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Council committees advance $7.04M biogas-upgrade contract and $5.18M NIPSCO interconnection for sewage plant renewable natural gas project
Summary
City Utilities told the Common Council committees that a packaged biogas upgrading system and a NIPSCO interconnection agreement are intended to convert flared biogas at the Water Pollution Control Plant to pipeline-quality gas; committees recommended due-pass on both ordinances.
Two ordinances to convert biogas produced at the city’s Water Pollution Control Plant into pipeline-quality natural gas advanced with due-pass recommendations from committee on Sept. 16, 2025.
City Utilities staff presented the project as a two-part effort: a $7,043,000 construction contract for a packaged biogas upgrading system (S250904) and a $5,178,506.43 facilities interconnection agreement with Northern Indiana Public Service Company (NIPSCO) (S250905). Committees voted to recommend both measures for approval; the votes were unanimous in committee and will return to the full council for final action.
Why it matters: City Utilities staff said the project would capture biogas from anaerobic digesters that the department currently flares, upgrade it to natural gas quality, and either use it at city facilities or deliver excess product into the NIPSCO pipeline. Staff estimated $7 million to $8 million in net revenue over a 20‑year bond life and said net revenue would grow after bond retirement. The project will require regulatory approvals, including from the Indiana Utility Regulatory Commission (IURC), for the interconnection and sales arrangements.
City Utilities described the technical and funding structure: the packaged upgrading equipment will be installed at the Water Pollution Control Plant to reduce the portion of biogas currently flared (City Utilities staff said flaring accounts for roughly 70% of produced biogas). The interconnection agreement covers NIPSCO’s construction of pipeline-tie facilities to accept metered upgraded gas. Staff said the construction contract (S250904) will be funded via the Sewer State Revolving Fund and that the interconnection agreement (S250905) reflects NIPSCO’s costs to construct their portion of the tie-in.
Committees discussed market, contract and regulatory arrangements. City Utilities staff said the city has negotiated a minimum sale price for environmental attributes and a multi-year price arrangement with a commercial purchaser (described in the briefing) that includes a locked minimum price and a split of additional revenue above the minimum. Staff noted the project has a multi-year construction schedule with substantial completion targeted in October 2026 and final completion in November 2026.
Council members sought clarification about price determination, regulatory approvals and the scope of City Utilities’ new role in selling upgraded gas. Staff said NIPSCO will pay the city for the gas delivered into their system and that separate commercial arrangements cover environmental attributes and additional value. Staff also confirmed the matter will go to the IURC as part of the interconnection and sales approvals.
Both ordinances were read into the committee record and advanced on unanimous due-pass recommendations; the committee recorded a 6-0 recommendation in favor of both measures.
