A Crib Sheet for the City’s $16.1 Million Wastewater Plant Upgrade

by Mike Dunphy and Phil Dodd

The Skinny:

Montpelier needs to upgrade its wastewater treatment plant. The City Council recently authorized further study of a two-phase upgrade plan. The first phase, which is currently estimated to cost $16.1 million and will be funded by a bond, addresses aging infrastructure and additional “organics to energy” features, such as an enhanced digester system and a methane boiler to heat more buildings at the plant. The upgrades would allow the plant to receive additional organic waste from waste haulers.

A final decision about Phase 1 will be made in September. Phase 2, if implemented, could make for a more energy-neutral plant that would produce more renewable energy than it consumes, although compared with Phase 1, Phase 2 is  “cash negative if viewed as a standalone project,” according to City Engineer Kurt Motyka, and would potentially mean higher sewer rates. This is based on preliminary estimates from a conceptual design for power production with generators fueled by excess methane production. A decision about the actual scope of Phase 2 won’t be made for a few years in order to allow for measurement of the amount of methane generated and to provide time for the city to explore other alternatives for using the gas.

The Problem:

The wastewater treatment plant is 45 years old, although not all the equipment is the same age. An analysis shows that the remaining life expectancy of about half of the existing equipment falls in the 0–5 year range. Furthermore, the plant is at 110 percent of its theoretical organic load capacity, meaning aeration tanks are at capacity. That doesn’t mean they will fail, but it does mean the city cannot accept additional high-strength waste unless there’s a more comprehensive upgrade.

Phase 1:

Proposed upgrades would go beyond the bare minimum needed. The plant’s capacity would be increased by upgrading to state-of-the-art biodigesters, allowing the city to increase its revenues from organic waste producers in the region, such as septic pump-out companies that bring septage to the plant, as well as dairy waste and grease. Montpelier takes in about 22,000 gallons of hauled waste a day and received over $1 million this past fiscal year in tipping fees. Waste was brought to the plant from as far away as New Hampshire, offsetting plant costs and keeping rates lower than they would be otherwise. Phase 1 would increase the city’s ability to accept haulage waste, bringing in another $230,000 to $400,000 in revenue annually depending on the additional volume processed. Electrical and process improvements will also result in savings on operations. A recent septage pilot test at the plant indicated that chemical treatment costs were higher than anticipated, so additional work is being done to modify the final design for Phase 1.

Phase 2:

At an estimated cost of another $3.6 million beyond the $16.1 million Phase 1 costs, this more ambitious part of the project seeks to incorporate heat and power production from increased methane production. Although cost estimates are currently only available for this option, the gas could be used for many purposes, including melting snow, producing fertilizer, running city vehicles, or sale of natural gas on the wholesale market. Its objective is to significantly reduce the city’s carbon footprint through renewable energy generation and to help achieve Montpelier’s net-zero goals. The additional impact on sewer rates and environmental benefits will depend on which option is ultimately selected.

The Cost:

Based on a $300,000 year-long study by Indiana-based Energy Systems Group, Phase 1, including “Organics to Energy,” is now estimated to cost $16.1 million, with an annual budget cost of $90,600 per year. Energy Systems Group will guarantee projected revenue savings via a surety bond. The total cost with Phase 2, if power production is the selected option, would be $19.7 million and create an annual budget cost of anywhere from $150,000 to $224,000, depending on the price of electricity. Currently the Department of Public Works does not feel power production is the best use of the methane gas produced. Instead, they are exploring drying solids to produce fertilizer or sale of natural gas on the wholesale market as the best long-term alternatives.

The Rates:

City officials are still studying how the project will affect sewer rates, and updated bids are needed to finalize the construction costs. Currently, a single-family homeowner using 48,000 gallons of water a year pays an annual sewer bill of $640. The water component of the annual bill on that amount of usage is $588, for a total annual water and sewer bill of $1,328. Before the proposed plan was developed, the city had been expecting sewer rates to rise 3.5 percent a year, but larger increases are likely if the Phase 1 upgrade plan goes forward. Estimates of rate increases should be available before the City Council makes its final decision in September.

The Questions:

What will be the effect on sewer rates over the expected 20-year life of the bond, or if Phase 2 is pursued?

If the upgraded facility charges more for haulers, will as many come as now? Or will the demand to treat hauled waste continue to grow?

Can state or federal money be appropriated for the project, including a pollution control grant connected to solids handling?

How will the Trump tariffs on steel and iron affect the costs of the new equipment, some of which comes from Germany?

What will be the impact of a lawsuit by the Conservation Law Foundation challenging Montpelier’s wastewater permit?

The Next Steps:

A draft contract is expected to be ready by July 27, and the final contract is expected by August 30. A presentation to the City Council will take place September 12. If the project is approved then, it will be followed by two bond public hearings on September 26 and October 31. The measure would then appear on the November 6 ballot for Montpelier residents to vote for or against the proposal.

The information above was obtained from city documents and interviews with three Montpelier Department of Public Works employees: Director Tom McArdle, City Engineer Kurt Motyka, and Wastewater Plant Chief Operator Chris Cox.

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