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Exhibit MSD 80A - Surrebuttal Testimony Richard Unverferth, MSDMSD Exhibit No. MSD80A 2019 Rate Change Proceeding RICHARD L. UNVERFERTH Surrebuttal Testimony Metropolitan St. Louis Sewer District June 3, 2019 Table of Contents Page Wastewater Capital Improvement & Replacement Program (CIRP) ..........................................1 Surrebuttal Testimony of Richard L. Unverferth, MSD June 3, 2019 2019 Rate Change Proceeding 1 MSD Exhibit No. MSD 80A Wastewater Capital Improvement & Replacement Program (CIRP) 1 2 Q1. Michael P. Gorman testified in rebuttal testimony that the District has discretion to 3 delay a number of projects within the CIRP into future years, specifically in fiscal years 4 2023 and 2024, and specifically in three areas: (1) wastewater solids combustion boiler, (2) 5 wastewater plant repair, and (3) capacity expansion. Does the District have that 6 discretion? 7 8 A. No, the District does not have that discretion. Deferring until after FY 2024 would risk 9 non-compliance with the Consent Decree, state and federal laws and regulations, and NPDES 10 permit compliance at treatment plants. 11 12 Please note that the “areas” identified by Mr. Gorman are really larger categories of 13 multiple projects, which during Direct Testimony Mr. Gorman confirmed were the following 14 projects: 15 • The “wastewater solids combustion boiler” that was referred to was the 16 fluidized bed incinerator project at the Bissell and Lemay wastewater treatment plants. 17 (MSD project 12565) 18 • The “wastewater plant repair” referred to were a number of wastewater 19 treatment plant repair projects at various wastewater treatment plants. (see Table MPG-3 20 page 2 of 2, MSD Exhibit MIEC 73) 21 • The “capacity expansion” referred to were projects related to the capacity 22 expansion of the Lower Meramec Wastewater Treatment Facility (MSD project 12255), 23 and the decommissioning of the Fenton Treatment Facility (MSD project 12170). 24 25 The Bissell and Lemay Fluidized Bed Incinerators project replaces incinerators originally 26 constructed in the 1970s. The operation of these incinerators is regulated by USEPA and 27 MDNR. 40 CFR Part 62 – Federal Plan Requirements for Sewage Sludge Incineration Units 28 Constructed on or Before October 14, 2010 (SSI Rule) was finalized in June, 2016, and required 29 new Maximum Achievable Control Technology (MACT) standards to be included in the Bissell 30 and Lemay plant operating permits. The SSI Rule defines a 50% threshold for the cumulative 31 cost of changes to existing incinerators before mandating replacement. As MSD has reached this 32 Surrebuttal Testimony of Richard L. Unverferth, MSD June 3, 2019 2019 Rate Change Proceeding 2 MSD Exhibit No. MSD 80A threshold, future rehabilitation of the existing incinerators is prohibited. The District’s second 33 material amendment to the Consent Decree was negotiated to financially accommodate the 34 construction of new fluidized bed incinerators, by delaying a number of major Consent Decree 35 tunnel projects. This Consent Decree amendment states “the Parties agree that this proposed 36 Amendment is necessary because MSD currently incinerates 68,000 tons of sewage sludge 37 annually, utilizing multiple hearth incinerators. The Federal Plan Requirements for Sewage 38 Sludge Incineration Units Constructed on or before October 14, 2010, set forth at 40 C.F.R. Part 39 62, Subpart LLL (“SSI Rule”), issued by EPA in 2016, require MSD to replace its multiple 40 hearth incinerators. The replacement of these incinerators will occur in fiscal years 2021–2026 41 timeframe and is estimated to cost approximately $360 million in 2017 dollars.” Construction 42 funding for this project is budgeted in FY 2023, 2024, and 2025. The FY 2025 budget funds 43 construction work that will extend into FY 2026. The District has no discretion to delay this 44 project. 45 46 Regarding “wastewater plant repairs”, the District is obligated to operate and maintain its 47 facilities to stay in compliance with its regulatory obligations and wastewater treatment plant 48 permits. NPDES permit violations and negative environmental impacts could result from the 49 District’s failure to complete the treatment plant rehabilitation, repair and replacement projects. 50 The District utilizes an Asset Management approach and prioritization process in planning these 51 types of projects, as described in the Rate Commission Third Discovery Request (EXHIBIT 52 MSD 63A-D). This approach is intended to ensure that the most critically important projects are 53 funded first, while projects without an anticipated potential for near-term failure or that appear to 54 have minor consequences of failure are not funded. Based on the District’s efforts to prioritize 55 these projects, and the potential for NPDES permit violations and negative environmental 56 impacts at these facilities if these projects do not proceed, we do not have discretion to delay 57 these projects. 58 59 Regarding the “capacity expansion”, these projects are listed in the Consent Decree as 60 required projects. See following for the dates associated with these projects. The District has no 61 discretion to delay these projects. 