Marion County, Covanta continue seeking ‘renewable’ status amid threats to close plant
After a bill failed in the 2019 session to qualify Covanta’s Brooks plant as a renewable energy source, the company is setting sights on the 2020 session. Covanta and Marion County are in talks to extend their contract before their contract deadline.
Marion County’s waste disposal partner was unable to secure from 2019 legislators a lucrative deal that would deem the company a renewable energy producer and now the Brooks plant’s future is in question.
Now, Covanta and the county are publicly making veiled threats that, if lawmakers don’t pass a proposal next year to make the Brooks plant eligible for “renewable energy certificates,” the facility could close.
Covanta burns garbage and biomass to produce energy. Being approved for renewable energy certificates would allow the company to earn an estimated $5 million more per year, county officials say.
The New Jersey-based company said it needs that money to fund ongoing maintenance at the 32-year-old incinerator. Its current contract with the county expires Sept. 20.
Both sides are in talks to extend the contract for another year. If Covanta’s trash-burning is deemed renewable, it could sell its power at a premium to Portland General Electric — and Marion County government could get a cut.
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A 2017 report prepared for the county states that the Brooks plant burns 187,000 tons of waste to produce 13.1 megawatts of electricity, which is then sold to Portland General Electric. Currently, the county gets 90 cents of every dollar from electricity sales.
“We’re doing everything we can to keep this facility open,” said Covanta spokesman James Regan.
That includes actively courting lawmakers. Leading up to the 2019 legislative session, Covanta donated $21,750 to the campaigns of Gov. Kate Brown, legislative leaders and legislators serving on the committee considering the legislation, according to state Elections Division records. State records show the company spent $344,689 on lobbying from 2018 to 2019.
Environmentalists and some lawmakers question whether incineration should be treated renewable energy similar to solar and wind.
“Trash incineration is a pretty dirty business,” said Paige Spence, lobbyist for the Oregon League of Conservation Voters, which worked to kill Senate Bill 451. That would have qualified Covanta as a renewable energy producer.
Furthermore, environmentalists point to Covanta’s corporate profits and note that the company has refused to disclose the financial state of the Brooks facility.
“It’s never appropriate for the state to dole out money to a company that’s not willing to lend some transparency to the conversation,” Spence said.
Still, Covanta says it needs the revenue from the higher energy sales. Regan said money would pay for “a variety of refurbishment projects and replacements” for the facility to run for years to come.
“Having that (revenue) was something we were earmarking and looking to use for some of that work. And, like I said, we’re trying to do everything we can now to keep that facility open,” he said.
Marion County Commissioner Kevin Cameron agreed. He said Wednesday that the incinerator needs the extra cash. He said if it closed, nearby landfills couldn’t handle all of Marion County’s waste, meaning trucking local garbage hundreds of miles to Arlington.
“What’s the carbon footprint of that?” he said. He added that items such as commercial fishing nets currently burned by the incinerator could be improperly thrown away.
Spence said those claims are dubious.
“This is preposterous, given that Covanta has never relied on (renewable energy credits) to meet its bottom lines, and has not articulated what has changed now,” Spence wrote in testimony to legislators earlier this year. “SB 451 is bad for the environment, bad for public health, and bad for Oregonians’ wallets.”
Spence questioned Cameron’s assertion that the Corvallis-based Coffin Butte Landfill doesn’t have the capacity to take the extra trash.
Julie Jackson, municipal manager for Republic Services, which operates Coffin Butte, said Marion County has not asked about sending additional waste to the landfill, but Coffin Butte would readily begin those conversations. She said the landfill has 40 years left on its life, and the company is working hard to extend that.
Regardless, the fight for certificates in the short 2020 session will be difficult. Sen. Michael Dembrow, D-Portland, was a key vote in getting SB 451 out of committee and to a Senate vote. He amended the bill so that Covanta would only get certificates for the megawatts produced from burning biomass rather than plastics.
But after that proposal failed in the 2019 session, he doesn’t see a route to passage next year.
“Boy, it’s really hard for me to see it having life in 2020,” Dembrow said.
Sen Lee. Beyer, D-Springfield, introduced SB 451 for Covanta. He declined an interview but through a spokesperson said he does not plan to do so again in 2020.
What that could mean for Marion County is uncertain. Revenue and expenses for the plant are the largest factors in Marion County’s environmental services fund, which pays for the county’s waste collection in unincorporated parts of the county.
Rep. Karin Power, D-Milwaukie, said she was lobbied often by Covanta Marion, but remains unsold that the company deserves the certificates. She said Covanta said they need the additional revenue they would get for selling renewable energy to do deferred maintained on the Brooks plant, but the global company is reporting increased profits.
It doesn’t add up, she said.
“Whether Covanta’s waste-to-energy operations, which emit a large amount of pollution at the same time, should be treated the same as say, renewable solar and wind is something I still have questions about,” Power said.
Brian May, Marion County’s environmental services manager, said the facility handles “the largest portion of disposal for the county.”
Covanta Marion declined to say how much it could make if it landed the ability to sell renewable energy credits. Cameron and May, however, told Salem Reporter it could end up being $5 million annually.
“It’s a big factor,” May said of the ongoing contract negotiations. “That funding mechanism, right, is a big piece of that picture.”
May said any extra money would enable Marion County to hold local garbage rates steady for several years. He said expenses have been rising in the industry.
According U.S. Securities and Exchange Commission filings, Covanta reported $10 million in profits in the second quarter of 2019.
Ultimately, if the Brooks facility closes as has been suggested, May said the county is developing plans to keep any impacts to a minimum.
“I think we have options to handle waste on a short- to mid-term basis if Covanta does go away,” he said. “I don’t view things as ‘the sky is falling and garbage is piling to the curb.’ I can guarantee that won’t happen.”
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