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HomeMy Public PortalAboutExhibit MSD 83B1 - MSD's Supplemental Information PacketBissell & Lemay WWTF Fluidized Bed Incinerators (12565-015.8) Program Management Committee Meeting July 5, 2023 Exhibit MSD 83B1 2 Agenda Item Bissell & Lemay Fluidized Bed Incinerator (12565) •Appropriates Funds •$101M of a total of $900M •Enters into contract •Kokosing/Plocher, LLC 3 Agenda •Brief Background •Purpose of Today’s Presentation •Question & Answer Format •Why the cost increase? •Why FBIs, rather than…? •Incineration w/ ash disposal •Anerobic digestion w/ land application •Should MSD partner with Illinois American Water? •Have we considered other project financing incentives? •Why do the project now? •Recommendation •Additional Questions PROJECT GOALS •Improve Air Quality by meeting new air emissions standards and addressing future regulations •Biosolids Solution to meet MSD's long- term needs •Replace Aging Infrastructure •Balance impacts to MSD customers 4 BRIEF BACKGROUND •April 13th –Agenda item introduced April 2023 •May 11th –Board Meeting –Agenda Item held •May 25th –Special PM Meeting –Staff Presentation •June 8th –Board Meeting –Agenda Item held •July 5th –TODAY -PM Meeting –Staff Presentation •July 13th –Board Meeting –Agenda Item scheduled to be considered for adoption Why the cost increase? -Brad Nevois •Initial study performed 2016-2017 •Conceptual estimated $360M (2017 dollars) •Approached EPA for CD Modification •New air regulation •Potential effect on rate payers •Final project scoping began 2019 •Major scope modifications: •Overall Solids Volume Increases •2016 –2018 river levels •Operational Redundancy •Additional incinerators related to maintenance cycles 6 Question Can you explain why the cost of the project has increased over the life of the project? •Owner’s Representative estimate of $575M in early 2020 •2020 –2023 Market Instability •Lowest Price Proposal $899M (6% above) •Other Price Proposals Received: $1.0B, $1.2B 7 Question Why was the final Price Proposal more than the Owner’s Representatives estimate? Design Cost Estimating Range of Accuracy Year AGC CCIs Base Cost Estimate Low End (-20%) High End (+30%) 2020 $575,000,000 $460,000,000 $747,500,000 2021 12.2%$645,150,000 $516,120,000 $838,695,000 2022 18.5%$764,502,750 $611,602,200 $993,853,575 2023 10.9%$847,833,550 $678,266,839 $1,102,183,615 Why FBI, rather than …? -Jay Hoskins, P.E. Biosolids: the byproduct of the wastewater treatment clarification process. Biosolids Considerations •Location –Where are the biosolids generated? •Bissell and Lemay Plants •Quantity –What is the scale and variability of production? •MSD is a large quantity producer •Chemistry –What is in the biosolids? •MSD biosolids have lower volatile content •Treatment –What technologies are available? •Two options: incineration or anaerobic digestion 9 Major Factors Biosolids Considerations: •Location •Quantity •Chemistry Fluidized Bed Incineration 10 Biosolids Management Approach •Incineration •Ash Disposal •Anerobic Digestion •Land Application Thermal combustion process converts all organic material to CO2 and water, leaving ash Fluidized Bed Incineration •Technological upgrade to existing incineration facilities •Reduces air emissions by at least 70% •Can process low volatile MSD solids and variable quantities •Fits on existing facility land •No additional infrastructure or trucking •Ash continues to be disposed at MSD landfill •Promising PFAS destruction and treatment technology •Can incorporate energy or steam generation 11 Biosolids Management Approach •Incineration •Ash Disposal •Anerobic Digestion •Land Application Anerobic Digestion (AnD) Biological process that transforms ~50% of organic material in raw solids into methane 12 Biosolids Management Approach •Incineration •Ash Disposal •Anerobic Digestion •Land Application Anerobic Digestion (AnD) •New treatment process •MSD biosolids organic content is lower than typical. Yields less natural gas, less energy benefit •Systems with thermal hydrolysis (THP) need high pressure steam reactors. Safety concerns from grit and soil •Process more easily upset by change conditions MSD cannot control •Larger process footprint •Needs additional land MSD doesn’t own •Requires additional facilities and equipment: storage, loading, transportation, land, and odor control •Requires new biosolids land application program •Does not remove PFAS •Can incorporate renewable natural gas generation 13 Biosolids Management Approach •Incineration •Ash Disposal •Anerobic Digestion •Land Application Ash Landfilling •Existing MSD owned landfill •Annual hauling event from plant to landfill, flexible timing •Lower material volume, less hauling •Limits spreading “forever chemicals” Land Application •MSD doesn’t land apply now •6000 acres needed •Location limited: 20-mile radius of plant •Requires treated biosolids storage •13,000 –20,000 truckloads annually •Seasonal application •4x more trucks than ash hauling •Needs special, efficient loading facilities •Requires new farm equipment, fuel, and labor for tilling •PFAS regulation Uncertain near future 14 Biosolids Management Approach •Incineration •Ash Disposal •Anerobic Digestion •Land Application Cost comparison •Fluidized Bed Incineration •$900 million capital cost •Anaerobic Digestion with THP •$1.1-1.3 billion capital cost •Added cost: TBD facility land purchase •Added cost: $250M land application program Regulatory comparison •FBI with landfilling •MSD has permits to operate & construct •AnD with Land Application •Hauling distance limits •Seasonal application restrictions •PFAS & other emerging contaminants 15 Biosolids Management Approach •Incineration •Ash Disposal •Anerobic Digestion •Land Application Should MSD partner with Illinois American Water? -Jay Hoskins, P.E. •Early-Stage Concept, Few Details, Many Questions, No Commitment to Date •Would require MSD to haul 40-60 trucks of raw, odorous solids to the facility, every day •Currently no