If signed into law, the bill will establish a unique program to subsidize power purchase agreements and expansion expenses for municipally-owned combustion facilities.
Published March 15, 2022
Cole Rosengren Lead Editor
Florida, home to more solid waste combustion facilities than any other U.S. state, may soon double down on that status with a new law.
Last week, state legislators finalized passage of a bill (SB 1764) that would establish a municipal solid waste-to-energy (WTE) program within the state’s Department of Agriculture and Consumer Services (DACS). This program would provide financial assistance for power purchase agreements (PPAs) as well as incentive grants for capacity expansion to publicly-owned waste combustion facilities.
Sponsors were initially seeking as much $100 million per year, but that was later cut, and the annual budget state legislators approved on Monday does not include a specified amount. While opponents say any amount of money spent on these facilities is misguided, supporters say more disposal capacity is needed in a peninsular state with the second-highest rate of population growth and many competing land uses.
“The need for solid waste disposal facilities is pretty sizable, and the counties where Florida has waste-to-energy facilities tend to be Florida’s most populous counties,” said Joe Kilsheimer, a consultant who is executive director of the Florida Waste-to-Energy Coalition, noting in many areas “there’s not a spare 3,000 acres in those communities that you can go put a landfill on.”
Florida combusts an estimated 8% of its overall municipal solid waste, according to 2020 state Department of Environmental Protection (DEP) data, with another 50% going to landfills and the rest counted as recycling. While Florida has the largest solid waste combustion capacity of any state, and it debuted the nation’s newest such facility in 2015, the overall volume the state processed declined in 2019 and 2020 (the two most recent years for which data is available).
Some solid waste combustion facilities have closed in recent years, bringing the state’s total count down to 11, but that trend could reverse as multiple expansions and new projects are under consideration. Pasco County’s facility is the only one known to have an expansion actively underway, but discussions are occurring in the counties of Miami-Dade, Broward and elsewhere.
Local government entities own the majority of Florida’s existing facilities and comprise the primary membership of the new coalition. Covanta — the operator of many publicly-owned plants, plus one privately-owned site that would not be covered by the bill — is an associate member.
“We support the proposed legislation because it acknowledges the importance of these facilities and the communities that have invested in them. These sites hold a critical part in helping the state meet its renewable and solid waste goals,” said Nicolle Robles, Covanta’s senior manager of communications and media relations, in a statement.
Landfill operators have been quiet on the matter. The National Waste & Recycling Association’s Florida chapter didn’t take an official position on the bill but supported a recycling amendment clarifying that grants may not be used to “promote, establish, or convert a residential collection system that does not provide for the separate collection of residential solid waste from recovered materials.”
Financial factors
While some lawmakers questioned why state taxpayers should be subsidizing solid waste disposal facilities for certain counties — especially when the proposed subsidy was for $100 million per year — supporters made the case this was inherently a state issue given Florida’s history.
Florida passed a law in the 1970s directing its most populous counties to explore the construction of WTE facilities during a period of heightened national concern around landfill capacity. The number of facilities soon grew from just one in the early 1980s to as many as a dozen at one point.
At the same time, the federal Public Utility Regulatory Policies Act of 1978 established a new framework for promoting energy efficiency. Under that law, utilities are required to purchase a certain amount of power using a formula based on the avoided cost of not having to build new energy capacity. At the time, this was largely based on the cost of building more expensive coal-fired power plants, but as natural gas and forms of renewable energy gained scale, the economics have shifted. Now, multi-decade PPAs that used to generate tens of millions of dollars — including for solid waste combustion facilities — are far less lucrative.
The expiration of PPAs has been cited as one factor in the closure of multiple facilities around the country in recent years, including one in Florida’s Bay County. According to a legislative analysis, six sites have PPAs set to expire with either Duke Energy or Florida Power & Light (FPL) in the 2024-2034 time period. Four others, including at least one that previously had a long-term PPA, now receive “as-available” energy cost payments from FPL.
“It’s no one’s fault that the utility industry has changed, it’s just been the dynamics of the marketplace,” said Kilsheimer.
With some utilities now feeling they don’t need energy from these facilities to meet their obligations, the shift for local governments with PPAs can be dramatic. Pasco County is often cited as a key example and inspiration for the legislation. State Rep. Amber Mariano, a primary sponsor of the bill, hails from the area and is also related to a Pasco County commissioner.
“What that does in Pasco’s case is you’re going from the final year of the existing power purchase agreement being valued at tens of millions of dollars now falling off to near zero,” said Jason Gorrie, president at JMG Engineering, who is a coalition associate and consultant on the county’s facility expansion.
The bill calls for state grants to pay locally-owned facilities up to “two cents per kilowatt-hour of electricity purchased by an electric utility during the preceding state fiscal year,” specifically for sites that had PPAs prior to 2022.
Justin Roessler, solid waste director for Pasco County, said his team is actively negotiating with Duke for a new PPA, but the return is likely to be much smaller after the current agreement expires at the end of 2024. The county is also looking to potentially expand its on-site use of the electricity for a wastewater treatment plant and biosolids processing facility. In the future, Roessler hopes to see more emphasis on renewable energy credits that would be beneficial for solid waste combustion facilities.
