about compost, they must simply craft a message specific to the requirements of their own particular product and program. Smaller garden centers and mass merchants primarily purchase compost in bagged form. WPWMA, will however, need to educate new, potential end-users who have not used food residuals compost, and who may not be accustomed to inert contamination being present in their compost products.

The most popular composting feedstocks in the region are yard trimmings (often containing related wood materials), various manures, compost produced from yard trimmings and food residuals. Significant volumes of compost are available in the regional market (maybe 2-3 million cubic yards??), and these volumes will likely increase because of current and expected legislation. It should be mentioned that WPWMA will be at a marketing disadvantage, if it tries to access the Bay Area marketplace, because of its facility location and potential inert contamination. Compost contaminated with inorganic inert materials (e.g., glass, plastic, etc.) are deemed as highly unacceptable within the lawn/garden industry; especially with residential end users or product being resold (in bulk and bagged form). It is unclear whether the agricultural community will accept inert contamination on a long-term basis. History has shown that some farmers will use dirty compost, on a short-term basis, if it provided for free or at a major discount.

Lawn/Garden - Landscapers and resellers (including garden centers, landscape supply and topsoil companies) are very familiar with compost, while golf courses and nurseries are less so. These are typical results of surveying experience with compost in North America. Homeowners are another popular market for compost, and purchase in both bulk and bagged form. Blended soils containing compost are

extremely popular in the region, and may even be as popular as straight (unblended) compost with landscapers and homeowners. Compost is popular in this application because the organic matter content of regional soils is low, organic matter mineralizes quickly in the climate, and water conservation is important. Compost is typically used in landscape bed installation and in turf establishment (and maintenance) projects. Compost is used throughout the year, but is used more from April through October, depending on weather conditions, with some slowing in July and August. It is applied along with soil or blended in with soil before application. Since compost containing inert contamination is not acceptable to regional soil blenders, the WPWMA may consider manufacturing blended landscape soils using waste soils that they can accept at the composting site for a tipping fee. This could be used internally or resold, if found to be acceptable by the marketplace. Since soil is very heavy, its sales focus would have to be within the local market area.

Agriculture - Massive potential agricultural markets exist for the use of compost in California. Compost is currently being marketed to organic and conventional farmers throughout northern and central California. That stated, very little success exists with the sale of compost contaminated with significant amounts of man-made inerts to agriculture. There is, however, some limited experience with the distribution of dirty compost to farmers, where the product is given away for free, and the shipping and sometimes spreading is paid for by the composter. Compost manufactured in Roseville and marketed within the Central Valley could have a transportation advantage over products produced by Bay Area composters. However, farmers prefer composts that are nutrient-rich, possess a lower bulk density and are clean. As mentioned earlier, organic farmers also exist in the regional marketplace, but can only be accessed if the product is OMRI Listed.

Environmental - The use of compost in erosion control is expanding in California (e.g., Caltrans), although WPWMA can only access this market if it can meet Caltrans compost specifications (found in the Appendix) which includes a 0.5% (dw) maximum allowance for inert contaminants. The erosion control market can be significant but will require a coarsely graded product that is free of inert contamination. Other applications, such as stormwater management techniques (for example, rain gardens, or creating soil that absorbs and percolates stormwater) hold great promise, but will require concentrated marketing efforts.

There are a large number of abandoned mines, as well as rock and sand quarries which could potentially use compost that contains some inert contamination. They typically will not pay for compost that they use on these applications. Compost contaminated with inert material may be able to be used as a part of a landfill ADC, but whether diversion credits will be attainable for this material is unclear.

6.3 Opportunity/Value WPWMA’s greatest opportunity to market a ‘clean’ compost is probably regionally, within a 50-75 mile radius. Both large lawn/garden and agricultural markets can be accessed within this area. As mentioned earlier, however, significant volumes of compost are being manufactured in the region, so the WPWMA will have to compete in the marketplace through product quality, pricing and customer service. The opportunity to ’sell’ and potentially even distribute (give away) compost that contains significant inert contamination will be impacted by regional competition. Further, Calrecycle is currently proposing a regulation that would consider compost containing over 0.1% of inert contamination as ‘solid waste’, and it is very unclear if this product will even be able to be sold or distributed.

The greatest short-term market opportunity lies within the horticultural sectors; including landscapers, soil companies, and other bulk resellers (such as garden centers). These markets are open to buying reasonably priced, high-quality compost. If WPWMA can work transportation ‘back hauls’ it could expand WPWMA’s market area. In some regions of the country, dirty composts are used to produce blended soils, but these blended soils are typically manufactured by the companies manufacturing the compost.

6.3.1 Pricing WPWMA should concentrate its marketing efforts on wholesale, large, truckload-type sales because of the volume of compost that it produces. Currently, large buyers of compost are paying, $6 to $11 per cubic yard, picked up, while lower volume customers can pay up to double that price. Farmers and spreaders are paying $10 to 16 per ton, picked up, for yard trimmings composts that are OMRI Listed, and more for manure-based products (richer in nutrients). Compost containing significant inert contamination may very well be unsalable or salable at an extremely low price, and will likely only be used in commercial (not residential) applications.

7 Conclusions

WPWMA is currently managing its yard trimmings through a contract with Nortech, which is operating a windrow composting operation at its Roseville recycling facility. The operation is composting approximately 50,000 tons of incoming yard trimmings into a high quality ‘finished’ compost which is both OMRI Listed and participating in the US Composting Council’s Seal of Testing Assurance Program. As part of its planning process, the WPWMA is evaluating how best to manage food waste, possessing various levels of contamination and using different scenarios. Six (6) potential technology and feedstock scenarios were considered during this process. Four of the technologies are characterized as AD, 3 of which are high solids systems, and 2 use composting as the only processing method. All 4 of the AD systems would compost the solid digestate after AD, as a means to stabilize it and allow for more successful reuse.

Regardless of how the material is processed, history has shown that the ‘dirtier’ the feedstocks (e.g., scenarios 3,4 and 6), the more expensive they are to process and more difficult they are to produce into a 'clean' product (if possible at all). This is important because composts contaminated with inerts often possesses little to no value, and cannot be marketed to most 'high value' markets (e.g., garden centers, packaging). That stated, based on inspection of an ALMO densimetric table screened compost, it is likely that at least a moderately contaminated compost could be able to be improved (cleaned up) enough to allow its sale; although perhaps not to the highest value markets. Further, these products will not likely be allowed for sale within certified organic agriculture. Food separated from a mixed waste feedstock is not allowed as a feedstock for use in organic agriculture. For this reason, if WPWMA hopes to maximize the amount of food residuals it can process, then significant investment will be required for screening, especially if the bulk of the feedstock is processed through the MRF from a mixed waste stream. If the finished product cannot be refined, then it will be practically valueless (and even perhaps be costly to distribute or dispose of). If screening options are too expensive (e.g., ALMO densimetric table), then the WPWMA may consider producing soil products for its internal usage, or may have to consider a management option that generates lower volumes of dirty feedstock. Further, CalRecycle’s proposed regulation limiting inert contamination to 0.1% (dw) must be monitored, as it will likely impact the WPMWA’s processing options.

The regional compost market that the WPWMA can access with its compost products is large and well established. However, significant competition does exist in the marketplace and inert contamination in compost is not accepted at all within the lawn/garden market (high value markets).

APPENDIX A Survey Responses/Contact List

Market Company Name City Phone Contact

Ag McCormick Ranch Solano County 707- Duncan McCormackReclamation Region 9, USEPA San Fran, CA 415-972-3063 Harry AllenReclamation CASA Sacramento, CA 916-844-5262 Greg KesterComposter Synagro Various in CA 909-322-0388 Lorie Lodor

Composter / soil blender Lopez Ag. Service Sacramento 916-296-3298 Mitch LopezComposter Z-Best / Zanker Gilroy (408) 313-0444 Alex SharpeComposter Newby Island/Republic Milpitas 408-687-1928 Glenn Bohling Composter Recology Gilroy 707-249-1338 Kim CarrierLandscape Jet Mulch Capitola, CA 925-250-5590 Phil ReikerLandscape Caltrans Sacramento, CA 916-601-6040 Greg BalzerProcessor Clean World Gold River, CA 916-853-0349 Josh Rapport

N/A Calrecycle Sacramento, CA 916-341-6313 Ken DecioSoil Blender / Reseller L.H.Voss Concord 510-813-9100 Butch Voss

Soil Blender / Reseller

American Soil & Stone Products Richmond 510-292-3018 Lou Truesdell

Soil Blender / Reseller TMT Enterprises San Jose 408-432-9040 Matt MooreComposter Nortech Waste LLC Roseville 916-6455230 Paul / Larry

Soil Blender / Reseller Pleasanton Trucking Pleasanton 925-449-5400 Tom BonnellSoil Blender / Reseller Redi-Gro Corporation Sacramento 916-381-6063 Sharon Yon

Soil Blender / Reseller

American Soil & Stone Products San Rafael 415-456-1381 Doc King

Soil Blender / Reseller Rice's Soil Farm Half Moon Bay 650-726-0100 Tom RiceSoil Blender / Reseller Lyngso Garden Materials Redwood City 650-222-3070 David Perkins

Reclamation Teichert Aggregates Sacramento 916-480-5505 Barry Baba

Landscape

California Majestic Landscape Rancho Cordova 916-638-2607 Amy Gutierrez

Resellers

Blain Stumpf Rock Sand & Gravel Placerville 530-642-1555 Blain Stumpf

Resellers Sweetland Garden Supply North San Juan 530-292-9000 Darlene MarkeyResellers Garden Outlet Yuba City 530-763-4545 Alan Sutton

Resellers

Browns Valley Garden Center Browns Valley 530-743-4220 Stephanie Pevey

Resellers Acer Garden Center Shingle Springs 530-677-4716 Steve Harris

21-1.02M Compost NEWEST CALTRANS VERSION Compost must be derived from one or a combination of the following types of materials: 1. Green material consisting of chipped, shredded, or ground vegetation or clean, processed, recycled wood

products 2. Biosolids 3. Manure 4. Mixed food waste Compost must not be derived from mixed, municipal solid waste and must not contain paint, petroleum products, pesticides or other chemical residues harmful to plant or animal life. Materials must be composted to reduce weed seeds, pathogens, and deleterious materials under 14 CA Code of Regs §17868.3. Metal concentrations in compost must not exceed the maximum listed under 14 CA Code of Regs §17868.2. Compost must comply with the requirements shown in the following table:

Property Test method a Requirement

pH TMECC 04.11-A Elastomeric pH 1:5 slurry method pH

6–8.5

Soluble salts TMECC 04.10-A Electrical conductivity 1:5 slurry method dS/m (mmhos/cm)

0–10

Moisture content TMECC 03.09-A Total solids & moisture at 70 ± 5 °C % wet weight basis

30–60

Organic matter Content

TMECC 05.07-A Loss-on-ignition organic matter method (LOI) % dry weight basis

30–70

Maturity TMECC 05.05-A Germination and vigor % relative to positive control

--

Seed emergence 80 or aboveSeedling vigor 80 or above

Stability TMECC 05.08-B Carbon dioxide evolution rate mg CO2-C/g OM per day

8 or below

Pathogen TMECC 07.01-B

Salmonella < 3 MPN per 4 grams, dry weight basis

Pass

Pathogen

TMECC 07.01-B Fecal coliform bacteria < 1,000 MPN per gram, dry weight basis

Pass

Physical contaminants

TMECC 02.02-C Man-made inert removal and classification: Plastic, glass, and metal % > 4 mm fraction

combined total:< 0.5%

Physical contaminants

TMECC 02.02-C Man-made inert removal and classification: Sharps (sewing needles, straight pins and hypodermic needles) % > 4mm fraction

none detected

PARTICLE SIZING FOR PARTICULAR PRODUCTS

Fine compost (for soil incorporation)

TMECC 02.02-B Sample sieving for aggregate Size classification % dry weight basis

Min Max

Pass 2”-inch sieve 98% --

Pass 3/8-inch sieve 95% --

Medium compost (for erosion control blankets, native plant establishment, ldsp. mulching)

TMECC 02.02-B sample sieving for aggregate Size classification % dry weight basis

Min Max

Pass 2-inch sieve 90% --

Pass 3/8-inch sieve (minimum 40% retained) 50% 75%

Maximum particle length: 6 inches

Coarse compost (for compost filter socks)

TMECC 02.02-B sample sieving for aggregate Size classification % dry weight basis

Min Max

Pass 2-inch sieve 90% --

Pass 3/8-inch sieve (minimum 70% retained) -- 30%

Maximum particle length: 6 inches

a TMECC refers to "Test Methods for the Examination of Composting and Compost," published by the United States Department of Agriculture and the United States Compost Council (USCC).

APPENDIX E

From: Wallin, Jennifer@CalRecycle [mailto:[email protected]] Sent: Thursday, March 19, 2015 11:07 AM To: 'Will Dickinson' Cc: 'Eric Oddo'; Wicker, Kerry@CalRecycle; Rasmussen, Joseph@CalRecycle; Brady, Hank@CalRecycle Subject: RE: question re AB 1826 requirements Thank you, Will, for your inquiry and for the additional information provided. As Hank noted, we are finalizing some of our resources to assist jurisdictions in developing their programs related to AB 1826. We are continuing to add resources to the Mandatory Commercial Organics Recycling webpage, and plan to relay additional information through workshops in April. However, we can see that you need the information before then, so we initiated the discussion internally to develop a response. From the business perspective, there are several ways for a covered business that generates green waste, landscape and pruning waste, nonhazardous wood waste, and/or food-soiled paper waste that is mixed in with food waste to meet the requirements of the law: (1) Source separate organic waste from other waste and subscribe to a basic level of organic waste recycling service that includes collection and recycling of organic waste. (2) Recycle its organic waste onsite or self-haul its own organic waste for recycling. (3) Subscribe to an organic waste recycling service that may include mixed waste processing that specifically recycles organic waste. Under Public Resources Code section 42649.82, jurisdictions have a number of requirements in relation to implementing an organic waste recycling program, one part of which is in subsection (c) which provides that the organics recycling program shall be directed at organic waste generators, and may include, but is not limited to, one or more of the following:

(1) Implementing a mandatory commercial organic waste recycling policy or ordinance that addresses organic waste recycling. (2) Requiring a mandatory commercial organic waste recycling program through a franchise contract or agreement. (3) Requiring organic waste to go through a source separated or mixed processing system that diverts material from disposal.

Compliance with AB 1826 will be determined as part of the review of jurisdiction compliance with AB 939 (every 2 or 4 years depending on the jurisdiction). That review would include all of the aspects of AB 1826, for example the jurisdiction’s efforts to implement an organic waste recycling program that meets the needs of its businesses, identify covered businesses, as well as provide education, outreach, and monitoring. Jurisdictions are going to need to demonstrate to CalRecycle that their organics waste recycling services are appropriate for the jurisdiction and meet the needs of its businesses. To assist jurisdictions in developing appropriate programs and understanding how CalRecycle will assess program implementation and compliance, CalRecycle is developing a separate analytical tool to demonstrate the nature of the questions and information that staff will use in reviewing jurisdiction programs – e.g., has the jurisdiction done the following:

Identified generators and the amount of organic material they generate, Assessed if the generators are already diverting their organic material,

Determined the availability of existing organics recycling services to those generators and the need for additional services,

Determined what else it will need to implement to meet the needs of its generators, and, Reported to CalRecycle if there are barriers and developed and provided a plan to address the

barriers? While jurisdictions do not need to use this analytical tool, they should be aware that it reflects the types of information that CalRecycle will be looking to assess as part of the formal Jurisdiction Review. This information may assist you in determining if what is being proposed by the Authority could be justified to CalRecycle that it is adequately capturing the commercial organic waste stream. Based upon what you describe the Authority’s program would be designed to capture organic material generated by all of the regulated entities either through a source separated collection program and/or by recovering organics through the mixed waste processing facility. This appears to be a good program because the program is designed to capture the organic material generated by regulated entities regardless of the amount of material or type of organic material that they generate. However, CalRecycle cannot answer in advance whether the planned program to recover material from the 50-70 highest food content generators plus food recovery from a mixed waste MRF would be enough for the jurisdictions to be in compliance with AB 1826. There are numerous factors that CalRecycle will take into consideration when it reviews each jurisdiction’s compliance, including the degree to which commercial organic waste is collected and diverted, did the jurisdiction sufficiently demonstrate that the commercial organics recycling programs available to regulated businesses and multifamily complexes were adequate, did the jurisdiction conduct the necessary education and outreach activities, etc. Hopefully, however, this message provides helpful input regarding the WMA’s proposed program even though we cannot provide you a definitive determination at this time. As noted, additional tools and resources and being developed during this time, such as the FAQ page which will be online before the end of this month Will be part of the Mandatory Commercial Organics webpage linked to previously), and the information that will be shared at the April workshops. Once all of these resources have been finalized and discussed as part of the workshops, our LAMD staff, in this case Kerry Wicker and Joe Rasmussen, will be better poised to provide targeted technical assistance to jurisdictions in relation to the development of their organic waste recycling program and answer specific questions about the planned program elements. Thank you again for your inquiry. Updated information about AB 1826 resources will be going out from the LAMD email mailbox. Please let Kerry Wicker know if you are not currently receiving these messages. In addition, updates will also be shared through the AB 1826 listserv. http://www.calrecycle.ca.gov/Listservs/Subscribe.aspx?ListID=138. Jennifer Wallin, Environmental Program Manager I Department of Resources Recycling and Recovery (CalRecycle) Materials, Markets, and Local Assistance Division Local Assistance and Market Development Branch - South Section 2929 E. Willow Street Long Beach, CA 90806 Phone: (562) 492-9685 E-Phone: (916) 324-6848 E-Fax: (916) 319-7531

Email: [email protected]

APPENDIX F

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Grants and Incentives

Introduction This section focuses on potential grant opportunities available to the WPWMA that could help reduce capital costs associated with each of the organics management scenarios under consideration, and identifies potential subsidies or credits that could help to increase operating revenues. Table 1 shows the scenarios with applicable grant programs and incentives. A California sales tax exclusion program applicable to all scenarios is discussed separately.

Table 1. Organics Management Scenarios Grants and Incentives

Process

Scn

Bioenergy Product

Grants

Trade Credits

On-Site Anaerobic Digestion

with mixed organic feedstock 60,000 TPY Biogas blended into landfill gas to existing ICE grid electricity

1 Biogas

CalRecycle (OGP) CEC ARFTVP (PON 14-602)

PCAPCD (TAP)

LCFS, RINS

Electricity

CalRecycle (OGP) CEC EPIC (PON 14-305)

PCAPCD (TAP)

RECs

with mixed food waste and greenwaste 8,000 TPY Biogas blended into landfill gas to existing ICE grid electricity

2 Biogas CalRecycle (OGP) CEC ARFTVP (PON 14-602)

PCAPCD (TAP)

LCFS, RINS

Electricity CalRecycle (OGP) CEC EPIC (PON 14-305)

PCAPCD (TAP)

RECs

On-site Aerated Static Pile Composting

4 CalRecycle (OGP) PCAPCD (TAP)

Transfer off-site

Separated organic waste shipped to off-site anaerobic digester 8,000 TPY DODA or similar pre-processor


Partners**

Food waste co-digestion at wastewater treatment plant 8,000 TPY DODA or similar pre-processor


Partners**

Natural Gas Fueling Station

Biogas conditioned to RNG and dispensed by a fueling station

Biogas/ RNG

CEC ARFTVP (PON 14-608) CEC ARFTVP (PON 14-602)

PCAPCD (TAP, CAP)

LCFS, RINS

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Grant Opportunities WPWMA would qualify and be a strong contender for grant opportunities offered by CalRecycle and the California Energy Commission. These grant programs were selected based primarily on their strong likelihood of continued state support and the potential for more substantial award amounts. CalRecycle – Greenhouse Gas Reduction Fund Greenhouse gas emissions resulting from the decomposition of organic wastes in landfills have been identified by the State of California as a significant source of emissions contributing to global climate change. Reducing the amount of organic materials sent to landfills and increasing the production of compost and mulch are part of California’s AB 32 (California Global Warming Solutions Act of 2006) Scoping Plan. The Greenhouse Gas Reduction Fund (GGRF) was established in 2012 and receives Cap-and-Trade auction proceeds which are appropriated annually by the Legislature and Governor for projects that support the goals of AB 32. CalRecycle has received Greenhouse Gas Reduction Funds as a line item in the State budget submitted by Governor Jerry Brown. The Governor’s FY 2014–15 budget included $25 million in funds for CalRecycle; the FY 2015-2016 budget includes the same amount. CalRecycle grants provide funding to promote infrastructure development for recycling, manufacturing, composting and anaerobic digestion facilities in California that divert more materials from landfills and reduce GHG emissions. CalRecycle Organics Grant Program The Organics Grant Program falls within CalRecycle’s GGRF. The purpose of this competitive grant program is to lower overall greenhouse gas emissions by expanding existing capacity or establishing new facilities in California to reduce the amount of California-generated green materials, food materials, and/or Alternative Daily Cover (ADC) being sent to landfills. Grants are targeted to build or expand organics management infrastructure, such as composting and digestion, or rescuing food to feed people.

