In the Spotlight
Lancaster County Solid Waste Management Authority: Managing Opportunity While Maintaining Its Core Mission
The Lancaster County Solid Waste Management Authority’s primary purpose is to manage waste in such a manner that it minimally impacts the environment. They accomplish this while also developing renewable energy projects that benefit their business, as well as other parties involved.
The Lancaster County Solid Waste Management Authority (LCSWMA) was created by Lancaster County in 1987. The state mandated that its basic responsibility was to fulfill the role of solid waste management, required of county government. Community leaders at the time developed a countywide plan that focused on establishing an Integrated System, with the guiding principles of minimizing landfill consumption and maintaining public ownership of the disposal facilities. Additionally, the plan directed LCSWMA to maintain self-sufficiency, which meant that as the county population and corresponding waste stream grew, the organization would expand and upgrade its facilities to accommodate the additional waste. Finally, the plan determined that LCSWMA would institute a user-fee based system rather than levying taxes. The organization would be solely responsible for all operational costs and any debt of the system.
As the sixth largest county in Pennsylvania, LCSWMA serves a population of approximately 500,000. The organization’s typical budget is approximately $55 million per year. During 2011, LCSWMA employed 76 full-time staff and will manage approximately 600,000 tons of waste.
LCSWMA’s major assets include: 1) a 2,200 tons per day transfer station, which is part of a larger complex that also houses its household hazardous waste facility and corporate offices; 2) a 2,200 tons per day landfill, located along the Susquehanna River, which incorporates a 3.2MW landfill gas plant (LCSWMA and PPL partnership); and 3) a 1,200 tons per day waste-to-energy facility, which is owned by LCSWMA and operated by Covanta Energy. Although the county government appoints LCSWMA’s board of directors, the organization operates as an independent entity. “We own the facilities, we issue the debt, we get our own credit rating and we operate as a pure enterprise funded system,” says James Warner, LCSWMA’s CEO.
Renovating for Efficiency
In 2003, LCSWMA began a major renovation project to expand and overhaul its transfer station complex and corporate offices. They set out to successfully acquire available land located next to the complex, including a heavy solvent tank business, a printing company and a former body shop and car dealership. These acquisitions allowed LCSWMA to double the transfer station complex area from 5 acres to 10 acres.
Phase I of the renovation included constructing a new truck maintenance building and a drive through household hazardous waste (HHW) facility. In Phase II, the back of the administration building, where the truck maintenance and HHW were housed, was demolished. In the final phase, the original transfer station was demolished and a new transfer station was constructed. The new transfer station features a 40,000 square foot tipping floor where waste is top loaded into LCSWMA’s transfer trailers that are staged in a tunnel beneath the tipping floor. The renovation resulted in a more efficient operation and ability to better serve their customers.
A unique addition to the transfer station includes a training room with floor-to-ceiling windows, which offers a view of the entire operation. The training room is a beneficial part of the facility because it serves as a safe area where visitors can look out onto the tipping floor without being affected by the dust or smell. Another unique addition to the complex is the drive-through HHW facility, which operates on a budget of $350,000 per year. This annual investment includes all operational costs of the facility, including supplies, staff, disposal, etc. The facility manages 35,000 to 40,000 customers each year, minimizing the cost per customer that is typical of many other HHW operations. “We implemented several components of various transfer stations that we visited along the east coast before we built our complex. Our transition to the new operation was initially challenging, but we made many operational upgrades along the way. Today, it’s painful to remember how we used to transfer waste,” says Warner.
The transfer station complex is efficient, functional (currently processes about 300,000 tons per year) and aesthetically pleasing, which was important to LCSWMA since they are located on a main thoroughfare into the city of Lancaster. “Franklin and Marshall College is located a short distance down the street, along with the Lancaster General Health Center. We wanted to enhance the streetscape and chose an all-brick facade, since brick is a traditional Lancaster area building material. The community is thrilled with what we’ve done. The transfer station complex looks like a mini-college campus rather than a place where trash goes,” stresses Warner.