off-loading facilities: TBD cost •Estimated hauling cost: $6-9M/year •Odor and nuisance hazards •Increased greenhouse gas emissions •Regional facility doesn’t solve PFAS risk •Regional facility doesn’t solve need for new land application program 17 Illinois American Water Concept •Facility located in Metro East Illinois •Taking biosolids from entire area •Constructed by Illinois American Water •Utilize anaerobic digestion Public Input •MSD staff do not recommend proceeding unless a modified Clean Water Act 208 Regional Water Quality Plan is approved •Plan Modification Process •Plan Development •Approval and recommendation from East- West Gateway Council of Governments •Approval of the Missouri Clean Water Commission & Illinois Pollution Control Board •Approval of the Governors of Missouri and Illinois •Approval of the EPA Region 5 and Region 7 Administrators •Best Case Outcome: 5+ years •IAW regional facility could not be built in time to meet MSD’s existing facility needs 18 Illinois American Water Concept •Facility located in Metro East Illinois •Taking biosolids from entire area •Constructed by Illinois American Water •Utilize anaerobic digestion Have we considered other project financing incentives? -Tim Snoke 20 Project Financing Incentives •MSD is always on the look out for Federal funding •Proposing to fund FBI project with SRF and WIFIA •ARPA funding is gone •Inflation Reduction Act (IRA) does provide for a tax credit •Renewable Natural Gas Credit: Start Construction by 1/1/25 •MSD would need to foot the upfront capital funds •Tax credits are generated after project is in service •Credit value is reduced if financed with tax-exempt debt •Credit is only on the cost of the renewable energy investment, not whole project •Majority of project costs are in wastewater treatment •Conclusion: changing project to earn tax credits will result in net project cost increases Why do the project now? -Bret Berthold •Existing incinerators 50+ years old •Bissell Point has 3-5 years life remaining •Lemay has 5-10 years life remaining •EPA air emission standard •Extensive rehabilitation prohibited •Operating permit violations •Reduced treatment capacity •Wastewater bypassing to river •CD modification implications •Project was basis for CD modification •“The replacement of these incinerators will occur in fiscal years 2021 –2026 timeframe …” 22 Primary Reasons For Project Now •Replace Aging Infrastructure •Comply with air emission standards •Improve air quality •Avoid Operating Permit violations •Comply with CD modifications Recommended Solution •Handles all MSD plants biosolids •Addresses Aging Infrastructure •Improves air quality and meets new air emission regulation, PFAS and considers future regulations •Allows MSD to continue high- quality wastewater treatment •Balances social, environmental and financial impacts to MSD customers 23 Proceed with Upgrade of the Biosolids Treatment at both Bissell and Lemay Treatment Facilities with Fluidized Bed Incinerators Most cost effective and environmentally beneficial solution. Questions? Memo To: MSD Board of Trustees From: MSD Staff Subject: Bissell & Lemay Fluidized Bed Incinerators (FBI) (12565-015.8) Technical Issue Review Date: July 5, 2023 This document was produced to provide additional information and answer numerous inquiries and suggestions from the Board of Trustees and community partners regarding the above referenced project. This information will be discussed as part of a follow-up presentation to the Board’s Program Management committee on July 5, 2023. Issue: During the development of the FBI project from the study phase through planning and design, scopes have been adjusted and estimated costs have escalated, please elaborate. Response: Complex projects of this nature go through a process of an evolution in finding the best solution to meet the public’s needs. This project due its complexity and scale faced many challenges. Accordingly, a detailed study was performed from 2016-2017 to help better define the best solution for the public. At the completion of the initial study period a conceptual estimate of $360M (2017 dollars) was used to approach the EPA about a CD modification. In June 2018, MSD was granted a CD modification related to the implementation of a new air regulation that resulted in additional spending to fund this project. MSD began the final solution definition in earnest in 2019. This began with the selection of an Owner’s Representative Team of industry experts to assisting in further defining the project scope and assist in the Design Build procurement. Two major factors affected the overall scope and subsequently the cost of the project: 1. Overall Solids Volume Increases – The Owner’s Representative Team in conjunction with MSD staff conducted a detailed analysis of actual solids volumes currently being incinerated along with future needs. This was especially influenced incinerator volumes experienced during the extreme high Mississippi river level years of 2016-2018. Ensuring the ability to react to the differing conditions caused by fluctuations in the Mississippi River levels, significantly increased the needs for both the solids handling equipment and incinerator sizing. 