Legislature(2011 - 2012)BARNES 124

02/21/2012 08:00 AM House COMMUNITY & REGIONAL AFFAIRS


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= HB 312 NATURAL GAS CONVERSION PROGRAM/FUND TELECONFERENCED
Moved CSHB 312(CRA) Out of Committee
+ HCR 10 ENCOURAGING WASTE-TO-ENERGY TECHNOLOGY TELECONFERENCED
Moved CSHCR 10(ENE) Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
         HCR 10-ENCOURAGING WASTE-TO-ENERGY TECHNOLOGY                                                                      
                                                                                                                                
8:34:38 AM                                                                                                                    
                                                                                                                                
CHAIR MUNOZ announced  that the final order of  business would be                                                               
HOUSE  CONCURRENT  RESOLUTION  NO.  10,  Encouraging  the  state,                                                               
municipalities  of the  state, and  private organizations  in the                                                               
state  to  weigh  the  benefits   and  costs  of  waste-to-energy                                                               
technology and  to consider waste-to-  energy technology  to help                                                               
meet  the  energy  and  waste  management  needs  of  the  state,                                                               
municipalities  of the  state, and  private organizations  in the                                                               
state.  [Before the committee was CSHCR 10(ENE).]                                                                               
                                                                                                                                
8:34:45 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE PETE PETERSEN, Alaska State Legislature, speaking                                                                
as the sponsor of HCR 10, provided the following testimony:                                                                     
                                                                                                                                
     Waste-to-energy is  a class of technologies  that turns                                                                    
     garbage  into  energy  while  reducing  the  amount  of                                                                    
     landfill space needed.   Waste-to-energy is a renewable                                                                    
     energy  source  that  generates  between  500  and  600                                                                    
     kilowatt hours of electricity for  every ton of garbage                                                                    
     burned  and  with  the  use  of  district  heating,  an                                                                    
     additional 2  megawatt hours of  heat can  be captured.                                                                    
     That's from  each ton.   Waste-to-energy  technology is                                                                    
     being used around  the world and in at  least 24 states                                                                    
     across the  nation.  According  to the  Energy Recovery                                                                    
     Council, there  are at least 86  waste-to-energy plants                                                                    
     in  the  United  States.     This  technology  is  also                                                                    
     utilized  currently  at  Eielson   Air  Force  Base  in                                                                    
     Alaska,  where garbage  is burned  in conjunction  with                                                                    
     coal.    In  Anchorage  they  are  in  the  process  of                                                                    
     building  a generator  to  harness  the methane  that's                                                                    
     being created from the Anchorage landfill.                                                                                 
                                                                                                                                
     There  are several  different ways  of creating  energy                                                                    
     from garbage.   The waste can be burned  directly or it                                                                    
     can  be processed  into  other combustible  substances,                                                                    
     like ethanol or biodiesel.   Waste-to-energy plants are                                                                    
     being used  to provide  power to  major urban  areas in                                                                    
     the  U.S. and  Europe  and also  in small  communities.                                                                    
     Waste-to-energy plants have  been successfully built in                                                                    
     Arctic   and  sub-Arctic   climates,  including   small                                                                    
     communities.   There  are also  much smaller  waste-to-                                                                    
     energy generators  in the process of  development.  For                                                                    
     example, one  company is trying to  develop a generator                                                                    
     about the  size of a  large dumpster that  will produce                                                                    
     120 kilowatts of  electricity.  And also  the U.S. Army                                                                    
     has been  testing smaller sized  generators in  Iraq to                                                                    
     provide  an alternative  form  of  energy for  military                                                                    
     operations.                                                                                                                
                                                                                                                                
     As  advances continue  to  be  made in  waste-to-energy                                                                    
     technology, the  number of communities in  Alaska where                                                                    
     this  technology can  be employed  in a  cost efficient                                                                    
     manner  will  only  increase.     As  you  know,  rural                                                                    
     communities are  working to replace the  most expensive                                                                    
     diesel   fuel  and   the   waste-to-energy  offers   an                                                                    
     opportunity  for larger  communities as  well.   As the                                                                    
     technology  improves, smaller  communities will  likely                                                                    
     be  able to  benefit.   Waste-to-energy technology  has                                                                    
     been  shown to  produce fewer  emissions than  would be                                                                    
     created by just dumping it  into the landfill.  The EPA                                                                    
     has   determined   that    waste-to-energy   has   less                                                                    
     environmental impact  than almost  any other  source of                                                                    
     electricity generation.   Another benefit  of waste-to-                                                                    
     energy  technology is  that with  the  use of  magnetic                                                                    
     sorting  after combustion,  every year  American waste-                                                                    
     to-energy  plants recover  770,000  tons of  recyclable                                                                    
     scrap metal that would otherwise  have just been dumped                                                                    
     into landfills.   Waste-to-energy has the  potential to                                                                    
     be  a  piece  of  our statewide  energy  puzzle  and  I                                                                    
     encourage the  committee to support this  resolution to                                                                    
     encourage  the   state,  municipalities,   and  private                                                                    
     sector   organizations  to   consider  the   costs  and                                                                    
     benefits of waste-to-energy technology.                                                                                    
                                                                                                                                