Minimizing Landfill Consumption
Adhering to its originating purpose, LCSWMA focuses on minimizing landfill consumption. Part of that initiative includes a waste-to-energy (WTE) asset which combusts waste that is not recycled. The plant serves two main purposes: 1) reduce the volume of waste by 90 percent, and 2) generate approximately 34 MW of electricity. To further reduce the amount of waste that would otherwise be landfilled, LCSWMA removes 6,500 tons per year of ferrous and non-ferrous metals from the post-combustion ash. The remaining ash is used beneficially as daily cover at LCSWMA’s landfill.
LCSWMA’s landfill opened in 1989, at the same time the organization broke ground on its WTE plant. Since that time, they’ve used approximately two-thirds of its capacity. At a consumption rate of about 3 percent per year, Warner estimates that the remaining capacity will last until 2019. LCSWMA successfully extended the life of its landfill because of the conscientious decision to implement an aggressive recycling program—now removing 39 percent from the waste stream—and combust the remaining waste to generate renewable energy, which also reduces the trash volume.
“Had we not established the Integrated System, our landfill would have been full 10 years ago,” says Warner. “Our dividend has not only been recycling to reduce the waste, but we’ve gained 18 years of landfill space by recycling and generating energy. If we were using the previous system from the 1980s, today’s waste stream would have used almost 1,000,000 cubic yards. Instead, it has only used 55,000 cubic yards.”
In fact, LCSWMA’s landfill diversion rate is 95 percent due to their recycling and combusting of waste. The organization is currently planning an expansion of the landfill by a process of building Mechanically Stabilized Earthen walls. New waste will be filled over the top of the current landfill. Warner stresses that the ultimate goal is to do something good with the waste. “Material reuse and energy generation both provide diversion, which has the benefit of extending the life of your landfill. We keep it simple, because both lead toward the same end goal—diverting waste from the landfill,” says Warner.
Expanding for the Future
Since LCSWMA’s WTE facility is at capacity, the organization is in talks with the Harrisburg Authority to purchase Harrisburg’s WTE plant because of its available capacity and proximity to LCSWMA’s transfer station. Purchasing this facility will allow LCSWMA to continue minimizing landfill consumption as Lancaster County’s waste stream grows.
“We spent two years evaluating whether or not to build a fourth unit on our WTE plant; but we decided that it would be more economical to purchase the Harrisburg WTE plant,” says Warner. “The Harrisburg plant is only 18 miles from our WTE facility. A major highway is located directly between the two assets, so our transfer trucks can get there in about 35 minutes. As our waste stream grows, the plan is to use the available capacity at the Harrisburg location. In the long run, it’s a less expensive option than to build a fourth unit at our WTE plant.”
Generating Renewable Energy from Waste
Although its core function is managing Lancaster County’s waste, LCSWMA explores others types of business as well. Over the last decade, they have initiated many renewable energy projects. In addition to their WTE facility, which generates electricity from combusting waste, LCSWMA’s landfill gas plant produces renewable energy by combusting gases created by the decomposition of waste. The plant consists of two Caterpillar 1.6MW engines. Working in conjunction with local utility company, PPL, the plant draws gas not only from the active landfill, but also a closed landfill, used from 1968-1988. This project, in particular, can power the equivalent of approximately 3,000 area homes.
In addition, PPL sells steam produced from the landfill gas plant to nearby Turkey Hill Dairy (a local Pennsylvania brand owned by the Kroger Corporation). The manufacturing plant makes ice cream and iced tea products. “Our landfill gas plant not only produces electricity from burning methane gas, but the internal combustion engines produce exhaust at 1,100 degrees. A boiler at the landfill gas plant site takes hot air from the combustion engines and heats water to create steam. The steam is then sent through a pipeline from the gas plant to Turkey Hill Dairy,” explains Warner.