62 63 64 Surrebuttal Testimony of Richard L. Unverferth, MSD June 3, 2019 2019 Rate Change Proceeding 3 MSD Exhibit No. MSD 80A Lower Meramec River System Improvements – Baumgartner to Fenton WWTF Tunnel (Pg. E-65 28) 66 • Initial Design 8/20/2016 67 • Commence Construction 7/30/2020 68 • Complete Construction 7/9/2024 69 • Placement in Service 11/6/2024 70 Lower Meramec WWTF Expansion Phase II (Page E-29) 71 • Initial Design 3/13/2018 72 • Commence Construction 2/25/2021 73 • Complete Construction 2/10/2024 74 • Placement in Service 11/6/2024 75 Fenton Wastewater Treatment Plant Elimination (Page E-22) 76 • Initial Design 2/25/2021 77 • Commence Construction 8/14/2023 78 • Complete Construction 8/8/2024 79 • Placement in Service 11/6/2024 80 81 Q2. During the rebuttal testimony technical conference Nicole Young was questioned on 82 the overall percentage of the CIRP that is either CD related, Regulatory, or Other, what 83 are those percentages? 84 85 A. Previously provided in Appendix 7.2.2-4 of Exhibit MSD 1 have been summarized 86 below: 87 88 Surrebuttal Testimony of Richard L. Unverferth, MSD June 3, 2019 2019 Rate Change Proceeding 4 MSD Exhibit No. MSD 80A Percentage of CD to Regulatory to others for each and all 4 years of the Rate cycle: 89 FY CD Regulatory Other Total: 2021 321,048,000 25,310,000 1,000,000 347,358,000 Percentage 92.4% 7.3% 0.3% 100% 2022 309,759,000 20,530,000 6,000,000 336,289,000 Percentage 92.1% 6.1% 1.8% 100% 2023 298,336,000 124,928,000 1,000,000 424,264,000 Percentage 70.3% 29.4% 0.2% 100% 2024 234,290,000 168,320,000 6,000,000 408,610,000 Percentage 57.3% 41.2% 1.5% 100% Totals: 163,433,000 339,088,000 14,000,000 1,516,521,000 Percentage 76.7% 22.4% 0.9% 100% 90 Q3. During the rebuttal testimony technical conference Nicole Young was questioned on 91 the Bissell Trickling Filter Replacement project proposed in the upcoming rate cycle, and 92 the potential for utilization of existing aeration tankage that exists at the plant. Can you 93 provide the background that provides the basis for the scheduling of this project? 94 95 Need for New Trickling Filter Media 96 • The Trickling Filter (TF) Media Replacement was identified in the February 2014 97 WWTF Capital Improvement Plan document; in the 5-10 year timeframe (2024 98 would be 10 years). 99 • TF media was put online in 1992 and is 27 years old, it has reached end of life 100 and is showing signs of failure such as sections on top starting to crumble and 101 media pulling away from walls. There is no way to determine exact life 102 expectancy remaining without decommissioning one TF (making it inoperable) 103 and taking out five modules from each layer and sending in for testing. This 104 would not only reduce capacity but also have a significant cost. 105 • The manufacturer stated that when TF media has reached its end of life and fails it 106 is usually a catastrophic failure. They also felt if one goes the others are not far 107 behind. They stated TF media life expectancy is around 25 years. The media has 108 Surrebuttal Testimony of Richard L. Unverferth, MSD June 3, 2019 2019 Rate Change Proceeding 5 MSD Exhibit No. MSD 80A lasted as long as it has because this media design was very hearty due to the 109 organic loading on the plant initially and then that loading was reduced by 110 AB/Inbev putting in their own pretreatment system. 111 • Lead time on media is 5-6 months as it is made to order and then there is the 112 install time & cost. So this is not a project easily done in an emergency failure 113 situation. 114 • There is treatment benefit to replacing as well. As the new media can be designed 115 for existing loading and we can use more cross flow media which allows for 116 better oxygen transfer, and better nutrient removal. And the Nutrient study 117 recommended Biological Treatment keeping TF and doing chemical removal. 118 119 Trickling Filter Media Replacement vs. Turning Back On Aeration 120 Aeration cannot go back on line due to the following: 121 • Aeration was designed as polishing units to follow TF, not to treat the full flow of 122 the plant without TF, so media replacement would still be required. This was 123 verified in the comprehensive nutrient study. 124 • Aeration is situated at a higher elevation than primary so it would require 125 pumping up to TF to aeration. 126 • All piping, expansion joints and aeration air valves would need to replaced 127 • There is an estimate of over $150K in tree removal as snails and trees were left to 128 grow after these basins were removed from service. 129 • Concrete repairs to aeration tanks will be required; the extents of repairs are 130 unknown. Assessments would need to be made after all trees are removed 131 • O&M cost of running aeration tanks is higher than TF. 132 • The comprehensive Nutrient study is summarized: The activated sludge would be 133 beneficial for future nutrient removal, however, the current tanks are too small 134 and would need to be replaced with bigger tanks, even needing the trickling filter 135 footprint, so demolition would be required. 136 137 Q4. Does this conclude your surrebuttal testimony? 138 A. Yes 139