2. Operation Redundancy – While working with the Owner’s Representative team of experts on the final scope it became apparent that operational redundancy was not considered in the conceptual estimate. Ensuring that the project scope has adequate incinerator capacity to account for efficient incinerator shut down to allow for maintenance of the equipment is essential. This resulted in an overall increase the number of incinerators units at both plants. Based 2020 data and incorporating these scope modifications, the Owners Representative team put a project estimated of $575M together based on available data at the time. Issue: Upon completion of the Design-Build proposal, an estimate of probable costs was prepared by the District’s Owners Representative, since that time through the final proposed appropriation for the project the price has escalated. Please elaborate on impacts to these cost during this period. Response: Beyond the changes in the scope, during the procurement of the project the construction market went through a period of considerable instability. This instability results in risk for bidders who are guaranteeing their price, which resulted in bidders increasing their overall prices. The market instability showed up in several different ways during the 2+ years prior to the Design Build teams submitting their price proposal in December 2022. • Materials – increase material costs and the lack of availability of materials • Supply Chain – extensive delays in getting specialized equipment • Labor – lack of availability of skilled labor and the resulting higher labor costs • Construction Market Activity – continued higher than normal construction activity creating greater demand • Construction Cost Escalation – increased overall cost escalation resulting increase costs associated with market instability Based 2020 data, the Owners Representative team put a project estimated of $575M together based on available data at the time. In a previous meeting staff provided the CBRE Construction Cost Index (CCI) to show this impact. Below is a chart to help further demonstrate these impacts. It should also be noted if we utilize a similar Association of General Contractors (AGC) index for our industry, the 2023 base cost estimate would have been $848M as shown below. Any estimate at this stage would typically have uncertainty, we typically assume -20% to +30%. Conceptual Design Cost Estimating Range of Accuracy Year CBRE CCIs Base Cost Estimate Low End (-20%) High End (+30%) 2020 $575,000,000 $460,000,000.0 $747,500,000 2021 8.3% $622,725,000 $498,180,000.0 $809,542,500 2022 10.5% $688,111,125 $550,488,900.0 $894,544,463 2023 7.0% $736,278,904 $589,023,123.0 $957,162,575 Conceptual Design Cost Estimating Range of Accuracy Year AGC CCIs Base Cost Estimate Low End (-20%) High End (+30%) 2020 $575,000,000 $460,000,000.0 $747,500,000 2021 12.2% $645,150,000 $516,120,000.0 $838,695,000 2022 18.5% $764,502,750 $611,602,200.0 $993,853,575 2023 10.9% $847,833,550 $678,266,839.8 $1,102,183,615 Issue: Please discuss the Alternative Technologies evaluated by the District for the treatment of its Biosolids. Response: Some of the major factors in searching for a biosolids treatment solution are the location, quantity, and chemistry of the biosolids. The majority of MSD’s biosolids, at least 80%, are processed at Bissell or Lemay. It makes sense to treat biosolids at Bissell and Lemay because these facilities are the ones that produce most of them. MSD produces a significant quantity of biosolids at its seven (7) wastewater treatment plants. For an idea of the scale, MSD produces about 40 percent of all the biosolids created by Missouri utilities. Bissell & Coldwater 45% Lemay 35% MO River 7% Lower Meramec 5% Fenton 2% Grand Glaize 6% 2022 Facility Solids Production Total = 45,177 dry tons Solids Production, Dry Tons Treatment facility 2016 2017 2018 2019 2020 2021 2022 Coldwater 5,045 4,689 4,951 4,951 5,402 4,942 5,211 Bissell 34,442 44,730 35,015 38,145 29,463 16,195 15,176 Lemay 17,514 16,752 18,490 18,078 16,219 16,752 15,850 MO River 2,832 3,175 3,160 3,589 3,356 3,221 3,061 Lower Meramec 1,660 1,683 1,858 1,999 1,937 2,829 2,101 Fenton 793 959 898 1,490 974 930 961 Grand Glaize 2,887 2,737 2,883 2,892 2,876 2,743 2,817 Total 65,173 74,725 67,255 71,143 60,227 47,612 45,177 Additionally, the quantity and chemical makeup of the biosolids that MSD must process is significantly affected by the flow of the Mississippi River. When the river is high, inflow from the river comes to the wastewater treatment plants. Then, biosolids quantities go up, and the amount of organic material (or fuel content) in the biosolids goes down. When the river is low, biosolids quantities go down and fuel content increases. When we are looking at technologies that can meet our needs, the wide variability in biosolids quantity and fuel content is a major factor that we must engineer for. Also, this variability is something out of our control, and we can’t predict when it will happen. MSD’s engineering design consultant, Black & Veatch (B&V), analyzed MSD’s production quantities and solids chemistry and provided design recommendation to MSD as part of this work. (Bissell and Lemay WWTF Fluidized Bed Incinerators (12565), Technical Memorandum No. 04: Solids Quantities and Characteristics, 24 September 2019.) B&V considered the current solids processing rate, as well as future needs. Future needs include increase solids recovery that will need to occur due to requirements for additional wastewater treatment for phosphorous beginning in 2028. These estimates do not account for the impact of the Lower/Middle Des Peres CSO Storage Tunnel, and additional treatment required to operate it. While the precise impact of the tunnel is uncertain, it will increase solids production using primary treatment processes. An excerpt of the design parameters the B&V developed, and MSD staff concurred with, are provided below. Design Parameters for Sizing Biosolids Treatment Design Parameter Bissell Point Lemay Lower Meramec Grand Glaize Total Solids, DTPD % Volatile Solids Total Solids, DTPD % Volatile Solids Total Solids DTPD Total Solids DTPD Normal, Annual Average 134.0 42.9 104.4 53.2 15.3 10.7 Normal, Max Month 168.1 44.9 129.4 47.9 19.3 12.9 Normal, Peak Weak 246.8 32.6 153.8 50.7 24.0 16.8 Flooding, Max Month 247.6 32.2 143.5 45.6 25.9 14.9 Flooding Peak Week 297.3 28.6 189.3 40.6 34.6 25.0 At a high level, there are essentially three (3) approaches to treatment and disposal of biosolids: Anerobic digestion with subsequent land application or landfilling, landfilling of raw solids, and incineration. MSD looked at various options for all of these and evaluated them across a triple bottom line matrix based on social, environmental, and economic