With a $12 million hole to fill over the next five years, the head of the state’s trash authority believes the state should allow it to receive a renewable energy credit for the trash it burns and turns into energy.
That’s part of the sustainability plan, Thomas Kirk, president and CEO of Connecticut Resources Recovery Authority, presented to a state task force Tuesday.
The concept of giving the trash authority a renewable energy credit or REC for the electricity it produces by burning trash was a hard one for lawmakers to get their arms around this year.
“We think that Class I REC’s typically related to wind, solar power, run of the river hydro, and fuel cells, are not likely to be made available to trash-to-energy, but biomass and landfill gas REC’s are available,” Kirk said. “An argument can be made — I think a credible one — that the biogenic portion of the waste utilized, consumed in the trash-to-energy facility, typically 65 to 66 percent, should be eligible for Class I RECs.”
He said he believes that this year the idea will be considered favorably by the legislature.
State Rep. Lonnie Reed, co-chair of the legislature’s Energy and Technology Committee, said Wednesday that lawmakers told CRRA they were unwilling to entertain the REC proposal until CRRA got its fiscal house in order.
“They’re top heavy,” Reed said.
She said until the issue regarding the management of the organization was addressed it would have been difficult for the legislature to agree to subsidize the energy it produces.
“Structural changes need to happen before we talk about putting them in a different category,” Reed said.
Kirk did not formally address any of the issues auditors pointed out about the salaries and fringe benefits offered to top executives at the authority. The top five executives make $1.36 million in salaries and benefits, according to the Cohen Reznick audit released last week.
In his presentation Tuesday, Kirk suggested that if its board of directors reduced the $2.2 million a year it pays to the city of Hartford in lieu of taxes, reduced its education budget $97,000 per year, sold about $7 million in unused property, and applied the fiscal surplus from 2013, it could sustain its operations for five more years.
He said the organization also was open to using its bonding authority. The auditors suggested last week that bonding for capital improvements could be beneficial to the organization, which is looking at replacing some of its older equipment in order to increase its efficiency.
Kirk maintained that the organization can continue to be sustainable without any direct taxpayer support.
“I would argue that if the facility cannot be made sustainable without direct state or taxpayer support, likely you should be looking at dissolution or viability of the facility,” Kirk said. “It should be able to and can stand on its own.”
Over the past few years, CRRA has lost a number of municipalities who used the facility to dispose of their trash. There were 19 communities who chose not to renew with CRRA after the end of their 30-year contracts. The Mid-Connecticut Project, the CRRA facility which turns trash into energy, previously contracted with 70 towns and now contracts with 51.
Environmentalists are not sold on the idea of giving CRRA renewable credits.
“The proposal to include electricity from incineration in the top tier of our renewable electricity standard has been considered and rejected multiple times,” Abe Scarr, director of the Connecticut Public Interest Research Group, said. “It should be rejected again.”
He said the purpose behind renewable energy is to incentivize new, clean energy sources.
“Incineration is neither new nor clean and does not deserve Class 1 status or any other special carve out invented to achieve the same subsidy end,” Scarr said.
Macky McCleary, deputy commissioner of the Department of Energy and Environmental Protection, said he wasn’t exactly impressed with the presentation because while the business model presented would keep tipping fees low for municipalities, it doesn’t provide the operating capital needed to make improvements.
“It’s a bridge to nowhere,” McCleary told Kirk.
He said CRRA seems to have a five-year plan, but it doesn’t make room for improving its operations or giving its clients a good product.
“You could start an airline right now flying 707s, but you would not make money,” McCleary said. “It’s not a sustainable business model. The technology is ancient.”
Sticking with the plane analogy, Kirk said he thinks the current operation is more like a 737.
“It’s still viable. It still operates. It still moves passengers from one city to another,” Kirk said. “At some point in time the market will change and engine efficiencies will be such that you can’t afford to move from Hartford to Miami with a 737 anymore.”
He said if CRRA started today, the next best technology available is 10 years away. At that point, he said, efficiencies will improve to the point where it’s not necessary to operate six trash facilities in the state. CRRA is the only publicly owned facility and the least efficient, so it’s likely going to be the first to be shuttered.
CRRA will be required to submit their final plan to the task force by Nov. 30. The task force will then make recommendations to the legislature about the future of the authority, which was created in 1973.