Agenda Item # 2
Columbus Consolidated Government
Council Meeting

06/13/2017

Agenda Report # 143


TO: Mayor and Council

SUBJECT: Environmental Services Agreement between Columbus Power Produces, Limited Liability Corporation (CPP) and Columbus Consolidated Government (CCG).

INITIATED BY: Public Works


Recommendation: Approval is requested to enter into an Environmental Services Agreement with Columbus Power Producers to develop beneficial uses for landfill gas produced at Pine Grove and Schatulga Road Municipal Solid Waste (MSW) Landfills.
Background: In February of 2017, the Council approved Enerdyne Power Systems as the provider to investigate the possibilities for the beneficial use of existing landfill gas from Pine Grove MSW Landfill and Schatulga Road MSW Landfill. CPP, LLC is the entity owned by Enerdyne Power Systems that has been created to carry out a proposed project at MSW. CPP has completed the investigation and has found that the amount of landfill gas will be sufficient for a viable project or projects and would like to proceed with the installation of equipment necessary for extraction of landfill gas

Analysis: Landfill gas is a "Green House Gas" and as such, the Environmental Protection Division (EPD) requires landfill owners to control landfill gas emissions by destruction of the gas thru a flare or by capturing the gas and using it in a beneficial way. CPP, LLC is willing to capture the landfill gas for use in a beneficial way by selling the energy the gas produces on the commercial market. Since the gas belongs to CCG we are required to deal with in an acceptable manner. Using the gas as a means of producing electricity is an acceptable manner.

Financial Considerations: CPP will install a gas collection system at its sole expense, to include the purchase of all materials, design of the system, modification of the system as needed, obtaining permits to construct and operate the gas collection system and operation of the gas collection system at the landfill in accordance with applicable requirements. CPP will, at its discretion and at its sole expense, purchase, design, install and operate a power plant to generate electricity. CPP agrees to pay the CCG for the gas as set forth in the contract Article 2;

Article 2.3 (a)(i) - Power production - For that portion of the Landfill Gas used by the Power Plant solely for the production of electricity, beginning on the first date that the power plant actually produces electricity, CPP shall pay CCG an amount equal to Forty Cents ($0.40) for
each MMBtu (Million British Thermal Units) of Landfill Gas used by the Power Plant for the production of electricity that CPP may sell to an unrelated third party.

Article 2.3 (a)(ii) - Landfill Gas - For that portion of the Landfill Gas that is sold to a third party for use as a fuel, CPP shall pay CCG the amount of Fifty Cents ($0.50) for each MMBtu of Landfill Gas.

Article 2.3(b) - Economic Price Adjustment - CPP agrees to a price adjustment of 1% of the price of landfill gas beginning on the 5th anniversary from the commencement date and a flat rate increase of 1% on each subsequent anniversary.

Article 6 - The Agreement will continue for 20 years following the date of the operational delivery of the first Landfill Gas for Beneficial Use. The capacity to put the gas to beneficial use requires the construction of a gas collection system and a power plant by CPP. If the gas is not put to a beneficial use within three years of the execution of the Agreement, it will be terminated, but CCG will retain the below ground portion of any gas collection system at no cost.

Article 11.4- CPP will have up to two years from the effective date of the contract to install a gas collection system and the agreement can be terminated by CCG if it does not.

Projected Annual Fiscal Impact Statement: CPP will have the right to take all actions reasonably necessary to develop and operate a power generation facility at no cost to the CCG. CPP will share revenue from power production with CCG as described in Article 2, section 2.3(b) and 2.4

Legal Considerations: CPP will have exclusive rights to use CCG's landfill gas and shall have exclusive rights to develop and sell energy obtained from use of CCG's landfill gas for a twenty year period from the successful installation and activation of a power plant to put the Landfill Gas to beneficial use in return for the payments described above. The Council's approval is required for the City Manager to enter into the Environmental Services Agreement and necessary supporting documents

Recommendation /Actions: Approval is requested to enter into a contract with Columbus Power Producers to develop beneficial uses for landfill gas produced at Pine Grove and Schatulga Road Municipal Solid Waste (MSW) Landfills.





A RESOLUTION
NO._____

A RESOLUTION AUTHORIZING THE CITY MANAGER TO ENTER INTO A CONTRACT WITH COLUMBUS POWER PRODUCERS TO DEVELOP BENEFICIAL USES FOR LANDFILL GAS AT PINE GROVE AND SCHATULGA ROAD MUNICIPAL SOLID WASTE (MSW) LANDFILLS.

WHEREAS, the Columbus Consolidated Government desires to use the landfill gas produced by Schatulga Road and Pine Grove Municipal Solid Waste Landfills in a beneficial way which would both be environmentally friendly as well as generate revenue for the Integrated Waste Fund, and;

WHEREAS, landfill gas is a greenhouse gas which is regulated by the Georgia Environmental Protection Division and as a regulated must be either used or destroyed to prevent or limit harm to the environment, and;

WHEREAS, Columbus Power Producers (CPP) has proposed a beneficial use for landfill gas as a fuel to generate power and CPP would like to develop this beneficial use at no cost to the Columbus Consolidated Government (CCG), and;

WHEREAS, CPP agrees to share revenue earned from the production of Electrical Power with the CCG.

NOW, THEREFORE, THE COUNCIL OF COLUMBUS, GEORGIA, HEREBY RESOLVES AS FOLLOWS:

The City Manager be authorized to execute an Environmental Services Agreement and all of the associated documentation, in substantially the forms attached, with Columbus Power Producers, LLC for the development of a landfill gas extraction system and beneficial use of said landfill gas.
_____________

Introduced at a regular meeting of the Council of Columbus. Georgia, held the _____ day of ________________ 2017, and adopted at said meeting by the affirmative vote of _______________ members of Council.


Councilor Allen voting __________.
Councilor Baker voting __________.
Councilor Barnes voting __________.
Councilor Davis voting __________.
Councilor Garrett voting __________.
Councilor Henderson voting __________.
Councilor Huff voting __________.
Councilor Thomas voting __________.
Councilor Turner Pugh voting __________.
Councilor Woodson voting __________.





_______________________________ _________________________
Tiny B. Washington, Clerk of Council Teresa Pike Tomlinson, Mayor

Environmental Services Agreement.pdf