factors. Anaerobic Digestion MSD considered several versions of anaerobic digestion technologies to treat biosolids. Anaerobic digestion is a biological process that works best with consistent feeds rates and fuel content. For all of these, the variability in biosolids quantity and chemical makeup of the biosolids currently produced at the Bissell and Lemay plants would make treatment operations with digesters difficult. The chemical makeup of the biosolids that MSD must process at these two plants is significantly affected by the flow of the Mississippi River and grit and soil received in the combined sewer system. This was a major factor among others that MSD chose not to pursue this option. The volatile content of the material to be digested, a major chemical attribute for designing and operating these systems, is frequently very low at Bissell Point and Lemay. Their material would yield less natural gas than typical biosolids. Volatile solids percentages at wastewater treatment plants with separate sewers are often 60-80 percent. Also, in the anaerobic digestion process, not all of the volatile solids are converted into biogas; typically, about half of the volatile solids are destroyed. With solids feedstock containing lower volatile content, there is a major question as to whether anaerobic digestion technology is even feasible, especially during critical periods like a flood. If it is even feasible, then these facilities would need to be designed and constructed using atypical design parameters (e.g., volatile suspended solids loading rates, solids retention time, and/or solids/water content) and equipment. To ensure feasibility, further testing and validation of the design, equipment, and operational approaches would need to be proven. Potentially, MSD would need an additional biosolids treatment process to handle biosolids at times when anaerobic digestion isn’t feasible. Such an additional process would add significant additional cost and operational challenges to an already complex treatment system, and at a critical period. Because anaerobic digestion is a biological process, and reasonably consistent volatile loading rates are necessary to produce stable conditions that the microorganisms require for treatment. Consider that the volatile content of the material from Lemay and Bissell can swing (e.g., 30 -50 percent), which is significant, and typically accompanied by increased volume of material overall. If these changes cause MSD to “lose” the microorganisms necessary to operate the treatment process, then MSD could not digest biosolids and then the entire wastewater treatment process would stop working. Future CSO controls at Lemay will extend the duration of changed influent conditions, making operating and preventing upset of anaerobic digestion facilities more difficult. Any type of anaerobic digestion process would require significantly more land than the existing incineration process. At Lemay, MSD would need to acquire land, potentially through condemnation. Land acquisition at Lemay alone could negate the project. Anaerobic digestion would require other process and operational changes. MSD would need different solids dewatering equipment. MSD would need digested biosolids storage facilities. Finally, because the volume of biosolids leaving each plant would be greater, four (4) times as many trucks would be required for hauling as currently needed. Trucking transportation/facility roadway improvements at each facility would be needed for the additional hauling, as well as the larger facility footprint. MSD would need to develop a large land application program, or landfilling program. Either raw or digested solids are not permitted to be disposed in MSD’s landfill. For landfilling to be an option, digested solids would either need to be disposed in one of the area’s privately operated landfills, or MSD would need to construct a landfill (see discussion on landfilling, below). Anaerobic digestion technology will not remove PFAS from biosolids, adding uncertainty to future disposal options (see discussion on landfilling and land application, below). The engineering of these systems has been investigated by MSD for many years, and again now. The conclusions of those assessments have consistently been the same: anaerobic digestion of MSD’s biosolids into natural gas at Lemay and Bissell Point is not a good plan and cannot reliably meet all of MSD’s needs, all of the time. Landfilling MSD staff also considered raw solids landfilling. MSD would need to haul 40-60 trucks per day of raw solids. MSD would be storing undigested and odorous solids for extended periods at the Bissell Point and Lemay plants. Trucking raw solids also represents an odor and nuisance hazard. Landfilling would have the highest greenhouse gas emissions. Also, there is significant concerns about the long-term viability of landfilling raw solids due to future PFAS regulation. The St. Louis region has landfill facilities that MSD has utilized, at times, for disposal of raw solids. Controlling odors during transportation is sometimes difficult and leads to complaints. Landfill operators, in response, have discussed that MSD needs to address the odor concerns, or the landfill will refuse to accept the material. Also, wastewater solids sometimes need additional processing in the landfill (e.g., mixing with other waste) to make the material acceptable for disposal, at additional cost. MSD doesn’t own the land where an appropriately sized new landfill could be located, and therefore land would need to be acquired for that option to be viable. Construction and operation of a new raw solids landfill would be subject to challenging environmental permitting requirements and land use restrictions. MSD staff are not recommending landfilling as a long-term biosolids management strategy. Fluidized Bed Incineration In a biosolids incineration process, the volatile part of raw solids are combusted and inert material (ash) is produced. Fluidized bed incineration (FBI) uses hot sand and air to create a “floating” or fluidized bed that “burns” or combusts the solids into carbon dioxide, water, and an inorganic ash material. All the volatile material is combusted in the fluidized bed. As such, incineration has the greatest volume and weight reduction of any common biosolids treatment option, resulting in the least amount of material to dispose and lowest associated truck traffic. With this alternative, MSD would also be able to continue to dispose of ash in its existing landfill. FBI units use natural gas as an auxiliary fuel to start the treatment process. Once in steady-state operation, the solids combustion process is typically self-sustaining (e.g., unless the volatile content is too low). FBI technology provides a stable, high temperature combustion (e.g., 1,500 °F) for clean burning and incorporates heat recovery for conserving auxiliary fuel. FBI facilities can be designed to handle the variability in biosolids quantity and chemical makeup that MSD must treat, without other major facility and operational changes. FBI facilities could be located on the existing Lemay and Bissell Point sites (i.e., additional land purchase is not needed). The exhaust stack for an FBI facility is much smaller and lower than the stacks MSD currently uses. The existing “smokestacks” at Bissell and Lemay would be taken out of service and demolished. Example operating FBI facility with Exhaust Stacks High efficiency emission control equipment is required to meet regulations. EPA established Maximum Achievable Control Technology (MACT) emission standards for Sewage Sludge Incinerators (SSI) based on FBI performance with advanced emissions controls. Environmental permitting associated with installation of SSIs can be very challenging. Obtaining Clean Air Act permits requires that emissions not only meet the SSI MACT standards, but also a complex emissions accounting analysis to ensure prevention of significant deterioration (PSD). Based on the results of the PSD analysis, regulatory agencies determine what permit process is followed. For sites without existing emission sources, air construction permitting of a new FBI system is very challenging and the PSD analysis may yield uncertain results. As such, it is very difficult to move a SSI facility to a new location. However, existing sources have a path to obtain air construction permits, provided projects meet agency requirements. Both Bissell Point and Lemay have existing sources of emissions because they both currently operate multiple hearth incineration units. MSD staff met with regulatory agency staff to identify what the air permitting process would be, should MSD replace the existing multiple hearth incinerators with new FBI technology. The regulatory agencies determined that these projects could meet the De Minimis Construction Permit requirements, based on predicted solids throughput rates and performance of emissions controls required to meet the MACT SSI requirements. Based on this analysis, the agencies concluded that potential emissions from FBIs at Bissell Point and Lemay would be below levels it considered de minimis for each regulated air contaminant. As such, the agencies have issued air construction permits for new FBI facilities. FBI is a promising PFAS destruction technology. Additionally, included emission control processes, like granular activated carbon, should remove PFAS from the exhaust. One of the safest approaches to limiting the spread of PFAS contamination via biosolids is fluidized bed incineration and landfilling the ash. The FBI approach scored highest in the triple bottom line assessment, compared to anaerobic digestion and landfilling. Issue: Please provide a comparison of Capital Costs, FBI vs. Anaerobic Digestion Response: Some people have stated “an alternative biosolids facility that would generate methane that could be sold as an alternative and renewable fuel source would cost nearly half of the incinerator project.” Implied is that MSD should use an anaerobic digestion process to treat biosolids. B&V provided MSD with a current cost projection for anaerobic digestion facilities with the Thermal Hydrolysis Process (THP). (This approach would be similar technology to what Kansas City Water is building at its Blue River facility. See below discussion.) The cost projection is $1.1 billion to $1.3 billion, in today’s dollars. This cost does not include land acquisition. Land acquisition alone could negate feasibility at Lemay and could significantly increase the cost of the Bissell facility. This cost also does not include other required facility and operational changes (see above). The construction cost of the FBI project is $900M, and less than the projected cost of anaerobic digestion with THP. Cost recovery from renewable natural gas generation would be lower than typical because of the lower volatile solids content, and lower prices for RNG. (See below discussion on Energy Production and Energy Cost Recovery.) Issue: Please discuss the future and current outlook for Biosolids Land Application. Response: MSD does not currently land apply any biosolids. MSD does not own land where biosolids could be land applied. To utilize biosolids land application, MSD would need to acquire many thousands of acres farmland and/or contract with farmers to land apply the biosolids as fertilizer. Other utilities that land apply biosolids have additional staff dedicated to this program, spending years developing their land application programs and the relationships with farmers that make the program successful. MSD estimates it would need about 6,000 acres of land for land application of digested biosolids, each year. Missouri currently restricts land application of biosolids to within a 20-mile radius of the wastewater treatment facility. Most of the land within the 20-mile radius of Bissell Point or Lemay is urbanized. Having sufficient agricultural land to apply all of MSD biosolids within this distance makes land application