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State’s renewable energy bill is costly for Covanta waste-to-energy plant

The Covanta energy plant, which serves as the municipal waste burner for Stanislaus County and Modesto, can continue for another year selling higher-cost electricity to buyers that want renewable energy credits.

But a major state Senate bill to increase renewable energy sources in California will remove its special status in 2017. The facility is the only waste-to-energy plant in the state that’s eligible for renewable energy credits, because of a special status granted by the Legislature in 2002.

Senate Bill 350, which awaits the governor’s signature, will require that 50 percent of utilities’ energy come from renewable sources by 2030. And it does not restore the renewable credits for the waste burner near Interstate 5 west of Crows Landing.

Facilities that incinerate garbage to make electricity for homes and businesses are not accepted as green energy by backers of SB 350.

Keith Boggs, county assistant executive officer, said he expects Covanta to work on a legislative solution next year to get the renewable credits extended.

In a statement issued Thursday, Covanta said that SB 350 will put the plant’s long-term economic viability at risk.

The company noted the facility has three sources of revenue – fees charged to garbage haulers, energy and metal recycling. “Over the long term, the facility could be forced to increase tip fees to make up for the revenue loss,” the statement said.

Under a 15-year contract, Covanta burns at least 243,000 tons of garbage for the county and Modesto annually, and other cities in the county receive a 10 percent credit that helps them meet a state mandate to reduce landfill wastes by 50 percent.

Any attempt to charge more for cities to send their garbage to the Covanta plant could raise a few hackles.

In a 10-year agreement approved in May, the county lowered the Fink Road Landfill fees from $33 to $26 per ton and discounted the fees on garbage hauled from cities to the waste burner. In exchange, Turlock, Ceres, Hughson, Oakdale, Riverbank, Patterson, Newman and Waterford agreed to send a guaranteed amount of garbage to the landfill and Covanta plant.

The lower cost for cities to use landfills outside the county had threatened to unravel the solid waste partnership in Stanislaus County.

Approved last week on the last day of the legislative session in Sacramento, SB 350 also affects local utilities including the Modesto, Turlock and Merced irrigation districts.

Valley legislators such as Adam Gray, D-Merced, believe the districts’ hydroelectric plants that generate power for customers in Stanislaus and Merced counties should be considered renewable energy because they don’t produce greenhouse emissions.

“He would even accept a higher target if you count hydro as renewable,” said Mike Lynch, a Gray staff member. “We should be consistent with what constitutes renewable energy. You can’t have hydro excluded and solar roofs excluded but solar farms included.”

In its statement Thursday, Covanta said it supports goals in California for increasing renewable energy, reducing greenhouse gases and diverting garbage from landfills. But it argues that California and the U.S. are far behind Europe on policies for sustainable waste management and reduction of greenhouse gases.

People who favor waste-to-energy technology say it reduces demand on landfills that emit methane into the atmosphere.

Ken Carlson: 209-578-2321

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