The Updated Rhode Island Comprehensive Solid Waste Management Plan Michael Oconnell

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1 The Updated Rhode Island Comprehensive Solid Waste Management Plan Michael Oconnell Executive Director Rhode Island Resource Recovery Corporation Environmental Business Council of New England Energy Environment Economy

2 Updating the Comprehensive Solid Waste Master Plan The Future of Solid Waste in Rhode Island Environmental Business Council March 25,2014 Michael OConnell, Executive Director Rhode Island Resource Recovery Corporation 2

3 Current Mission/Objectives Mission: Provide safe, environmentally compliant, clean, and cost effective solid waste and recycling services for all Rhode Islanders. Key Objectives: 1. Work collaboratively with stakeholders to increase recycling and diversion to make RI a greener and healthier place to live. 2. Continue to increase the life of the landfill in order to provide long term significantly reduced waste disposal costs versus the market for all municipalities. 3. Remain financially self-sufficient funding all operational and capital requirements from fees. 3

4 Will Cover Today Background/Scope: -RI Solid Waste Volumes/Remaining Landfill Capacity -Waste Diversion Opportunities - Regional Market and Waste to Energy Plan Issues to Address: - Strategies that will Reduce Solid Waste - Optimal Post Johnston Disposal Solution - RIRRC s Funding Dilemma 4

5 RI Solid Waste Generation Rhode Island generates ~1.5M tons of solid wastes each year: ~25% is recycled or composted; ~20% is transported and disposed out of state ~55%, or 750K tons, is currently disposed in the Central Landfill 5

6 Current Disposition of 1.2M tons of RI Refuse Segregated Durable Goods 2% Segregated Wood 1% Other Recycling 0% Yard Debris Composting 7% Segregated Paper and Packaging 15% Materials Shipped OOS to WTE 21% Materials Disposed In State 54% 6

7 Background - continued Remaining approved landfill capacity (Phases V &VI) is 18.7M tons = 25 years at current loading rates Limited potential for further landfill expansion Additional recycling is possible but constrained by limited markets, required investments, and additional costs. Even at 90% recovery of currently mandated materials, coupled with some food waste recovery, 400K 500K remaining tons will need disposal. 7

8 Potential Disposition of RI Refuse Assuming 90% Recovery of Mandatory Recyclables Food Waste 0% Durable Goods 4% Other 3% Wood 4% Yard Debris 12% Waste Disposed 49% Non-Durable Papers, Containers and Packaging 28% 8

9 Potential Waste Diversion Initiatives Maximize paper and packaging recovery Expand recycling of durables through Extended Producer Responsibility (e.g. tires, carpet, medications, batteries, appliances) Commercial Food Waste Residential Food Waste Construction & Demolition and Wood 9

10 Regional Solid Waste Market 10

11 New England Solid Waste Disposal Capacity (Annual Tons) (ME, NH, MA, CT, and RI) Landfill WTE Total Capacity Demand Excess Capacity M 6.7M 12.6M ~ 12.6M None 2015E 5.0M 6.7M 11.5M ~ 10.0M +1.5M Observations: Current regional waste generation in the 10 million ton range. Market overcapacity will keep pricing unstable. Key Drivers affecting overall supply/demand:» Economy and waste generation» Transportation costs» New legislation» New technology» Recycling markets» Closed/Mothballed/New WTE/Landfill Sites 11

12 Rhode Island Market Dominated By Regional Incinerators Number of Incinerators Percent Incinerated National Rank Connecticut 6 65% 1 Massachusetts 7 34% 2 United States 87 7% N/A 12

13 Waste To Energy Economics/RIRRC Position Capital costs of $200,000/ton of installed capacity = $400 million for a 2,000 ton facility. Tipping fee ~$99-$111/ton (per study by GBB) RIRRC is open to utilizing WTE technology under the following conditions: Meets regulatory requirements. Uses proven, not experimental, processes. Must be economically attractive to municipalities. 13

14 Conclusions Regional Solid Waste Market Waste Disposal is currently a buyer s market but may be correcting. Minimal opportunity now for RIRRC to raise Commercial prices without risking volume losses. No new greenfield WTE plant built in 18 years across the US. Incinerators are price leaders, landfills are price followers. Potential may exist to lock up relatively low disposal prices for major long term commitments of solid waste volumes. 14

15 Planning Horizon Strategy Options Strategy Options Maintain Status Quo Invest in New Programs and Policies to reduce waste Become primarily a Municipal Disposal Facility Long Term Disposal Options (> 5 years) Transport/Dispose most RI waste out of state Utilize technology to process solid waste Pursue a Zero Waste Objective Explore feasibility of a major expansion of RI landfill 15

16 Strategy Options 1.) Maintain Status Quo Maintain current loading of 750k tons/yr. Seek incremental improvements in existing programs Minimal investments in new projects Manage facility to minimize tip fee increases Landfill Closes:

17 Strategy Options 2.) Invest in New Programs and Policies to reduce waste Solid Waste loading reduced up to 200K tons Improve paper and packaging recycling Expand Extended Producer Responsibility Increase commercial recycling and implement food waste diversion Landfill Closes:

18 Strategy Options 3.) Become primarily a Municipal Disposal Facility Reduce commercial Solid Waste loading by 250K tons through price increases to push volume out Preserves landfill capacity for municipalities Landfill Closes:

19 Long Term Strategy Options ) Transport/Dispose most RI waste out of state Assess locations/logistics/costs and implement by 2020 Maintain minimal local disposal capacity for back-up or emergencies Landfill Closes:

