Water Authority takes step toward digester plan
$825,000 audit could result in $29M project
The Altoona Water Authority has agreed to pay $825,000 for an investment-grade audit that could lead to an approximately $29 million anaerobic digester project at the Westerly Sewer Treatment Plant.
The “project development agreement” with Energy Systems Group was the authority’s first significant financial commitment to the digester proposal, which would take place under an energy-conservation initiative of the Pennsylvania Sustainable Energy Fund — with a guarantee that it would at least break even long-term.
Funded with 20-year loans, the digester would enable the authority to earn revenue for accepting “high-strength” organic waste, which the digester would process to generate methane gas, which would power dryers to turn troublesome biosolids produced by the plant into saleable mulch and possibly power a furnace to heat the plant buildings and to generate electricity to run equipment — with the additional possibility of selling excess gas and electricity to their respective markets.
The authority could decide to commit to the full project around February, after it would obtain a digester permit from the state Department of Environmental Protection and a funding commitment from Pennvest.
Project construction would take up to two years, according to Todd Musser, director of wastewater treatment operations.
The investment-grade audit would require partial design, with the extent of that design determined by the DEP’s permit requirements — which would emphasize environmental issues like the content of discharges to a nearby stream, officials indicated.
The DEP might require as much as 90 percent completion on those components of the project, said Jim Balliet of the authority’s consulting engineering firm Gwin, Dobson & Foreman.
The investment-grade audit will not only help the authority determine whether it wants to go through with the project, but it will also help ESG determine if it wants to commit — although the company seems confident the project is workable, Musser said.
Work on the project is about a month behind schedule, but the parties continue to push, partly to help the authority to be the first in the region to construct a digester, in hopes of assuring a plentiful supply of high-strength organic waste through “forever” contracts — or at least contracts that run through the term of debt service, Musser said.
If another sewer treatment agency should get a project done sooner, there could be competition for the waste, and the revenue potential could decrease, officials said.
In recent years, Tyrone Borough has investigated the feasibility of constructing a digester to ensure it can dispose of its biosolids at a reasonable cost, but the borough put that effort on hold several months ago.
The Altoona authority has recently been negotiating with Tyrone to accept the borough’s biosolids at the proposed Westerly digester, Balliet said.
The authority will use the investment-grade audit to ensure that the liquid waste from the anaerobic digester that would flow into an aerobic digester that already operates at Westerly won’t “screw up” the aerobic process — which has worked “better than I ever envisioned,” Balliet said.
There are two aerobic digesters “in series” at Westerly, and one would remain if the anaerobic digester is constructed, according to staff engineer Mike Sinisi.
As ESG works through the investment-grade audit, the authority will need to figure out which supplementary projects it might want to do on its own.
That could include simple upgrades like installation of LED lights, replacement of a boiler and the air handling unit and an HVAC upgrade.
The authority could use cash on hand to do such projects, officials said.
But there is plenty of other capital work that the cash on hand could pay for — and it might make sense to fold all the measures proposed by ESG into the digester project to take advantage of the 1 percent Pennvest loan the authority is hoping will pay for that work, officials said.
The $825,000 cost of the investment-grade audit would be folded into the funding for the entire project if the authority decides to proceed after the audit’s completion.