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Water & Resource Recovery Center ArticleCopyrighted April 6, 2020 City of Dubuque Action Items # 5. ITEM TITLE: Water & Resource Recovery Center Article SUMMARY: City Manager providing a copy of the "Food Waste Co - digestion at Water Resource Recovery Facilities" article from Water Environment & Technology (WE&T) Magazine that features Dubuque's Water & Resource Recovery Center. SUGGESTED DISPOSITION: Suggested Disposition: Receive and File ATTACHMENTS: Description Type Water and Resource Recovery Center Recognition City Manager Memo Article Supporting Documentation Masterpiece on the Mississippi TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Water and Resource Recovery Center Recognition DATE: April 1, 2020 Dubuque *Merin City 11 IIi' 2007.2012.2013 2017*2019 The City of Dubuque spent $70 million to replace the Sewer Plant that incinerated waste with a Water Resource Recovery Center using anaerobic digestion where the only three by-products are clean water, agricultural fertilizer and methane gas. The City then partnered with a private company to invest the capital to clean the methane and turn it into natural gas (BioCNG) that is sold back into the Black Hills Energy grid and bought by companies wanting to lower their carbon footprint. The City also uses some of the BioCNG to turn three electrical turbines that allows the facility to substantially reduce the purchase of electricity from the grid. The City also uses the heat off of the anaerobic digestion process to heat the facility's buildings. This saves the City sanitary sewer utility hundreds of thousands of dollars a year in electrical and natural gas costs, reducing the wastewater utility customer's bills, including residential, business and industry. Besides regular waste from homes, businesses and industry the City now receives from the sanitary sewer collection system, the City is saving major industrial employers money by accepting High Strength Waste. This is waste the EPA will not let the industry put down the sewer, but they still must find a way to get rid of it. Previously these companies were trucking the High Strength Waste hundreds of miles out of state at great costs. This includes Hormel, Rousselot, John Deere, and West Dubuque Bio-Diesel in Farley, Iowa. The attached article titled. "Food Waste Co -digestion at Water Resource Recovery Facilities" from Water Environment & Technology (WE&T) Magazine is another example of the recognition this facility receives as stated, "The transformation of the waste water sector requires Water and Resource Recovery Facilities to be innovative and resourceful. "Dubuque is one of, "Fewer than 1 in 10 of the 14,000 Water and Resource Recovery Facilities use anaerobic digestion to process wastewater solids..." and Dubuque is on the leading edge of this sound environmental practice that supports the success of local industry while saving the environment. Michael C. Van Milligen MCVM:jh Attachment cc: Crenna Brumwell, City Attorney Teri Goodmann, Assistant City Manager Cori Burbach, Assistant City Manager William O'Brien, Water & Resource Recovery Center Manager Gina Bell, Sustainable Community Coordinator Jill Connors, Economic Development Director Rick Dickinson, President & CEO, Greater Dubuque Development Corporation 2 Evaluating the business case can identify benefits to the triple -bottom -line Carol Adaire Jones The wastewater sector's utility of the future (UOTF) initiative envisions the sector shifting to a circular economy business model — whereby wastewater treatment plants disposing of waste transform into water resource recovery facilities (WRRFs) managing critical resources. Co -digestion of high -strength organic wastes (HSOW) with wastewater solids is a core component of the circular economy. By diverting food waste from landfills, incinerators, and wastewater treatment and by recovering valuable renewable energy and nutrient products from digestion residuals, co -digestion can benefit the triple bottom line of WRRF finances, environmental stewardship, and community well-being. However, adoption is limited. Fewer than 1 in 10 of 14,000 WRRFs use anaerobic digestion (AD) to process wastewater solids, and fewer than 1 in 10 of those are co -digesting food wastes (fats, oils, and grease [FOG]; food processing residuals; and food scraps). There appears to be significant untapped potential for co -digestion. A contributing factor to this lack of co -digestion is the sector's risk -averse corporate culture. As a result, WRRFs can be averse to adopting co -digestion and producing renewable energy from the increased biogas because they are not core wastewater treatment services, and they are associated with various potential financial, operational, regulatory, stakeholder/political, and organizational