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HomeMy WebLinkAbout08.a.3) (Handout)N. 11 Board Meeting of June 2, 2011 Additional Written Announcements: June 2"d Board Agenda Update k) Deferral of Amendment To Agreement With URS for Professional Engineering Services for the Alternative Energy and Greenhouse Gas Reduction Plan In April 2009, the District hired URS to build a computer model that simulates greenhouse gas emissions in the treatment plant, complete an alternative energy study, and develop an energy portfolio that will power the plant while complying with AB 32's greenhouse gas requirements. At that time, it was anticipated that the District would fall into the capped sector by its use of natural gas in the cogeneration system and to replace the landfill gas, used as the auxiliary fuel in our multiple hearth furnaces, as it is depleted and that greenhouse gas reduction strategies would need to be implemented in the near term. In late March, staff received updated landfill gas projections that show no depletion for at least five to ten years and thus no immediate need to make adjustments in our power portfolio to comply with AB 32. At the same time and while developing the model, staff became concerned about the impending Clean Air Act regulatory changes that may have required a substantial investment in the multiple hearth furnaces or a switch to fluidized bed incinerators. Due to the size of the required investment, staff and several Board Members asked the question, should we consider switching to anaerobic digestion and land disposal of solids? Due to the interconnectedness of our process, with heat recovered from the furnaces used to produce steam to run our aeration blowers, this is a complex question. Switching to anaerobic digesters could require developing another source of waste heat to produce steam or changing to electric blowers. Due to the complexity of the analysis, and the need to look at how it would impact energy consumption and green -house gas generation, it was determined that the best analytical approach would be to incorporate the analysis into the URS computer model. Unfortunately, the complexity of the analysis also makes this an expensive undertaking, estimated at an additional $350,000. While the Clean Air Act regulatory changes did not end up resulting in the $50 million expenditure first feared, there are still significant expenditures planned for the existing furnaces and ancillary equipment ($14 million) over the next ten years. Therefore, staff still has an interest in determining if continued investment in the furnaces is the best course of action for the future. Additional Written Announcements June 2, 2011 Page 2 of 3 This proposed $350,000 expenditure was discussed earlier this week with the Budget and Finance Committee. They were concerned about the magnitude of the expenditure given the current economic climate and our need to raise rates to fund essential projects. They questioned if this analysis could be deferred. As discussed at the Capital Planning Workshop in April, staff had been pursuing two efforts in parallel: 1) the added features to the URS model to do a detailed comparison of digesters to incineration and 2) a planning exercise to look at what our "plant of the future" may include. Our thinking was that the URS model should be completed before the plant of the future exercise as many of the innovative nutrient removal and recovery processes involve anaerobic digestion of sludge. However, another approach would be to complete the plant of the future exercise and ask the question would future treatment processes be enhanced by switching to anaerobic digestion or does continued incineration fit just as well with future wastewater treatment technologies. If the planning exercise suggested strongly that anaerobic digestion should be seriously considered, then we could revisit the concept of further enhancing the URS computer model. In deference to the Budget and Finance Committee's concerns, staff is comfortable deferring this work and approaching the consideration of future solids handling alternatives from a more conceptual level as we consider the plant of'the future. If this exercise suggests that anaerobic digestion should be seriously considered, staff would reevaluate the scope and cost of the URS effort and bring it back to the Board in the future for consideration. Recycled Water Project Update 1) District - Concord Recycled Water Project State of California Proposition 84 Grant Funding Proposition 84 was passed by California voters in 2006 to provide grants for water related projects that are included in Integrated Regional Water Management Plans (IRWMP's). Funding is to be provided from the sale of State bonds. Proposition 84 is the only currently available State grant funding program for recycled water projects, and it succeeds the grant programs from Propositions 13 and 50. Proposition 84 grants are awarded based on administrative review and approval by the State Department of Water Resources (DWR) using the Proposition 84 ranking system (legislative approval is not part of the process). Proposition 84 gives the most points to projects like ours that are ready to bid and that improve the State water supply situation and the Delta. �' i Additional Written Announcements June 2, 2011 Page 3 of 3 The CCCSD Concord Recycled Water Project was included in the 2006 Bay Area IRWMP (listed as part of our Zone 1 Project), and therefore, it is eligible to be included in funding applications under Proposition 84. In 2010, DWR issued a call for proposals for eligible projects for Proposition 84. The CCCSD Concord Recycled Water project was submitted to DWR for grant funding as part of BACWA's regional application on January 7, 2011. Proposition 84 funding is awarded regionally, and funding will be administered through BACWA. In May 2011, DWR issued its Draft Funding Recommendations and the Concord Landscape Project is included for $1 M in grant funding as part of BACWA's recommended award. There will be a one month public comment period ending June 10, and then DWR is scheduled to issue its Final Funding Recommendations in mid July 2011 (which should be the same as the draft unless something comes up during the comment period). Project funding agreements will then be established with agencies based on the Final Funding Recommendations. It is expected to take six to eight months to have the necessary agreements approved with DWR, at which time (in early 2012), it is expected that the State will sell bonds to pay for the awards. The timing of additional bond sales beyond 2012 is uncertain due to the State budget situation, although there is a potential for an additional $150 million to be available after 2012.