20 Long Term Strategy Options ) Utilize technology to process solid waste Assess viability of various waste-to- energy technologies Assess a Phase VII expansion for ash/residue disposal 10 year period to plan, vet, approve, bid, finance, construct Facility online 2025 Landfill Closes:

21 Long Term Strategy Options ) Pursue a Zero Waste Objective Develop policies and plans to maximize diversion from WTE and LF: Organics Durables MRF Materials Special Waste Landfill Closes:

22 Long Term Strategy Options ) Explore feasibility of a major expansion of RI landfill Acquire property, site, permit and develop major 25+ year expansion of RI landfill Landfill Closes:

23 Key Business Trends Category Actual Actual Actual Actual Actual Actual Actual Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Statistical Solid Waste Tons(millions) Average Tip Fee/Ton: *Municipal $32 $32 $32 $32 $32 $32 $32 **Commercial $52 $55 $61 $53 $50 $50 $50 Remaining Landfill Life (years) Recycled Tons (000) *$32 ton since 1992 **$50 ton in

24 Key Financial Trends (All In Millions) Actual 2007 Actual 2008 Actual 2009 Actual 2010 Actual 2011 Actual 2012 Actual 2013 Revenues $69.8 $66.9 $45.5 $48.8 $51.9 $ Operating Expenses Operating Income Transfer to State of Rhode Island

25 The Funding Dilemma The current system is funded through disposal fees and sales of recovered recyclable materials. Decreasing volume, decreases revenue. Landfilling is a service industry that has high fixed costs; as volumes decrease, the cost per ton increases. Even if more recycling to reduce solid waste, the revenue increase from recycling mitigates but does not offset disposal revenue losses. The cost structure that remains after the recent restructuring is composed of approximately 50% fixed costs. Therefore. decreasing volumes will require eliminating services, raising prices, or finding an alternative funding source. 25

26 RIRRC Landfill Costs Per Ton Estimates Solid Waste Landfilled (K Tons) ,000 Total Cost ($M) $27.6 $ 32.0 $ 36.5 Average Cost Per Ton* $ 55 $ 43 $ 37 Landfill Life(Years) *Includes $1.7M in program costs unrelated to the landfill. 26

27 RIRRC Average Cost Paid From Landfill Revenues Average Landfill Cost Per Ton Municpal Tip Fee Commercial Tip Fee $90.00 $80.00 $70.00 $60.00 $50.00 $40.00 $30.00 $20.00 $10.00 $0.00 1,500 1,400 1,300 1,200 1,100 1, Quantity Landfilled (K tons per year) 27

28 RIRRC BUSINESS SEGMENTS (ex MRF) With Controlled Pricing Segment F12 Tip Revenue Price Set By Municipal Solid Waste 11.0M Statute Commercial Solid Waste 13.1M Market Leaf and Yard Debris 0.3M Statute Eco-Depot 0 Practice Construction Debris and Other Total Charges for Services 5.8M Market/Statute $30.2M MRF Recyclables 0 Statute Grand Total $30.2M *Greater than 50% of services offered by RIRRC have fees or volumes controlled by statute. 28

29 Funding Dilemma - Conclusion Solid Waste disposal fee increases or new funding sources will be needed in order to: Operate the landfill at lower volumes to conserve landfill life; Maintain current free programs and services; Fund any new programs and technologies that municipalities or the state deem vital. 29

30 Examples of Impact from Possible Municipal Tip Fee Increases On Disposal Fees ($K)* Municpality Housholds Served Solid Waste Disposed FY2013 Solid Waste Disposed Per HH Current Disposal $32/ton Disposal $42/ton Disposal $52/ton Barrington 5,916 5, $ 199 $ 250 $ 301 Coventry 12,000 12, $ 417 $ 526 $ 635 Middletown 4,082 2, $ 73 $ 96 $ 118 Providence 62,500 55, $ 1,856 $ 2,366 $ 2,875 Woonsocket 10,193 8, $ 283 $ 372 $ 460 *Disposal Fees = Tip Fee up to Solid Waste Cap + Over the Cap Fees 30

31 Annual Per Houshold Disposal Cost Municpality Current $32 disposal fee Incremental $42/ton Incremental $52/ton Barrington $ $ $17.24 Coventry $ $ $18.24 Middletown $ $ $11.15 Providence $ $ $16.31 Woonsocket $ $ $

32 Municipal Costs & Opportunities Bulky Wastes -Mattresses; Scrap Metal; Appliances; Tires Extended Producer Responsibility -Tires; Unwanted Medications & Sharps; Carpet Leaf & Yard -Local composting areas; Backyard composting Automated collection -Large wheeled carts for recycling, smaller carts for refuse Pay As You Throw -Treat trash and recycling as a utility; Use (create) less, pay less. 32

33 Next Steps 1.) Reform the Municipal Pricing Structure: *Study Commission needed. *Remove pricing from legislative control. *Make all pricing contractual between RIRRC and Munis. *Identify impacts on Munis and actions to mitigate. *Implement by 2017 giving Munis time to plan/adjust. 2.) ADOPT A LONG TERM PLAN FOR SOLID WASTE THAT: *Is in the best long term interest of Rhode Islanders. *Balances trade-offs environmental and economic, but with minimal risk. 33

34 Municipal Pricing Reform Study Commission Review RIRRC Landfill Operating Costs, Average Cost per Ton, Marginal Cost Per Ton, and overall financial condition. Determine a structure or funding mechanism to periodically adjust the municipal fee required to fund the system. Consider a utility-based, fair process for setting fees on a recurring basis, such as via the PUC, which will facilitate funding projects and programs. 34