8:38:42 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GARDNER, referring to  the second "WHEREAS" in HCR
10, asked whether trash is considered a renewable resource.                                                                     
                                                                                                                                
REPRESENTATIVE  PETERSEN  pointed out  that  one  of the  reasons                                                               
there is  a steady stream  of garbage in  Alaska is that  over 95                                                               
percent of what's  consumed in Alaska is shipped  into the state.                                                               
In fact, Alaska  has more garbage per capita  than anywhere else.                                                               
He  highlighted that  waste-to-energy technology  would slow  the                                                               
filling of the state's landfills and would generate electricity.                                                                
                                                                                                                                
8:40:04 AM                                                                                                                    
                                                                                                                                
DAVID  DUNSMORE,  Staff,  Representative  Pete  Petersen,  Alaska                                                               
State Legislature,  explained that waste-to-energy  is considered                                                               
renewable because a large portion  of it was originally a biomass                                                               
source.                                                                                                                         
                                                                                                                                
REPRESENTATIVE  PETERSEN informed  the committee  that after  the                                                               
waste is  burned, the ashes  are buried  in the landfill.   Since                                                               
the  ashes  are biodegradable,  the  landfill  will likely  never                                                               
reach capacity and have to be  moved.  He told the committee that                                                               
30 years  ago garbage in  Anchorage was dumped at  Merrill Field,                                                               
but once it was full a new disposal  site 15 miles away had to be                                                               
utilized.   Therefore, an additional  cost for fuel  to transport                                                               
the garbage to  the new landfill site is incurred  as well as the                                                               
time it takes to do so.                                                                                                         
                                                                                                                                
8:41:53 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  CISSNA remarked  that partnerships,  such as  the                                                               
military and rural  Alaska, are important with  [waste and energy                                                               
management].  She asked if that's part of this resolution.                                                                      
                                                                                                                                
REPRESENTATIVE  PETERSEN  told  the committee  that  Eielson  Air                                                               
Force  Base has  been using  this waste-to-energy  technology for                                                               
some time.   He  suggested that  other military  facilities would                                                               
utilize   waste-to-energy   technology   when  it   made   sense,                                                               
particularly since the military is  also facing federal cuts.  He                                                               
opined  that with  the  state's renewable  energy  grant fund,  a                                                               
community could  apply for a  grant to start  a [waste-to-energy]                                                               
plant.   He has heard that  some rural Alaska communities  may be                                                               
barging their  garbage down the  river for disposal.   Therefore,                                                               
there might a  situation in which a larger  rural community could                                                               
build  a  waste-to-energy  plant and  other  smaller  communities                                                               
could barge their waste to it in the summer.                                                                                    
                                                                                                                                
8:44:48 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SADDLER inquired  as  to the  costs of  waste-to-                                                               
energy technology  per British thermal unit  (Btu) versus natural                                                               
gas, coal, or hydro power.                                                                                                      
                                                                                                                                
REPRESENTATIVE  PETERSEN  said that  there  are  lots of  upfront                                                               
costs for  waste-to-energy technology.   He pointed out  that the                                                               
garbage would be  low cost and possibly free,  depending upon the                                                               
arrangement.   He also pointed  out that a  waste-to-energy plant                                                               
would face  the same  process for permits  that is  necessary for                                                               
coal or  natural gas.   Still, since  the fuel, that  is garbage,                                                               
would be very low cost or  free, it would actually cost less than                                                               
purchasing coal  or natural gas.   Therefore, the costs  would be                                                               
upfront and  the company would  bond for it  and pay it  off over                                                               
the course of [a specified time].                                                                                               
                                                                                                                                