risks and impediments. To stimulate and inform further evaluation of co -digestion, the Water Research Foundation commissioned a series of reports exploring the technology and economics of implementing co - digestion. A recent report funded by the Water Research Foundation, Food Waste Co -digestion at Water Resource Recovery Facilities: Business Case Analysis, represents the last logical link in The City of Dubuque, Iowa, is very committed to sustainability, which motivated the transformation of its wastewater plant into a water and resource recovery center. A very large- scale investment project to upgrade the outdated and inefficient facility provided an opportunity to add anaerobic digestion and energy generation facilities in 2013. Using a public - private partnership with BioResource Development of Omaha, Neb., in 2018, the utility was one of the first to add a renewable natural gas facility at a co -digesting WRRF. City of Dubuque WWW.WEF.ORG/MAGAZINE I MARCH 2020 I WE&T 27 ► ► ► ► ► ► ► ► Co -digestion When a rapidly expanding local brewery threatened to overwhelm the wastewater treatment capacity of the Stevens Point, Wis., water resource recovery facility, installing a pipeline to divert brewery waste to anaerobic digestion was a triple -win strategy. The change avoided a huge investment to expand treatment capacity, reduced energy costs by decreasing aeration needs for treatment and increasing biogas production, and protected the ability to attract new wet industries to area. City of Stevens Point, Wises, Public Utllitles Department. The full report 1.1 can be accessed online at bit.ly/ codigestion-TWRF. the series. This report provides insights into the business strategies that utilities have used to address the range of impediments and risks WRRFs face in adopting co -digestion, and outlines a diagnostic framework each WRRF can apply to analyze its opportunities and potential business strategies for co -digestion. Building on prior research about strategies to address operational and regulatory risks, the primary focus is about strategies to address financial opportunities and risks; other types of risks are addressed to the extent that they affect the facility economics or access to capital. UOTF `Innovation Ecosystem' Framework The transformation of the wastewater sector requires WRRFs to be innovative and resourceful. The pursuit of innovation is central to the UOTF vision of a clean water "innovation ecosystem," centered around wastewater utilities. Other key elements include technology developers and suppliers, the finance community, energy utilities, public and private elements of the solid waste sector, and state and municipal governments, which define the market and policy environments in which each WRRF operates. Through the combined efforts of all ecosystem members, utilities are enabled to take and manage risks as they increasingly manage valuable resources to the benefit of customers, the community, and the environment. Co -digestion can provide many benefits to this ecosystem as outlined in Table 1 on p. 29. The UOTF innovation ecosystem model provides the organizing framework for the research. To inform the analysis, structured interviews were conducted with more than 65 organizations, including wastewater utilities, and other innovation ecosystem representatives from the solid waste, energy, technology, project development, and government sectors. The report presents six major case studies and 25 thumbnail sketches, which were chosen to represent the full range of WRRF characteristics, policy and market environments, and strategic choices in food waste feedstocks, energy uses, biosolids uses, contracting and financing options. Included in the thumbnail sketches are WRRFs that decided against adopting co -digestion, or suspended or cutback programs in place. Table 2 (p. 30) summarizes key elements of the six utilities in the major case studies. WRRF Business Strategy Choices The first challenge a utility faces is to determine if co -digestion fits with its mission and long-term strategic goals. If it does, the next challenge is to sketch out a long-term business strategy and implementation plan for a mature utility co -digestion program as well as to develop detailed investment project proposals, as they are needed to carry out the plan over time. Six key decision elements are integral to developing a long-term co -digestion strategy. Four elements are production related: • AD co -digestion capacity needs, technology, and siting; 28 WE&T I MARCH 2020 I WWW.WEF.ORG/MAGAZINE ► ► ► ► ► ► ► ► Co -digestion • organics feedstock supply; • biogas supply and energy products, uses, and technologies; and • biosolids management. The final two elements relate to the structure of contractual relationships and the choice to establish a public —private partnership (P3), and financing options. To inform the choices for each element and the design of integrated strategy, the utility analyzes its market and policy context to determine what opportunities and risks co -digestion could provide and how to leverage them to advance the utility mission and long-term goals. Successful WRRFs: Co -Digestion Strategies and Programs In this section we report key findings from the case studies of operational co -digestion programs. Drivers. The financial drivers for co -digestion most frequently mentioned by WRRFs were rising energy costs and financial support programs to promote greenhouse gas mitigation, renewable energy, and food scrap diversion. Operational and regulatory drivers included underutilized AD or energy infrastructure, new requirements for biosolids management, and the need to preserve wastewater treatment capacity (and the ability to accommodate new business moving into the area) in the face of dramatically expanding pretreatment program wastes that otherwise would overwhelm the wastewater treatment capacity. Environmental and community drivers included providing a service to FOG, food processing, and food scrap waste generators (particularly ones from their service area) seeking new outlets to comply with more stringent regulatory requirements; supporting economic development; and supporting community goals for renewable energy, greenhouse gas (GHG) reduction, and food scrap diversion. Decision Criteria for Investments. Many co - digestion projects were required to meet return on investment or payback period tests, though the thresholds for approval varied widely. For non -core - mission projects, the Los Angeles County Sanitation District uses 5 to 10 years as a maximum payback target, whereas Stevens Point, Wis., uses a 20-year payback threshold. Various WRRFs placed different requirements on these projects in non -core business lines, including maintaining or improving water quality, no detrimental effect on facility operations, and no effect on taxpayers. Central Marin Sanitation Agency (San Rafael, Calif.), and the City of Dubuque, Iowa, combined co -digestion and energy projects with larger investment projects for regulatory compliance or for scheduled maintenance or upgrades in the utility asset management plan, highlighting the financial value co -digestion can contribute to the larger projects. Scope and Costs of Co -Digestion Projects. Successful co -digestion programs are typically implemented over time in a series of projects or phases. During initial projects to accommodate receiving HSOW, the scale of investment varies tremendously across WRRFs. This variation depends on what facilities and process are currently available, the type and quality of incoming feedstock supply, and the current level of commitment to co -digestion. For example, Victor Valley Water Reclamation Authority (Victorville, Calif.) spent $10,000 to convert an existing tank to a FOG receiving station, whereas CMSA spent $2 million on a new organics receiving station, which includes a 1.1-million-L (300,000-gal) tank, mixing pumps, rock trap grinder, paddle finisher, and odor control system. Among energy projects, the costs of renewable natural gas (RNG) pipeline injection projects vary widely depending upon pipeline proximity and interconnection standards. These standards vary across states and utilities. Major Sources of Cost Savings and Revenues. WRRFs also collect revenue from these projects. The most frequently cited sources of financial gain include tip fees (in some cases, with sufficient Table 1. Potential Benefits of Co -Digestion Financial New tipping fee revenue Energy cost savings Increased energy security and resiliency (In some cases) new revenues from renewable energy sales, and biosolid product sales Reduced wastewater operating and collection costs Green payments for renewable energy (RECs, RINS), GHG mitigation, food scrap recycling Environmental Reduced GHG emissions from substituting renewable for fossil fuels, reduced flaring of excess biogas, and diverting food scraps from landfills Replacement of manufactured fertilizer with recycled nutrients Improved water, air, and soil quality and healthier ecosystems Community Affordable disposal location for industry, creating a business -friendly environment Improved sewer management (reduced pipe blockages and overflows) by digesting FOG Cost savings, which lower the need for rate increases Increased resiliency of the community power sector WWW.WEF.ORG/MAGAZINE I MARCH 2020 I WE&T 29 ► ► ► ► ► ► ► ► ► Co -digestion revenues to support major AD upgrades as well as receiving station investments), energy cost savings and/or revenues, savings in wastewater aeration costs by diverting liquid wastes from the headworks to the digester, and savings in biosolids management costs (and potentially revenues) by supporting thermal dryers to create Class A Exceptional Table 2. Key Elements of Major Co -Digestion Case Studies Quality biosolids. They also cited financial incentive programs providing grants or green payments. Biogas and Biosolids Production. Biogas production increased substantially from the addition of co -digestion substrates. The rate of increase for the facility increases with the number of facility digesters involved in co -digestion and the amount of haracteristic Wastewater Treatment (MGD) avg daily dry weather flow City of Stevens Point, Wis. 2.8 Township (DPa) Municipal Authority i i� City of Dubuque, Iowa 7 Central Marin Sanitation Agency (San Rafael, Calif.) 