The company that designed and built the anaerobic digester complex at the Altoona Water Authority’s Westerly Sewer Treatment Plant is paying the authority $479,000 to cover a 2024 shortfall between the cost of operating the digester and the value of the energy it produced, a shortfall largely reflecting difficulties in obtaining high-strength waste to process in the complex, according to authority officials.

The authority built the digester based on an agreement with Energy Systems Group under an energy-conservation initiative of the Pennsylvania Sustainable Energy Fund that guarantees that the operation at least breaks even over the 20-year payback term of the loan that funded construction.

“This is year one of a 20-year guarantee,” said Sewer Operations Director Brad Kelly at a recent authority meeting.

Kelly acknowledged that the authority is somewhat disappointed that the project didn’t break even the first year and that he’s a bit concerned that high-strength waste has been difficult to obtain, but “ESG is working through it,” procuring companies like grease haulers and other sources with which the authority can sign contracts, he said.

According to the arrangement between the parties, ESG is “responsible for communications and getting the contracts in front of us,” Kelly said.

The Mirror left messages with an ESG official who was involved in the project, but didn’t hear back.

There will probably be a shortfall again for this year, according to authority General Manager Mark Perry.

The obligation to pay for such shortfalls is the incentive for ESG to procure the high-strength waste opportunities for the authority, Perry and Kelly said.

The digester system is currently at about 30% of capacity, so there is lots of room for additional biogas production, according to Kelly.

As soon as enough high strength waste comes in, the system can begin operating closer to its full potential, according to Kelly.

Biogas production so far has been sufficient to heat the digester itself, but not enough to power the dryer that transforms Class B “cake” — which is restricted in its uses — to innocuous Class A biosolids that can be used freely as mulch, officials have said.

The authority made its first serious financial commitment to the digester when it signed a project development agreement with ESG in mid-2019.

The authority began “feeding” the digester with sludge produced at the plant in September 2022, then started adding high-strength waste a couple months later.

At the time, an ESG official cautioned that a long operational ramp-up would be required for the $35 million complex.

At the same meeting, the authority board authorized an application for a $500,000 Statewide Local Share Assessment Grant for a new closed circuit TV van that can be used for inspecting sewer lines.