Columbia to become power broker?
Columbia BY AD CRABLE, Staff Writer
The county waste authority has moved a step closer to purchasing the debt-ridden Harrisburg incinerator, and Columbia Borough has agreed to act as a middleman to sell electricity from the facility to power state buildings, including the Capitol.
On Jan. 28, Columbia Borough Council approved a letter of intent for the plan with the Lancaster County Solid Waste Management Authority.
The authority hopes to finalize its purchase of the Harrisburg Resource Recovery Facility from the Harrisburg Authority within the next two months.
Approval would have to come from the state receiver for the financially distressed city, as well as from the courts and others.
If, as expected, the authority takes over, it wants to sell electricity generated by the incinerator to the state Department of General Services. Currently, power generated at the incinerator goes into the regional electrical grid.
Selling the power to the state would enable the authority to issue tax-free bonds to finance the purchase.
However, the Pennsylvania Municipal Authorities Act would prohibit the authority from commercially reselling power. But a borough can sell beyond its borders if the borough owns or operates the power plant.
Ephrata currently does that, as do many others around Pennsylvania.
Under the arrangement being finalized between Columbia and the authority, the authority would hire the borough to operate the power plant portion of the Harrisburg incinerator.
The borough, in turn would contract the current operator of the incinerator, Covanta, to run the power plant.
On paper, the authority would sell steam at the incinerator to the borough. The borough would then make the electricity from that steam and sell the power directly to the state.
In exchange for being the legal conduit for the sale of electricity, Columbia would net an estimated $50,000 per year, with a 2 percent increase over 20 years.
The authority would take all responsibility for any environmental issues, power failures, work stoppages or other issues at the incinerator.
"We also chose Columbia because we have a good history of cooperation with them and there is no borough more impacted by LCSWMA activities than Columbia," James Warner, chief executive officer of the authority, said Thursday.
Sale of power from the incinerator is estimated to produce $4.3 million in revenue for the authority in the first year.
The authority has been pursuing purchase of the incinerator for two years. The authority had previously planned on a $175 million expansion of its own resource-recovery incinerator in Conoy Township to meet Lancaster County's growing needs for trash disposal.
But it switched gears, saying taking over the Harrisburg incinerator, even with its troubled past, would be a cheaper alternative.
Originally, the authority had offered Harrisburg $45 million for the incinerator, then upped its price to $125, if the city and Dauphin County would provide a guaranteed stream of trash.
After a formal bidding process, last July the Harrisburg receiver chose to negotiate solely with the authority.
Sale of the incinerator would be a linchpin in the state-sponsored recovery plan for Harrisburg. Much of its $340 million in debt can be attributed to an ill-timed retrofit of the incinerator.
Correspondent Stephanie Bradford contributed to this story.
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