MR.  DUNSMORE  interjected that  the  largely  upfront costs  are                                                               
capital  intensive  because  to  meet the  EPA  requirements  for                                                               
reduced  emissions, one  has to  be using  a fairly  cutting edge                                                               
technology.  Since this technology  is deployed in various sizes,                                                               
the U.S.  Department of Energy  doesn't have a  specific estimate                                                               
for  waste-to-energy.   However,  the U.S.  Department of  Energy                                                               
does have  an estimate for  biomass, of which  waste-to-energy is                                                               
considered to be a form.   He then related the U.S. Department of                                                               
Energy's estimates for the levelized  cost of power for a biomass                                                               
plant, which  included a waste-to-energy plant,  in 2016 averaged                                                               
$112.15 per megawatt hour.   In contrast, hydropower costs $86.40                                                               
per megawatt  hour while combustion turbine  natural gas averages                                                               
$124.50  per  megawatt  hour and  carbon  capture  coal  averages                                                               
$136.20   per   megawatt   hour.     In   further   response   to                                                               
Representative Saddler, Mr. Dunsmore  reminded the committee that                                                               
the cost  of a  waste-to-energy plant is  highly variable  due to                                                               
the size  of the plant  and the technology deployed.   Therefore,                                                               
it has to be assessed on a case-by-case basis.                                                                                  
                                                                                                                                
8:49:36 AM                                                                                                                    
                                                                                                                                
MR.  DUNSMORE,  in response  to  Representative  Dick, agreed  to                                                               
provide the committee with those numbers                                                                                        
                                                                                                                                
REPRESENTATIVE  PETERSEN,  for  clarity, informed  the  committee                                                               
that the  $112.50 is about  $.11 per kWh, which  is comparatively                                                               
in  the range  of  and for  some  lower than  what  those in  the                                                               
Railbelt are paying now.                                                                                                        
                                                                                                                                
MR.  DUNSMORE directed  attention  to the  White  Paper from  the                                                               
Solid  Waste  Association  of   North  America  (SWANA)  entitled                                                               
"Waste-to-Energy   Facilities    Provide   Significant   Economic                                                               
Benefits"  in the  committee  packet.   The  paper discusses  the                                                               
particulars  of several  [waste-to-energy]  plants  in the  U.S.,                                                               
including the specific costs of those plants.                                                                                   
                                                                                                                                
8:51:06 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SADDLER restated  his earlier  question regarding                                                               
the  costs of  waste-to-energy  technology  versus its  benefits,                                                               
specifically in terms of environmental,  permitting costs as well                                                               
as  the  relative   cost  of  this  technology   per  Btu  versus                                                               
hydropower, coal, and natural gas.                                                                                              
                                                                                                                                
8:51:45 AM                                                                                                                    
                                                                                                                                
TED  MICHAELS, President,  Energy  Recovery  Council, echoed  Mr.                                                               
Dunsmore's  testimony   that  the  costs  are   highly  variable,                                                               
depending upon the technology used  and the location of the site.                                                               
Another difficulty in specifying the  price is that there haven't                                                               
been a great number of  facilities being constructed recently, in                                                               
the  last 15  years, because  of capacity  issues.   However, the                                                               
first trend toward  growth of this sector has  been the expansion                                                               
of  existing  facilities  in  the  last couple  of  years.    For                                                               
instance, Florida  has increased  capacity by  50 percent  at its                                                               
existing  facility for  a cost  of just  over $100  million.   He                                                               
acknowledged that the aforementioned is  a large number and there                                                               
will be even  larger numbers because this is  a capital intensive                                                               
technology.  These are sophisticated  power plants with state-of-                                                               
the-art emission  control technologies  as required by  the Clean                                                               
Air  Act.    He  noted   that  these  facilities  have  excellent                                                               
environmental  records  because they  are  required  to meet  the                                                               
maximum  (indisc.) technology  standards and  are among  the most                                                               
heavily  regulated facilities  in the  U.S.   With regard  to the                                                               
cost of  waste-to-energy relative  to other  electricity sources,                                                               
Mr. Michaels  said that  will be difficult  to compare  because a                                                               
coal-fired  power  plant  is designed  specifically  to  generate                                                               
electricity.  Therefore,  the Btu profile of coal  is denser than                                                               
the Btu profile of municipal solid  waste.  Although no one would                                                               
use municipal solid waste as a fuel  if they had to dig it out of                                                               
the earth  as is done with  coal because of the  low Btu profile,                                                               
solid waste  is something that  exists in every community  in the                                                               
U.S.  He said the  primary purpose of all these [waste-to-energy]                                                               
facilities is as a solid waste  disposal unit, but the benefit of                                                               
electricity is  that this form  of management of  municipal solid                                                               
waste is more attractive than  a landfill. Additionally, there is                                                               
the benefit  of environmental  controls and  land sustainability.                                                               
Mr. Michaels summarized that compared  to a coal-fired facility a                                                               
waste-to-energy   facility  will   be   more   expensive  on   an                                                               
electricity basis.   He  opined that  in order  to obtain  a true                                                               
cost  comparison  one would  have  to  compare a  waste-to-energy                                                               
facility to a  coal-fired facility and a landfill.   These waste-                                                               
to-energy  facilities   are  under  constant  evolution   as  the                                                               
controls and  the combustion  engineering are  more sophisticated                                                               
and the  materials and labor  will be  more costly.   Hundreds of                                                               
companies in the  U.S. are trying to develop new  and better ways                                                               
to  convert waste  into energy,  which will  drive the  cost down                                                               
over time, he opined.                                                                                                           
                                                                                                                                
