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Pasco industrial wastewater plant faces multimillion‑dollar shortfall as processors object to proposed rate fixes
Summary
After an expansion and new private‑partner treatment contract, Pasco’s Process Water Reuse facility reported a start‑up deficit and projected a larger shortfall in 2026. Processors said recent rate increases were already severe and warned further hikes would be untenable. City staff and the industry formed a work group to seek alternatives, including renegotiating the operator contract and using federal tax credit proceeds.
City staff told the Pasco City Council and an industry work group on Monday that the Process Water Reuse facility (PWF) ended 2025 with a deficit after start‑up costs and underperformed revenue from renewable natural gas (RNG) sales. Director Sarah said the fund used reserves and closed 2025 about $800,000 in the red; updated projections prepared for the council showed a potential cumulative shortfall in 2026 of several million dollars.
The PWF expansion added a biological treatment train and an RNG production component; the biological units are operated by a private contractor under a 30‑year agreement. Council heard that the city’s own operating components came in under budget in 2025 while the private operator’s operating costs exceeded projections and RNG revenue underperformed relative to forecasts.
“We are not presenting a rate proposal tonight; we’re reporting the annual review and the short‑term outlook,” Director Sarah said. She told the council staff would continue working with processors through a stakeholder work group and would return with vetted alternatives for council consideration.
Processors and industry representatives told the council they cannot absorb the sort of price increases modeled by staff. Twin City Foods president Dale Goya said the city’s internal reporting showed the private operator missed costs by several million dollars while the city’s internal portions came in favorable: “If you think about that, that delta is what we need explained — we cannot continue to underwrite contractor over‑runs,” he said. Elizabeth Ober of the Oregon Potato Company said the plants pay for wastewater treatment, not for producing RNG: “We’d love the benefits, but they’re not forthcoming — and we’re being billed for them,” she said.
Processors urged the council to pursue alternatives that do not transfer the full start‑up and operating risk to industrial customers. Options under discussion include renegotiating the private‑operator agreement, pursuing operational efficiencies, accelerating RNG market efforts, and using proceeds from federal carbon‑reduction tax credits that the city holds in a restricted account. Several council members said they opposed immediate across‑the‑board rate hikes and asked staff to bring back options that could protect local businesses while stabilizing the utility.
Next steps: staff said a PWF work group will meet again soon to refine alternatives; the council asked staff to seek measures that avoid immediate, drastic rate increases and to consider contract discussions with the private operator and limited use of restricted tax‑credit proceeds to buy time while longer‑term solutions are negotiated.
Who said what: Director Sarah (speaker 18) led the staff presentation. Processor representatives who spoke included Twin City Foods’ Dale Goya (speaker 57) and Oregon Potato Company’s Elizabeth Ober (speaker 53).