FY 2015-2016 Organics Grant Program An initial and draft “Program Overview” and “Scoring Criteria” were released by CalRecycle in March, 20151. Previous experience with this grant program indicates that

1 Available at: http://www.calrecycle.ca.gov/Actions/PublicNoticeDetail.aspx?id=1447&aiid=1317. At the time of this report Program Overview and Scoring Criteria were only online under the workshop notice.

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draft versions may be incomplete and/or may be amended before the official Request for Proposals is issued. Program funding and Individual Award funding:

$15M total for organics

$13M for composting and digestion projects

– There is a maximum of $3 million per project

$2M for composting and digestion projects in rural areas; max $1 million per application

– Within the $15 million total grant funding there is a separate $2 million set aside for rural projects. Rural is defined as a county with a population of less than 70,000, and applicants are scored separately.

Eligible Applicants Eligible applicants may submit an individual, regional, or cooperative application. In a regional or cooperative application, one entity must be identified as the Lead Participant. Local government entities are eligible to apply and are defined as:

1) Cities, counties, and cities and counties as defined in Public Resources Code section 30109; 2) Regional or local sanitation agencies, waste agencies, or Joint Powers Authorities.

The Organics Grant Program FY 2014-2015 specifically listed as eligible “Solid waste service providers, owners/operators of solid waste facilities (e.g., landfills and transfer stations).” This wording is not included in the initial overview document for FY 2015-2016. However, FY 2015-2016 does list as eligible “Private, for-profit entities”. For purposes of this program, a “private, for-profit entity” is defined as a business intended to operate at a profit and return a profit to its owners that is in good-standing in California.

Eligible Projects

The on-site anaerobic digestion scenarios proposed for WPWMA in Scenario 1 and Scenario 2 should qualify as eligible construction, renovation or expansion of facilities projects. The off-site transfer scenarios proposed in Scenario 3 and 5, may qualify as eligible for the pre-processing of organics and providing pre-processed materials to another site. From the Mar 2015 Organics Program Overview eligible projects include:

Construction, renovation, or expansion of facilities to increase in-state infrastructure for the digestion or composting of organics and greenwaste into compost, soil amendments, biofuels, or bioenergy.

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Construction, renovation, or expansion of facilities to increase in-state infrastructure for the preprocessing of organics and greenwaste when providing preprocessed materials to an in-state digestion or composting2.

Timeline and Cycle Details

The FY 2014-2015 Organics Grant Program released the Request for Proposals in May, 2014 with a due date of July 1, 2014. Awards were anticipated in September, but awardees were actually announced in November, 20143. The first workshop for the FY2015-2016 cycle will be held on March 19, 2015. The FY 2015-2015 timeline is expected to be similar to the previous year.

Previous Awards and Scoring Criteria Five awards of approximately $3 million each were made in FY 2014-20154. The complete scoring criteria for FY 2014-2015 is also available at the website. The Organics Grant Program emphasizes increases in GHG reduction. Applications must demonstrate an increase in the quantity (tons) of California-generated greenwaste, food materials, or ADC diverted from landfills and composted or digested. All Cap-and-Trade funded projects are required to benefit disadvantaged communities. The Organics Grant Program includes this aspect in its scoring and identifies disadvantaged communities using a mapping system called CalEnviroScreen. If there are no disadvantaged communities that would be identified within the WPWMA area, partnering with an organization that services these communities could be considered. California Energy Commission – Electric Program Investment Charge The California Energy Commission is an administrator of the Electric Program Investment Charge (EPIC), an initiative funded by California utility ratepayers through the three major investor-owned utilities (Pacific Gas & Electric, Southern California Edison, and San Diego Gas &Electric). EPIC’s goal is to promote the development of non‐commercialized new and emerging clean energy technologies in California, while providing assistance to commercially viable projects5. All EPIC projects must benefit California electrical utility rate payers. EPIC is a long term commitment by the PUC and CEC. There are three funding plan phases: Investment Plan 1, 2012-2104; Investment Plan 2, 2015-2107; and Investment Plan 3, 2018-2020.

2 See footnote 1 for Program Overview website. 3 The reason for the delay was reportedly that CARB conducted in-depth review and analysis of the GHG reduction calculations that were in each grant application. 4 The FY 2014-2015 scoring criteria and the final project award list with brief project summaries, called ORG1 Awards, is available at: http://www.calrecycle.ca.gov/Climate/GrantsLoans/Organics/default.htm 5 The EPIC program replaces the previous CEC PIER program. Although older PIER awarded projects are still under completion, there are no longer new PIER funding PONs.

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Objectives and Funding Total

EPIC consists of three program areas funded at a total of $162 million/year: (1) Applied research and development ($55 million/year); (2) Technology demonstration and deployment ($75 million/year), and; (3) Market facilitation, consisting of market research, regulatory permitting and streamlining, and workforce development activities ($15 million/year). WPWMA projects would likely, but not exclusively, fall within the technology demonstration and deployment funding area. A minimum of 20% of the CEC’s funding for technology demonstration and deployment must be used for bioenergy projects. Strategic Objective 13 has $27 million allocated for bioenergy in each Investment Plan period. The Strategic Objective states:

Strategic Objective 13. Demonstrate and Evaluate Biomass-to-Energy Conversion Systems, Enabling Tools, and Deployment Strategies.

– S13.1 Demonstrate and Evaluate Environmentally and Economically Sustainable Biomass-to-Energy Systems for Woody and Other Dry Biomass.

– S13.2 Accelerate the Demonstration and Early Deployment of Emerging Bio-Digester and Integrated Clean Generation to Efficiently Use Agricultural, Municipal, and Other Organic Waste.

Bioenergy Program Opportunity Notices PON 14-305. Demonstrating Bioenergy Solutions that Support California’s

Industries, Environment and the Grid. EPIC solicitations from Investment Plan 1 that would be pertinent to WPWMA are currently closed, but will be repeated in round two, Investment Plan 2. PON-14-3056 is particularly relevant for WPWMA. A new opportunity notice should appear sometime in 2015 and should be similar to PON-14-305.

Program Funding and Award Amounts

PON 14-305 had $27 million allocated to 4 project groups (group specifics may vary by Investment Plan phase or year). Group 3, Biochemical Conversion Technologies or Deployment, had a total of $10 million in funding with an award minimum of $1 million and maximum of $ 5 million.

6 CEC PON-14-305: Demonstrating Bioenergy Solutions that Support California’s Industries, Environment and the Grid. Status: Closed. Technology Demonstration and Deployment (S13). $27 million.

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Notice of recent awards for PON 14-305 that were granted under Investment Plan 1 is available at http://www.energy.ca.gov/contracts/PON-14-305_NOPA_Amended.pdf .

Application Process and Scoring Criteria

The screening and scoring criteria for EPIC PON 14-305 is available at: http://www.energy.ca.gov/contracts/PON-14-305 Stage one of the screening is a checklist of whether the application includes the required materials as described in the PON. CEC is very strict regarding required materials and proposals are disqualified if all formats are not followed and all materials are not submitted. Stage two, Application Scoring is the guidance given to the technical reviewers who will read, rate and score the proposals. PON’s in the Technology Development and Deployment sector have a 20% match funding minimum requirement. However, higher percentages of match can raise the final score. All EPIC projects must benefit California ratepayers and the scoring criteria section “Impacts and Benefits for California IOU Ratepayers” provides guidance on how to meet this objective in the proposal narrative. California Energy Commission - Investments in California's Alternative and Renewable Fuel and Vehicle Technology Markets (ARFVTP) The CEC's Alternative and Renewable Fuel and Vehicle Technology Program (ARFVTP) was instituted by AB 118 (Nunez in 2007). The ARFVTP is often referred to as the AB 118 program. AB 118 authorized the CEC to develop and deploy alternative and renewable fuels and advanced transportation technologies to help attain the state's climate change policies. ARFVTP investments target the energy innovation pipeline for the development and deployment of alternative and renewable fuels and advanced transportation technologies to help meet the state's goals for reducing greenhouse gas emissions and petroleum dependence in the transportation sector.

Objectives and Funding Total The Alternative Fuel Production portion of ARFVTP has a budget of $100 million in the most recent FY 2014-2015 Investment Plan to support projects that includes developing and producing low-carbon alternative fuels. Within the Alternative Fuel Production program, Early Stage Biofuel Production and Supply was funded for $3 million in the FY2014-15 plan and is expected to remain constant in the upcoming round. Natural Gas Fueling Infrastructure has been funded for $1.5 million in Q1 of 2015. These 2 programs are discussed below.

PON 14-602 Biofuels Early and Pre-Commercial Technology Development

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Last year’s Biofuels Early and Pre-Commercial Technology Development, PON 14-602, targeted biofuels projects that are in the early/pre-commercial technology development stage. The solicitation seeks technology solutions to biofuels industry problems that increase yields, productivity, or cost effectiveness of biofuel production; and/or that target a significant unmet need in California’s biofuels industry. The full solicitation is available at: http://www.energy.ca.gov/contracts/PON-14-602.

Eligible Projects

The eligibility section from the current PON-14-602 solicitation is available at: http://www.energy.ca.gov/contracts/PON-14-602/ Projects that deploy newer technologies or try innovative solutions are favored under the PON 14-602 criteria. Novel approaches, including partnerships among multiple entities that demonstrate logistics or technological advances would also make strong applications.

All proposed projects must result in a biofuel with calculated carbon intensity below the California Air Resources Board (ARB) Low Carbon Fuel Standard (LCFS) reference baselines for corn ethanol for gasoline substitutes (80.7 gCO2e/MJ), or soy biodiesel for diesel substitutes (83.25 gCO2e/MJ), as applicable. For the purposes of this solicitation, biomethane projects are stipulated as meeting this eligibility requirement.

Eligible feedstocks for biomethane are pre-landfill or landfill waste-based biomass sources including, but not limited to, agricultural residues, woody biomass and forest residues, animal manure, food waste, and municipal solid waste (MSW).

Awards and Award Amounts The maximum award could be $1 million, or 50% of the total allowable project costs, whichever amount was less. The Notice of Proposed Awards has not yet been released.

Timeline and Funding Cycle The PON-14-602 application was structured somewhat differently than most CEC grants. A pre-proposal abstract was due mid-December, 2014. Based on the abstract, applicants were accepted for a full proposal submission. The posting of the pre-proposal abstract results was February 26, 2015, final proposal submission is April, 2015 and awards will be posted in June, 2015. Based on the 2015 schedule it is anticipated that there will not be a solicitation similar to PON-14-602 again in 2015, but a comparable solicitation is anticipated in 2016.

PON 14-608 Natural Gas Fueling Infrastructure

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With PON 14-608 the CEC is seeking to fund projects that establish or expand infrastructure necessary to store, distribute and dispense compressed natural gas (CNG) for use in natural gas vehicles. It is a competitive grant solicitation designed to support CNG transport for the school districts and develop CNG fueling infrastructure for other public agencies. The full solicitation is available at: http://www.energy.ca.gov/contracts/PON-14-608.

Eligible Projects

This is an open solicitation for California public K-12 school districts and other public entities located in California.

To be eligible for this solicitation, projects must be located in California and be either new CNG fueling infrastructure or an upgrade to existing CNG infrastructure.

Public entities located in California must provide a minimum of 25 percent of the

total allowable project costs as match share. (School districts do not have a match requirement). Note: total allowable project cost is the sum of the allowable Energy Commission reimbursable share and Applicant’s match share. Applications that do not meet the minimum match share requirement will be rejected. The specifics on ‘match share’ are in the solicitation and can also be discussed with CEC. Funding and Award Amounts

A total of $1,500,000 is available for awards under this solicitation. The maximum award amount is $250,000 for public entities such as WPWMA. The maximum is higher for K-12 school districts, $500,000.00 The full solicitation with complete evaluation criteria is available at: http://www.energy.ca.gov/contracts/PON-14-608. Although there is no previous PON 14-608 to use as a comparison for types of projects awarded, ARFVPT did have a somewhat similar opportunity in 2012, PON 11-602, for alternative fuels infrastructure. The Notice of Proposed Awards for that solicitation is available at: http://www.energy.ca.gov/contracts/PON-11-602_NOPA.pdf.

Timeline and Funding Cycle

The pre-application workshop for PON 14-608 will be held at the CEC on April 1, 2015. The application deadline is June 11, 2015 and award notifications are expected to be posted in July.

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Federal Grants The USDA and the Department of Energy have grant programs supporting bioenergy development. USDA programs are aimed at rural development, and focus on rural communities, agricultural enterprises or forest products. (See for example, USDA Rural Energy for America Program, http://www.rd.usda.gov/programs-services/rural-energy-america-program-energy-audit-renewable-energy-development-assistance). WPWMA could possibly be an eligible producer under the USDA Advanced Biofuel Payment Program. Contact would need to be made with the USDA State Rural Development Energy Coordinator for California to discuss both eligibility and which USDA programs have or expect funding in 2015 and 2016. The Department of Energy has funding opportunities through the Bioenergy Technologies Office (BETO). However, these grants are aimed almost exclusively at research and development. A search of current Energy financial opportunities can be viewed at the EERE Funding Opportunity Exchange under programs in ‘biomass’ (https://eere-exchange.energy.gov/). The funding archive of previous programs supports the idea that grant funds are directed almost exclusively to R&D. (https://eere-exchange.energy.gov/Default.aspx?Archive=1). The US EPA has bioenergy development funds that were authorized under the Farm Bill, and have been directed towards agriculture. For example, EPA’s AGSTAR supports dairy digesters(http://www.epa.gov/agstar/tools/funding/incentive/USbioenergyprogramforadvancedbiofuels.html.) There are no other biomass or bioenergy grants at this time. The EPA Grants website is: http://www.epa.gov/ogd/competition/open_awards.htm. Local Grants The Placer County Air Pollution Control District Technology Assessment Program

The Placer County Air Pollution Control District (PCAPCD) has established a Technology Assessment Program (TAP) to provide financial assistance in the form of grants for the development and evaluation of technologies which have the potential to reduce air pollution in Placer County. Althought the TAP original intent was to provide funding for studies and analyses for projects that would result in emission reductions in Placer County, it could be used for equipment, such as emission controls7.

Applicants to the TAP can request funding by submitting a proposal to the PCAPCD with the following:

Introduction summarizing the proposed project

Detailed description of the technology or idea to be evaluated for potential emission reductions

7 Personal Communication, March 16, 2015 with Bruce Springsteen, Compliance and Enforcement Program Manager, PCAPCD

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– Current state of emissions without use of the proposed technology or idea

– Projected emission reductions provided by the proposed technology or idea

– Cost estimate of employing the proposed technology or idea

– Schedule estimate of when the proposed technology could be available for use

Proposed Statement of Work for the project, including

– Description of the various work elements

– Schedule of the various work elements

– Identification of any partners or subcontractors in the project

– Proposed meetings or progress reports with/to the District

– Contents of the final report documenting the results of the project

Cost Proposal, including

– Requested amount of grant funds

– Cost for any subcontractors

– Cost share potential by applicant or partners Cost of any materials required by the project

The TAP is funded solely by the PCAPCD and its discretionary annual budget. There is no scheduled RFP process.There have been three past projects funded, a woody biomass utilization feasbility study in Foresthill; a wastewater treatment plant study at the Lincoln facility, and an anaerobic digestion study at the WPWMA MRF. These studies ranged from $20 to $40K.

Placer County Air Pollution Control District Clean Air Grant Program

Since 2001, the PCAPCD has managed the Clean Air Grant (CAG) Program annually. This program is incentive driven and makes funds available to public or private agencies, groups, or individuals for projects that can cost effectively reduce criteria pollutant emissions, or for projects which help to aid the PCAPCD in meeting its attainment goals. The primary objective of the CAG is:

To fund projects that cost-effectively achieves nitrogen oxide (NOx), reactive organic gas (ROG), and diesel particulate matter (DPM) emission reductions from on and off road motor vehicles, and area-wide and stationary sources that are not required by law to reduce their emissions.

The CAG program is designed to reduce criteria pollutant emissions through the provision of incentive funds as described above. The seven project categories include:

Heavy duty diesel equipment and vehicle modernizations and repowers that are not already required by law to be upgraded,

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Alternative fueling infrastructures,

New or expanding transit service,

Public education and outreach related to air quality,

Diesel to electric agriculture pump repowers,

Innovative forest management practices that reduce open burning, and

“Other” category - which provides opportunities for individuals to submit an application, which does not fit into the first six categories, yet still meets the requirements of the program.

In discussions with the PCAPCD, it was determined that per the WPWMA organics management options, if the final conversion product is biomethane for use as a transportation fuel, the facility may be eligible for the first two project categories above. WPWMA could apply for funding to convert diesel fuel vehicles, and perhaps on site rolling stock that uses diesel, to Renewable Compressed Natural Gas (RCNG). Also, RCNG fueling facilities on site could also be funded. The CAG will most likely not fund the organics conversion equipment and any emissions control equipment8.

The CAG is funded by two sources:

The California Department of Motor Vehicles (DMV) Surcharge Fund whereby the PCAPCD recieves $6 per vehicle registered in Placer County.

The Air Quality Offsite Mitigation Fund whereby the PCAPCD receives funding from developers within Placer County through the PCAPCD's Offsite Mitigation Program. Developers of land use projects that cannot mitigate air quality impacts on-site can participate in this program to offset air quality impacts resulting from their project.

Over the past 10 years, funding for the PCAPCD CAG program has exceeded $1MM annually.

Carbon Market Incentives WPWMA production of biomethane, or renewable natural gas, from either anaerobic digestion, landfill methane emissions, or a combination, would qualify as a renewable transportation biofuel and meet the requirements for two types of tradable carbon offset credits: California’s LCFS credits and US EPA RINs. Both are discussed below. There are also carbon marketplaces aimed at GHG emission reduction rather than production of renewable transportation fuels: the California Carbon Credit Market and the Voluntary Credit Market. WPWMA would not be able to participate in either market at this time and the reasons are discussed below. Should WPWMA produce renewable electricity 8 Personal Communication, March 25, 2015 with Bruce Springsteen, Compliance and Enforcement Program Manager, PCAPCD

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from either anaerobic digestion, landfill methane emissions, or a combination, the kilowatts hours produced could qualify to help meet California’s Renewable Portfolio Standard: Renewable Energy Certificates, RECs, are the RPS market tradable unit. California Air Resources Board (CARB) - Low Carbon Fuel Standard (LCFS) As part of California’s Global Warming Solutions Act (AB 32), California adopted a Cap and Trade market mechanism that allows regulated entities to meet their greenhouse gas emission targets by purchasing emission allowances that are auctioned off by the state. Executive Order S-1-07 (January 18, 2007), the Low Carbon Fuel Standard (LCFS), calls for a reduction of at least 10 percent in the carbon intensity (CI) of California's transportation fuels by 2020 (a greater reduction by 2030 is under discussion). It instructed the CARB to coordinate activities and initiate regulatory proceedings for implementation. The CARB program uses a market-based Cap and Trade approach to lowering the greenhouse gas emissions from petroleum-based transportation fuels like reformulated gasoline and diesel. Petroleum importers, refiners and wholesalers can either develop their own low carbon fuel products, or buy LCFS credits from other companies that develop and sell low carbon alternative fuels. The LCFS program has a registry of alternative fuel producers who have received an approved carbon intensity (CI) value for their fuel.