infeasible. Land Application Requirements Map Missouri DNR would need to approve any proposal by MSD to land apply at distances greater than 20 miles from the wastewater treatment facility. DNR’s hauling restriction is a long-standing requirement that some stakeholders have requested DNR keep in place to prevent spreading of biosolids into rural areas. Given those concerns and the sheer quantity of biosolids that MSD creates, DNR approval of a waiver is very uncertain. But if DNR would grant MSD approval to haul further and MSD could locate the acreage required, then land application could consist of: • Land application of biosolids is not typically performed year-round. Each facility would therefore need digested biosolids storage. For planning purposes, Lemay would need about 100,000 cubic yards of storge, and Bissell would need about 150,000 cubic yards of storage. • Annually, 13,000 to 20,000 truckloads of biosolids would be loaded. • Digested biosolids are typically land applied in the fall. Given the amount of material and short window (several weeks) for land application, Lemay and Bissell would each need a special biosolids loading facility capable of simultaneously filling several trucks. • Tractors, farming equipment, fuel, and labor to till thousands of acres of biosolids into the earth. As shown, the logistical challenges of MSD developing a biosolids land application program would be significant. B&V estimate that present value cost of operating a land application program like this to be about $250 million (20-year operating life). This cost is much greater than disposal of ash in the MSD landfill, which has a present value of $40 million. These costs are based on current regulations (e.g., do not include cost impacts from future PFAS regulations). A significant emerging consideration for land application programs everywhere is future regulation on disposal of biosolids containing Per- and Polyfluoroalkyl Substances (PFAS). For example, regulatory requirements for using biosolids as a fertilizer and land application will soon be much more stringent due to changes that EPA is making to address PFAS. (See below discussion about PFAS.) Issue: Did the District consider treatment of biosolids like Kansas City Blue River Wastewater Treatment Plant Response: Some have criticized MSD for not pursuing anaerobic digestion for treating biosolids. Often, these critics cite the Kansas City Water Blue River Treatment Plant as an example of a Midwestern utility that is already using this approach and infer that MSD should also. Kansas City Water is in the process of constructing an anaerobic digestion with THP (Thermal Hydrolysis Processing) biosolids treatment process. This facility is not yet in operation. Rather, Kansas City Water is about halfway through construction of a design-build project that includes anaerobic digestion with THP. When compete and in operation, Kansas City will be the first Missouri utility to use the technology. There are key differences between the projects and opportunities in Kansas City and St. Louis. • As described previously, MSD looked at anerobic digestion as a biosolids treatment approach, in detail. MSD staff do not believe that it is the right technical approach. • Anaerobic digestion systems that include thermal hydrolysis process (THP), like what is being constructed by Kansas City Water, rely on high pressure steam reactors to produce biosolids. Inorganic grit and soil, major components of the low-volatile solids produced at Bissell Point and Lemay, can create hazardous safety issues in the high-pressure steam reactors. • The system that Kansas City Water is building is much smaller than what MSD would need. A system that would meet MSD’s needs would cost more than a comparable sized FBI approach (see above discussion of cost). • Kansas City already owns a significant amount of land for land application and is already land applying biosolids. Notably, B&V is also one of the consulting firms working on the Kansas City project, and in fact, B&V recommended anaerobic digestion with THP to Kansas City. While B&V is also working for MSD on this project, B&V is not recommending MSD take the same approach that Kansas City Water has taken. Rather, B&V is instead recommending that MSD use fluidized bed incineration. Different situations and problems require different solutions. Other cities and sewer districts also use fluidized bed incineration. For example, the only other comparatively sized wastewater treatment facility in the Mississippi River basin is in Minneapolis-St. Paul, MN, and that facility uses fluidized bed incineration. And in the Kansas City area, both Little Blue Valley Sewer District and the City of Independence use fluidized bed incineration. Issue: Contaminants of Emerging Concern and PFAS Response: In 2018, EPA’s office of the Inspector General (OIG) conducted an independent evaluation of the biosolids program, to determine if the regulations that EPA has are sufficiently protective. OIG determined that EPA was unable to assess the impact of hundreds of unregulated pollutants in land-applied biosolids and determined from this that EPA needed to strengthen regulations. OIG recommended that EPA take several actions to address the problem, including additional monitoring, research, and risk assessment of currently unregulated pollutants in land applied biosolids. Based on the risk assessment work, EPA will develop new concentration criteria that land applied biosolids will have to meet. EPA is performing the biosolids land application risk assessment work now. Wastewater utility organizations, including the National Association of Clean Water Agencies (NACWA), are very concerned that risk assessment work is overly conservative and therefore the concentration criteria being developed for many chemicals will be very low and difficult/costly to meet. EPA also developed a PFAS Strategic Roadmap, in which EPA committed to several actions before 2024 for this specific emerging