8:56:25 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  CISSNA posed  the question:   How  much would  it                                                               
cost  not  to  do  this?    Once  waste  is  present  it  becomes                                                               
extraordinarily expensive to  get rid of it,  which often results                                                               
in large  amounts of waste  staying around in  rural communities.                                                               
She  expressed hope  that this  resolution results  in developing                                                               
local jobs.   She then inquired as to the  subsidies available to                                                               
get the original energy and various products to Alaska.                                                                         
                                                                                                                                
MR. MICHAELS  said he isn't  aware of any federal  subsidies that                                                               
are available for those types of purposes.                                                                                      
                                                                                                                                
9:00:02 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SADDLER   related  his  understanding   that  the                                                               
implication of HCR 10 is that  the benefits outweigh the costs of                                                               
waste-to-energy technology.  However, the cost of waste-to-                                                                     
energy technology seems to be  vague.  He recalled Mr. Dunsmore's                                                               
testimony  that [the  levelized]  cost of  power  [for a  biomass                                                               
plant, which included a waste-to-energy  plant, in 2016] averaged                                                               
$112.15  per  megawatt   hour.    He  asked  if   that's  a  fair                                                               
equivalent.  He  expressed interest in Mr.  Michaels' estimate of                                                               
the relative costs of energy from waste-to-energy technology.                                                                   
                                                                                                                                
MR. MICHAELS recalled  that Mr. Dunsmore's numbers  were in terms                                                               
of  the  cost of  electricity  versus  constructing the  facility                                                               
upfront.   In  further  response to  Representative Saddler,  Mr.                                                               
Michaels said that the cost of generating energy from a waste-                                                                  
to-energy  facility  would,  depending   upon  the  size  of  the                                                               
facility, be in the millions.   He told the committee he has seen                                                               
promises  to  deliver   waste-to-energy  facilities  for  $10-$20                                                               
million.  He  related that he has  also seen a 3,000  ton per day                                                               
waste-to-energy facility  in a large,  densely populated  area in                                                               
Florida be constructed for $650 million.                                                                                        
                                                                                                                                
CHAIR MUNOZ pointed  out that the committee  packet includes cost                                                               
estimates from various areas in the country.                                                                                    
                                                                                                                                
9:02:05 AM                                                                                                                    
                                                                                                                                
CHAIR MUNOZ asked  if there is an economy of  scale for waste-to-                                                               
energy technology that works for  larger population areas, but is                                                               
not as effective for smaller rural communities.                                                                                 
                                                                                                                                
MR. MICHAELS,  drawing from discussions with  developers, related                                                               
his understanding that  there is a "sweet spot"  such that larger                                                               
waste-to-energy  facilities that  [process] 1,000-1,500  tons per                                                               
day result in a good balance  of cost for the investment.  Still,                                                               
there are  a significant number of  waste-to-energy facilities in                                                               
the U.S.  and the world  that are  much smaller facilities.   For                                                               
instance, in  the 1980s Minnesota  directed local  communities to                                                               
develop  waste-to-energy facilities.   Therefore,  there are  now                                                               
nine facilities  operating in Minnesota that  generally [process]                                                               
80-100 tons per day.   For example, in the 1980s  the city of Red                                                               
Wing invested $2.5 million [for  a waste-to-energy facility], but                                                               
he didn't know what that  facility would cost in today's dollars.                                                               
He  opined  that  as  time   passes,  there  will  be  technology                                                               
improvements   to  construct   smaller   modular  facilities   in                                                               
communities with small amounts of  waste for an economical value.                                                               
The aforementioned is  how it has worked in Europe.   Denmark has                                                               
28  facilities, many  of which  are small  facilities that  serve                                                               
smaller  communities  and  provide   district  heating  to  local                                                               
communities.    Waste-to-energy  technology   has  had  a  strong                                                               
presence  in  Europe in  terms  of  waste management  and  saving                                                               
landfill  space as  well as  getting as  much energy  out of  the                                                               
waste as possible.                                                                                                              
                                                                                                                                
