Grand Rapids’ $84.5M biodigester project delayed again, now until March 2021

In a Tuesday, July 21, memo to city leaders, City Engineer Tim Burkman wrote the latest delay pushing full completion of the biodigester from July 2020 to March 2021 is due to “revised phasing, extended equipment delivery schedules and COVID-related delays.”

So far, several parts of the project are completed, Burkman said. The biodigestion tanks themselves, as well as the natural gas recovery and phosphorous removal systems, aren’t yet finished.

No additional funding is being sought because of the delay, Burkman said.

The project to turn concentrated waste from businesses like Founders Brewing Co. into renewable energy is currently budgeted at $84.5 million, according to the city.

The additional delay could negatively affect future sewer rates, because estimated revenues from the sale of renewable gas generated by the biodigester won’t start until after project completion. City officials said they are currently calculating that impact.

Officials last fall estimated the biodigester project, financed through the sewer system fund and revenue bonds, would hike sewer rates by 11 percent in 2021. Some of that was loaded onto the current 2020 rates.

The biodigester was pitched in early 2017 as a $30 million project to handle a growing amount of concentrated waste that would overload the wastewater plant’s capacity in the next few years. At the time, a wastewater treatment plant expansion was billed at $90 million.

Biodigesters uses bacteria to break down organic waste, such as food scraps and feces. The byproduct of that process is largely methane, and the city plans to capture and clean it into renewable natural gas for sale.

At the project’s inception, turning the waste into renewable natural gas wasn’t planned.

City officials last fall estimated total revenues from the project, including the sale of renewable natural gas, phosphorus and liquid industrial by-product, stand at about $3 million a year.

Although market prices for natural gas have rebounded since then, city staff haven’t changed annual revenue estimates because of unknowns about natural gas market volatility and the impact of the COVID-19 pandemic.

The project was viewed by city officials as the cheaper and more environmentally friendly option over a traditional wastewater treatment plant expansion. Cost overruns, delays and permitting failures have plagued the project.

Officials have largely blamed overages on design changes and rising construction and materials costs.

When city officials broke ground on the project in December 2017, it was slated for completion in spring 2019. It was delayed several times after.

Some delays were caused by adding the renewable natural gas component. Others were caused by final design revisions that the city deemed cost-cutting measures.

Final design changes were prompted by a failure to consult with the Michigan Department of Environment, Great Lakes and Energy for nearly a year.

That resulted in late design changes and three violations for starting and continuing construction on the biodigester without a permit from EGLE’s Air Quality Division.

Top city officials, like Deputy City Manager Eric DeLong, were unaware of the permit issue for more than half a year.

Posted By: MLive on July 23, 2020. For more information, please click here to read the source article.

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Drake V. Harper

Drake V. Harper

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