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.