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Home My WebLink AboutAgenda - 01-15-2008-6bORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: January 15, 2008 SUBJECT: Landfill Gas Recovery Process O DEPARTMENT: Solid Waste Management Action Agenda -~ Item No. ons PUBLIC HEARING: (Y/N) No ATTACHMENT(S): Proposed Memorandum of Understanding Project Map INFORMATION CONTACT: Gayle Wilson, 968-2885 PURPOSE: To follow-up the December 11, 2007 Board of Commissioner meeting regarding direction to staff to meet with, University of North Carolina staff to negotiate a Memorandum of Understanding (MOU) for the purpose of development of a .gas recovery project at the Orange County landfill. BACKGROUND: At the December 11, 2007 BOCC meeting, the Board considered three options regarding how to proceed with development of a landfill gas recovery project. The options were: 1. to enter into a formal Memorandum of Understanding with the University to grant UNC exclusive negotiating privileges on a potential landfill gas recovery project 2. to proceed with a Request for Proposals process, encouraging the University to participate 3. for Orange County to proceed to develop a landfill gas recovery project itself. On December 11, the BOCC directed the Manager to meet with University staff in an attempt to reach a preliminary agreement on a MOU and return to the January 15, 2008 Board meeting with a mutually agreeable draft MOU for BOCC consideration. Should the Manager be unable to reach a mutually agreeable draft MOU, the Board would be informed of the areas of disagreement and consider any additional Manager recommendations. The proposed MOU (attached) is the product of meetings held between County Management, Solid Waste, and UNC officials in response to direction by the BOCC and an effort to establish. mutually agreeable language to ensure due diligence and anticipate effective implementation of a landfill gas recovery project. The impacted project area is also shown in the accompanying map. The principal elements of the MOU are summarized below: 2 Energy Generation and Use: Gas flaring is a short term outcome only; Alternatives, including but not limited to the proposed Carolina North development, remain the most desirable final outcome. Economic Feasibility: Structuring a business arrangement that responds favorably to the economic needs and interests of both parties and would negate, ideally, the need or purpose for the University to subcontract with a third party for the generation and/or use of the landfill gas. Due Diligence: Obligating both parties to work aggressively during the prescribed 90 days to bring forth a credible, joint plan of action (draft working contract) for beneficial reuse of the gas, pending review by the County Manager and County Attorney, and final approval as the BOCC may decide. FINANCIAL IMPACT: There is no direct financial impact to Orange County relative to discussing the options or execution of a Memorandum of Understanding. However, there are expected to be revenue/expenditure consequences related to execution of any final agreement, beyond and as a result of the proposed MOU, for implementation of a specifically defined gas recovery project with the University, depending on detailed project economics. RECOMMENDATION(S): The Manager recommends that the BOCC authorize the Chair to execute the proposed Memorandum of Agreement with the University to explore the feasibility and joint timely implementation of a landfill gas collection and energy use system. Memorandum of Understanding between The University of North Carolina at Chapel Hill and Orange County, North Carolina Goals of the Parties: • The University of North Carolina at Chapel Hill (University), a premier public research university, is committed to addressing the problems and priorities of the citizens of North Carolina and to establishing a leadership position among its peers with respect to climate change and sustainability. • The University's Chancellor has signed the American College and University Presidents Climate Commitment, pledging that the University will achieve climate neutrality as soon as possible. • The University has begun the development process for a new campus, Carolina North, which it desires to be climate neutral from inception. Use of landfill gas as an alternative fuel for both thermal and electric energy production is an important component of achieving this goal. • Orange County is committed to addressing the problems and priorities of its citizens, and to taking a leadership role among local governments with respect to climate change. • Orange County has joined ICLEI -Local Governments for Sustainability and is leading the climate change effort for local governments in Orange County. • Orange County desires to eliminate the odor and methane gas released from its Eubanks Road Landfill, and to create an additional revenue stream for the County, by utilizing the gas for energy or other beneficial purposes. • The University and the County desire to work together to explore the feasibility, and if feasible the joint timely implementation of, a landfill gas collection and use system that will manage this waste stream in a sustainable manner that benefits the County, the University, the community, and the environment. Responsibilities of the University • Further refine the gas production estimates included in the March 2006 report, Landfill Gas Recovery Feasibility Study, by Olver Incorporated. • Identify alternatives for use of the gas by the University for energy or other beneficial purposes, it being understood that flaring of the gas may be the best short term alternative to quickly reduce odor but is not an acceptable final outcome. The length of the anticipated short term will be defined as part of the proposed project schedule in the final agreement negotiated between the University and the County. Anticipated alternatives to be examined are as follows: o Gas to existing Airport Drive Complex at Carolina North for Thermal and/or Cogeneration Use o Gas to existing UNC Cogeneration facility for use as a cofiring fuel in the boilers o Electric Generation for the Airport Drive Complex at Carolina North • Assess the economic feasibility of the identified alternatives and identify possible approaches to structuring a mutually satisfactory business relationship between the University and the County. • Aggressively pursue the supporting analysis and present recommendations with the explicit intent of moving forward with a plan to work with the County on the beneficial use of the gas. • Complete this feasibility work within 90 days of the execution of this agreement. Responsibilities of Orange County • Provide information on its operations as needed for the completion of the feasibility analyses • .Generally support the feasibility analyses led by the University and ensure compatibility of proposals with ongoing landfill operations and objectives. • Permit access to its facilities in conformance with its policies and procedures as needed to enable completion of the technical and financial feasibility analyses. This includes access for drilling test wells to better ascertain potential gas flows and quantities. The University and the County Agree that: • This Memorandum contemplates the use of gas from the landfill on both the north and south sides of Eubanks Road, according to the attached map. • This is an exclusive relationship and neither the University nor the County will enter into a conflicting agreement to develop an energy program based on the County's landfill gas prior to the expiration of the 90 day term discussed herein • This Memorandum will terminate 90 days from inception unless extended by mutual written agreement of the parties. • The University may enter upon the landfill property for the purposes of completing the feasibility analysis. The University shall notify Gayle Wilson, the County's Solid Waste Director prior to entering the landfill property. To the extent provided by the North Carolina Tort Claims Act, The University shall be solely responsible for any and all losses, damages, and injuries sustained or caused by its employees, agents and contractors while they are engaged in work pursuant to this Memorandum while on County owned property. • Coincident with the 90 days feasibility analysis period, the University and the County will work together to draft a detailed agreement for the collection and use of the landfill gas. o It is the intent of the parties to be prepared to execute a final agreement for the collection and use of the gas based on the goals established herein at the end of the feasibility study period if both parties agree to proceed following receipt of the results of the feasibility study. o The final agreement will address design, finance, permitting (local and state), construction, operation, and maintenance of the system, including progress benchmarks. o The final agreement will address revenue sharing; including carbon credits. 5 BY: The University of North Carolina at Chapel Hill Richard L. 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