CARB Approved CI Values for Biofuels WPWMA could become a CARB Registered Biofuel Facility eligible to participate in the LCFS Credit Market and sell or trade credits for their production of low CI biomethane. The approved CI for biomethane from anaerobic digestion that is used by CARB was established by CleanWorld, Sacramento, CA, for high-solids (greater than 15% solids) digestion o food and greenwastes. The carbon intensity (CI) of this biomethane product is -15.29 CI. The CARB Complete LCFS Producers Registration List: Physical Pathways Approved is available at http://www.arb.ca.gov/fuels/lcfs/reportingtool/registeredfacilityinfo.htm.

LCFS Credit Market Prices CARB supervises the LCFS market for the sale and trade of LCFS credits. One credit equals one metric ton of CO2 eq. emission reduction. The “Monthly LCFS Credit Transfer Activity Report for February 2015” was posted on 3/10/2015. The average price per credit in February was $24.00, fairly consistent with an average price of $25 in January and $26.00 in December and November of 2014. The average annual price in 2013 was $55.00 and in 2014 was $31.00. Monthly credit trading activity reports for each month since January, 2014 are available at http://www.arb.ca.gov/fuels/lcfs/lrtmonthlycreditreports.htm.

LCFS Credit Calculation

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Example LCFS credit calculations are shown for Scenario 1 and Scenario 2. Scenario 1 anaerobic digester with an annual intake of 60,000 TPY produces approximately 171,045 MMBTU of biomethane. This is a 20,657 MT of CO2 eq reduction in GHG emissions when compared to the CARBOB standard. At a price of $25.00 per LCFS credit, 1 LCFS credit equal to 1 MT CO2 eq, the total value of annual credits is 20,657 * $25.00 = $516,425.00. Scenario 2 dry fermentation digestion system with an annual intake of 8,000 TPY produces approximately 6,300 MMBTU of biomethane resulting in 761 MT of CO2 eq9. At a price of $25.00 per LCFS credit the annual total is $19,025.00. The Scenario 2 example calculation is shown below in Table 2. At $25.00 per LCFS credit, a biofuel producer receives about $3.00 per MMBTU. Converted to diesel gallons equivalents (DGEs)10, a biofuel producer receives about $0.38 per DGE.

Table 2. Example Calculation of LCFS credits

Calculation Steps

Results Units

Annual production in MMBTU of biomethane: 6,300 MMBTU Calculate megajoules (MJ) of energy in the AD biogas: MMBTU MJ 6,300 6,646,853 Calculate difference in carbon intensity between the standard and the AD biogas CI of standard (CARBOB) 99.18 gCO2e/MJ CI of bio methane -15.29 gCO2e/MJ CI difference 114.47 gCO2e/MJ Calculate carbon offset credits in grams of CO2 equivalent Number of MJ 6,646,853 MJ CI difference 114.47 gCO2e/MJ Credit in gCO2e 760,865,240 gCO2e Convert grams of CO2 equivalent into metric tons of CO2 equivalent Credit in metric tons CO2e 761 MT CO2e 761 LCFS credits

9 This is an approximation of MMBTU output for a dry fermentation system using an estimate of 40% biomethane production compared to a wet digester. 10 California Energy Almanac, DGE and BTU estimates for alternative fuels for vehicles. 1 DGE = 127,500 BTUs. For transportation applications Lower Heating Values are used. Listed values are consistent with GGE conversions performed in the 2009 Integrated Energy Policy Report.

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US EPA - Renewable Identification Numbers (RINS) The United States EPA’s Renewable Fuel Standard (RFS) is a requirement that a certain percentage of petroleum transportation fuels be displaced by renewable fuels. RFS1 began with the Energy Policy Act of 2005. Congress updated the standard in the Energy Security and Independency Act of 2007, known as RFS2. RFS is a renewable fuel standard for biofuels only that requires obligated parties to sell a certain amount of biofuels per year through 2022. RFS2 contains a four-part mandate for reducing greenhouse gas emissions levels relative to a 2005 baseline of petroleum: for renewable fuel, advanced biofuel, biomass-based diesel, and cellulosic biofuel. Biomethane from food waste and greenwaste is categorized as an Advanced Biofuel D5 RIN.

D5 Advanced Biofuel RINS Renewable fuel credits under the US EPA are called RINs - Renewable Identification Number - and represent 77,000 BTUs of fuel (approximately 13 RINs per MMBTU). A RIN is a serial number assigned to a batch of biofuel for the purpose of tracking its production, use, and trading for the RFS. Renewable fuel producers generate RINs based on the volume of compliant renewable fuel they make available. RINs can then be traded, carried over to the following year, and used by petroleum refiners and importers (“obligated parties”) to show compliance with their volume obligations. WPWMA may be eligible to generate D5 Advanced Biofuel RINS under the RFS if the biomethane produced is used as a transportation fuel. Registering, tracking and trading RINS by most small to mid-size biofuel producers is done through a contracted third party with expertise in this market and the documentation and reporting that it requires. The RIN market offers futures contracts and other fairly complex financial vehicles, and prices have been volatile through time.

RIN Market Price RIN spot market pricing is available from several energy data services; most sell their time-sensitive daily fuel and RIN market data services. Examples include OPISnet (http://www.opisnet.com) or ARGUS Media (http://www.argusmedia.com). The PFL Biofuel Markets Daily Report is available online (http://progressivefuelslimited.com/) at no charge. As an example, Advanced Biofuel D5 RIN prices on March 10, 2015 ranged from $00.68 - $00.78 per RIN. For each MMBTU of D5 biogas produced, 12.97 RINS are generated. RIN prices in the $0.68 to $0.78 range equate to $8.80 to $10.11 per MMBTU. This RIN price range equates to $1.12 to $1.28 per DGE11. California Air Resources Board – The Cap-and-Trade Carbon Market

11 See footnote 7 for DGE calculation

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California's Cap-and-Trade Program took effect in early 2012 as one of the regulatory measures California would undertake in response to AB 32, the Global Warming Solutions Act of 2006. The enforceable ‘caps’ or compliance obligations began on January 1, 2013 for GHG emissions. California has a mandated compliance market covering emissions from multiple sectors including deliverers of electricity, industries, and refiners of petroleum and natural gas. California’s regulated carbon market is administered by CARB which registers and manages tradable credits called California Carbon Offsets from approved Compliance Offset Projects that reduce greenhouse gases. CARB offset credits are issued to offset projects that meet specific requirements and represent verified GHG emission reductions or removal enhancements achieved under ARB’s Compliance Offset Protocols. Like the LCFS credits, an offset represents the reduction or removal from the atmosphere equivalent to 1 MT of CO2 eq..

Compliance Offset Protocols At this time CARB has no Compliance Offset Protocol for organic waste composting, organic waste digestion or landfill gas. The five Compliance Offset Protocols adopted by ARB that may be used to generate CARB offset credits are: US Forest Projects, Urban Forest Projects, Livestock Projects (specifically dairy or livestock manure anaerobic digesters), Ozone Depleting Substances and Mine Methane Capture Projects. None of these protocols cover municipal solid waste, nor greenwaste or food waste diversion from landfills. WPWMA would not be able to trade carbon reduction offsets on the California Carbon Offset Market unless the appropriate protocols are adopted by CARB.

California Carbon Credit Prices The “California Cap-and-Trade Program Summary of Auction Settlement Prices and Results” current as of January, 2015 shows prices per carbon offset ranged in January from about $10.00 to a high of $14.00, with an average price of approximately $12.35. Available at: http://www.arb.ca.gov/cc/capandtrade/auction/results_summary.pdf Climate Action Reserve – Voluntary Carbon Offset Market The most established and largest carbon offset registry for the North American carbon market is the Climate Action Reserve. The Reserve establishes quality standards for carbon offset projects by developing offset protocols, oversees independent third-party verification bodies, issues carbon credits generated from such projects and tracks the transaction of credits over time in a publicly-accessible system. The Reserve participates in the Voluntary Carbon Market (as opposed to California’s Compliance Market).

Organic Waste Composting and Waste Digestion Protocols

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The Reserve has developed two protocols that would permit WPWMA to register projects and obtain carbon offset credits for reduced emissions. The Organic Waste Composting Project Protocol and the Organic Waste Digestion Protocol. Both provide a standardized approach for quantifying and monitoring the GHG reductions from projects that avoid methane emissions through the diversion and composting or anaerobically digesting municipal food waste and food soiled paper waste that would otherwise have been sent to a landfill.

Effect of California’s AB 1826 on Organic Waste Diversion for Carbon Offset Credit

California’s AB 1826, a mandate to reduce the amount of organic waste going to landfills, is set to be enacted on April 1, 2016, at which time any California “business” (defined as a commercial or public entity or a multi-family dwelling of 5 units or more) that generates more than eight cubic yards of organic waste per week must arrange for recycling services for that waste. Climate Action Reserve organic waste composting or digestion projects will not be able to be credited for waste streams once they become subject to this new mandate. Starting April 1, 2016, any waste stream originating from California commercial or public entities that generate eight (or more) cubic yards of organic waste per week will no longer be considered an eligible waste stream. California Public Utilities Commission - Renewable Energy Certificates California’s Renewable Portfolio Standard (RPS) requires investor-owned utilities, electric service providers, and community choice aggregators to increase procurement from eligible renewable energy resources to 33% of total procurement by 2020. The RPS program has an associated Renewable Energy Certificate (REC) trading program. RECs provide a mechanism by which to track the amount of renewable power being sold and to financially reward eligible power producers. For each unit of power that an eligible producer generates, a certificate or credit is issued. As renewable generators produce electricity, they create one REC for every 1000 kilowatt-hours (or 1 megawatt-hour) of electricity placed on the grid. RECs can then be sold either in conjunction with the underlying power (bundled) or separately to energy supply companies (unbundled). A market exists for RECs because energy supply companies in California are required to redeem RECs equal to their obligation under the RPS program. The California Energy Commission (CEC) tracks the RECs, and at the end of a compliance year, verifies how many RECs each retail seller has procured for compliance with the RPS.

REC Sale and Pricing

Grid-tied renewable electricity generators produce two distinct products: physical electricity and RECs. At the point of generation both products can be sold together or separately, as a bundled or unbundled product. RECs could be generated by WPWMA as a qualifying facility which would register with the CEC.

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Typically the Power Purchase Agreements (PPAs) between a renewable electricity generator and utility include the REC in the purchase price – the RECs and associated electricity are bundled and are considered a Bucket 2 REC. If the RECs are not included in the PPA, then electricity sold to the grid would be classed as having a Bucket 1 REC, a REC from an eligible in-state facility directly interconnected to the grid. Bucket 1 RECs have a value of $25-$35/MWh and could be sold to any buyer. Power used on-site and not sold to the grid is a Bucket 3 REC and worth approximately $0.60 - $0.75/MWh. Pricing (Tariff) Incentives California Public Utilities Commission – Self-Generation Incentive Program (SGIP) The Self Generation Incentive Program (SGIP) provides financial incentives for the installation of new qualifying technologies that are installed to meet all or a portion of the electric energy needs of a facility. The purpose of the SGIP is to contribute to GHG emission reductions, demand reductions and reduced customer electricity purchases resulting in improved transmission and distribution system utilization, as well as market transformation for distributed energy resource technologies.

Eligibility Participation in the SGIP is restricted to customers who are located in the Pacific Gas &Electric (PG&E) Southern California Edison (SCE) and San Diego Gas and Electric (SDG&E) service territories and physically connected to the electric utility transmission and distribution system. SGIP is administered by the utility that services the renewable energy provider/customer. Biogas is considered an emerging technology and receives funds from the SGIP Renewable and Emerging Technology budget category.

Pricing Incentive rates for the eligible Emerging Technologies in 2015 include biogas. The biogas incentive is an ‘adder’ that may be used in conjunction with fuel cells or any conventional CHP technology.

Advanced Energy Storage $1.46/W Biogas Adder $1.46/W Fuel Cell – CHP or Electric Only $1.65/W

Funding Cycle and Application

Application for SGIP incentives is handled through the facility’s utility provider (one of the 3 investor-owned utilities listed above). SGIP is an annual program run on the calendar year. Applications are accepted once the program year begins, and SGIP funds are reserved on a first eligible basis.

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Program information, technical requirements and the application process are in the “2015 Self Generation Incentive Program (SGIP) Handbook”, available at: http://www.pge.com/en/mybusiness/save/selfgen/handbook/index.page California Public Utilities Commission – SB 1122 The CPUC released a ‘Proposed Decision” November, 2014 implementing a 250 megawatt feed-in tariff program for new small-scale bioenergy projects which convert organic waste to electricity. The decision was required by Senate Bill 1122 (Rubio, 2012) and is referred to by the bill name. This legislation amends California’s Renewables Portfolio Standard (RPS) program to require that investor-owned utilities (IOUs) procure mandated quantities of RPS-eligible generation from facilities using specified types of bioenergy. The 3 IOUS are Pacific Gas &Electric (PG&E) Southern California Edison (SCE) and San Diego Gas and Electric (SDG&E). SB 1122 requires procurement of 250 MW of electricity generated from organic waste and allocated by fuel resource category:

Category 1: 110 MW generated from organic waste that would otherwise be landfilled, wastewater treatment, co-digestion and food processing;

Category 2: 90 MW from dairy and agricultural waste; and

Category 3: 50 MW from forestry waste from high wildfire hazard zones.

A detailed analysis of SB 1122, and its administrative and regulatory framework, is outside the scope of work of this section. However, eligibility for SB 1122 is discussed below, along with notes on the current state of feed-in-tariff pricing.

Eligibility SB1122 encourages small-scale bioenergy production, and a generation facility with a capacity of up to 3 MW is eligible to participate. Electricity must be generated from ‘biomass’. A facility using biogas generation is eligible to participate under SB 1122 if the feedstock used is one of the four listed for the biogas category: wastewater treatment, municipal organic waste diversion, food processing, and co-digestion. It is important to note that landfill gas does not meet the definition covered under the CPUC’s November ruling on SB 1122. Anaerobic digestion with greenwaste and diverted food waste could qualify under Category 1 power generation. SB 1122 allocates the procurement obligation among the three large IOUs according to each IOU’s share of statewide peak demand. An eligible facility must be physically located within PG&E’s, SCE’s, or SDG&E’s electric service territory and must be interconnected to the IOU’s electric distribution system.

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Pricing

A single statewide contract starting price has been determined and will be the initial tariff price prior to any periodic adjustments. That starting price is $127.72/MWh. The price adjusts independently for each category based on program participation and market behavior. SB 1122 pricing methods are generally based on the Renewable Market Adjusting Tariff (ReMAT), which was adopted by the Commission in 2012 for small renewable projects. The IOUs have designated the new SB 1122 tariffs as the Bioenergy Market Adjusting Tariffs (BioMAT)12. There is no price cap, but a CPUC review will be triggered if the price for any category reaches $197/MWh for two consecutive periods. Sales Tax Incentive California’s Sales Tax Exclusion for the development of renewable energy sources is not well known among bioenergy project developers and is described below.

California Alternative Energy and Advanced Transportation Financing Authority The California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA) was authorized to provide financing solutions for California’s industries that reduce the State’s greenhouse gas emissions. CAEATFA supports increasing the development and deployment of renewable energy sources, energy efficiency, and advanced transportation and manufacturing technologies to reduce air pollution, conserve energy, and promote economic development and jobs. CAEATFA is the main state bond issuer for energy related bonds. These include Cogeneration Facility Bonds, Clean Renewable Energy Conservation Bonds (CREBS), and Qualified Energy Conservation Bonds (QECB). Specific discussion of bond issuance is outside the scope of this report. However, information is provided below for the CAEATFA Sales Tax Exclusion.

CAEATFA Sales Tax Exclusion CAEATFA administers the Sales Tax Exclusion Program, which provides a sales tax exclusion for advanced manufacturing projects or for companies that design, manufacture, produce or assemble advanced transportation or alternative source products, components or systems.

Eligibility

12 Specifics of Bio-MAT contracts and pricing are in process and can be tracked at the CPUC. Price adjustments can raise or lower prices. See “Appendix A: Proposed Joint IOU Schedule BioMAT.”

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Under the program, sales tax is not paid on equipment or materials used for the construction of a biogas capture or production system which is considered an ‘alternative source’ of energy. Both landfill gas capture and anaerobic digestion production systems qualify for the CAEATFA sales tax exclusion. CAEATFA eligibility is defined as:

Alternative Source: products capable of generating energy by utilizing an alternative source, such as wind or the sun. Examples include wind turbines and solar panels. Also fuels made from renewable resources, such as captured methane from dairies or landfills.

Application and Scoring Criteria

The application process requires a narrative project description and an Excel spreadsheet model that is used to determine eligibility. The project must show a net benefit to the state. The final scoring system includes an economic benefit calculation including jobs, a fiscal benefit calculation, and an environmental benefit calculation. Environmental benefits include estimates of the dollar value of greenhouse gas reductions and reduction on dependence of fossil fuels. The environmental benefits are also derived from the capacity to generate electricity from alternative sources, thereby reducing the need for traditionally generated electricity. If accepted, the application is approved at a CAEATFA Board Meeting which meets monthly.

Previous Awards The previous CAEATFA sales tax exclusion awards demonstrate both landfill gas and anaerobic digester projects. Financing applications that have been considered and approved are available at: http://www.treasurer.ca.gov/caeatfa/ste/applicants/considered.pdf Summary Grants and incentives vary based on the final products resulting from the organics management scenarios. Compost as a final product has the fewest grant or incentive opportunities. The production of biomethane, or renewable natural gas, has the greatest possibility of subsidy and support due to a tradable market for low carbon fuel credits. Generating renewable electricity can receive a premium pricing tariff through SB 1122 and SGIP, but only for new bioenergy facilities. The bioenergy development community has shifted increasingly towards biofuel production because of the subsidy offered through market-based credit incentives.

CalRecycle CalRecycle’s Organics Program objectives dovetail perfectly with the WPWMA organics management scenarios. The most important attribute of the CalRecycle grant funds is

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their aim to reduce GHG emissions. The final product, biogas or electricity, is not relevant except in effecting the ultimate GHG emission reduction. CalRecycle funds might be available for the off-site transfer of organics (scenarios 3, 5) by forming a partnership application, for example with the wastewater treatment plant. In addition, CalRecycle does fund pre-processing equipment and a partnership that included organic waste separation at the MERF with co-digestion elsewhere falls within their objectives. CalRecycle is a competitive grant program emphasizing GHG emission reduction. Calculation of those emissions is a key segment of the application, and larger reductions receive higher scoring towards final selection. Although CalRecycle has previously funded development of a new aerated static pile composting facility, WPWMA should keep in mind that an addition to its existing compost facility would need to demonstrate a ‘competitive’ amount of GHG reduction relative to other grant submissions. CalRecycle scores points for food waste recovery programs and for work with disadvantaged communities. A partnership with an organization that works in these areas could be helpful.