He continues, “Previously, Turkey Hill Dairy fired up two commercial boilers with diesel fuel because they need a lot of steam for their industrial processes in the dairy. Now, because they receive steam from our landfill gas plant, they no longer need to buy diesel fuel to fire up their commercial boilers. They are saving more than 200,000 gallons of diesel fuel per year by purchasing steam that has been produced from hot engine exhaust.”
The landfill gas project is unique because it has two different renewable components: 1) generating electricity from methane gas, and 2) offsetting combustion of diesel fuel by providing steam from hot air. As a result, this partnership received project of the year award in 2006 from the Environmental Protection Agency’s Landfill Methane Outreach Program.
Creating Power with Wind
Due to the success of the landfill gas project, LCSWMA and PPL agreed to explore other opportunities to partner in additional renewable energy ventures. In 2009, they collectively pursued a wind energy project because LCSWMA’s landfill site is on a bluff overlooking the river where strong winds come in from the west/northwest. They believed that if a couple of wind turbines were placed on the ridge, there would be enough wind to support the project and sell the electricity to Turkey Hill Dairy.
As a result, LCSWMA and PPL further explored the opportunity and shared in the developmental cost of a wind study, which involved placing a 180-foot meteorological tower at the site and measuring the wind speed for a year and a half. The data was analyzed and showed the average wind speeds to be 14.5 miles per hour. In turn, they presented a business proposal to Turkey Hill Dairy and negotiated a contract in which the manufacturing plant buys the power output for 10 years at retail rates. LCSWMA and PPL also came to their own contract terms. Both parties ultimately agreed that it would be more cost-effective for PPL to own the wind turbines.
“The entire project cost $9.5 million dollars. First, LCSWMA received a $1.5 million dollar grant from the state. Second, by PPL owning the project, they received a 30 percent tax credit. This brought the cost down to $5.6 million. LCSWMA loaned PPL $4.65 million at 6 percent interest. PPL only needed to contribute $1 million up front. This was a great deal, as our total return on investment averages about 8 percent per year, since we also share a small portion of the electric revenues. And, it lowered PPL’s cost to borrow as well. So everybody was happy and we ended up with a successful project,” says Warner. “Today, our landfill has two 1.6MW General Electric wind turbines that together are providing 25 percent of the annual electric usage for Turkey Hill Dairy.”
LCSWMA’s two renewable energy projects that utilize waste as a resource, as well as the wind project that utilizes the geo-physical properties of the asset it owns (landfill), generate enough renewable energy to power one in six Lancaster County homes.
Maintaining Self-Sufficiency
Despite diversifying their investments through various renewable energy projects, Warner does point out that the economy has affected the organization’s revenue stream.
“From 1998 to 2006 we saw a steady 3.5 percent growth in waste volume and then in 2006 the line started to stagnate. In 2008, the line dipped and finally stabilized in 2009. Our volume remained steady in 2010, and now we are up 2 percent in 2011,” says Warner.
Although not experiencing the same robust growth as in previous years, LCSWMA finds revenue elsewhere by exploring different types of business development. “This business is very fixed asset and cost-driven. One of the things that have helped us diversify is our independence as an Authority. Our board of directors expects management to quickly and effectively assess an opportunity and bring it to them for their review and approval,” says Warner.
He continues, “Many times public agencies operate slowly or they’ll study an issue to death. By the time they make a decision, opportunities are gone. We are fortunate in that we make assessments quickly and are skilled at identifying capable partners. If we didn’t act on our renewable energy projects, the additional money would just be sitting in our reserves. We wouldn’t have a wind project and would only be making about 7/10 of 1 percent. Instead, we put a small amount of our reserves to work, have a great wind project and are making 8 percent on that investment. That’s good fiscal management and strong leadership. That’s what we expect of ourselves.”