7.5 Victor Valley Reclerrewater amation Authority (Victorville, Cal 11.3 Los Angeles County Sanitation Districts (Whittier, a Calif.) iM 4 280 Drivers Dramatic increase in brewery pretreatment wastes; Wis. Focus on Energy technical and financial assistance; Increasing restrictions on biosolids, effluents Increasing biosolids management challenges, optimize beneficial uses of on -site generated biogas, and reduce energy costs Community sustainability goals; Large-scale investment to upgrade outdated facility provided opportunity to add AD and resource recovery Financial support for GHG mitigation; Calif. organics recycling mandate, diversion goals; Marin County's Zero Waste Goal by 2025 High electricity prices; Electric power instability; Financial support for renewable energy (subsidies, tariffs and grants) Calif. organics recycling mandate, diversion goals; CA LCFS, US RFS, South Coast Air Quality Management District 1191 Vehicle Fleet Rules Goals Energy neutrality and efficiency; Keep operating costs low; Service to brewery waste generators Maintain reasonable customer rates, Energy neutrality; Provide reliable outlet for local or regional sources of FOG and HSOW Public health and environment; Energy efficiency and neutrality; Resource recovery, Service to waste generators; Revenue streams Support local solid waste hauler achieve food scrap diversion; Energy savings and neutrality; Use underutilized digester and energy equipment Energyefficiency and neutrality (and later: electricity to grid, RNG to pipeline); Improved treatment process control parameters Provide food scrap diversion option for local haulers. Convert waste into renewable energy and soil amendments. Major Sources of Cost Savings Wastewater treatment, energy Energy, biosolids management Staff, energy, biosolids management Energy Energy Energy Tipping Fee Rates: FOG (dropped FOG for more valuable feedstocks) $1.16/gal $0.06/gal sliding scale: $0.06/gal (first 1500 gal.) to no charge (> 15,000 gal.) $0.04/gal NA Food processing residuals $0.00606/gal, from service area, $0.03988/ gal, from outside service area $0.0378/gal $0.03 to $0.06/gal NA $0.04/gal n;\ Food scraps slurry NA $0.0378/ga1 NA $0.0938/gal $0.04/gal $allon g($.104/ gal) CY2020 Total TippinFee Revenues for Food Waste $110,000/year on average FOG = $387,400 (2018) Other HSOW = $50,000 (2018) $189,644 (FY 2019) $150,000 (2017-2018) $249,693 (2017) $1.5 million (FY2019/2020) Feedstock Contracting Long-term agreement with brewery G2E MOU for food scrap slurry with Divert No contracts Long-term MOU for food scrap slurry with Marin Sanitary Services No contracts Current: 1-yr contracts for food scrap slurries (multiple private haulers; county facility) 30 WE&T I MARCH 2020 I WWW.WEF.ORG/MAGAZINE ► ► ► ► ► ► ► ► Co -digestion HSOW added to each participating digester. Biosolids did not increase with co -digestion in four out of six of the facilities. Developing Trends Resource Recovery Product Lines. More WRRFs are slowly beginning to address the relatively untapped potential of food scraps as an AD feedstock. Innovative arrangements to supply the new product of preprocessed food scrap slurries suitable for digestion are helping. Many WRRFs are now evaluating projects to produce RNG for use as vehicle fuel or pipeline injection (typically for vehicle fuel). The use of biogas for RNG can be an Characteristic City of Stevens Drra.)Township Point, Wisauf Authority Ciunicipalty of Dubuque, IowaAI Marin Sam anon Agency (San Rafael, Calif.) Victor Valley Reclal amation Authority (Victorville, Calif.) Los Angeles County Sanitation Districts (Whittier, Calif.) Onsite Feedstock Pretreatment Equipment Bar screen, rock trap, grit sump pump, chopper pump Aerobic FOG conditioning, rock trap, grinder, chopper pump No equipment Rock trap grinder, paddle finisher No equipment Pending: grit and plastics removal Food Waste as Share of Total AD feedstock 34% of volume, 40% of TVS 12% of volume, 33% of TVS 22% of volume, 44% of TSS ° of volume 20 /° 10% of volume, 20% of TSS 9% of volume, 30% TSS (in the 1 co -digesting AD out of 24 total for demo project) Biogas Production (% increase; Total