CEC CEC EPIC funding is for projects with a final product of renewable electricity. Although the general goals of the EPIC FY 2015-2017 Investment Plan13 are available, specific bioenergy solicitations are just beginning to be posted. PON 14-305 or a similar solicitation could appear in 2015 or 2016. CEC ARFVTP (AB 118) funding is for projects that produce biofuels. The Biofuels Early and Pre-Commercial Technology Development funds, PON 14-602, are particularly well-suited for projects that integrate new technologies or design novel methodologies. If WPWMA pursues a RNG fueling station, PON 14-608 is a current opportunity open for proposal submission.

Federal Grant Programs A scan of federal programs supporting bioenergy did not show current programs or grant opportunities for which WPMDA would be eligible.

Credit / Certificate Markets / Pricing Incentives Biofuels 13 The Electric Program Investment Charge Proposed 2015-2017 Triennial Investment Plan Commission Final Report. (PDF file, 232 pages, 1.7 megabytes). Pub: CEC-500-2014-038-CMF

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California’s LCFS credit market is available to WPWMA should it decide to produce biofuel. However, the California Cap-and-Trade carbon market is not an option for WPWMA because there are no CARB-accepted protocols for organic waste management or digestion. Since passing AB 1826 (Chesbro) in 2014 it is less likely that a protocol will be developed. The current pricing for LCFS credits has been fairly stable for the past 3 to 6 months. At $25.00 per LCFS credit, a biofuel producer earns about $0.38 per DGE. However, LCFS pricing has been fairly volatile when viewed over the last three years. The US-EPA RIN market for advanced biofuels depends on the political landscape of the Renewable Fuel Standard. It should be noted that the RFS has been subject to intensive debate in Congress and elsewhere as to whether it should be repealed or not. At current pricing of $0.68 - $0.78 per RIN, a biofuel producer earns about $1.12 to $1.28 per DGE. Electricity There are three pricing incentives for renewable electricity generators. SB 1122 and SGIP are available for new installations and facilities, and cannot be utilized for existing or retrofitted facilities. RECS are available for any facility tied into the electric grid; an installation need not be new. SB 1122 is a relatively recent feed-in tariff and the pricing and application processes are not well defined. However, the SGIP program is well established and eligibility determination and the application process are handled by the indicated IOU and would not be too administratively difficult. All 3 programs, SB 1122, SGIP and RECs, require that the electricity generator be a customer of one of the three large IOUs; PG&E, SCE or SDG&E.

CAEATFA WPWMA would be a very strong contender for the CAEATFA Sales Tax Exclusion and is strongly encouraged to apply.

APPENDIX G

1

Task 5: Permitting and Environmental Review

Introduction Task 5 focuses on a review of the five scenarios and the potential impact of environmental permitting for the installation and operation of one of the five organics management scenarios identified by Capital PFG at the Western Regional Sanitary Landfill (WRSL) and Materials Recovery Facility (MRF). Each scenario is described and then analyzed per the following principal environmental permits (or land use entitlements) Principal Permitting Agencies and Existing Permits Land Use Entitlement The installation and operation of the scenarios may require land use permitting, such as the potential for a Conditional Use Permit (CUP), CUP amendment, or another land use entitlement instruction requiring a discretionary permitting decision by Placer County. Such permitting has need for accompanying environmental impact analysis per the California Environmental Quality Act (CEQA). The Placer County Department of Community Development, Planning Services Division administers Land use permitting in Placer County). The WRSL was originally approved by the issuance of the original CUP No. 225 on March 2, 1978. In December 1993 another CUP (CUP-1717) was approved for the construction of the MRF and related activities including recycling facilities, composting facilities, and hazardous waste facilities. In 2003, as part of the WPWMA Capacity Enhancement Project 2002-2003, CUP 1717 was modified to allow a variety of things, including increasing the maximum tonnage throughput at the MRF, increasing the number of vehicles, increasing the size of the MRF, expanding the composting area, and several other MRF related activities. Most importantly for this analysis, Item 1p of the modified CUP, “Allowing food waste and biosolids to be composted including additives in the composting feedstock”. The Environmental Impact Report1 prepared for the CUP-1717 modification furthers describes how the food waste might be composted with green waste on the existing and expanded compost pad. Air Quality The five scenarios have two basic questions as follows. What air quality permitting for the scenarios might be necessary for the Placer County Air Pollution Control District

1 Draft Environmental Impact Report for the WPWMA Capacity Enhancement Project 2002-2003, January 9, 2003

2

(PCAPCD)? Are there any potential future or proposed air district rules or regulations that might affect the particular scenario? There are several air quality permits issued by the PCAPCD regarding WRSL and MRF operations, as well as the landfill gas (LFG) electricity cogeneration power plant operated by Energy 2001. WRSL currently maintains a Title V permit (PCAPCD WR-001) for the small and large LFG flares. These flares are to be used when the Energy 2001 power plant (or portions thereof) is off-line. The Title V permit sets total emissions not to exceed for nitrogen oxides (NOx) at 109 pounds per day, and for carbon monoxide (CO) at 364 lbs./day for the flaring system. If the flaring of LFG were to occur at 100% this would result in 19.9 TPY of NOx, and 66.4 of CO). Per the flare permit, Volatile Organic Compound (VOC – as methane) destruction efficiency must be at least 99% by weight. The MRF itself has a PCAPCD permit (WPMR-01-01), which regulates operating conditions of the emissions controls (water spray and hoods) for the compost grinder, and screening and conveying equipment to reduce excess dust. The permit also conditions how much paints and solvents can be received by the MRF, as well as the can crusher’s carbon filtration system. The LFG cogeneration power plant, operated by Energy 2001, Inc., has six operating air permits, one for each of the internal combustion engines used to combust the LFG for electricity generation. These six engines are all the same model. They are Caterpillar Model G3516, 1,148 horsepower, rated at 810 kilowatts. It should be noted that three of the engine generator set permits are issued by the PCAPCD to Energy 2001 (ENER 01-01, 05-01, 08-01), Inc. and three to GenPower (GPWR 13-01, 13-02, 13-03). The total emissions allowed by the six operating permits are shown in the table below.

Table 5-1. Currently Permitted Emissions at Energy 2001

Pollutant Pounds per Quarter

Pounds per Year

Tons per Year

Reactive Organic Compounds (VOC)

16,298 65,192 32.5

Nitrogen Oxides (NOx) 20,164 80,656 40.3 Sulfur Oxides (SOx) 13,303 53,212 26.6 Particulate Matter (PM-10) 12,677 50,708 25.4 Carbon Monoxide (CO) 83,229 332,916 166.5

3

The PCAPCD currently does not have rules or regulations regarding air emissions from composting operations. Nor is the promulgation of composting related regulations currently being considered2. Waste Discharge Requirements (WDR) Regulations administered by the California Central Valley Regional Water Quality Board (CVRWQB) that may impact the 5 scenarios are examined below. In addition, the California State Water Resources Control Board, under which the Regional Boards operate, released in January 2015 new proposed draft WDR requirements for composting facilities that will affect current composting at the WPWMA MRF, as well as future composting-related scenarios. Their potential application to the scenarios is also examined. The WRSL currently has a WDR for the landfill and its operations3. The composting operations currently have a WDR exemption from the CVRWQB4. The MRF and composting areas are also covered under the State’s General Industrial Storm Water Permit (Waste Discharge I.D. 5S31 011144). Solid Waste The WPWMA landfill and MRF currently operates under two Solid Waste Facility Permits under the authority of CalRecycle and the Placer County Local Enforcement Agency (LEA - part of the Placer County Department of Health & Human Services, Environmental Health Services). The five scenarios are to be evaluated as to their regulatory impact regarding WPWMA MRF permit. In addition, CalRecycle is currently promulgating revised and new regulations regarding composting in California. The potential effect of these proposed regulations regarding the scenarios are reviewed where appropriate. The MRF facility and composting activities operate under Solid Waste Facility Permit (SWFP) 31-AAA-0001, last issued December 12, 2011. The SWFP allows up to 1,750 ton per day of MRF throughput (design capacity is 3,850 tons per day), with 1,014 vehicles allowed to enter the site. The composting area size in the SWFP is approximately 25 acres with a design capacity of 75,000 cubic yards. The MRF and composting area design and operations are also covered in the facility’s Transfer/Processing Report and Report of Composting Site Information, which are filed with the LEA in support of the SWFP (as required by CA Title 14, Section 18221.6).

2 February 10, 2015 meeting with John Finnel, Permitting Program Manager, and Bruce Springsteen, Compliance and Enforcement Program Manager 3 CVRWQB Order No. R5-2007-0047 – Waste Discharge Requirements for Western Placer Waste Management Authority for Western Regional Sanitary Landfill Facility 4 Personal communication with Eric Oddo, Environmental Engineering Program Manager, Western Placer Waste Management Authority, February 10, 2015

4

Scenarios and Environmental Permitting Review Scenario 1: On-site Anaerobic Digestion with Mixed Organic Feedstock

This scenario involves the construction and operation of an on-site Anaerobic Digestion system processing 60,000 tons per year (TPY) or an average of 164 tons per day. For feedstock it would utilize the following:

Source separated food scraps from such establishments as restaurants, institutions or other facilities in WPWMA service territory which can potentially supply food waste collected separately from municipal solid waste;

Food waste hand-sorted from mixed waste at the existing, collocated Materials Recovery Facility (MRF), and;

Mixed waste MRF residue with an organic content of approximately 35%, by weight).

Overall feedstock contamination (plastics, metals, glass) would not exceed 50%

A wet fermentation process similar to that used by CleanWorld

The AD system will produce both solid and liquid digestate during the conversion of the organic component to biogas. The solid digestate will be 40% solids and would be mixed with green waste the WRSL facility uses for its current aerobic composting. Any compost created from the solid digestate and green waste combination will be finished with a 3/8” screen with additional processing by an ALMO Densimetric Table (or equivalent) The liquid digestate from the AD system is planned to be directed to the existing detention ponds near the facility’s compost pad areas and mixed with composting runoff/storm water for return application to the composting windrows. The biogas produced by the AD system would be combined with the landfill gas currently extracted from the landfill and directed to the existing internal combustion engine electric generator sets at the facility. This scenario process flow would be as indicated in Figure 5-1.

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communication with the Placer County Planning Department. The Department would need to see a complete land use entitlement application to make the appropriate decision6

Air Quality The 60,000 TPY AD system would produce biogas that would be directed to the Energy 2001 power plant facility for conversion into electricity. When the power plant is not operating, or otherwise cannot receive the AD system biogas, the biogas will be directed to the existing flares. It is expected that the biogas will first be blended into the LFG stream before it is used at the power plant or flared. Both of these systems will require some modification to their existing permits allowing the introduction of the biogas. The addition of biogas from the 60,000 TPY AD system could potentially add to the emissions from the Energy 2001 power plant facility, if it is assumed that the facility runs at 100%. A 60,000 TPY AD system would generate additional emissions as estimated in the table below.

Table 5-2. Estimated Emissions Using Biogas in the Energy 2001 Power Plant

Regulated Pollutant Tons per Year currently permitted for Energy 2001

Estimated TPY Using Biogas

Percent of existing permitted emissions


32.5 1.5 4.7%

Nitrogen Oxides (NOx) 40.3 4.1 10.3% Sulfur Oxides (SOx) 26.6 0.02* 0.1% Particulate Matter (PM-10) 25.4 0.002 0.01% Carbon Monoxide (CO) 166.5 10.4

6.3%

*Sulfur, as H2S to be removed prior to blending with the LFG As can be seen in the table above, there could be addition of VOCs, NOx, and CO that would have to be taken into account regarding the existing Energy 2001 power plant permits. However, discussions with PCAPCD representatives7 indicate that Energy 2001 facility internal combustion engines operate well under their full capacity and should be able to accommodate the additional biogas without exceeding the currently permitted limits. In addition, unlike existing AD systems in the Sacramento region (i.e. the CleanWorld facilities in Sacramento and Davis), the food waste feedstock stream under this WPWMA scenario would have significantly more inert contaminants that could reduce its actual biogas production.

6 Ibid, March 3, 2105 7 February 10, 2015 meeting with John Finnel, Permitting Program Manager, and Bruce Springsteen, Compliance and Enforcement Program Manager

7

If there is an increase in emissions above that are already allowed by the existing air permits, Energy 2001 would have to request a permit modification and likely need to purchase emission offset credits for VOC and NOx. This may be problematic as NOx offsets are particularly scarce. As an alternative to purchasing NOx offsets, additional NOx emissions controls could be added to one (or more if necessary) of the Energy 2001 engines to lower it NOx emissions levels. In regards to the flaring of the LFG gas blended with biogas from the AD system, a similar situation exists as in the internal combustion engines total permitted, except the potential increase in NOx and CO emissions is even more significant as shown in the following table.

Table 5-3 . Estimated Emissions Using Biogas in the WRSL Flare System

Regulated Pollutant Pounds per day currently permitted

Estimated Pounds/Day flaring Biogas


Nitrogen Oxides (NOx) 109 19.9 22.2% Carbon Monoxide (CO) 364 66.4

24.1%

As is the case with the Energy 2001 power plant, the PCAPCD indicated that the flare system emissions are well under their permitted conditions. Plus, the AD system biogas production for this permitting review is conservatively overestimated as the contaminant level in the 60,000 TPY scenarios could significantly lower the actual biogas output, and thus the amount of NOx and CO emissions through the flaring system. Nonetheless, if an AD system, with the food waste feedstock stream of 60,000 TPY as characterized in this scenario, is further considered for the project site, the potential for modifying the flaring permit will need to be considered. As mentioned in a previous section, the PCAPCD not does currently regulate composting activities at WRSL. However, nuisance odor is under the purview of the PCAPCD via their Rule 205. Wet fermentation AD systems do generate ammonia which resides in part in the solid and liquid digestate. Ammonia, particularly in the liquid digestate component, can be elevated (2500 to 3500+ mg/L). This may lead to odor issues during the transfer and use of solid digestate in composting activities, and the potential use of liquid digestate on composting piles and discharge into retention ponds. The liquid effluent ammonia concentration would likely have to undergo treatment immediately as it exits the AD system tanks so as to not cause an odor issue. In addition, this would also allow for potential discharge of the liquid effluent, when needed, to the sanitary sewer. The facility is serviced by the City of Roseville, and their specific acceptance limitation for ammonia is 20 mg/liter (City of Roseville Municipal Code Section 14.26.140).

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Wastewater Currently, the MRF and composting area have been historically, and are currently,

exempt from WDR permitting by the CVRWQB8. However, with the January 2015 rollout of the proposed General Waste Discharge Requirements for Composting Operations by the State Water Resources Control Board (SWRCB), both existing composting operations as well as additional composting of AD system digestate as envisioned in this scenario will receive significant additional scrutiny. It should be noted though that the AD system itself, as a fully-enclosed vessel system, would not be required to obtain coverage under the proposed General Order. The primary effect of these proposed WDRs would be on all of the current and future composting operations at the site. As the existing composting operations are in excess of 25,000 cubic yards, the facility will categorized as a Tier II composting facility. Even if the facility did not exceed 25,000 cubic yards, with the addition of food waste digestate to the composting mix, it would still be captured into the Tier II. The proposed Tier II requirements of particular note are:

Regarding the surface that the existing composting operations are located, the proposed requirements are: – Working surfaces must be capable of resisting damage from movement of

operating equipment and weight of piles, have a hydraulic conductivity of 1.0 x 10‐5 cm/s or less, and consist of one of the following:

a) Compacted soils, with a minimum thickness of one foot;

b) Asphaltic concrete or Portland cement concrete; or

(c) An equivalent engineered alternative approved by the Regional Water Board.

Detention pond liners must meet a hydraulic conductivity of 1.0 x 10‐6 cm/s or less and include of one of the following:

(a) A liner system consisting of a 40‐mil synthetic geomembrane (60‐mil if high‐density polyethylene) underlain by either one foot of compacted clay, or a geosynthetic clay liner installed over a prepared base; (b) A liner system that includes Portland cement concrete underlain by a 40‐mil synthetic geomembrane (60‐mil if high‐density polyethylene);or

8 Personal communication February 10, 2015 with Eric Oddo, Environmental Engineering Program Manager, WPWMA.

9

(c) An equivalent engineered alternative approved by the Regional Water Board.

The WPWMA composting operations will be affected by these particular requirements. For example, the northern compost area will likely require repairs to its concrete pad and the northern retention pond is unlined and likely to be decommissioned9. Fortunately the southern compost area pad reportedly meets or exceeds all of the proposed composting WDRs listed above, with the exception of a lysimeter beneath the southern retention pond10. And, the northern pond is to be replaced, along with the adjoining compost pad elsewhere at the MRF facility. This pond should be sized accordingly to potentially accept the additional liquid effluent for storage.

Implementation of the WDR requirements for existing operations is that the facility must file a complete Notice of Intent, filing fee, and technical report within one year of adoption of the General Order. The technical report shall include a schedule for full compliance and must be as short as practicable but may not exceed 6 years from the date of the NOI. The proposed composting WDR are undergoing public review as of January 2015 and the SWRCB is currently scheduled to consider the General Order in June 2015. The complete summary of Draft Requirements, General Waste Discharge Requirements for Composting Operations, January 6, 2015 can be found in Appendix A. Solid Waste California regulations currently permit AD systems as a standard composting system. As the WPWMA currently has a full SWFP (31-AA-0001), which allows for the solid waste transferring and processing at the MRF, as well as composting activities, the 60,000 TPY in-vessel AD system would currently be allowed under the permit11. The facility does not have to modify the permit, but would need to amend their Report of Composting Site Information to include a full description of its operations and odor management program for the AD system. It should be noted that under the current SWFP, the AD system would have be under the ownership of WPWMA, but could be operated by a contractor (such as Nortech Disposal). If WPWMA opted to allow the AD system to be owned and operated by a third-party entity, the AD system would require its own full SWFP. Scenario 2: On-site Anaerobic Digestion with Food and Green Waste

9 Personal communication February 20, 2015 with Eric Oddo, Environmental Engineering Program Manager, WPWMA 10 Ibid, February 20, 2015 11 Personal communications, February 26 and March 3, 2015, with Paul Holloway, Placer County Department of Health and Human Services, Environmental Health Services

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Potential Permitting Impacts Land Use The MRF and composting areas of the facility are currently operating under CUP-1717 and it amendments. In discussions with the Placer County Planning Department regarding the installation of an AD system at the MRF, the 8,000 TPY AD system could require, at minimum, another amendment to the CUP12. The CUP amendment, being a discretionary decision of the part of the Placer County Planning Commission, would require additional CEQA. However, given the existing MRF and composting operations, and the approval of food waste composting in the 2003 amendment to CU-1717, it is likely only a Mitigated Negative Declaration would be needed. There is also the possibility that a new CUP could be required by Placer County for an 8,000 TPY AD system. However, in discussion with the Department regarding the much smaller project size than Scenario 1, the CUP-1717 amendment process would be more likely for Scenario 2. However, the Department would need to see a complete land use entitlement application to make the appropriate decision13. Air Quality The 8,000 TPY AD system would produce biogas that would be directed to the Energy 2001 power plant facility for conversion into electricity. When the power plant is not operating, or otherwise cannot receive the AD system biogas, the biogas will be directed to the existing flares. It is expected that the biogas will first be blended into the LFG stream before it is used at the power plant or flared. Both of these systems will require some modification to their existing permits allowing the introduction of the biogas. The addition of biogas from the 8,000 TPY AD system could potentially add to the emissions from the Energy 2001 power plant facility, if it is assumed that the facility runs at 100%. An 8,000 TPY AD system would generate additional emissions as estimated in the table below.