Multiple states currently offer some form of renewable energy credits for solid waste combustion or incineration — including in area with high concentrations of these facilities, such as the Northeast — according torecent research from The New School. Florida currently does not.
Tok Oyewole, U.S. and Canada policy and research coordinator at the Global Alliance for Incinerator Alternatives (GAIA), opposes this bill and views framing solid waste combustion as renewable energy a “fallacy,” since “waste is a source that is depleted when used.” Earthjustice also opposes the concept of supporting PPAs or considering combustion facilities a necessary energy source.
“People seem to think that incinerators, for some reason, are renewable energy, when they’re by far the dirtiest form,” said Bradley Marshall, a senior attorney in Earthjustice’s Florida office. “I also find it ironic at the same time the legislature passed a ban on net metering [because it would be subsidizing rooftop solar] they’re talking about huge subsidies for power from incinerators.”
Though proponents of these facilities recognize energy generation is secondary to their core waste management function, the loss of revenue from PPAs has become a financial challenge operators such as Covanta have noted in the past.
In the case of municipally-owned facilities like Pasco’s, where PPA proceeds are generally shared, Roessler said this lost revenue must be offset somehow because operating costs are fixed. Pasco County has contracted with Covanta, the operator of its current facility, to work on a planned $220 million expansion that could begin construction by the end of next year.
The proposed municipal solid waste-to-energy program could see excess funds not used to subsidize PPAs help accelerate such activity. According to the bill, DACS could offer dollar-for-dollar matching grants to “assist with planning and design for constructing, upgrading, or expanding MSWE facilities, including necessary legal or administrative expenses.”
“It would be material,” said Roessler, when asked how this would fit into Pasco’s plans. “It’s not going to be the whole facility, it’s going to be a little piece, but I think it will also help incentivize communities who are looking at waste-to-energy to do these types of projects, because they’re expensive.”
Next steps
If the bill is enacted, the next areas to watch will be how much funding this program receives and whether it affects broader state policy considerations.
Because no line item for funding was included for the grant program, legislators will need to revisit the issue through a future appropriations process. Supporters, such as the Florida Waste-to-Energy Coalition, are optimistic the program will receive funding, in part because bill sponsor Sen. Ben Albritton is in line to be a future Senate president. The senator who currently holds that title, Wilton Simpson, is also favored to be elected as the next DACS commissioner this fall and could be an ally.
“Our work is not done,” said Kilsheimer, “however, this is a huge step forward in terms of recognizing the value of waste-to-energy as critical infrastructure.”
This potential sign of state support could also renew discussions around broader waste planning efforts in Florida. While all forms of solid waste disposal generate emissions, landfill methane is an especially potent contributor to climate change and combustion facilities have a lower greenhouse gas emission profile.
“The support to level the playing field is indeed a step in the right direction,” said Philipp Schmidt-Pathmann, CEO of the Institute for Energy and Resource Management. “The better step would be to phase out landfilling altogether of untreated waste [and] focus on an integrated waste management system.” Schmidt-Pathmann and his colleagues also want to see more focus on the greenhouse gas implications of resource management.
Florida previously set a goal of achieving 75% recycling by 2020, when factoring in credits for combustion and landfill gas-to-energy systems, but didn’t meet it. The state’s current political climate isn’t considered favorable for policies such as extended producer responsibility, container deposit systems or postconsumer recycled content requirements that are gaining traction elsewhere. A bill that would have directed DEP to develop a “comprehensive waste reduction and recycling plan” did not gain traction this session, nor did a bill to reverse an existing policy that preempts local packaging ordinances.
Groups such as Earthjustice and GAIA want to see more discussion about the state’s overall waste infrastructure. They note the majority of Florida’s solid waste combustion facilities are in environmental justice communities, based on data from the U.S. EPA and other sources.
“These facilities are in decline nationally because of the backlash and because it is not a lucrative financial model, and they have to jump through a lot of hoops to actually get money,” said Oyewole. “There are economic losses, there are environmental and health losses.”
Earthjustice’s Marshall said his group will continue working with local residents in the group Florida Rising to oppose an air permit renewal for a facility in Doral and feels state funding would be better spent on waste reduction efforts.
Gorrie of JMG Engineering said technology continues to improve for such facilities, noting the Pasco expansion will have features such as a new air scrubber, baghouse, carbon injection, ammonia injection for nitrogen oxide reduction and continuous emissions monitoring.
Roessler said Pasco County has positive community relations with its neighbors; it’s maintaining a focus on increased recycling efforts; and it also has a responsibility to manage the growing volumes of waste material being generated. The new facility is being built to have excess capacity because the county currently has to send a portion of its waste to an outside landfill, but the population is growing so quickly that Roessler estimates the facility “will pretty much already be full by the time this is built” in 2026.
The fate of Florida’s potential municipal solid waste-to-energy program now rests with Gov. Ron De Santis, who some believe is likely to sign the legislation given it passed unanimously in the Senate and by a wide margin in the House of Representatives.
To read the article in WasteDive please click here.