with co -digestion) ° 100 /°; 100,000 scfd ° 78 /°> 267,000 scfd 33-78%; 300,000 to 400,000 scfd 80%; 280,000 scfd (2018) 120%; 685,000 scfd (2016) 33% in co -digesting AD, 1.4% overall; 7,300,000 scfd (demo project) Biogas Uses (beyond boilers) 1) CHP; 2) [pending] biosolids thermal dryer 1) Biosolid thermal dryer, 2) CHP engine, 3)[pending]injection additional CHP 1) CHP; 2) RNG to pipeline 1 1) CHP; 2) [pending] new CHP for electricity sales 1) CHP; 2) [pending] microgrid/battery storage; RNG g production 1) CHP; 2) CNG for onsite fueling station; more CHP or RNG pipeline P p injection [pending] WRRF Energy Sales Tariffs Wisconsin Public Service Renewable Energy Tariff: $0.10/kWh (peak) and $0.05/kWh (offpeak) No energy sales 5% of gross RNG and RINS sales revenue Electricity Sales to Marin Clean Energy at $0.105/kWh 1) No energy sales; 2) [pending] net metering sales Spot market sales to CA ISO Grid Public —Private Partnership Structure P3 in which brewery and WRRF share costs of dedicated pipeline and HSOW receiving station. Future GESA for expanded co- digestion DBFOM with BioResources Development for RNG pipeline injection PPA with Marin Clean Energy (10-year contract) 1)PPA and lease with Anaergia; 2) Negotiating a DBFOM with Anaergia for RNG pipeline injection NA Biosolids (% increase with co -digestion) 12% Increase 15% Increase Minimal change Minimal change No change No detectable change (demo project) Financing and Grants 1) Wisconsin Focus on Energy grants, Build America Bonds; 2) WI Clean Water Fund bonds 1) Municipal bonds, 2) municipal bonds, PA Green Energy Works Grant IA State Revolving Fund loans Utility Capital Investment Accounts, CA grants Private sector P3 funding, CA grants Internal funds, CA grants Key: Numbers 1), 2), and 3) refer to separate co -digestion projects. G2E: Grind to Energy; MOU: Memo of Understanding; scfd: standard cu ft per day; CHP: combined heat and power; DBFOM: design -build -finance -operate -maintain; PPA: Power purchase agreement; GESA: PA Guaranteed Energy Savings Act; NA: not applicable; TSS: total suspended solids; TVS: total volatile solids; HSOW: high strength organic wastes; RINS: Renewable Identification Numbers (RINs) under the Renewable Fuel Standard (RFS) Program; LCFS: Low Carbon Fuel Standard; P3: Public —private partnership WWW.WEF.ORG/MAGAZINE I MARCH 2020 I WE&T 31 f, ► ► ► ► Co -digestion To respond to California initiatives for climate change mitigation and food waste diversion, Central Marin Sanitation Agency (San Rafael, Calif.) and the local solid waste agency, Marin Sanitation Services, created the Food2Energy Program partnership. Extensive pre- processing occurs at both facilities to generate a clean feedstock for anaerobic digestion. CMS/\ 4.471.4 0d WOW: . . I „1f Sakti lit SEC hardy Iod W. {drr Dan xd DIrn04 fnrtIng;PYrgss Ku I:' Rsttlaima Prat* Swim) arid ihrec.dal FocdkilxIg RN. HMoarlaihe hrd nr,hr Pura AkwArroavxu11fee Leis! .roe iglvrJY/.bFnwrtoID! „h,.' roxIlliu6FfiPro hider ?Kati wR IU x Zi1/414315rh 14T-T:arsF,. Trrri (tiered u;Ylark rgs.Da,Gref&+FOGF tiKla� I}ss'_ Ire' Flow% Mils Ica Swry wol Wee 60Ctb-a.: {liar+ S. viw Crdd4 rmahrr Wide ?FRUuk Apqn • ik6leklmr !pinks Men 1PlldigF0.1 1 Ta RetenrIN YCCrising 1 rKat'll 4i5rlaWMr I '%rililkrre plki Aelpufilmil IFU Pump Pdrer.g HPM - . Emgr IF;F6n 0] Li Qlln¢q 9V' $ rMaTgyF grmerdiar Suuhber Sack RiAgagn. aid 1.1 al %WI Nulaed9rxipr to Dear {llrVl►'04� alternative to, or in addition to producing renewable heat and power. The relative values of subsidy programs have shifted more in favor of production of vehicle fuel. However, the decline in the price of credits in the Renewable Fuel Standard program and continuing price uncertainty due to the current Administration policies have engendered a wait -and - see attitude for WRRFs planning energy projects a few years away. Performance -Based Contracting. Though WRRFs have been reluctant, and, in some cases, prohibited by charter, to engage in P3s in the past, they are moving into performance -based contracting for new projects that are outside their core area of expertise. This is notably the case for energy projects and, especially, RNG projects. Benefits of P3s include accessing expertise not available in- house, shifting risks, and (infrequently) accessing private financing to circumvent tight public financing for non -core projects and potentially long and politicized approval processes. Impediments Among WRRFs that evaluated co -digestion, the primary reason offered for not going forward is the lack of enough economic return. Contributing factors cited include uncertain feedstock supply and revenues, low energy prices (which mean low energy savings), lack of access to energy markets to sell electricity or RNG due to stringent interconnection standards or unfavorable energy tariffs, scale