12 Personal communications (several) with Sherri Conway, Senior Planner, Placer County Planning Department 13 Ibid, March 3, 2105

12

Table 5-4. Estimated Emissions Using Biogas in the Energy 2001 Power Plant

Regulated Pollutant Tons per Year

currently permitted for Energy 2001

Estimated TPY Using Biogas



32.5 1.5 0.9%

Nitrogen Oxides (NOx) 40.3 4.1 2.1% Sulfur Oxides (SOx) 26.6 0.02* 0.01% Particulate Matter (PM-10) 25.4 0.002 0.001% Carbon Monoxide (CO) 166.5 10.4

1.3%

*Sulfur, as H2S to be removed prior to blending with the LFG As can be seen in the table above, there could be a very small addition of VOCs, NOx, and CO that would have to be taken into account regarding the existing Energy 2001 power plant permits. However, discussions with PCAPCD representatives14 indicate that Energy 2001 facility internal combustion engines are well under their full capacity and should be able to accommodate the additional biogas from an 8,000 TPY system without exceeding the currently permitted limits. In regards to the flaring of the LFG gas blended with biogas from the AD system, a similar situation exists as in the internal combustion engines total permitted, that there is the potential for a slight increase in emissions as shown in the table below.

Table 5-5 . Estimated Emissions Using Biogas in the WRSL Flare System

Regulated Pollutant Pounds per day currently permitted

Estimated Pounds/Day flaring Biogas


Nitrogen Oxides (NOx) 109 3.2 3.0% Carbon Monoxide (CO) 364 17.6

4.8%

As is the case with the Energy 2001 power plant, the PCAPCD also indicated that the flare system emissions are well under their permitted conditions and should be able to accommodate the potential increase in daily emissions with the addition of the biogas

14 February 10, 2015 meeting with John Finnel, Permitting Program Manager, and Bruce Springsteen, Compliance and Enforcement Program Manager

13

from the 8,000 TPY AD system. Nonetheless, if an AD system, with the food waste feedstock stream of 8,000 TPY as characterized in this scenario, is further considered for the project site, the potential for modifying the flaring permit will need to be considered. As mentioned in a previous section, the PCAPCD not does currently regulate composting activities at WPWMA. However, nuisance odor is under the purview of the PCAPCD via the District’s Rule 205. Wet fermentation AD systems do generate ammonia which resides in part in the solid and liquid digestate. Ammonia, particularly in the liquid digestate component, can be elevated (2500 to 3500 mg/L). This may lead to odor issue during the transfer and use of solid digestate in composting activities, and the potential use of liquid digestate on composting piles and discharge into retention ponds. Wastewater Until the proposed General Waste Discharge Requirements for Composting Operations are adopted by the SWRCB as described in Scenario 1, the WPWMA WDR exemption remain in place. Once the proposed composting WDRs are adopted, the digestate from the 8,000 TPY AD system, when mixed with green waste in the composting area at any amount would trigger entry in the Tier II category. However, this is a moot point as the existing WPWMA composting facility already exceeds the 25,000 cubic yard facility capacity threshold. Thus the effects of the proposed composting WDRs affect this scenario in basically the same way as Scenario 1. Solid Waste Similar to Scenario 1, an 8,000 TPY in-vessel AD system would currently be allowed under the permit15. The facility does not have to modify the permit, but would need to amend their Report of Composting Site Information to include a full description of its operations and odor management program for the AD system. It should be noted that under the current SWFP, the AD system would have to be under the ownership of WPWMA, but could be operated by a contractor (such as Nortech Disposal). If WPWMA opted to allow the AD system to be owned and operated by a third-party entity, the AD system would require its own full SWFP. However, at 8,000 TPY, or an average of 22 tons per day, and under the currently proposed CalRecycle regulations (California Title 14, Section 17896.5, Regulatory Tiers Requirements for In-Vessel Digestion Operations and Facilities), such a system would be regulated under the Registration Permit Tier (Medium Volume In-Vessel Digestion Facilities (≥ 15 and < 100 tons per day).

15 Personal communications, February 26 and March 3, 2015, with Paul Holloway, Placer County Department of Health and Human Services, Environmental Health Services

14

Scenario 3: Separated Organic Waste Shipped Off-Site This scenario considers the consolidation and transfer to an off-site conversion facility (e.g. a regional Anaerobic Digester facility). Volume of off-site shipped feedstock would be 20,000 TPY (55 tons per day) and would consist of:

Source separated food scraps from such establishments as restaurants, institutions or other facilities in WPWMA service territory which can potentially supply food waste collected separately from municipal solid waste;


Mixed waste MRF residue with an organic content between 35% to 90% by weight, and;

Food waste would have a solids content of approximately 35%

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Solid Waste The SWFP for the MRF allows for processing and transfer of solid waste so this scenario is already allowed16.

Scenario 4: Aerated Static Pile Composting Scenario 4 has been broken out into two scenarios. They will both use an aerated static pile (ASP) composting system17, but different feedstock mix and volume. Scenario 4a This on-site aerated static pile composting scenario will consist of 30,000 TPY of feedstock consisting of:

Green waste;

Source separated food scraps from such establishments as restaurants, institutions or other facilities in the WPWMA service territory which can potentially supply food waste collected separately from municipal solid waste;


Mixed waste MRF residue with an organic content great than 35% by weight. Being an aerobic process, the ASP composting does not produce biogas, but will instead produce Volatile Organic Compounds as air pollutant emissions. To control these emissions from the ASP system, WPWMA will use forced aeration treatment technology including:

Aeration distribution and collection system

Liquids aeration system

Biofilter system for odors

16 Personal communications, February 26 and March 3, 2015, with Paul Holloway, Placer County Department of Health and Human Services, Environmental Health Services 17 Aerated Static Piles are forced, mechanical aeration composting systems, and where the composting piles are not turned or physically manipulated to introduce air into the piles.

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Air Quality As previously discussed, The PCAPCD currently does not have rules or regulations regarding air emissions from composting operations. Nor is the promulgation of composting related regulations currently being considered19. However, both of these scenarios have the potential to emit VOCs, which may eventually be regulated by the PCAPCD, and therefore projected controlled emissions are presented here. The projected emissions are based on VOC emissions data taken from the San Joaquin Valley Air Pollution Control District’s (SJVAPCD) June 2008 report entitled “Organic Material Composting and Drying focusing on Greenwaste Compost”, which has emissions data for both green waste and food waste composting. This report serves as one of the basis for the SJVAPCD Rule 4566 – Organic Material Composting Operations. It should be noted that the rule does not set numerical limits on VOC emissions from compost but rather sets various operating conditions on composting depending on the annual amount of compost production. The data presented is a combination of the available data in the SJVAPCD on green waste and food waste composting. Green waste VOC emissions are from windrow, uncovered composting, so it should be noted that when combined with food waste in covered piles, such as in an “Ag Bag” arrangement the direct emissions will likely be reduced and those emissions would be directed to the biofilter. Although the SJVAPCD uses a rather conservative emissions control efficiency, other sources have indicated that up to 98% VOC emissions control is possible. Emissions calculations in the table below assume that the green waste and food waste are blended 50/50 by weight and use a 98% control efficiency.

Table 5-6. Estimated Emissions for Green Waste/Food Waste Composting 30,000 TPY

System Tons per

Year

VOC lbs./ton

VOC emissions TPY

98% Control Potential via

Biofilter*

Cumulative TPY (GW +

FW) Green Waste 15,000 4.5 33.75 0.68 Food Waste 15,000 37.1 278 4.0 4.68

8,000 TPY System

Tons per Year

VOC lbs./ton

VOC emissions TPY

98% Control Potential via Biofilter*

Cumulative TPY (GW + FW)

Green Waste 4,000 4.5 9 0.18 Food Waste 4,000 37.1 74.2 1.48 1.66

*Air and Waste Management Association Fact Sheet: Air Pollution Emission Control Devices for Stationary Sources, 2007

19 February 10, 2015 meeting with John Finnel, Permitting Program Manager, and Bruce Springsteen, Compliance and Enforcement Program Manager

20

Both scenarios would result in the VOC emissions not exceeding the threshold of 10 TPY or need emissions offset credits. This is advantageous to WPWMA as recent VOC offset credits in the PCAPCD have sold for just under $10,000 per ton20. Wastewater The composting activities of Scenarios 4a and 4b, in regards to the CVRWQCB, fall into the same regulatory scheme as Scenario 1. The composting operations currently have a WDR exemption from the CVRWQB21, and will be affected in the same manner per the proposed, and finally approved, WDR currently under consideration by the SWRCB. Solid Waste Composting of combined food waste and green waste has previously been approved by the Placer County Environmental Health Services per the amendment to the Report of Compost Site Information submitted by the WPWMA in November 2014. That approval for the Pilot Food Scraps Composting Project, proposed to handle up to a maximum of 5,000 cubic yards of material (green material, food material, and/or wood waste) at any one time. Discussions with Placer County indicate approval to conduct green waste/food waste composting operation per Scenarios 4a and 4b would likely also be approved under the Report of Compost Site Information and SWFP 31-AA-0001)22. Scenario 5: Food Waste Codigestion at Wastewater Treatment Plant Scenario 5 is similar to Scenario 3 in that food waste will be processed on-site, but shipped off-site for conversion. This scenario will consist of processing 8,000 TPY (22 tons per day) of 95% pure food waste in a DODA system23 or equivalent and producing 15 to 20% food waste solids slurry. This solids slurry would be loaded into tanker trucks and transported to the City of Roseville Pleasant Grove Wastewater Treatment where the food waste slurry would be codigested in that facility’s wastewater digester system.

20 2011 and 2012 Emission Reduction Offset Transaction Costs Summary Report, CA Air Resources Board, Stationary Source Division. There were no VOC offset transactions in 2013 in the PCAPCD. 21 Personal communication with Eric Oddo, Environmental Engineering Program Manager, Western Placer Waste Management Authority, February 10, 2015 22 Personal communications, March 3, 2015, with Paul Holloway, Placer County Department of Health and Human Services, Environmental Health Services 23 A DODA is a de-packaging piece of equipment that uses hammer mill technology to depackage and a screen system that takes advantage of centrifugal forces to separate inorganics from organic and food wastes.

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Wastewater The processing and transfer of the food waste from the facility will not result in the need for permitting from the CVRWQCB. And, since this scenario does not involve on-site composting, the proposed General Waste Discharge Requirements for Composting Operations will not affect this scenario either. Solid Waste The SWFP for the MRF allows for processing and transfer of solid waste so this scenario is already allowed24.

24 Personal communications, March 3, 2015, with Paul Holloway, Placer County Department of Health and Human Services, Environmental Health Services

APPENDIX H

Task 4: Water Balance

Task 4 focuses on tracking and identifying water throughout various organics processing scenarios. Five scenarios were identified by Capital PFG. TSS has been tasked with identifying impacts to wastewater discharge associated with each of the five scenarios.

Existing Water Use Western Placer Waste Management Authority (WPWMA) has three service lines, two ¾-inch lines and one 2-inch through Placer County Water Agency (PCWA). Both are lines are metered; however there is, in addition to the PCWA service lines, an irrigation well onsite that is unmetered. WPWMA does not have records of the quantity of water extracted from the irrigation well. WPWMA provided water consumption estimates for 2013:

- MRF and Landscaping: 16.5 Million gallons/year - Module 5 Excavation: 9.6 Million gallons/year - Composting: 7.8 Million gallons/year - Landfill: 3.1 Million gallons/year - Energy 2001: 0.1 Million gallons/year - Total 37.1 Million gallons/year

The line item for Module 5 Excavation was for dust control while excavating Module 5 of the landfill. The remaining estimates will be used as a basis for comparing additional water streams based on the five scenarios that have been identified. In addition to total annual water consumption, WPWMA has provided a graphic of their water consumption rates from 2011 to 2013 (Figure 1). Water consumption appears to peak annually between approximately May through November with the peak occurring in approximately August. This corresponds to the dry part of the year.

Figure 1. WPWMA Water Consumption Rates, 2011 to 2013

Existing Water Storage WPWMA has four storage ponds (Figure 2). The North Compost Pond (NCP) is designed to handle seasonal storage of runoff from the North Compost Pad and Storage Area along with the Construction and Demolition/Green and Wood Waste Processing Area. The NCP is unlined and designed to contain runoff from the 100-year 24-hour storm, with no discharge (4.45 inches, generating 1.76 acre-feet of leachate). The NCP must handle, with no discharge, a rainy season equal to the wettest year of record. The NCP has a storage capacity of 9.4 acre-feet.

Figure 2. Map of Existing Storage Ponds

WPWMA recently expanded the South Compost Pond (SCP), the Discharge Point, and the Water Quality Pond. The SCP is designed to handle seasonal storage of runoff from the South Compost Pad and Storage Area. The SCP was expanded due to an extremely wet December in 2012 in which the pond was forced to discharge water into the sanitary sewer collection system to prevent overtopping. The SCP has a storage capacity of 7.1 acre-feet. The Water Quality Pond was designed as a settling pond for stormwater runoff from the MRF and the Discharge Pond was designed to collect stormwater runoff from the MRF after retention in the Water Quality Pond. The Water Quality Pond has a storage capacity 1.95 acre-feet while the Discharge Pond has a storage capacity of 2.25 acre-feet.

Scenario 1: Organic Waste System (OWS) Anaerobic Digester with Mixed Feedstock This scenario focuses on OWS anaerobic digestion technology using mixed feedstock sourced from: 1) source-separated food waste, 2) food positively separated from mixed waste, 3) MRF

residue, and 4) paper. Feedstock inputs of 60,000 tons per year (TPY) are assumed for this scenario. Water inputs are introduced exclusively through the water content of the feedstock, with food waste feedstock as high as 70 percent moisture. Food waste feedstock will be mixed with additional organic feedstock including paper, with significantly lower moisture content (less than 20 percent based on ambient conditions). OWS proposal identifies water outputs in terms of water entrained in the biogas and digestate. No excess liquid effluent is projected with the feedstock mix provided to OWS.

Water entrained in the biogas will be released to the atmosphere via engine exhaust, representing approximately 25 TPY of water. Digestate production is estimated at 50,000 TPY at 39 percent solids. Digestate removal will capture the release of approximately 30,500 TPY of water. Digestate removal represents over 99.9 percent of total water output. At 61 percent moisture content after being pressed, digestate has moisture content comparable to green waste (approximately 65 percent moisture content) and when mixed into green waste composting, digestate is not expected to change the water demands of the composting operation or to vary seasonally. The liquid removed during the pressing of digestate is assumed to be reused in the digester for the OWS system. No liquid effluent will be required for management in the detention ponds or via the sewer lines.

Scenario 2: CleanWorld Anaerobic Digester with Source-Separated Feedstock This scenario focuses on CleanWorld anaerobic digestion technology using source-separated clean feedstock at a feed rate of 5,000 TPY. Food waste averages 70 percent moisture content resulting in 3,500 TPY (2.58 acre-feet) of water input. Water outputs include biogas, digestate, and liquid effluent. Based on projected outputs of 89,041 standard cubic feet (SCF) per day of biogas and 1,050 TPY of digestate, TSS calculated expected liquid effluent disposal (Table 1).

Table 1. Water Disposal Methods; Scenario 2

Source Moisture Content Quantity of Water Biogas 6% 40 TPY (0.03 acre-feet/yr.) Digestate 65% 683 TPY (0.50 acre-feet/yr.) Liquid Effluent 95.3% 2,777 TPY (2.04 acre-feet/yr.)

Liquid effluent has approximately 5 percent total solids yielding 2,923 TPY or 2.15 acre-feet per year of liquid effluent. Depending on regulations, ambient conditions, and compost mix, the liquid effluent may be eligible for disposal on compost piles. The total annual discharge of 2.15 acre-feet per year is should not fluctuate seasonally for an average discharge of 0.18 acre-feet per month. For the NCP, Table 1 shows the effects of the additional water effluent to the NCP pond design.

Table 1. Design Year Water Flows for NCP with Digester

Month Net Flows (acre-feet)

Surplus (acre-feet)

September 0.04 0.04 October 0.84 0.88 November 1.87 2.75 December 1.04 3.79 January 1.59 5.38 February 1.48 6.86 March 2.17 9.03 April 0.98 10.01 May -0.67 9.34 June -0.96 8.38 July -1.12 7.26 August -1.05 6.21

The pond holds 8.94 acre-feet up to one-half foot below the top of the spillway. The addition of liquid effluent from CleanWorld would add 1.07 acre-feet to the pond at peak capacity. The pond water surface area is 1.1 acres, resulting in an approximate 11.7-inch rise. This additional water is expected to exceed the design capacity of the NCP during the wettest year. The SCP is designed for 19.7 acre-feet 1-foot below the top of the spillway. Table 2 shows the impact of the liquid effluent on the design year flows.

Table 2. Design Year Water Flows for SCP with Digester

Month Net Flows (AF) Surplus (AF) October 0.91 0.91 November 3.2 4.11 December 3.9 8.01 January 5.04 13.05 February 4.29 17.34 March 3.46 20.8 April 0.62 21.42 May -1.14 20.28 June -2.54 17.74 July -3.05 14.69 August -2.41 12.28 September -1.31 10.97

The addition of the liquid effluent would increase the maximum cumulative storage by 1.26 acre-feet. With a surface area of 1.6 acres, the increase in water level would be approximately 9.5 inches. This additional water is not expected to exceed the total capacity of the pond.

The design of the liquid effluent management could allow the liquid to be diverted to any of the ponds onsite, which could help ensure compliance with storage design capacity; however, the current NCP is unlined and does not have sufficient capacity per California Water Resources Control Board Standards.1 However, it is planned to locate a replacement pond meeting the standards at the facility, along with an adjoining composting area2. This pond could be sized to be able to accept the additional liquid effluent from the digester.

Scenario 3: Consolidate and Transfer Offsite This scenario focuses on the consolidation and transportation of organic wastes offsite. Consolidated material includes source-separated food, food waste positively separated from the MRF, and mixed waste MRF residue. In this scenario, all water inputs will be transported offsite with the exception of water residue the remains on the ground. This residual water is considered de-minimis for the purposes of this assessment.

Scenario 4: Onsite Aerated Static Pile This scenario focuses on onsite aerated static pile composting of 5,000 TPY of food waste and organic waste from 15,000 TPY MRF residues mixed with green material in a 1:1 ratio. Assuming 65 percent contamination levels for MRF residue, total additional feedstock from this scenario will be 5,000 TPY of food waste, 5,250 TPY of food-rich organics from MRF residues, and 9,750 TPY of contaminants (e.g. inert plastic, glass). Food waste material averages 70 percent moisture resulting in 7,175 TPY of water inputs per year. Properly mixed and aerated static piles result in limited leachate due to the rapid drying effects of aeration, often resulting in the addition of water over the composting period. Annual green waste throughput at WPWMA is approximately 50,000 TPY distributed approximately evenly between the north and south compost piles. At 65 percent moisture, total water inputs from feedstock at the south compost pile is approximately 16,250 tons per year. In addition, approximately 7.8 million gallons (32,526 tons) per year of water is used for composting across both sites. The south composting piles are assumed to use 16,263 tons per year. Since the food waste and green waste will be mixed, this analysis assumes that drying will occur equally between pure green waste and mixed piles. 25,000 tons per year of green waste requires approximately 32,513 tons per year of water. The food waste addition of 10,250 is therefore expected to require, at most, 13,330 tons of water resulting in water demand from the SCP of 6,155 tons per year. The additional water draw represents an 18.9 percent increase in water demand. Table 3 shows the impacts of the additional water draw to the SCP design capacity by

1 Communication with Eric Oddo, Environmental Engineer Program Manager, Western Placer Waste Management Authority 2 Ibid.

proportionally increasing the water demand from the SCP during each month when water is used.

Table 3. Design Year Water Flows for SCP with Digester

Month Net Flows (AF) Surplus (AF) October 0.73 0.73 November 3.02 3.74 December 3.72 7.47 January 4.86 12.33 February 4.11 16.44 March 3.28 19.72 April 0.25 19.98 May -1.56 18.42 June -3.06 15.36 July -3.60 11.76 August -2.89 8.87 September -1.71 7.16

Despite food waste having additional water entrained in the feedstock, the drying associated with aerated static piles may increase the amount of water use from the composting pond depending on seasonal conditions, mix ratios, and compost configuration.