9:05:33 AM                                                                                                                    
                                                                                                                                
CHAIR MUNOZ asked  if the waste-to-energy technology  can be used                                                               
to convert existing landfills into energy.                                                                                      
                                                                                                                                
MR. MICHAELS surmised that Chair  Munoz is referring to mining an                                                               
existing  landfill.   Although mining  an  existing landfill  has                                                               
been done, it hasn't been done  well and isn't the model followed                                                               
now.   He recalled  that when  the waste  stream decreased  for a                                                               
waste-to-energy facility  in a community  in Portland,  Maine, it                                                               
mined its  landfill and ran  the product through the  facility in                                                               
order to maintain the energy levels  from the facility.  He noted                                                               
that [the ability to mine  an existing landfill] depends upon the                                                               
climate   such  that   a  moist   environment  results   in  more                                                               
decomposition  whereas   a  dry   environment  results   in  less                                                               
decomposition.    Therefore, whether  waste-to-energy  technology                                                               
can be used to convert  existing landfills into energy would have                                                               
to  be  determined  on  a  case-by-case  basis.    Although  it's                                                               
possible, he  said he  wouldn't rely  on it  as the  primary fuel                                                               
source.                                                                                                                         
                                                                                                                                
9:07:14 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE PETERSEN  pointed out that there  hasn't been much                                                               
discussion regarding the space  heating aspect of waste-to-energy                                                               
technology.  He  explained that depending upon the  location of a                                                               
waste-to-energy plant  relative to  a population center  the heat                                                               
could   be   transferred  to   heat   other   facilities.     The                                                               
aforementioned would  provide additional efficiencies.   In areas                                                               
where  there is  curbside recycling  that separates  aluminum and                                                               
glass, this [waste-to-energy technology] works very well.                                                                       
                                                                                                                                
9:08:22 AM                                                                                                                    
                                                                                                                                
MR.  DUNSMORE returned  to Chair  Munoz's question  regarding the                                                               
use  of waste-to-energy  technology  in smaller  areas.   As  Mr.                                                               
Michaels discussed there  are economies of scale  and the smaller                                                               
[the facility] the  more expensive it is to  construct.  However,                                                               
the waste-to-energy technology has  been successfully deployed in                                                               
Scandinavian countries  on a  small level;  these are  areas that                                                               
have similar challenges to those  faced in rural areas in Alaska.                                                               
He directed  the committee's attention  to the  committee packet,                                                               
which  includes information  regarding three  Scandinavian waste-                                                               
to-energy plants.   One of the plants is located  in Iceland just                                                               
south  of the  Arctic Circle  and serves  a metropolitan  area of                                                               
2,867  people.   As  a  point  of reference,  the  aforementioned                                                               
community in  Iceland is just  a little  smaller than Nome  and a                                                               
little   larger  than   Dillingham.     He  reviewed   the  other                                                               
Scandinavian  waste-to-energy plants  that  are  reviewed in  the                                                               
committee packet.                                                                                                               
                                                                                                                                
9:10:23 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  CISSNA emphasized  that economic  costs in  rural                                                               
remote areas of  Alaska don't work the same  [as hub communities]                                                               
because of the lack of jobs  and cash economy.  She then recalled                                                               
the community of Nikolski in  the Aleutians, which because of its                                                               
strategic  position  has  a clinic,  telemedicine,  and  lots  of                                                               
technology.   She  estimated that  there  are 80-100  communities                                                               
like that in  Alaska, and thus it's not  comparable to Minnesota.                                                               
She stressed  that waste-to-energy technology in  Alaska could be                                                               
significant, if done correctly.                                                                                                 
                                                                                                                                
9:13:33 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GARDNER  moved to  report  CSHCR  10(ENE) out  of                                                               
committee  with individual  recommendations and  the accompanying                                                               
fiscal notes.   There being no objection, it was so ordered.