too small to attain economics of scale, and lack of incentive programs to provide financial support. Many WRRFs cite use of payback periods as a decision criterion. It is unknown how the financial returns would have increased if a net present value had been calculated over the lifetime of the equipment rather than the shorter periods many cited. Nonfinancial reasons offered for no-go decisions include not -in -my -backyard concerns and changing municipal priorities as political leadership changed. Facilities have suspended co -digestion because of changes in feedstock supply availability or the need to invest in additional equipment not planned or budgeted for. These changes were reinforced by market changes that reduced the economic returns as compared to the condition at time of adoption. For example, one utility known as a nationwide leader in co -digestion, found itself confronting a combination of aging equipment and reduced tipping fees and digester capacity limitations. This situation raised questions about the cost-effectiveness of continuing to accept HSOW. Facing requirements for both near -term and long-term capital investments to continue co - digestion and competing priorities for capital, the municipality decided to suspend the co -digestion program for the time being. The mayor stated the city would consider "refining the program when financing terms become more favorable." In several other cases, facilities cited the loss of their sole food waste source — typically a local food processor that moved away — and limited incentives to pursue a replacement. The facilities were close to their generating capacity 32 WE&T I MARCH 2020 I WWW.WEF.ORG/MAGAZINE ► ► ► ► ► ► ► ► ► Co -digestion and at risk of flaring or energy prices had plummeted since the time of the initial investment. Some WRRFs continue co -digestion but cut back on the quantity of food waste feedstocks accepted. For example, failures of combined heat and power (CHP) equipment or thermal dryers for biosolids prevented facilities from effectively using the level of biogas or biosolids produced at their prior scale of co -digestion. In other cases, WRRFs experienced digester issues due to problems with the quality of some of their feedstocks; some of the affected facilities were considering future investments in pretreatment equipment to resolve the feedstock quality issues. Successful WRRF Strategies A successful business strategy for co -digestion will create value and will manage the associated risks. However, the specifics will vary for each utility because a successful strategy Table 3. Solutions to Co -Digestion Impediments and Risks: Creating Value and Managing Risks Access to Financial Capital • Scarce financial capital (high debt load) • Low priority for "non -core -wastewater" projects Feedstock: Operations and Economics • Variable and uncertain quantity, quality and price (tip fees) of feedstock supplies • Landfill tip fees for food scraps are lower than costs to supply food scrap slurry Energy: Operations and Economics • Cogeneration equipment difficult to maintain, prone to shutdowns • Access for selling electricity to the grid may be constrained • Access for injecting RNG into pipeline may be constrained • Cost savings/revenues maybe low and/or uncertain due to o Low energy prices o Tariffs with high fixed and demand fees • Air permits may be required when biogas is used for incineration, drying, boilers, co -generation Biosolids: Operations and Economics • May not have capacity to handle an increase in biosolids with current management options • Accepting food waste may change quality of biosolids, e.g., increase nutrient loading in biosolids (as well as effluent) • Evaluate potential for use of internal capital reserve funds. • Explore availability of incentive program grants and loans. • Consider below -market Clean Water State Revolving Fund loans. • Consider a Public -Private -Partnership to provide financing. • Link co -digestion investments with capital projects needed to comply with regulatory requirements or implement needed maintenance/upgrades. • Highlight the full set of financial, environmental and community benefits. • • • • • Conduct a market assessment of potential feedstock supplies, and implement a program for market development and supplier retention. Leverage regulations for more stringent requirements for FOG, liquid industrial wastes, and food scraps to attract more suppliers. Encourage solid waste agencies to enforce recycling mandates. Encourage solid waste agencies to establish pricing across generator disposal options that incentivizes recycling scraps. Diversify food waste sources to avoid reliance on a single anchor supplier. Explore new supply options for preprocessed food scrap slurries: o Private market sources, including Waste Management, Divert, Grind2Energy, as