Scenario 5: Food Waste Processed with DODA and Transferred Offsite This scenario focuses on the processing of approximately 5,000 TPY source-separated food waste. The DODA is a de-packaging piece of equipment that uses hammer mill technology to de-package and a screen system that takes advantage of centrifugal forces to separate inorganics. The inorganics are relatively free of moisture. Water removed with inorganics is considered de-minimis for this assessment. All water inputs are removed with the pumped slurry. No excess water will be processed onsite.

APPENDIX I

Organic Processing Financial ProjectionOption 1 - Clean World Partners AD at MRFOwned by WPWMA, operated by contractor

Capital BudgetDigester, acceptance & processing 3,218,792$ Enclosed Receiving Building, utilities 833,920$ Permitting 200,000$ acceptance & process equip 408,434$ site improvements 83,200$ Interest During Development 65,039$ start-up and testing 23,196$ sewer connection fees 543,450$ - minus grant funds -$ - SGIP incentives -$ net Capital Expense 5,376,031$

Operating Budget 2016 2017 2018 2019 2020 2021 2022Expenseamortized debt 507,085$ 507,085$ 507,085$ 507,085$ 507,085$ 507,085$ 507,085$ Operation & Maintenance - AD 92,783$ 93,711$ 94,648$ 95,594$ 96,550$ 97,516$ 98,491$ rehab and replacement fund 36,355$ 36,355$ 36,355$ 36,355$ 36,355$ 36,355$ 36,355$ admin and insurance 70,000$ 70,000$ 70,000$ 70,000$ 70,000$ 70,000$ 70,000$ disposal of waste products 34,694$ 35,387$ 36,095$ 36,817$ 37,553$ 38,305$ 39,071$ digestate composting 7,191$ 7,334$ 7,481$ 7,631$ 7,783$ 7,939$ 8,098$ imputed rent 5,000$ 5,000$ 5,000$ 5,000$ 5,000$ 5,000$ 5,000$ Member agency food collection costs 235,694$ 240,408$ 245,216$ 250,120$ 255,122$ 260,225$ 265,429$ MRF cost to sort organics 342,188$ 349,031$ 356,012$ 363,132$ 370,395$ 377,803$ 385,359$ avoided cost of landfilling organics (54,349)$ (55,436)$ (56,545)$ (57,676)$ (58,830)$ (60,006)$ (61,206)$ total expenses 1,276,638$ 1,288,875$ 1,301,346$ 1,314,058$ 1,327,014$ 1,340,220$ 1,353,681$

Revenuesale of solid digestate -$ -$ -$ -$ -$ -$ -$ sale of liquid digestate -$ -$ -$ -$ -$ -$ -$

electricity sales to grid (thru LFG plant) 7,595$ 7,747$ 7,902$ 8,060$ 8,221$ 8,386$ 8,554$ incentives -$ -$ -$ -$ -$ -$ -$ total revenues 7,595$ 7,747$ 7,902$ 8,060$ 8,221$ 8,386$ 8,554$

Revenues minus net expenses (1,269,043)$ (1,281,127)$ (1,293,444)$ (1,305,998)$ (1,318,793)$ (1,331,834)$ (1,345,127)$

Cost / Toncost/ton of food recovered 420.29$ 415.98$ 411.74$ 407.59$ 403.51$ 399.51$ 395.58$ cost/ton if applied to all MSW tons 6.19$ 6.13$ 6.06$ 6.00$ 5.94$ 5.88$ 5.83$

assumptions:finance term / asset life: buildings 15finance term / asset life: equipment 10Source Separated feedstock - tpy 1,813 1,849 1,886 1,924 1,962 2,001 2,042 Mixed waste feedstock - tpy 1,300 1,326 1,353 1,380 1,407 1,435 1,464 liquid effluent produced - gallons 214,831 219,128 223,511 227,981 232,540 237,191 241,935 digestate solids produced annually 654 667 680 694 708 722 736 net cost/ton to compost digestate 11.00$ 11.00$ 11.00$ 11.00$ 11.00$ 11.00$ 11.00$ wastewater requiring disposal 214,831 219,128 223,511 227,981 232,540 237,191 241,935 electricity from AD -kWh/year 506,356 516,483 526,813 537,349 548,096 559,058 570,239 food recovered 3,019 3,080 3,141 3,204 3,268 3,334 3,400 long term capitalized debt 3,680,080 short term capitalized debt 1,695,951 kWh / year per ton of organic waste 167.7disposal cost per gal of liquor 0.1615$

1

Organic Processing Financial ProjectionOption 1 - Clean World Partners AD at MRFOwned by WPWMA, operated by contractor

Capital BudgetDigester, acceptance & processingEnclosed Receiving Building, utilities Permittingacceptance & process equipsite improvementsInterest During Developmentstart-up and testingsewer connection fees - minus grant funds - SGIP incentives net Capital Expense

Operating BudgetExpenseamortized debtOperation & Maintenance - ADrehab and replacement fundadmin and insurancedisposal of waste productsdigestate compostingimputed rentMember agency food collection costsMRF cost to sort organicsavoided cost of landfilling organics total expenses

Revenuesale of solid digestatesale of liquid digestate

electricity sales to grid (thru LFG plant)incentives total revenues

Revenues minus net expenses

Cost / Toncost/ton of food recoveredcost/ton if applied to all MSW tons

assumptions:finance term / asset life: buildingsfinance term / asset life: equipmentSource Separated feedstock - tpyMixed waste feedstock - tpyliquid effluent produced - gallonsdigestate solids produced annuallynet cost/ton to compost digestatewastewater requiring disposalelectricity from AD -kWh/yearfood recoveredlong term capitalized debtshort term capitalized debtkWh / year per ton of organic wastedisposal cost per gal of liquor

2023 2024 2025 2026 2027 2028 2029 2030

507,085$ 507,085$ 507,085$ 507,085$ 507,085$ 507,085$ 507,085$ 507,085$ 99,476$ 100,470$ 101,475$ 102,490$ 103,515$ 104,550$ 105,595$ 106,651$ 36,355$ 36,355$ 36,355$ 36,355$ 36,355$ 36,355$ 36,355$ 36,355$ 70,000$ 70,000$ 70,000$ 70,000$ 70,000$ 70,000$ 70,000$ 70,000$ 39,852$ 40,649$ 41,462$ 42,291$ 43,137$ 44,000$ 44,880$ 45,778$

8,260$ 8,425$ 8,593$ 8,765$ 8,941$ 9,119$ 9,302$ 9,488$ 5,000$ 5,000$ 5,000$ 5,000$ 5,000$ 5,000$ 5,000$ 5,000$

270,738$ 276,153$ 281,676$ 287,309$ 293,056$ 298,917$ 304,895$ 310,993$ 393,066$ 400,927$ 408,946$ 417,125$ 425,467$ 433,977$ 442,656$ 451,509$ (62,430)$ (63,679)$ (64,953)$ (66,252)$ (67,577)$ (68,928)$ (70,307)$ (71,713)$

1,367,401$ 1,381,385$ 1,395,639$ 1,410,168$ 1,424,978$ 1,440,074$ 1,455,461$ 1,471,145$

-$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

8,725$ 8,899$ 9,077$ 9,259$ 9,444$ 9,633$ 9,825$ 10,022$ -$ -$ -$ -$ -$ -$ -$ -$

8,725$ 8,899$ 9,077$ 9,259$ 9,444$ 9,633$ 9,825$ 10,022$

(1,358,676)$ (1,372,486)$ (1,386,562)$ (1,400,910)$ (1,415,534)$ (1,430,441)$ (1,445,636)$ (1,461,124)$

391.73$ 387.96$ 384.25$ 380.61$ 377.05$ 373.55$ 370.11$ 366.74$ 5.77$ 5.71$ 5.66$ 5.61$ 5.55$ 5.50$ 5.45$ 5.40$

2,082 2,124 2,166 2,210 2,254 2,299 2,345 2,392 1,493 1,523 1,554 1,585 1,616 1,649 1,682 1,715

246,774 251,709 256,743 261,878 267,116 272,458 277,907 283,466 751 766 781 797 813 829 846 863

11.00$ 11.00$ 11.00$ 11.00$ 11.00$ 11.00$ 11.00$ 11.00$ 246,774 251,709 256,743 261,878 267,116 272,458 277,907 283,466 581,644 593,277 605,142 617,245 629,590 642,182 655,026 668,126

3,468 3,538 3,608 3,681 3,754 3,829 3,906 3,984

2

Organic Processing Financial ProjectionOption 2 - Zero Waste Energy AD at MRFOwned by WPWMA, operated by contractor

Capital BudgetDigester design and construction 2,447,676$ electrical generating equipment -$ Enclosed Receiving Building, utilities 833,920$ Permitting 200,000$ acceptance & processing equip 408,434$ site improvements 83,200$ Interest During Development 59,598$ start-up and testing 33,917$ sewer connection fees -$ - minus grant funds -$ - SGIP incentives -$ net Capital Expense 4,066,746$

Operating Budget 2016 2017 2018 2019 2020 2021 2022Expenseamortized debt 354,325$ 354,325$ 354,325$ 354,325$ 354,325$ 354,325$ 354,325$ Operation & Maintenance - Digester 135,670$ 137,027$ 138,397$ 139,781$ 141,179$ 142,590$ 144,016$ rehab and replacement fund 29,520$ 29,520$ 29,520$ 29,520$ 29,520$ 29,520$ 29,520$ admin and insurance 70,000$ 70,000$ 70,000$ 70,000$ 70,000$ 70,000$ 70,000$ disposal of waste products -$ -$ -$ -$ -$ -$ -$ digestate processing /composting 25,366$ 25,619$ 25,875$ 26,134$ 26,396$ 26,659$ 26,926$ Member agency food collection costs 235,694$ 240,408$ 245,216$ 250,120$ 255,122$ 260,225$ 265,429$ MRF cost to sort organics 342,188$ 256,579$ 261,710$ 266,944$ 272,283$ 277,729$ 283,283$ imputed rent 5,000$ 5,000$ 5,000$ 5,000$ 5,000$ 5,000$ 5,000$ avoided cost of landfilling organics (54,349)$ (55,436)$ (56,545)$ (57,676)$ (58,830)$ (60,006)$ (61,206)$ total expenses 1,143,413$ 1,063,041$ 1,073,498$ 1,084,149$ 1,094,996$ 1,106,043$ 1,117,294$

Revenue

electricity sales to grid (thru LFG plant) 4,914$ 5,012$ 5,113$ 5,215$ 5,319$ 5,426$ 5,534$ Incentives total revenues 4,914$ 5,012$ 5,113$ 5,215$ 5,319$ 5,426$ 5,534$

Revenues minus expenses (1,138,499)$ (1,058,028)$ (1,068,386)$ (1,078,934)$ (1,089,676)$ (1,100,617)$ (1,111,760)$

Cost / Toncost/ton of food recovered 377$ 344$ 340$ 337$ 333$ 330$ 327$ cost/ton if applied to all MSW tons 5.55$ 5.06$ 5.01$ 4.96$ 4.91$ 4.86$ 4.82$

assumptions:finance term / asset life: buildings 15finance term / asset life: equipment 10Source Separated feedstock - tpy 1,813 1,849 1,886 1,924 1,962 2,001 2,042 Mixed waste feedstock - tpy 1,300 1,326 1,353 1,380 1,407 1,435 1,464 green waste added - tpy 1,370 1,397 1,425 1,453 1,483 1,512 1,542 digestate solids produced annually 3,676 3,749 3,824 3,901 3,979 4,058 4,139 net cost/ton to compost digestate 11.00$ 11.00$ 11.00$ 11.00$ 11.00$ 11.00$ 11.00$ wastewater requiring disposal - - - - - - - electricity from AD -kWh/year 327,607 334,159 340,842 347,659 354,612 361,704 368,938 Food recovered 3,019 3,080 3,141 3,204 3,268 3,334 3,400 long term capitalized debt 3,658,312$ short term capitalized debt 408,434$

3

Organic Processing Financial ProjectionOption 2 - Zero Waste Energy AD at MRFOwned by WPWMA, operated by contractor

Capital BudgetDigester design and constructionelectrical generating equipmentEnclosed Receiving Building, utilities Permittingacceptance & processing equipsite improvementsInterest During Developmentstart-up and testingsewer connection fees - minus grant funds - SGIP incentives net Capital Expense

Operating BudgetExpenseamortized debtOperation & Maintenance - Digesterrehab and replacement fundadmin and insurancedisposal of waste productsdigestate processing /compostingMember agency food collection costsMRF cost to sort organicsimputed rentavoided cost of landfilling organics total expenses

Revenue

electricity sales to grid (thru LFG plant)Incentives total revenues

Revenues minus expenses


assumptions:finance term / asset life: buildingsfinance term / asset life: equipmentSource Separated feedstock - tpyMixed waste feedstock - tpygreen waste added - tpydigestate solids produced annuallynet cost/ton to compost digestatewastewater requiring disposalelectricity from AD -kWh/yearFood recoveredlong term capitalized debtshort term capitalized debt

2023 2024 2025 2026 2027 2028 2029 2030

354,325$ 354,325$ 354,325$ 354,325$ 354,325$ 354,325$ 354,325$ 354,325$ 145,456$ 146,911$ 148,380$ 149,864$ 151,363$ 152,876$ 154,405$ 155,949$

29,520$ 29,520$ 29,520$ 29,520$ 29,520$ 29,520$ 29,520$ 29,520$ 70,000$ 70,000$ 70,000$ 70,000$ 70,000$ 70,000$ 70,000$ 70,000$

-$ -$ -$ -$ -$ -$ -$ -$ 27,195$ 27,467$ 27,742$ 28,019$ 28,300$ 28,583$ 28,868$ 29,157$

270,738$ 276,153$ 281,676$ 287,309$ 293,056$ 298,917$ 304,895$ 310,993$ 288,949$ 294,728$ 300,623$ 306,635$ 312,768$ 319,023$ 325,404$ 331,912$

5,000$ 5,000$ 5,000$ 5,000$ 5,000$ 5,000$ 5,000$ 5,000$ (62,430)$ (63,679)$ (64,953)$ (66,252)$ (67,577)$ (68,928)$ (70,307)$ (71,713)$

1,128,754$ 1,140,425$ 1,152,313$ 1,164,421$ 1,176,754$ 1,189,316$ 1,202,110$ 1,215,143$

5,645$ 5,758$ 5,873$ 5,990$ 6,110$ 6,232$ 6,357$ 6,484$

5,645$ 5,758$ 5,873$ 5,990$ 6,110$ 6,232$ 6,357$ 6,484$

(1,123,109)$ (1,134,668)$ (1,146,440)$ (1,158,431)$ (1,170,644)$ (1,183,083)$ (1,195,754)$ (1,208,659)$

324$ 321$ 318$ 315$ 312$ 309$ 306$ 303$ 4.77$ 4.72$ 4.68$ 4.64$ 4.59$ 4.55$ 4.51$ 4.47$

2,082 2,124 2,166 2,210 2,254 2,299 2,345 2,392 1,493 1,523 1,554 1,585 1,616 1,649 1,682 1,715 1,573 1,605 1,637 1,670 1,703 1,737 1,772 1,807 4,222 4,307 4,393 4,481 4,570 4,662 4,755 4,850 11.00$ 11.00$ 11.00$ 11.00$ 11.00$ 11.00$ 11.00$ 11.00$

- - - - - - - - 376,317 383,843 391,520 399,351 407,338 415,484 423,794 432,270

3,468 3,538 3,608 3,681 3,754 3,829 3,906 3,984

4

Organic Processing Financial ProjectionOption 3 - direct haul food waste to Clean World Partners for ADOwned and operated by Clean World Partners

Capital BudgetEnclosed Receiving Building, utilities 833,920$ Permitting 100,000$ acceptance and processing equip 408,434$ site improvements 83,200$ sewer connection fees -$ Interest During Development 10,692$ start-up and testing -$ - minus grant funds - SGIP incentives -$ net Capital Expense 1,436,246$

Operating Budget 2016 2017 2018 2019 2020 2021 2022Expenseamortized debt 133,977$ 133,977$ 133,977$ 133,977$ 133,977$ 133,977$ 133,977$ Operation & Maintenance -$ -$ -$ -$ -$ -$ -$ rehab and replacement fund 9,939$ 9,939$ 9,939$ 9,939$ 9,939$ 9,939$ 9,939$ admin and insurance 20,000$ 20,000$ 20,000$ 20,000$ 20,000$ 20,000$ 20,000$ disposal of waste products -$ -$ -$ -$ -$ -$ -$ tipping fees paid to CWP 102,660$ 104,713$ 106,808$ 108,944$ 111,123$ 113,345$ 115,612$ transfer costs 51,606$ 51,094$ 52,116$ 54,802$ 55,898$ 57,016$ 58,157$ Member Agency food collection cost 235,694$ 240,408$ 245,216$ 250,120$ 255,122$ 260,225$ 265,429$ MRF cost to sort organics 342,188$ 349,031$ 356,012$ 363,132$ 370,395$ 377,803$ 385,359$ avoided cost of landfilling organics (54,349)$ (55,436)$ (56,545)$ (57,676)$ (58,830)$ (60,006)$ (61,206)$ total expenses 841,714$ 853,726$ 867,522$ 883,238$ 897,625$ 912,299$ 927,266$

Revenue

total revenues -$ -$ -$ -$ -$ -$ -$

Revenues minus expenses (841,714)$ (853,726)$ (867,522)$ (883,238)$ (897,625)$ (912,299)$ (927,266)$


assumptions:finance term / asset life: buildings 15finance term / asset life: equipment 10Source Separated feedstock - tpy 1,813 1,849 1,886 1,924 1,962 2,001 2,042 Mixed waste feedstock - tpy 1,300 1,326 1,353 1,380 1,407 1,435 1,464 Food recovered 3,019 3,080 3,141 3,204 3,268 3,334 3,400 Tipping Fee charged by CWP: $/ton 34.00$ 34.00$ 34.00$ 34.00$ 34.00$ 34.00$ 34.00$ long term capitalized debt 1,027,812$ short term capitalized debt 408,434$

5

Organic Processing Financial ProjectionOption 3 - direct haul food waste to Clean World PartnersOwned and operated by Clean World Partners

Capital BudgetEnclosed Receiving Building, utilities Permittingacceptance and processing equipsite improvementssewer connection feesInterest During Developmentstart-up and testing - minus grant funds - SGIP incentives net Capital Expense

Operating BudgetExpenseamortized debtOperation & Maintenancerehab and replacement fundadmin and insurancedisposal of waste productstipping fees paid to CWPtransfer costsMember Agency food collection costMRF cost to sort organicsavoided cost of landfilling organics total expenses

Revenue

total revenues



assumptions:finance term / asset life: buildingsfinance term / asset life: equipmentSource Separated feedstock - tpyMixed waste feedstock - tpyFood recoveredTipping Fee charged by CWP: $/tonlong term capitalized debtshort term capitalized debt

2023 2024 2025 2026 2027 2028 2029 2030

133,977$ 133,977$ 133,977$ 133,977$ 133,977$ 133,977$ 133,977$ 133,977$ -$ -$ -$ -$ -$ -$ -$ -$

9,939$ 9,939$ 9,939$ 9,939$ 9,939$ 9,939$ 9,939$ 9,939$ 20,000$ 20,000$ 20,000$ 20,000$ 20,000$ 20,000$ 20,000$ 20,000$

-$ -$ -$ -$ -$ -$ -$ -$ 117,924$ 120,283$ 122,688$ 125,142$ 127,645$ 130,198$ 132,802$ 135,458$

