The Pasco County Commission has entered an agreement with Covanta Pasco Inc., for a $260-million design-build project to expand the county’s Waste-To-Energy (WTE) Facility.
The facility, at 14220 Hays Road, is used to convert solid waste into energy.
Justin Roessler, the county’s solid waste director and the board’s agenda packet provided background about the WTE facility and expansion before the board voted to approve the design-build agreement and to extend its service agreement with Covanta.
The WTE facility was built by Covanta as a result of a 1988 agreement between the county and Covanta.
The board restated its service agreement with Covanta in March of 1989, to operate and maintain the WTE facility for 20 years. That agreement has since been extended twice, with the latest agreement approved in 2013. That is set to expire on Dec. 31, 2024.
In the meantime, the county’s Solid Waste and Resource Recovery Department has been planning for the future. It presented a solid waste master plan to the county board in April 2019, outlining a long-term solid waste strategy for the county.
The key component of the plan is the expansion of the WTE facility to allow all of the county’s garbage to be converted into renewable energy.
That will reduce the volume of the waste that goes to the landfill and provide a source of energy.
The county board authorized county staff on Feb. 18, 2020, to begin negotiations with Covanta for a 10-year service agreement, which will extend to 2034, and to work out a design-build agreement with Covanta for the WTE expansion.
The board then voted on Dec. 7, 2021 to award Covanta a Stage 1 design and pre-procurement services contract to develop the expansion up to a 30% design level of effort and to secure more firm commitments from large equipment suppliers. Then, on Aug. 16, 2022, the Inflation Reduction Act (IRA) was signed into law.
That law provides financial incentives and tax credits for renewable energy projects.
The WTE expansion qualifies under IRA, provided it meets certain labor and domestic material requirements.
Roessler told the board that the fourth boiler will come online at the WTE facility, enabling it to convert more garbage to energy and avoid using landfill space.
When the boiler comes online in 2026, the county will get a 6.6% reduction in the overall per pound cost, he said.
Here’s an overview of the county’s agreements:
- This includes a $260 million agreement for the design-build of the WTE facility. This includes a $30 million contingency fund, in case of supply chain, construction or other cost increases. If the contingency fund isn’t depleted, the parties will split the difference.
- The project will have a 36-month time frame, which breaks down this way: Design and off-site fabrication, will be finished in fall 2024; Construction, finished in summer 2026; First firing and commissioning, finished in summer 2026; commercial operation: September 2026.
Agreement terms also include $29,500 per day for liquidated damages in the event that Covanta fails to reach full commercial operation by the 36-month contract end date.
The parties also have agreed to a drawdown schedule to ensure the county’s maximum monthly obligation relating to payments for the WTE expansion construction. That schedule will enable the county to effectively manage its cash reserves and borrowing.
Pasco County Chairman Jack Mariano praised Roessler for his work connected to achieving the agreement.
“Justin, this is a phenomenal contract that you negotiated. It’s been a long-term plan for us to expand this for many, many years, for all of the great reasons you cited,” Mariano said.
County Administrator Mike Carballa also congratulated Roessler, his team and the county attorney’s office for successfully bringing the contract forward for the board’s approval.
“This is a complex deal,” Carballa said. “They come in and they make it look easy, but this has been four years of negotiations — many ups and downs. There were some parts and times when we didn’t think we were going to get there. But hat’s off, too, to our partner at Covanta, as well. This is truly a team effort. But my compliments to you, Justin, and the infrastructure team for getting it here.”
Published October 04, 2023