well as regional solid waste companies o Collaborations with solid waste agencies o WRRF onsite depackaging and slurrying Use feasibility studies, pilots, and/or demonstration projects to evaluate facility impacts of feedstocks before full implementation. Invest in onsite pretreatment equipment to reduce operational challenges and O&M costs. Establish long-term contracts where possible (most likely when supplier does pretreatment), establish collaborative customer relationships when not — to ensure a reliable supply and to reduce contamination. • • • Explore all energy products and onsite use/external sale options, taking into account evolving market access, tariff structures, and incentive programs, including the following products: o Heat (onsite boilers, thermal dryers to produce Class A biosolids) o Electricity o Pipeline injection of RNG o RNG for vehicle fuel production for local government fleets, direct sales, or through RNG brokers Diversify products and/or product outlets (onsite use and market sales). Build in equipment redundancy to provide resiliency during downtime for maintenance. Consider public -private partnerships to provide expertise and assume risks. Negotiate Power Purchase Agreements, setting long-term prices. Negotiate as a class with utilities/regulators for better contract terms. • Impose air quality performance standards on private energy developers. • Develop a collaborative approach with regulators. • Optimize feedstock types and solids processing to manage impact on quality and quantity of biosolids produced. Not all cases of co -digestion result in additional biosolids, it will depend upon the relative share of co -digestion feedstock. • Evaluate opportunities for producing new products for nutrients. WWW.WEF.ORG/MAGAZINE I MARCH 2020 I WE&T 33 ► ► ► ► ► ► ► ► ► Co -digestion Focused on achieving energy neutrality, and more recently sending electricity to the grid and injecting RNG into a utility pipeline on its property, Victor Valley Water Reclamation Authority (Victorville, Calif.) has used public -private partnerships (P3) for its energy development projects, and is the one case study example of using P3s for financing as well as construction and operations because financing capacity was stretched thin due to facility upgrade projects. WWRA staff photo needs to be tailored to the utility. This tailoring needs to take into account policy and market environment, long-term mission and strategic goals, organizational culture, and resources. As a result, we do not offer a simple menu of business case options or economic rules for revenues or costs. Instead we provide concepts to lead custom decision -making. The right context is necessary to have a successful co -digestion program. Every list of essential elements for a successful co -digestion program includes the need for a co -digestion champion in the utility or municipal government. Our research identified four other critical needs: • enough site space for vehicles to deliver feedstocks and for other equipment needs, • a business mindset to resource recovery, • a visionary utility board or municipal decision - makers who will support projects beyond the core wastewater mission that make economic sense to ratepayers, and • a location with access to a sufficient supply of feedstock at a good price. The first is a feasibility constraint; the next two are additional organizational attributes, ones that are associated with a UOTF orientation. The final one pertains to the potential for achieving scale for the program and generating revenues or cost - savings; a corollary is locating in an energy market where it is possible to generate energy cost -savings and/or energy revenues. A successful business strategy typically will evolve over time, adding additional projects that build on past successes. As a WRRF learns from experience and improves the economics of resource recovery over time, the strategic questions evolve. For example, for AD capacity, the focus evolves from identifying excess capacity, to rationing capacity to the highest value sources, and, finally, to examining the potential for co -digestion to support expansion in AD capacity. For energy, the focus evolves from achieving onsite energy neutrality, to breaking down barriers to accessing the power grid, or exploring the potential for supplying RNG to the market. Best practices for the design of a successful business strategy include the following. Demonstrate that the project will not compromise facility compliance with its environmental permits. Central to the mission of the wastewater sector are its important responsibilities for public health and environmental quality. Violation of those responsibilities can result in substantial financial penalties. Leverage available drivers in sync with WRRF mission. Drivers include regulatory policies pertaining to disposal of wastes, which can be a source of feedstocks; market -based opportunities to generate revenues and cost savings from biogas use and biosolids management; policies providing financial support to support investments in sustainability; and utility and community commitments to environmental quality and community service. 