59,320$ 60,506$ 61,716$ 62,951$ 64,210$ 65,494$ 66,804$ 68,140$ 270,738$ 276,153$ 281,676$ 287,309$ 293,056$ 298,917$ 304,895$ 310,993$ 393,066$ 400,927$ 408,946$ 417,125$ 425,467$ 433,977$ 442,656$ 451,509$ (62,430)$ (63,679)$ (64,953)$ (66,252)$ (67,577)$ (68,928)$ (70,307)$ (71,713)$ 942,533$ 958,106$ 973,990$ 990,191$ 1,006,717$ 1,023,573$ 1,040,766$ 1,058,303$

-$ -$ -$ -$ -$ -$ -$ -$

(942,533)$ (958,106)$ (973,990)$ (990,191)$ (1,006,717)$ (1,023,573)$ (1,040,766)$ (1,058,303)$

271.75$ 270.83$ 269.92$ 269.03$ 268.15$ 267.30$ 266.46$ 265.63$ 4.00$ 3.99$ 3.98$ 3.96$ 3.95$ 3.94$ 3.92$ 3.91$

2,082 2,124 2,166 2,210 2,254 2,299 2,345 2,392 1,493 1,523 1,554 1,585 1,616 1,649 1,682 1,715 3,468 3,538 3,608 3,681 3,754 3,829 3,906 3,984 34.00$ 34.00$ 34.00$ 34.00$ 34.00$ 34.00$ 34.00$ 34.00$

6

Organic Processing Financial ProjectionOption 4 - AD at Pleasant Grove WWTP, processing at MRFconvert biogas to CNG fuel

Capital BudgetDigester design and construction -$ electrical generating equipment -$ Enclosed Receiving Building, utilities 833,920$ gas compression, storage, delivery 2,400,000$ Permitting 150,000$ acceptance & process equip - MRF 638,434$ acceptance & process equip - WWTP 1,000,000$ site improvements 19,200$ Interest During Development 62,827$ start-up and testing 133,000$ sewer connection fees -$ - minus grant funds -$ - SGIP incentives -$ net Capital Expense 5,237,381$

Operating Budget 2016 2017 2018 2019 2020 2021 2022Expenseamortized debt 508,823$ 508,823$ 508,823$ 508,823$ 508,823$ 508,823$ 508,823$ Operation & Maintenance WWTP 266,000$ 266,000$ 266,000$ 266,000$ 266,000$ 266,000$ 266,000$ consolidation & transfer costs 56,961$ 57,531$ 58,106$ 58,687$ 59,274$ 59,867$ 60,466$ rehab and replacement fund 38,979$ 38,979$ 38,979$ 38,979$ 38,979$ 38,979$ 38,979$ admin and insurance 90,000$ 90,000$ 90,000$ 90,000$ 90,000$ 90,000$ 90,000$ disposal of waste products -$ -$ -$ -$ -$ 37,804$ 38,560$ digestate composting -$ Member Agency food collection costs 235,694$ 240,408$ 245,216$ 250,120$ 255,122$ 260,225$ 265,429$ MRF cost to sort organics 342,188$ 349,031$ 356,012$ 363,132$ 370,395$ 377,803$ 385,359$ avoided cost of landfilling organics (54,349)$ (55,436)$ (56,545)$ (57,676)$ (58,830)$ (60,006)$ (61,206)$ total expenses 1,489,295$ 1,500,335$ 1,511,590$ 1,523,065$ 1,534,763$ 1,584,494$ 1,597,409$

Revenuevalue of CNG 189,990$ 193,790$ 197,665$ 201,619$ 205,651$ 209,764$ 213,959$ electricity sales to grid -$ -$ -$ -$ -$ -$ -$ RINS / LCFS total revenues 189,990$ 193,790$ 197,665$ 201,619$ 205,651$ 209,764$ 213,959$



assumptions:finance term / asset life: buildings 15finance term / asset life: equipment 10Source Separated feedstock - tpy 1,813 1,849 1,886 1,924 1,962 2,001 2,042 Mixed waste feedstock - tpy 1,300 1,326 1,353 1,380 1,407 1,435 1,464 electricity from AD -kWh/year - - - - - - - Food recovered 3,019 3,080 3,141 3,204 3,268 3,334 3,400 long term capitalized debt 3,142,428$ short term capitalized debt 2,094,952$

7

Organic Processing Financial ProjectionOption 4 - AD at Pleasant Grove WWTP, processing convert biogas to CNG fuel

Capital BudgetDigester design and constructionelectrical generating equipmentEnclosed Receiving Building, utilities gas compression, storage, deliveryPermittingacceptance & process equip - MRFacceptance & process equip - WWTPsite improvementsInterest During Developmentstart-up and testingsewer connection fees - minus grant funds - SGIP incentives net Capital Expense

Operating BudgetExpenseamortized debtOperation & Maintenance WWTPconsolidation & transfer costsrehab and replacement fundadmin and insurancedisposal of waste productsdigestate compostingMember Agency food collection costsMRF cost to sort organicsavoided cost of landfilling organics total expenses

Revenuevalue of CNGelectricity sales to gridRINS / LCFS total revenues

Revenues minus net expenses


assumptions:finance term / asset life: buildingsfinance term / asset life: equipmentSource Separated feedstock - tpyMixed waste feedstock - tpyelectricity from AD -kWh/yearFood recoveredlong term capitalized debtshort term capitalized debt

2023 2024 2025 2026 2027 2028 2029 2030

508,823$ 508,823$ 508,823$ 508,823$ 508,823$ 508,823$ 508,823$ 508,823$ 266,000$ 266,000$ 266,000$ 266,000$ 266,000$ 266,000$ 266,000$ 266,000$

61,070$ 61,681$ 62,298$ 62,921$ 63,550$ 64,185$ 64,827$ 65,476$ 38,979$ 38,979$ 38,979$ 38,979$ 38,979$ 38,979$ 38,979$ 38,979$ 90,000$ 90,000$ 90,000$ 90,000$ 90,000$ 90,000$ 90,000$ 90,000$ 39,331$ 40,118$ 40,920$ 41,739$ 42,573$ 43,425$ 44,293$ 45,179$

270,738$ 276,153$ 281,676$ 287,309$ 293,056$ 298,917$ 304,895$ 310,993$ 393,066$ 400,927$ 408,946$ 417,125$ 425,467$ 433,977$ 442,656$ 451,509$ (62,430)$ (63,679)$ (64,953)$ (66,252)$ (67,577)$ (68,928)$ (70,307)$ (71,713)$

1,610,576$ 1,624,001$ 1,637,688$ 1,651,643$ 1,665,871$ 1,680,377$ 1,695,166$ 1,710,245$

218,239$ 222,603$ 227,055$ 231,596$ 236,228$ 240,953$ 245,772$ 250,687$ -$ -$ -$ -$ -$ -$ -$ -$

218,239$ 222,603$ 227,055$ 231,596$ 236,228$ 240,953$ 245,772$ 250,687$

(1,392,338)$ (1,401,398)$ (1,410,633)$ (1,420,047)$ (1,429,642)$ (1,439,424)$ (1,449,394)$ (1,459,558)$

401.44$ 396.13$ 390.92$ 385.81$ 380.80$ 375.89$ 371.07$ 366.35$ 5.91$ 5.83$ 5.76$ 5.68$ 5.61$ 5.54$ 5.47$ 5.40$

2,082 2,124 2,166 2,210 2,254 2,299 2,345 2,392 1,493 1,523 1,554 1,585 1,616 1,649 1,682 1,715

- - - - - - - - 3,468 3,538 3,608 3,681 3,754 3,829 3,906 3,984

8

Organic Processing Financial ProjectionOption 5 - haul food waste to Jepson Prairie for CompostingOwned and operated by Recology

Capital BudgetEnclosed Receiving Building, utilities 833,920$ Permitting 100,000$ acceptance and processing equip 408,434$ site improvements 83,200$ sewer connection fees -$ Interest During Development 10,692$ start-up and testing -$ net Capital Expense 1,436,246$

2016 2017 2018 2019 2020 2021 2022Operating BudgetExpenseamortized debt 133,977$ 133,977$ 133,977$ 133,977$ 133,977$ 133,977$ 133,977$ Operation & Maintenance -$ -$ -$ -$ -$ -$ -$ rehab and replacement fund 9,939$ 9,939$ 9,939$ 9,939$ 9,939$ 9,939$ 9,939$ admin and insurance 20,000$ 20,000$ 20,000$ 20,000$ 20,000$ 20,000$ 20,000$ disposal of waste products -$ -$ -$ -$ -$ -$ -$ tipping fees paid to Recology 159,878$ 163,076$ 166,337$ 169,664$ 173,057$ 176,518$ 180,049$ transfer costs 52,519$ 53,569$ 54,641$ 55,734$ 56,848$ 57,985$ 59,145$ Member Agency food collection costs 235,694$ 240,408$ 245,216$ 250,120$ 255,122$ 260,225$ 265,429$ MRF cost to sort organics 342,188$ 349,031$ 356,012$ 363,132$ 370,395$ 377,803$ 385,359$ avoided cost of landfilling organics (54,349)$ (55,436)$ (56,545)$ (57,676)$ (58,830)$ (60,006)$ (61,206)$ total expenses 899,845$ 914,563$ 929,576$ 944,890$ 960,509$ 976,441$ 992,691$

Revenue

total revenues -$ -$ -$ -$ -$ -$ -$

Revenues minus expenses (899,845)$ (914,563)$ (929,576)$ (944,890)$ (960,509)$ (976,441)$ (992,691)$


assumptions:finance term / asset life: buildings 15finance term / asset life: equipment 10Source Separated feedstock - tpy 1,813 1,849 1,886 1,924 1,962 2,001 2,042 Mixed waste feedstock - tpy 1,300 1,326 1,353 1,380 1,407 1,435 1,464 material transferred - tpy 3,019 3,080 3,141 3,204 3,268 3,334 3,400 Tipping Fee charged by Recology: $/ton $52.95 $52.95 $52.95 $52.95 $52.95 $52.95 $52.95Food recovered 3,019 3,080 3,141 3,204 3,268 3,334 3,400 long term capitalized debt 1,027,812$ short term capitalized debt 408,434$

9

Organic Processing Financial ProjectionOption 5 - haul food waste to Jepson PrairOwned and operated by Recology

Capital BudgetEnclosed Receiving Building, utilities Permittingacceptance and processing equipsite improvementssewer connection feesInterest During Developmentstart-up and testing net Capital Expense

Operating BudgetExpenseamortized debtOperation & Maintenancerehab and replacement fundadmin and insurancedisposal of waste productstipping fees paid to Recologytransfer costsMember Agency food collection costsMRF cost to sort organicsavoided cost of landfilling organics total expenses

Revenue

total revenues



assumptions:finance term / asset life: buildingsfinance term / asset life: equipmentSource Separated feedstock - tpyMixed waste feedstock - tpymaterial transferred - tpyTipping Fee charged by Recology: $/tonFood recoveredlong term capitalized debtshort term capitalized debt

2023 2024 2025 2026 2027 2028 2029 2030

133,977$ 133,977$ 133,977$ 133,977$ 133,977$ 133,977$ 133,977$ 133,977$ -$ -$ -$ -$ -$ -$ -$ -$

9,939$ 9,939$ 9,939$ 9,939$ 9,939$ 9,939$ 9,939$ 9,939$ 20,000$ 20,000$ 20,000$ 20,000$ 20,000$ 20,000$ 20,000$ 20,000$

-$ -$ -$ -$ -$ -$ -$ -$ 183,650$ 187,323$ 191,069$ 194,890$ 198,788$ 202,764$ 206,819$ 210,956$

60,328$ 61,534$ 62,765$ 64,020$ 65,301$ 66,607$ 67,939$ 69,298$ 270,738$ 276,153$ 281,676$ 287,309$ 293,056$ 298,917$ 304,895$ 310,993$ 393,066$ 400,927$ 408,946$ 417,125$ 425,467$ 433,977$ 442,656$ 451,509$ (62,430)$ (63,679)$ (64,953)$ (66,252)$ (67,577)$ (68,928)$ (70,307)$ (71,713)$

1,009,267$ 1,026,174$ 1,043,419$ 1,061,009$ 1,078,951$ 1,097,252$ 1,115,918$ 1,134,958$

-$ -$ -$ -$ -$ -$ -$ -$

(1,009,267)$ (1,026,174)$ (1,043,419)$ (1,061,009)$ (1,078,951)$ (1,097,252)$ (1,115,918)$ (1,134,958)$

290.99$ 290.07$ 289.16$ 288.27$ 287.39$ 286.54$ 285.70$ 284.88$ 4.29$ 4.27$ 4.26$ 4.25$ 4.23$ 4.22$ 4.21$ 4.20$

2,082 2,124 2,166 2,210 2,254 2,299 2,345 2,392 1,493 1,523 1,554 1,585 1,616 1,649 1,682 1,715 3,468 3,538 3,608 3,681 3,754 3,829 3,906 3,984

$52.95 $52.95 $52.95 $52.95 $52.95 $52.95 $52.95 $52.953,468 3,538 3,608 3,681 3,754 3,829 3,906 3,984

10

Organic Processing Financial ProjectionOption 6 - On-site Composting At WPWMA Owned by WPWMA, operated by contractorno energy production

Capital Budgetcomposting pad 550,944$ Enclosed Receiving Building, utilities 833,920$ site improvements 83,200$ acceptance & processing equip 603,434$ Permitting 150,000$ sewer connection fees -$ Interest During Development 8,264$ start-up and testing 206,462$ - minus grant funds - SGIP incentives -$ net Capital Expense 2,436,225$

Operating Budget 2016 2017 2018 2019 2020 2021 2022Expenseamortized debt 224,267$ 224,267$ 224,267$ 224,267$ 224,267$ 224,267$ 224,267$ Operation & Maintenance 247,969$ 252,928$ 257,987$ 263,146$ 268,409$ 273,777$ 279,253$ rehab and replacement fund 15,906$ 15,906$ 15,906$ 15,906$ 15,906$ 15,906$ 15,906$ admin and insurance 40,000$ 40,000$ 40,000$ 40,000$ 40,000$ 40,000$ 40,000$ disposal of waste products -$ -$ -$ -$ -$ -$ -$ Member agency food collection costs 235,694$ 240,408$ 245,216$ 250,120$ 255,122$ 260,225$ 265,429$ MRF cost to sort organics 342,188$ 349,031$ 356,012$ 363,132$ 370,395$ 377,803$ 385,359$ avoided cost of landfilling organics (54,349)$ (55,436)$ (56,545)$ (57,676)$ (58,830)$ (60,006)$ (61,206)$ total expenses 1,051,674$ 1,067,104$ 1,082,843$ 1,098,896$ 1,115,271$ 1,131,973$ 1,149,009$

Revenuecompost sales 15,128$ 15,431$ 15,739$ 16,054$ 16,375$ 16,703$ 17,037$ total revenues 15,128$ 15,431$ 15,739$ 16,054$ 16,375$ 16,703$ 17,037$



assumptions:finance term / asset life: buildings 15finance term / asset life: equipment 10Source Separated feedstock - tpy 1,813 1,849 1,886 1,924 1,962 2,001 2,042 Mixed waste feedstock - tpy 1,300 1,326 1,353 1,380 1,407 1,435 1,464 green waste added - tpy 3,113 3,175 3,239 3,303 3,369 3,437 3,506 compost produced tpy 2,521 2,572 2,623 2,676 2,729 2,784 2,839 compost value per ton 6.00$ 6.00$ 6.00$ 6.00$ 6.00$ 6.00$ 6.00$ Food recovered 3,019 3,080 3,141 3,204 3,268 3,334 3,400 long term capitalized debt 1,832,791$ short term capitalized debt 603,434$

11

Organic Processing Financial ProjectionOption 6 - On-site Composting At WPWMA Owned by WPWMA, operated by contractorno energy production

Capital Budgetcomposting pad Enclosed Receiving Building, utilities site improvementsacceptance & processing equipPermittingsewer connection feesInterest During Developmentstart-up and testing - minus grant funds - SGIP incentives net Capital Expense

Operating BudgetExpenseamortized debtOperation & Maintenance rehab and replacement fundadmin and insurancedisposal of waste productsMember agency food collection costsMRF cost to sort organicsavoided cost of landfilling organics total expenses

Revenuecompost sales total revenues



assumptions:finance term / asset life: buildingsfinance term / asset life: equipmentSource Separated feedstock - tpyMixed waste feedstock - tpygreen waste added - tpycompost produced tpycompost value per tonFood recoveredlong term capitalized debtshort term capitalized debt

2023 2024 2025 2026 2027 2028 2029 2030

224,267$ 224,267$ 224,267$ 224,267$ 224,267$ 224,267$ 224,267$ 224,267$ 284,838$ 290,535$ 296,345$ 302,272$ 308,318$ 314,484$ 320,774$ 327,189$

15,906$ 15,906$ 15,906$ 15,906$ 15,906$ 15,906$ 15,906$ 15,906$ 40,000$ 40,000$ 40,000$ 40,000$ 40,000$ 40,000$ 40,000$ 40,000$

-$ -$ -$ -$ -$ -$ -$ -$ 270,738$ 276,153$ 281,676$ 287,309$ 293,056$ 298,917$ 304,895$ 310,993$ 393,066$ 400,927$ 408,946$ 417,125$ 425,467$ 433,977$ 442,656$ 451,509$ (62,430)$ (63,679)$ (64,953)$ (66,252)$ (67,577)$ (68,928)$ (70,307)$ (71,713)$

1,166,385$ 1,184,110$ 1,202,188$ 1,220,629$ 1,239,438$ 1,258,623$ 1,278,192$ 1,298,152$

17,378$ 17,725$ 18,080$ 18,441$ 18,810$ 19,186$ 19,570$ 19,961$ 17,378$ 17,725$ 18,080$ 18,441$ 18,810$ 19,186$ 19,570$ 19,961$

(1,149,008)$ (1,166,384)$ (1,184,109)$ (1,202,187)$ (1,220,628)$ (1,239,437)$ (1,258,622)$ (1,278,191)$

331.28$ 329.70$ 328.15$ 326.62$ 325.13$ 323.67$ 322.23$ 320.83$ 4.88$ 4.86$ 4.83$ 4.81$ 4.79$ 4.77$ 4.75$ 4.73$

2,082 2,124 2,166 2,210 2,254 2,299 2,345 2,392 1,493 1,523 1,554 1,585 1,616 1,649 1,682 1,715 3,576 3,647 3,720 3,794 3,870 3,948 4,027 4,107 2,896 2,954 3,013 3,074 3,135 3,198 3,262 3,327

6.00$ 6.00$ 6.00$ 6.00$ 6.00$ 6.00$ 6.00$ 6.00$ 3,468 3,538 3,608 3,681 3,754 3,829 3,906 3,984

12

Assumptions Applied to All Options

2016 2017 2018 2019 2020 2021 2022 2023 2024

MSW growth rate 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0%MSW accepted - tons 205,000 209,100 213,282 217,548 221,899 226,337 230,863 235,481 240,190 cost of capital 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0%food waste growth rate 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0%SS food recovered - tpy 1,813 1,849 1,886 1,924 1,962 2,001 2,042 2,082 2,124 Mixed food recovered - tpy 1,300 1,326 1,353 1,380 1,407 1,435 1,464 1,493 1,523 electricity value per kWH 0.015$ 0.015$ 0.015$ 0.015$ 0.015$ 0.015$ 0.015$ 0.015$ 0.015$ marginal cost/ton of landfilling 18.00$ 18.00$ 18.00$ 18.00$ 18.00$ 18.00$ 18.00$ 18.00$ 18.00$ rehab and replacement % equip 0.8%cost/ton to process and market greenwaste 28.00$ 28.00$ 28.00$ 28.00$ 28.00$ 28.00$ 28.00$ 28.00$ 28.00$ Member SS food collection costs/year - large generators only 235,694$ 240,408$ 245,216$ 250,120$ 255,122$ 260,225$ 265,429$ 270,738$ 276,153$ MRF cost to sort organics from CL 251,548$ 256,579$ 261,710$ 266,944$ 272,283$ 277,729$ 283,283$ 288,949$ 294,728$ MRF cost to clean up SS food 90,640$ 92,453$ 94,302$ 96,188$ 98,112$ 100,074$ 102,075$ 104,117$ 106,199$ Design capacity - feedstock tpd 22

