Northwest Natural Renewables proposes landfill-to-pipeline renewable natural gas project for Toledo

Northwest Natural Renewables presented a proposal July 17 to the Mobility, Sustainability and Beautification Committee to build a facility that would collect biogas from the city landfill and the wastewater treatment plant, upgrade it to pipeline-quality renewable natural gas (RNG), and interconnect with the Columbia Gas system. The company says it will provide all capital, operate the facility and pay the city for the raw biogas delivered.

Megan Robeson, director for the Department of Public Service, introduced the project and said the city currently flares landfill gas and sought alternatives. "It would be irresponsible of us do that and not look at more sustainable approaches," Robeson said. Ryan Murphy, commissioner of solid waste, told the committee the proposal is structured to be low risk for the city: "the city is not expending any additional capital dollars for the development, operation, construction of this project," and Northwest Natural Renewables would assume those costs and risks.

Anna Chittum, president of Northwest Natural Renewables, described the commercial terms the company has proposed. She said the company would pay the city $1,000,000 when the gas-rights agreement is executed and an additional $500,000 when the project reaches commercial operation. Chittum summarized the per-MMBtu payments for raw biogas as "$2.50 up until the point we reach 300,000 MMBTUs in any given year, and then it jumps to $6 per MMBTU." She also said Northwest Natural Renewables plans to invest about $2,000,000 in the landfill gas collection system in the first several years and estimated roughly $200,000 per year in follow-on capital investments and about $125,000 per year to cover operation and maintenance of the collection system.

Chittum said the company has already funded diligence work on gas volumes, quality and interconnection and is pursuing creditworthy offtake markets for RNG sales. She estimated the city's portion of the federal investment tax credit would be roughly $2,300,000 and said the total projected benefits to the city over the life of the project exceed $32,000,000, while the company’s projections for raw-biogas payments to the city total more than $21,000,000 (all figures are company estimates shown to the committee).

Committee members asked questions about local labor and food-waste integration. Chair Komives asked for a dollar-frame for city capital the company would take on; a Northwest Natural Renewables representative estimated the city would avoid "at least 1 to 1 and a half million dollars in capital cost" over the next five to eight years for compliance and maintenance of the landfill gas system. Komives also requested that the company engage local labor unions; Robeson said project labor agreement requirements were included in the city’s request for proposals and discussed with bidders.

Council members discussed the potential for the project to accept additional organic feedstocks from the city's food-waste program and the wastewater digesters. Chittum and city staff said the facility would provide a home for digester gas and welcome additional waste streams, but emphasized the city would retain operational control of landfill and treatment-plant operations. "We are not the tail wagging the dog here," a Northwest Natural Renewables representative said, noting the company would process and pay for the gas the city and treatment plant deliver.

No formal vote or contract approvals were taken at the meeting. Committee members and presenters said there are three agreements contemplated to move the project forward: a biogas rights agreement, a lease agreement for city property, and an operations and maintenance agreement. The lease term discussed was calculated to be 20 years with a possible five-year extension.

Next steps discussed at the hearing include continued diligence by Northwest Natural Renewables, negotiation of the three agreements, and follow-up discussions with city operations and unions. Committee members expressed support for the project’s sustainability goals and revenue potential, and asked staff to continue negotiations and return with formal agreements for committee or council action.