pollutant. One of the actions EPA committed to in the Roadmap is the completion of the biosolids risk assessment for land-application of biosolids containing PFOA and PFOS. Based on what EPA is providing the public about the risk assessment procedures being used, MSD staff believe EPA will determine not only that PFOA and PFOS should be regulated in biosolids, but that the acceptable level will be very, very low. Some states (e.g., Maine, Michigan, and Arizona) have already moved ahead with regulation of PFAS in land applied biosolids. In Missouri, the biosolids program is administered directly by the EPA (i.e., the State does not directly regulate biosolids). Missouri utilities will need to comply with the biosolids regulations that EPA is developing. EPA has already proposed rules that designate PFOA, PFOS, and other PFAS chemicals as hazardous substances under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), or Superfund. EPA is proposing this so that the Superfund program can be used to clean up sites with PFAS. There is significant concern among wastewater utilities who land apply biosolids that they will become parties to pay for the cleanup of these Superfund sites. The Illinois law includes the PFAS Reduction Act, which largely addressed control of fire- fighting foams containing PFAS. Illinois also passed a separate law (415 ILCS 5/22.6) that prohibits the incineration of fire-fighting foam containing PFAS. This law explicitly states that it does not apply to municipal wastewater biosolids. The Illinois House recently passes legislation that would have expanded PFAS testing, including biosolids testing; however, the legislation did not carry the Illinois Senate. Issue: Incentives potential Response: MSD regularly evaluates state and federal programs and its eligibility for these programs to try to lower the cost of compliance with federal regulations. The District is the largest user of Missouri’s Clean Water State Revolving Fund (SRF) program and is one of a relatively small group of entities nationwide that has been invited to apply for multiple Wastewater Infrastructure Finance and Innovation Act (WIFIA) loans. MSD is not eligible to receive direct funding through most programs but will be receiving ARPA grant funds through the State to partially fund select projects. There are currently no programs available that will make an alternative biosolids disposal system more feasible than the recommended fluidized bed incinerator project. The Inflation Reduction Act provides tax credits for certain renewable energy investments, but eligible biogas projects must begin construction prior to the end of December 2024, which is not a realistic scenario. Even if it were possible, tax credits are only earned after a project is placed in service. MSD’s ratepayers would need to provide all funds to build the project and begin operation before MSD would receive any tax credits. Furthermore, credits are only applicable to the portion of the project that is for renewable energy generation. This would become a vital consideration because most of the project’s capital cost is for wastewater treatment—not renewable energy generation—and therefore most of the capital cost of the project would be ineligible. The credit would also be reduced since the project would be financed with tax-exempt debt. The total of cost of a new biogas facility should not be expected to be less than the proposed fluidized bed incinerators. Changes to the scope of the project to try to earn eligibility will result in net cost increases, not decreases, and will imperil MSD’s ability to comply with the Consent Decree, our clean water permits, and our clean air permits. Issue: Energy Production and Energy Cost Recovery Response: Renewable energy projects that are started after December 31, 2024, to be eligible to receive tax credits, will need to include electrical generation. Black & Veatch (B&V) is advising MSD that a facility would consider generating renewable natural gas (RNG) or electricity, but not both. The B&V team does not believe that there is a realistic scenario for starting construction of an anaerobic digestion facility prior to December 31, 2024. As such, a project started 2025 or after would be assumed to require electrical generation. From a practical standpoint, a facility considering either of these options would settle on one and commit to it, rather than implement both. A RNG project will require the implementation of a land application program for the project to be greenhouse gas negative and qualify for any tax credit. To qualify for tax credits for facilities that start after 2025, this would by default necessitate that the facilities focus on electrical generation only. The date may change as further clarifications from federal agencies are provided, but in any event, B&V would not expect that a facility would implement both RNG production and electrical generation. EPA released June 21, 2023, a final rule under the renewable fuel standard that lowered the volume set for all categories of biofuel, and it negatively impacts the market for municipal biogas converted to RNG. EPA cut the 2024/2025 D3 fuel blend by 30% and 54% respectively. (Note that biogas from municipal facilities fall under the “D3” criteria.) EPA also increased the fuel blend requirements of other type of renewable fuels, which could make the D3 RIN value fall even lower. The price of D3 was already trending downward, and with this decision, B&V anticipates the price trend will continue its downward trend. The lower price and lower yield of natural gas from MSD’s solids, due to lower volatile solids content, would yield lower revenue. Again, any tax credit benefit would be dependent on a clarification that RNG projects started 2025 or after are eligible; and the B&V interpretation at this time is that they are not. The team investigated energy recovery, combining fluidized bed incineration with steam generation or power generation. This is addressed by B&V in