13

Assumptions Applied to All Options

MSW growth rateMSW accepted - tonscost of capitalfood waste growth rateSS food recovered - tpyMixed food recovered - tpyelectricity value per kWHmarginal cost/ton of landfillingrehab and replacement % equipcost/ton to process and market greenwasteMember SS food collection costs/year - large generators onlyMRF cost to sort organics from CLMRF cost to clean up SS foodDesign capacity - feedstock tpd

2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035

2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0%244,994 249,894 254,892 259,990 265,189 270,493 275,903 281,421 287,049 292,790 298,646

3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0%2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0%

2,166 2,210 2,254 2,299 2,345 2,392 2,440 2,489 2,538 2,589 2,641 1,554 1,585 1,616 1,649 1,682 1,715 1,750 1,785 1,820 1,857 1,894 0.015$ 0.015$ 0.015$ 0.015$ 0.015$ 0.015$ 0.015$ 0.015$ 0.015$ 0.015$ 0.015$ 18.00$ 18.00$ 18.00$ 18.00$ 18.00$ 18.00$ 18.00$ 18.00$ 18.00$ 18.00$ 18.00$

28.00$ 28.00$ 28.00$ 28.00$ 28.00$ 28.00$ 28.00$ 28.00$ 28.00$ 28.00$ 28.00$

281,676$ 287,309$ 293,056$ 298,917$ 304,895$ 310,993$ 317,213$ 323,557$ 330,028$ 336,629$ 343,361$ 300,623$ 306,635$ 312,768$ 319,023$ 325,404$ 331,912$ 338,550$ 345,321$ 352,227$ 359,272$ 366,457$ 108,323$ 110,490$ 112,699$ 114,953$ 117,253$ 119,598$ 121,990$ 124,429$ 126,918$ 129,456$ 132,045$

14

Organic Processing Financial Projection - 7 year Planning PeriodOption 1 Short Term - Clean World Partners AD at MRFOwned by WPWMA, operated by contractor

Capital BudgetDigester, acceptance & processing 3,218,792$ electrical generating equipment -$ Enclosed Receiving Building, utilities 833,920$ Permitting 200,000$ acceptance & process equip 408,434$ site improvements 83,200$ Interest During Development 65,039$ start-up and testing 23,196$ sewer connection fees 543,450$ - minus grant funds -$ - SGIP incentives -$ net Capital Expense 5,376,031$

2016 2017 2018 2019 2020 2021 2022Operating BudgetExpenseamortized debt 862,887$ 862,887$ 862,887$ 862,887$ 862,887$ 862,887$ 862,887$ Operation & Maintenance - AD 92,783$ 93,711$ 94,648$ 95,594$ 96,550$ 97,516$ 98,491$ rehab and replacement fund 36,355$ 36,355$ 36,355$ 36,355$ 36,355$ 36,355$ 36,355$ admin and insurance 70,000$ 70,000$ 70,000$ 70,000$ 70,000$ 70,000$ 70,000$ disposal of waste products 34,694$ 35,387$ 36,095$ 36,817$ 37,553$ 38,305$ 39,071$ digestate composting 7,191$ 7,334$ 7,481$ 7,631$ 7,783$ 7,939$ 8,098$ imputed rent 5,000$ 5,000$ 5,000$ 5,000$ 5,000$ 5,000$ 5,000$ Member agency food collection costs 235,694$ 240,408$ 245,216$ 250,120$ 255,122$ 260,225$ 265,429$ MRF cost to sort organics 342,188$ 349,031$ 356,012$ 363,132$ 370,395$ 377,803$ 385,359$ avoided cost of landfilling organics (54,349)$ (55,436)$ (56,545)$ (57,676)$ (58,830)$ (60,006)$ (61,206)$ total expenses 1,632,441$ 1,644,677$ 1,657,148$ 1,669,860$ 1,682,816$ 1,696,022$ 1,709,483$

Revenuesale of solid digestate -$ -$ -$ -$ -$ -$ -$ sale of liquid digestate -$ -$ -$ -$ -$ -$ -$ electricity sales to grid (thru LFG plant) 7,595$ 7,747$ 7,902$ 8,060$ 8,221$ 8,386$ 8,554$ incentives -$ -$ -$ -$ -$ -$ -$ total revenues 7,595$ 7,747$ 7,902$ 8,060$ 8,221$ 8,386$ 8,554$



assumptions:finance term / asset life: buildings 7finance term / asset life: equipment 7Source Separated feedstock - tpy 1,813 1,849 1,886 1,924 1,962 2,001 2,042 Mixed waste feedstock - tpy 1,300 1,326 1,353 1,380 1,407 1,435 1,464 liquid effluent produced - gallons 214,831 219,128 223,511 227,981 232,540 237,191 241,935 digestate solids produced annually 654 667 680 694 708 722 736 net cost/ton to compost digestate 11.00$ 11.00$ 11.00$ 11.00$ 11.00$ 11.00$ 11.00$ wastewater requiring disposal 214,831 219,128 223,511 227,981 232,540 237,191 241,935 electricity from AD -kWh/year 506,356 516,483 526,813 537,349 548,096 559,058 570,239 food recovered 3,019 3,080 3,141 3,204 3,268 3,334 3,400 long term capitalized debt 3,680,080$ short term capitalized debt 1,695,951$ kWh / year per ton of organic waste 167.7disposal cost per gal of liquor 0.161$

15

Organic Processing Financial ProjectionOption 2 Short Term - Zero Waste Energy AD at MRFOwned by WPWMA, operated by contractor

Capital BudgetDigester design and construction 2,447,676$ electrical generating equipment -$ Enclosed Receiving Building, utilities 833,920$ Permitting 200,000$ acceptance & processing equip 408,434$ site improvements 83,200$ Interest During Development 59,598$ start-up and testing 33,917$ sewer connection fees -$ - minus grant funds -$ - SGIP incentives -$ net Capital Expense 4,066,746$

2016 2017 2018 2019 2020 2021 2022Operating BudgetExpenseamortized debt 652,739$ 652,739$ 652,739$ 652,739$ 652,739$ 652,739$ 652,739$ Operation & Maintenance - Digester 135,670$ 137,027$ 138,397$ 139,781$ 141,179$ 142,590$ 144,016$ rehab and replacement fund 29,520$ 29,520$ 29,520$ 29,520$ 29,520$ 29,520$ 29,520$ admin and insurance 70,000$ 70,000$ 70,000$ 70,000$ 70,000$ 70,000$ 70,000$ disposal of waste products -$ -$ -$ -$ -$ -$ -$ digestate processing /composting 25,366$ 25,619$ 25,875$ 26,134$ 26,396$ 26,659$ 26,926$ Member agency food collection costs 235,694$ 240,408$ 245,216$ 250,120$ 255,122$ 260,225$ 265,429$ MRF cost to sort organics 342,188$ 256,579$ 261,710$ 266,944$ 272,283$ 277,729$ 283,283$ imputed rent 5,000$ 5,000$ 5,000$ 5,000$ 5,000$ 5,000$ 5,000$ avoided cost of landfilling organics (54,349)$ (55,436)$ (56,545)$ (57,676)$ (58,830)$ (60,006)$ (61,206)$ total expenses 1,441,826$ 1,361,454$ 1,371,912$ 1,382,562$ 1,393,409$ 1,404,456$ 1,415,708$

Revenueelectricity sales to grid (thru LFG plant) 4,914$ 5,012$ 5,113$ 5,215$ 5,319$ 5,426$ 5,534$ Incentives total revenues 4,914$ 5,012$ 5,113$ 5,215$ 5,319$ 5,426$ 5,534$



assumptions:finance term / asset life: buildings 7 finance term / asset life: equipment 7 Source Separated feedstock - tpy 1,813 1,849 1,886 1,924 1,962 2,001 2,042 Mixed waste feedstock - tpy 1,300 1,326 1,353 1,380 1,407 1,435 1,464 green waste added - tpy 1,370 1,397 1,425 1,453 1,483 1,512 1,542 digestate solids produced annually 3,676 3,749 3,824 3,901 3,979 4,058 4,139 net cost/ton to compost digestate 11$ 11$ 11$ 11$ 11$ 11$ 11$ wastewater requiring disposal - -$ -$ -$ -$ -$ -$ electricity from AD -kWh/year 327,607 334,159 340,842 347,659 354,612 361,704 368,938 Food recovered 3,019 3,080 3,141 3,204 3,268 3,334 3,400 long term capitalized debt 3,658,312$ short term capitalized debt 408,434$

16

Organic Processing Financial ProjectionOption 3 Short Term - direct haul food waste to Clean World Partners for ADOwned and operated by Clean World Partners

Capital BudgetEnclosed Receiving Building, utilities 833,920$ Permitting 100,000$ acceptance and processing equip 408,434$ site improvements 83,200$ sewer connection fees -$ Interest During Development 10,692$ start-up and testing -$ - minus grant funds -$ - SGIP incentives -$ net Capital Expense 1,436,246$

Operating Budget 2016 2017 2018 2019 2020 2021 2022Expenseamortized debt 230,527$ 230,527$ 230,527$ 230,527$ 230,527$ 230,527$ 230,527$ Operation & Maintenance -$ -$ -$ -$ -$ -$ -$ rehab and replacement fund 9,939$ 9,939$ 9,939$ 9,939$ 9,939$ 9,939$ 9,939$ admin and insurance 20,000$ 20,000$ 20,000$ 20,000$ 20,000$ 20,000$ 20,000$ disposal of waste products -$ -$ -$ -$ -$ -$ -$ tipping fees paid to CWP 102,660$ 104,713$ 106,808$ 108,944$ 111,123$ 113,345$ 115,612$ transfer costs 51,606$ 51,094$ 52,116$ 54,802$ 55,898$ 57,016$ 58,157$ Member Agency food collection cost 235,694$ 240,408$ 245,216$ 250,120$ 255,122$ 260,225$ 265,429$ MRF cost to sort organics 342,188$ 349,031$ 356,012$ 363,132$ 370,395$ 377,803$ 385,359$ avoided cost of landfilling organics (54,349)$ (55,436)$ (56,545)$ (57,676)$ (58,830)$ (60,006)$ (61,206)$ total expenses 938,263$ 950,275$ 964,071$ 979,787$ 994,174$ 1,008,848$ 1,023,816$

Revenueelectricity sales to grid -$ total revenues -$

Revenues minus expenses (938,263)$ (950,275)$ (964,071)$ (979,787)$ (994,174)$ (1,008,848)$ (1,023,816)$


assumptions:finance term / asset life: buildings 7finance term / asset life: equipment 7 Source Separated feedstock - tpy 1,813 1,849 1,886 1,924 1,962 2,001 2,042 Mixed waste feedstock - tpy 1,300 1,326 1,353 1,380 1,407 1,435 1,464 Food recovered 3,019 3,080 3,141 3,204 3,268 3,334 3,400 Tipping Fee charged by CWP: $/ton 34.00$ 34.00$ 34.00$ 34.00$ 34.00$ 34.00$ 34.00$ long term capitalized debt 1,027,812$ short term capitalized debt 408,434$

17

Organic Processing Financial ProjectionOption 4 Short Term - AD at Pleasant Grove WWTP, processing at MRFconvert biogas to CNG fuel

Capital BudgetDigester design and construction -$ electrical generating equipment -$ Enclosed Receiving Building, utilities 833,920$ gas compression, storage, delivery 2,400,000$ Permitting 150,000$ acceptance & process equip - MRF 638,434$ acceptance & process equip - WWTP 1,000,000$ site improvements 19,200$ Interest During Development 62,827$ start-up and testing 133,000$ sewer connection fees -$ - minus grant funds -$ - SGIP incentives -$ net Capital Expense 5,237,381$

2016 2017 2018 2019 2020 2021 2022Operating BudgetExpenseamortized debt 840,633$ 840,633$ 840,633$ 840,633$ 840,633$ 840,633$ 840,633$ Operation & Maintenance WWTP 266,000$ 266,000$ 266,000$ 266,000$ 266,000$ 266,000$ 266,000$ consolidation & transfer costs 56,961$ 57,531$ 58,106$ 58,687$ 59,274$ 59,867$ 60,466$ rehab and replacement fund 38,979$ 38,979$ 38,979$ 38,979$ 38,979$ 38,979$ 38,979$ admin and insurance 90,000$ 90,000$ 90,000$ 90,000$ 90,000$ 90,000$ 90,000$ disposal of waste products -$ -$ -$ -$ -$ 37,804$ 38,560$ imputed rent 5,000$ 5,000$ 5,000$ 5,000$ 5,000$ 5,000$ 5,000$ Member Agency food collection costs 235,694$ 240,408$ 245,216$ 250,120$ 255,122$ 260,225$ 265,429$ MRF cost to sort organics 342,188$ 349,031$ 356,012$ 363,132$ 370,395$ 377,803$ 385,359$ avoided cost of landfilling organics (54,349)$ (55,436)$ (56,545)$ (57,676)$ (58,830)$ (60,006)$ (61,206)$ total expenses 1,821,105$ 1,832,145$ 1,843,400$ 1,854,875$ 1,866,573$ 1,916,304$ 1,929,219$

Revenuevalue of CNG 189,990$ 193,790$ 197,665$ 201,619$ 205,651$ 209,764$ 213,959$ sale of liquid digestate -$ -$ -$ -$ -$ -$ -$ electricity sales to grid -$ -$ -$ -$ -$ -$ -$ RECs -$ -$ -$ -$ -$ -$ -$ total revenues 189,990$ 193,790$ 197,665$ 201,619$ 205,651$ 209,764$ 213,959$



assumptions:finance term / asset life: buildings 7finance term / asset life: equipment 7 Source Separated feedstock - tpy 1,813 1,849 1,886 1,924 1,962 2,001 2,042

Mixed waste feedstock - tpy 1,300 1,326 1,353 1,380 1,407 1,435 1,464 electricity from AD -kWh/year 0 0 0 0 0 0 0Food recovered 3,019 3,080 3,141 3,204 3,268 3,334 3,400 long term capitalized debt 3,142,428$ short term capitalized debt 2,094,952$

18

Organic Processing Financial ProjectionOption 5 Short Term - haul food waste to Jepson Prairie for CompostingOwned and operated by Recology

Capital BudgetEnclosed Receiving Building, utilities 833,920$ Permitting 100,000$ acceptance and processing equip 408,434$ site improvements 83,200$ sewer connection fees -$ Interest During Development 10,692$ start-up and testing -$ - minus grant funds -$ - SGIP incentives -$ net Capital Expense 1,436,246$

2016 2017 2018 2019 2020 2021 2022Operating BudgetExpenseamortized debt 230,527$ 230,527$ 230,527$ 230,527$ 230,527$ 230,527$ 230,527$ Operation & Maintenance -$ -$ -$ -$ -$ -$ -$ rehab and replacement fund 9,939$ 9,939$ 9,939$ 9,939$ 9,939$ 9,939$ 9,939$ admin and insurance 20,000$ 20,000$ 20,000$ 20,000$ 20,000$ 20,000$ 20,000$ disposal of waste products -$ -$ -$ -$ -$ -$ -$ tipping fees paid to Recology 159,878$ 163,076$ 166,337$ 169,664$ 173,057$ 176,518$ 180,049$ transfer costs 52,519$ 53,569$ 54,641$ 55,734$ 56,848$ 57,985$ 59,145$ Member Agency food collection costs 235,694$ 240,408$ 245,216$ 250,120$ 255,122$ 260,225$ 265,429$ MRF cost to sort organics 342,188$ 349,031$ 356,012$ 363,132$ 370,395$ 377,803$ 385,359$ avoided cost of landfilling organics (54,349)$ (55,436)$ (56,545)$ (57,676)$ (58,830)$ (60,006)$ (61,206)$ total expenses 996,394$ 1,011,113$ 1,026,126$ 1,041,439$ 1,057,058$ 1,072,990$ 1,089,241$

Revenue

total revenues -$ -$ -$ -$ -$ -$ -$

Revenues minus expenses (996,394)$ (1,011,113)$ (1,026,126)$ (1,041,439)$ (1,057,058)$ (1,072,990)$ (1,089,241)$


assumptions:finance term / asset life: buildings 7 finance term / asset life: equipment 7 Source Separated feedstock - tpy 1,813 1,849 1,886 1,924 1,962 2,001 2,042 Mixed waste feedstock - tpy 1,300 1,326 1,353 1,380 1,407 1,435 1,464 material transferred - tpy 3,019 3,080 3,141 3,204 3,268 3,334 3,400 Tipping Fee charged by Recology: $/ton 52.95$ 53 53 53 53 53 53 Food recovered 3,019 3,080 3,141 3,204 3,268 3,334 3,400 long term capitalized debt 1,027,812$ short term capitalized debt 408,434$

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Organic Processing Financial ProjectionOption 6 Short Term - On-site Composting At WPWMA Owned by WPWMA, operated by contractorno energy production

Capital Budgetcomposting pad 550,944$ Enclosed Receiving Building, utilities 833,920$ site improvements 83,200$ acceptance & processing equip 603,434$ Permitting 150,000$ sewer connection fees -$ Interest During Development 8,264$ start-up and testing 206,462$ - minus grant funds -$ - SGIP incentives -$ net Capital Expense 2,436,225$

2016 2017 2018 2019 2020 2021 2022Operating BudgetExpenseamortized debt 391,030$ 391,030$ 391,030$ 391,030$ 391,030$ 391,030$ 391,030$ Operation & Maintenance 247,969$ 252,928$ 257,987$ 263,146$ 268,409$ 273,777$ 279,253$ rehab and replacement fund 15,906$ 15,906$ 15,906$ 15,906$ 15,906$ 15,906$ 15,906$ admin and insurance 40,000$ 40,000$ 40,000$ 40,000$ 40,000$ 40,000$ 40,000$ disposal of waste products -$ -$ -$ -$ -$ -$ -$ Member agency food collection costs 235,694$ 240,408$ 245,216$ 250,120$ 255,122$ 260,225$ 265,429$ MRF cost to sort organics 342,188$ 349,031$ 356,012$ 363,132$ 370,395$ 377,803$ 385,359$ avoided cost of landfilling organics (54,349)$ (55,436)$ (56,545)$ (57,676)$ (58,830)$ (60,006)$ (61,206)$ total expenses 1,218,436$ 1,233,866$ 1,249,605$ 1,265,658$ 1,282,033$ 1,298,735$ 1,315,771$

Revenuecompost sales 15,128$ 15,431$ 15,739$ 16,054$ 16,375$ 16,703$ 17,037$ total revenues 15,128$ 15,431$ 15,739$ 16,054$ 16,375$ 16,703$ 17,037$



assumptions:finance term / asset life: buildings 7finance term / asset life: equipment 7 Source Separated feedstock - tpy 1,813 1,849 1,886 1,924 1,962 2,001 2,042 Mixed waste feedstock - tpy 1,300 1,326 1,353 1,380 1,407 1,435 1,464 green waste added - tpy 3,113 3,175 3,239 3,303 3,369 3,437 3,506 compost produced tpy 2,521 2,572 2,623 2,676 2,729 2,784 2,839 compost value per ton 6.00$ 6.00$ 6.00$ 6.00$ 6.00$ 6.00$ 6.00$ Food recovered 3,019 3,080 3,141 3,204 3,268 3,334 3,400 long term capitalized debt 1,832,791$ short term capitalized debt 603,434$

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Further Evaluation of Organics Management Options v13 (3)

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Transcript of Further Evaluation of Organics Management Options v13 (3)