34 WE&T I MARCH 2020 I WWW.WEF.ORG/MAGAZINE ► ► ► ► ► ► ► ► ► Co -digestion Incorporate strategies to address financial risks. Risk management strategies include diversifying sources and product outlets, establishing long- term contracts, building in equipment redundancies to allow for scheduled or unscheduled maintenance requirements, establishing long-term contracts for purchasing feedstocks or selling products, and using public — private partnerships/contracts to share operating risks (as well as construction risks) with the private sector. Employ a life -cycle perspective, considering revenues and costs from the time of initial investments through replacement investments. It is critical to assess whether the utility can establish the operational and financial capacity to support the program over the long-term. This requires a life -cycle perspective because the full benefits of co - digestion typically will not accrue until the WRRF has achieved a mature program with a balanced set of feedstock supply and AD, energy generation, and biosolids management capacity. Further, identifying the full costs necessitates delineating capital requirements over the life cycle of initial investment, maintenance, and upgrades. WRRF Solutions for Co -Digestion Impediments and Risks The findings from successful and unsuccessful co -digestion programs highlight the importance of conducting long-term planning and adopting risk management strategies. Table 3 (p. 33) provides a set of solutions to various impediments and risks WRRFs may face, including access to capital and the operational and economic risks associated with feedstocks, energy, and biosolids. (The report also includes solutions to impediments related to making the business case to stakeholders outside and inside the utility.) Organizations in the innovation ecosystem can be instrumental in finding solutions. Two key sets of partners bear highlighting. A range of partners in the private sector and in municipal solid waste agencies are offering a new product line — food scrap slurries suitable for WRRF feedstocks — to address untapped opportunities. Also, project developers are offering P3s with performance -based contracts that can provide guaranteed cost savings and/ or revenues for energy or feedstock projects outside the core treatment mission, and further that can supply private capital as an alternative to municipal financing. Evaluate, Implement Co -digestion at WRRFs can be successful where there is a fit with the organization culture, support from the utility decision -makers for projects outside of the core mission area, and market and policy opportunities to create economic value. It is important to recognize that co -digestion does not fit all contexts. In some places, too many of the essential elements may be missing. Evaluating the business strategy thoroughly will provide a strong basis for deciding whether a co -digestion project should move forward. Even if the life -cycle economic potential is not favorable at the moment, a proper assessment may provide insights for what needs to change and how to create a path toward future co -digestion. '• Carol Adaire Jones, Ph.D., is a Visiting Scholar for Environmental Economics and Policy at the Environmental Law Institute (Washington, D.C.) and Co -Lead of its Food Waste Initiative. She was the Principal Investigator on the WRF study. She can be reached atjones@eli.org. The Environmental Law Institute gratefully acknowledges the Water Research Foundation's financial and administrative assistance in funding the project through which this information was discovered, developed, and presented. Co-authors of the WRF report were Co -Principal Investigators Craig Coker (Coker Composting & Consulting, Troutville, Va. ), Ken Kirk (former Executive Director of National Association of Clean Water Agencies, Santa Fe, N.M.), and Lovinia Reynolds (ELI, Washington D.C.). As a joint solid waste/wastewater agency, the Sanitation Districts of Los Angeles County (LACSD) developed an extensive food waste recycling program, motivated in part to facilitate compliance by its solid waste stakeholders with the state food scrap recycling mandate. With an eventual goal of handling 310 tonne/d of food scraps, it has developed a diversified set of sources including private solid waste haulers. The program also created its own food scrap pre- processing facility at its Puente Hills landfill. LACSD WWW.WEF.ORG/MAGAZINE I MARCH 2020 I WE&T 35