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Council hears proposal to capture and sell methane from wastewater plant as renewable natural gas
Summary
Council members heard a feasibility proposal for capturing methane at the wastewater plant, testing the idea with a small study and potentially financing a multi‑million‑dollar project that could generate seven‑figure annual revenue.
At the council’s work session, officials discussed a proposal to capture methane from the city’s wastewater digesters and convert it into renewable natural gas (RNG) for sale. Presenters and council members described an incremental approach: a feasibility study, pre‑project development, design and construction, with multiple financing options including revenue bonds.
Council discussion centered on scale and economics. A presenter explained the plant currently flares an estimated 88 MCF (thousand cubic feet) of gas per day and that with additional improvements capture could be increased into the low hundreds of MCF per day. He said the RNG product carries both commodity value and a carbon‑credit premium: “If Walmart, let's say, wants to use it...they're paying a premium for those credits of someplace between, according to Black Hills, dollars 15 to 30 in MCF,” the presenter said, and added that the project could produce “a seven‑figure a year, easily, revenue generator for the city.”
The presenter outlined estimated costs and next steps: a $10,000 feasibility study to confirm volumes and markets; a $200,000 pre‑project development phase; and a total project build cost in the neighborhood of $10 million, potentially financed by revenue bonds tied to utility revenues so the project would not fall on the general fund. Staff and a number of council members said the initial study would be a prudent, low‑cost step.
Council members reacted positively to the proposal’s revenue potential and asked for a short, funded feasibility study. One councilwoman said the requested $10,000 to $20,000 for initial study “is far, far less than we spend on most studies, and I think that would be one of our better investments.” Council direction: proceed with a feasibility study and return to council with findings and a financing plan.