detail in Technical Memorandum No. 11: Energy Recovery. The challenge we ran into was that user demand and payback didn’t meet the additional investment in either steam or power generation technology. (For example, at Bissell Point, MSD staff had conversations with Proctor & Gamble (P&G) about whether P&G would want steam that MSD could generate. P&G didn’t want to pursue this.) However, if there are future opportunities in this area, then both facilities could be retrofitted. B&V believe both incineration and digestion systems offer opportunities for energy recovery, with no substantial difference in applicability or cost savings. Issue : Regional Solution proposed (IAW) Response: At various times, MSD has been approached by third parties that are interested in collaborating on biosolids treatment and disposal. Mostly, other wastewater utilities want to bring their biosolids to MSD for treatment. MSD staff do not believe that treating others biosolids is a good plan for the community, and we have consistently said, “No thank you.” In 2018, the City of Alton, Illinois, approached MSD about MSD bringing some raw biosolids to Alton. The City was considering building an anaerobic digestion facility and asked MSD to consider sending biosolids to it. MSD sent the City a letter expressing interest in their project and agreeing to send biosolids from MSD’s smaller wastewater treatment facilities, should the project be built. The City never built the project. Recently Illinois American Water took over the City’s wastewater infrastructure. More recently, MSD received some information about the possibility of another regional biosolids facility to be built in Illinois, by Illinois American Water. This time, MSD would be hauling all of its biosolids to it, not only the smaller facilities. MSD developed preliminary cost estimates for hauling all of the District’s biosolids to the Metro East ($6M-$9M annually). This would require daily hauling 40-60 trucks from Bissell Pont and Lemay, with a significant greenhouse has footprint, and with undetermined impact on eligibility for renewable energy tax credits. The regional facility would need to be operated 7 days a week, 365 days a year, or else MSD would need storage for the raw solids. Odor controls would be needed for raw solids storage areas, and for loading and trucking older stored sludge. MSD staff have many, many, concerns about such a project, like the issues we had to consider in our original evaluations. One of them is trucking 40-60 trucks per day of raw, odorous, biosolids from Bissell Point and Lemay, through downtown St. Louis, and across state lines. Is this really something that our community wants us to do? Would Illinois government even allow such a facility to be built and operated, especially considering concerns about emerging pollutants like PFAS? Frankly, MSD’s facilities do not have enough time to find out the answers to the many questions this last-minute letter brings. The existing biosolids equipment at Bissell Point has 3-5 years of working life remaining. We estimate Lemay has 5-10 years remaining. As pieces of biosolids treatment equipment stop working, wastewater clarifiers can no longer be operated. Our region’s largest wastewater treatment facilities will be reduced (at best) and/or stop treating wastewater all together (at worst). When these processes fail, then MSD will not be able to treat wastewater and bypassing of wastewater into area rivers and streams will occur. Bypassing would also cause MSD to be out of compliance with its NPDES permits and its Consent Decree, and bypassing is subject to Consent Decree penalties. As such, MSD needs new facilities to be constructed and operating by 2028. Not doing this would constitute a regulatory permit violation and potential CD violation. Also, if IAW is interested in developing a regional biosolids treatment facility, then the region’s Clean Water Act 208 Water Quality Plan (“208 Plan”) should be amended to include it as a permanent wastewater treatment facility. The 208 Plan is essentially the region’s wastewater treatment master plan, and the amendment process includes a robust regulatory agency and public input process. All of MSD’s permanent treatment facilities are listed in the 208 Plan. Amending the 208 Plan is important because it would provide MSD with assurance there is regulatory and political support for the regional facility. Permanent facility designation is also important for prioritizing public funding to the project. Modifying the 208 Plan includes many steps, key ones are summarized below: • Drafting a modified plan, including presentation to state and federal regulatory agencies, incorporating their feedback. • Submittal to East-West Gateway Council of Governments (EWGWCOG) for their consideration and approval. • Public hearings and meetings on the proposed plan modification. • If the plan modification is recommended by EWGWCOG, then the plan would be submitted to the Missouri Clean Water Commission (CWC) & Illinois Pollution Control Board Approval (PCBA). • The Missouri CWC and Illinois PCBA would hold their own hearings and public participation process. If each recommends the modification, then it would be sent to the Governors of Missouri and Illinois for their respective consideration. • If each of the Governors recommend the modification, then it is sent to the EPA for review and approval. • Both the EPA Region 5 and Region 7 Administrators would need to approve the plan modification. MSD staff do not recommend MSD formally commit to a regional biosolids processing facility until after 208 Plan modification is complete. Even if all parties were on board with amending the 208 Plan, then the amendment process would take at least five (5) years. Likely, this process would take longer, because there would be robust public discussion about such a plan. As stated above, MSD’s needs a new biosolids treatment system in place before the plan could be approved, let alone designed and constructed.