Pinellas County shortlists operators for waste‑to‑energy plant; switches to open‑market power sales as rate study recommends modest fee increases

Pinellas County solid waste director Paul Sacco told the Board of County Commissioners on March 20 that the county has completed a qualifications phase and shortlisted two firms to operate its waste‑to‑energy facility: the incumbent operator ReWorld (formerly Covanta) and FCC Environmental Services. Sacco said the county expects to release phase‑two RFP documents to the shortlisted firms by the end of March and to allow 90–120 days for proposals, with a target award for the board in September and a mobilization/transition window before the end of the year.

The procurement follows ReWorld’s 2022 notice that it would not accept the contract extension under the existing terms. Sacco said the county negotiated a short extension while it ran a competitive process; the current extension sets the processing rate at $38 per ton with an allowable increase that would not exceed $40 per ton by the end of the extension. Sacco said the RFP will seek a 10‑year contract with two 5‑year renewal options for a new operator.

Why it matters: County staff and the outside rate consultant Raftelis say the county relied for years on a power purchase agreement and capacity payments that have largely disappeared; that loss reduced revenues that historically subsidized operations and capital. Raftelis presented a 30‑year financial model March 20 that assumes the county will use rate stabilization reserves for a period of years while phased tipping‑fee increases bring revenues toward full cost of service.

On power sales, Sacco told commissioners the county began a power‑brokering strategy on Jan. 1 and has contracts with Rainbow Energy (broker) and Apex (consultant). He said those agreements, plus interconnection arrangements with Duke Energy and Seminole Electric Cooperative, let the county sell power on the open market rather than rely solely on a fixed PPA with Duke. "We started January 1," Sacco said, noting unusually high price spikes in January that raised average sales for the month; he added the county will monitor market conditions and can choose a different path if the open market weakens.

Terry Boveri of Raftelis, the county’s rate consultant, summarized the updated financial model. Boveri said higher inflation, increased projected capital needs and the reduction in capacity and PPA revenues drive the need to phase in rate increases rather than adopt a single large jump. He recommended a multi‑year tipping‑fee schedule that the consultant estimates would raise fees by about $4.36 in the first year, $4.71 in year two and $5.08 in year three (per ton increases); Raftelis converts those increases to about 39¢ per month, on average, for a typical single‑family household as a way to show consumer impact. Boveri said the model anticipates drawing rate stabilization reserves through the late 2030s while the new fee path takes effect.

Key details reported to the board

- Operator procurement: Phase‑1 (qualifications) completed; two firms shortlisted (ReWorld and FCC Environmental Services). Phase‑2 RFP to be issued end of March; 90–120 days to respond; evaluation and negotiation through June/July; anticipated recommendation in September. (Paul Sacco)

- Existing contract and extension: ReWorld has operated the plant since 2014; current extension sets the processing rate at $38/ton with a potential increase capped at $40/ton by the end of the extension. (Paul Sacco)

- New contract length sought by staff: 10 years with two 5‑year renewal options. (Paul Sacco)

- Power sales: County began brokering power on Jan. 1; agreements in place with Rainbow Energy (broker) and Apex (consultant); interconnection agreements being finalized with Duke Energy and Seminole Electric Cooperative. Forecasted open‑market sale price range in staff materials: roughly $27–$32 per MWh on average; January produced short‑term spikes above that range. (Paul Sacco)

- Rate study and tipping fees: Raftelis presented a 30‑year model reflecting loss of capacity payments and PPA revenue, increased capital needs (net identified 10‑year capital needs rose by about $80 million compared with previous projections) and recommended staged tipping‑fee increases estimated at ~$4.36, $4.71 and $5.08 per ton across three years. Raftelis said the composite escalation assumption for expenses is roughly 3.5% per year. (Terry Boveri, Raftelis)

Board next steps and caveats

Sacco told commissioners the county will return with a formal recommendation after phase‑two evaluations and negotiations. Raftelis and staff recommended adopting a multi‑year fee schedule and using the county’s reserve (rate stabilization) to smooth the transition; staff said the user‑fee update and formal fee adoption will be brought to the board during the July time frame and incorporated into the FY‑26 budget process. Staff also emphasized the county can alter its strategy later if open‑market conditions change.

Quotes from the meeting

- Paul Sacco, director of solid waste: "The processing cost that they were quoting was just too high," referring to earlier renegotiation attempts with the incumbent operator.

- Paul Sacco: "We started January 1," referring to the county's move to power brokering and the agreements with a broker and consultant.

- Terry Boveri, Raftelis: "We developed a plan to phase in and raise the rates to offset that loss in revenues to maintain a fiscally sustainable financial plan."