Currently, LCSWMA is planning a solar project that will remove their entire transfer station complex from the power grid by December 2011. The necessary contracts are signed and construction will start in September. “We’re taking the lessons learned from the wind project and applying it to solar. We found the right partners who understood why we want to put some of our capital to work and take a little bit more risk, and lower their cost of capital by starting a project together. We don’t mind the private sector making money but we want some of the action as well. We will most likely make approximately 5 percent per year on this project,” says Warner.
Managing a Diverse Business Model
Although LCSWMA’s core agreement with the county is to manage its municipal waste, they also process 30,000 to 40,000 tons per year of residual waste from across the U.S. at their WTE facility. “We take pharmaceuticals from Virginia, Kentucky, Tennessee, New York, etc. It’s a very specific business because these companies require assured destruction through waste-to-energy. We developed the program 15 years ago and really found a service niche. We were able to get $150 a ton for that type of business and build an addition on to our WTE facility that includes warehousing and special truck docks. In turn, we generate about $3-$4 million dollars per year in that business. This helps to raise the average revenue of our blended tons that we take into the WTE facility,” Warner points out. On the residual end, the organization operates more as a private entity, setting their rates by situation or by a particular customer.
Warner explains, “We have the flexibility of diversifying our business into these other areas because we’re responsible for our debt. We can blend our business, which helps to support the core mission of managing Lancaster County’s municipal solid waste. If we didn’t have this flexibility, we couldn’t have accomplished all of these phenomenal projects or keep tipping fees to Lancaster County haulers and residents stable. We take our credit rating very seriously. By doing so, we have achieved an S&P credit rating of AA-, equal to that of the county. We have an excellent relationship with our customers for over 20 years. They possess an immense amount of respect for how we operate our business and how they are treated as customers.”
Supporting the Local Community
In addition to pursuing environmentally conscious power projects, LCSWMA also searches for opportunities to support the community through municipal and recreational partnerships. For example, LCSWMA recently renovated an old historic farm house located on their landfill property, called the Reiber House. This farm house dates back to 1772 and is one of the oldest western Germanic style homes in Lancaster County. LCSWMA restored the exterior of the building and renovated the interior space into a meeting area for small gatherings.
“We had no professional meeting space at our landfill. As we were working on these other projects, we realized it would be nice to have an office where 10 or 15 people could meet,” says Warner. “We combined our need for an office with restoring this historic property, and now, it’s absolutely fabulous. In addition, we built a pavilion on the site which houses an interactive display where tour and school groups can visit to learn more about our renewable energy initiatives.”
In addition to restoring the Reiber House, LCSWMA bought 80 acres down the road from their corporate offices and transfer station complex. On this land, which was once used as a landfill by their predecessor agency in the 1950s and 1960s, LCSWMA built a three-mile recreational trail over the summer of 2009. LCSWMA dedicated this trail, now known as Farmingdale Trail, as open space.
Another trail in development, called the Lancaster County Northwest River Trail, follows the Susquehanna River. LCSWMA invested a significant amount of time and money coordinating with municipalities to help build and pave this 14.5-mile trail. “This project is a multi-municipal partnership. Some sections of the trail were an overgrown footpath. We worked with municipal officials and brought in our equipment and staff to make it usable for the community,” says Warner.
Looking for Opportunity
Warner proudly points out that LCSWMA is an innovator in the waste industry because of their ability to develop projects that are beneficial to their business as well as to those involved. “If there’s an opportunity, we’ll find it and determine a way to monetize it. We don’t want to lose that chance. For example, the wind project involved determining what assets we owned and how to best use them. We happened to own a landfill located on a promontory point that sloped right where the wind hits. In addition, there’s a large industrial site right next to the landfill [Turkey Hill],” says Warner. “How do you take advantage of that opportunity? The first thing you do is measure the amount of wind you actually have at the site. Then you can begin to assess your selling opportunity.”
Warner continues, “Previous to the wind project, the focus was on landfill gas. For LCSWMA, it was always one of our planned capital projects; but we delayed implementing the project because something else more critical arose. When tax credits became available in 2005-2006, we finally decided to move forward with the project and partnered with PPL. Before we knew it, we had a landfill gas plant. We’ve generated five times more in revenue from selling the carbon credits than we ever did selling the gas. So it’s really managing opportunity while you’re maintaining your core mission.”
One thing LCSWMA doesn’t forget is their fundamental purpose—to receive and manage 2,000 + tons each day of society’s discards. States Warner, “Our main focus is to do something with the waste so it minimizes the impact on the environment. Everything flows from that—electricity, minimizing landfill consumption, renewable energy, financial performance, etc. It’s our core business and we try not to forget that.”
For more information, contact Kathryn Sandoe, Communications Manager for LCSWMA, at (717) 397-9968, e-mail [email protected] or visit www.lcswma.org.
Sidebar
James D. Warner: LCSWMA’s CEO and SWANA President
James Warner serves as LCSWMA’s Chief Executive Officer and is responsible to their Board of Directors to achieve all of the organization’s goals and objectives in accordance with the policies, procedures and programs approved by the Board. He directs all company activities, including operations, planning, finance, recycling, engineering and construction.
Serving as LCSWMA’s spokesperson, Jim maintains positive relationships with the public, government officials and regulatory agencies. During his tenure as LCSWMA’s top executive, he has led the organization through numerous innovative, successful projects including those involving renewable energy and monetizing carbon credits and renewable energy credits. He has over 25 years of experience in the solid waste industry and served as CEO since 1996.
Jim also serves as President of the Solid Waste Association of North America (SWANA), a professional trade organization, where the Integrated System in Lancaster is recognized as one of the best in the U.S. Jim holds a Masters Degree in Geo-Environmental Studies from Shippensburg University.
Sidebar
Awards and Recognition
2011 Green Power: Turn It On! Award for 3.2MW Wind Project (PennFuture)
2010 Envision Certificate of Merit – Renewable Wind Energy at Frey Farm Landfill (Envision Lancaster County)
2010 Wildlife at Work Certification – Creswell & Frey Farm Landfills (Wildlife Habitat Council)
2009 Gold Award for Transfer Station Excellence (SWANA)
2008 Preservation Honor Award for New Construction – Transfer Station Complex (Historic Preservation Trust of Lancaster County)
2008 Northeast Region Recycling Leadership Award – Rechargeable Battery Recycling Excellence (Rechargeable Battery Recycling Corporation)
2008 Nonferrous Material Recovery at the Waste-to-Energy Facility (Pennsylvania Waste Watcher Award)
2007 Envision Smart Growth Leadership Award – Reconstruction of the Transfer Station Complex (Envision Lancaster County)
2007 Green Power! Award – Renewable Energy Generator and 1st Public Environmental Services organization to become a member of the Chicago Climate Exchange (PennFuture)
2007 Bronze Award for Special Waste Management – Household Hazardous Waste Program (SWANA)
2007 Community Events Recycling Program (Pennsylvania Waste Watcher Award)
2006 Landfill Methane Outreach Program (LMOP) Project of the Year (EPA)
2006 Gold Award for Waste-to-Energy Excellence (SWANA)
2006 Special Collection Program (Pennsylvania Waste Watcher Award)
2005 Home Composting Program (Pennsylvania Waste Watcher Award)
2004 Computer Recycling Program (Pennsylvania Waste Watcher Award)
2003 Mercury Recovery Program (Pennsylvania Waste Watcher Award)
2002 Community Leadership Recycling Award (Rechargeable Battery Recycling Corporation)
2000 CFC Recovery Program (Pennsylvania Waste Watcher Award)
1999 Recycling Education Program (Pennsylvania Battery Recycling Corporation)
1998 Gold Award for Municipal Solid Waste Management Planning & Financial Management Excellence (SWANA)
1994 Systems Excellence Award for Waste-to-Energy Facility (Greater than 1,000 Tons) (SWANA)