goleader.com - Union County, NJ Newspapers 97oct23
Will Union Countys Trash to Cash Facility Turn to Ash for Taxpayers
In the 1970s, there was the gasoline crisis; in the 1980s, there was the landfill crisis; in the 1990s, theres the perpetual funding crisis. Dispersed throughout those 25 years were other crises such as sugar, coffee and brownouts. Who knows, with El Nino this year altering weather patterns in California, do we have an impending asparagus crisis?
The gasoline crisis was mitigated (I like this word -- it sort of means "assuaged, transferred out of mind but not actually solved"). To do this, we had a couple of wars; tried to drive 55 miles per hour (mph), lightened our cars, and bit the bullet as the cost rose from 29 cents to $1.40 per gallon. Except for the wars, the outcome was not too bad since nobody drove 55 mph anyway.
As for the cost, maybe our currency name (the "dollar") is synonymous with the "barrel." Whats the cost of a pack of gum today compared to then?
Now thinking about trash, do you remember the New York City garbage barge that wandered up and down the east coast and into the Gulf of Mexico looking for a disposal site? About that time, locally, New Jersey landfills were closed and costs for disposal in Pennsylvania and elsewhere soared. Other states threatened to block New Jersey landfill trash delivery.
In the late 1980s, New Jersey government stepped in and took action. Now, the Garden State has the highest recycling rate in the country, and five "Trash to Cash" burners are in operation. Back then, every one of the 21 counties in the state were supposed to build a trash burner to convert solids waste to electric power.
Only a handful complied and other counties "ducked out." Union County complied with the state directive. The Union County facility has been in operation for three years.
Now the irony landfill business in Pennsylvania has dropped off dramatically, and theyre looking for more business. Since landfill operators respond to the principles of supply and demand, theyve dropped their prices for disposal from the frenzied $85 per ton a decade ago to now as low as $30 per ton.
But in Union County, were stuck by contract at $83 per ton because we must pay off the bond debt for our trash burner (constructed at a cost of about $283 million). Also, we must keep the trash burner running at as high an occupancy rate as possible to maintain the revenues derived from sales of electricity or matters get worse. Otherwise, the Union County Utilities Authority (UCUA) will collapse financially, and county bonding will go into default.
The county is responsible for $35 million of the remaining $280 million outstanding bonds on the facility. Even this small amount may be in question. Up until July of 1996, there did not seem to be a looming problem. That was until a federal court judge ruled New Jerseys waste flow controls, which have allowed the UCUA to require that all trash dumped in the county goes to the Rahway incinerator, as unconstitutional because they violate the Commerce Laws of the United States Constitution. An appellate court judge has upheld the lower courts decision.
Once the court officially lifts waste flow controls, towns in the four counties in the state, including Union County, which have incinerators, will be free to search for the lowest price to dispose of the municipal garbage. With that in mind, the UCUA is currently in negotiations to sign a 25-year lease for the operation of the incinerator with Ogden Martin Systems, the builder of the incinerator. As part of the deal, disposal fees at the incinerator would drop from $83 per ton to $50 a ton.
Over the past few months, the Democrats of the Union County Board of Chosen Freeholders have been "teeth gnashing" with the Directors of the UCUA over the situation. At one point this year the Freeholders replaced the current Commissioners with a new board, citing the UCUAs inaction in addressing the looming crisis following last summers court ruling. A superior court judge ruled against the Freeholders resolution, and put back the current Authority.
Local towns are looking for ways to pull out of agreements. We dont think the proposal to sign a 25-year lease and turn the facility over to private industry solves the issue; but maybe it mitigates it.
First, its questionable that the facility has 25 years left in its life. If its refinanced over an unusually long period, were passing the buck to others in the future. Also, technology and the economy are advancing. The UCUA facility might soon be out of date and obsolete.
At the end of the lease the UCUA will take over the ownership, providing Ogden Martin certifies that the facility is worth $200 million and has another 25 years left in its life span. That would give the facility a life span of 50 years. Twenty years is pushing it, not to mention half a century.
So, for complying with state directives a decade ago, Union County is penalized. Others who ignored the state are today enjoying disposal costs at about $35 per ton. To us, there seems to be an issue of fairness here that should be corrected, but how?
To give you an idea of the dimension of the issue, if each of the 12,000 households in Westfield placed 100 pounds of attic waste on the street for disposal by the town; there would be 600 tons. At $83 per ton, the cost would be just under $50,000. At $50 per ton, the cost for disposal would be $30,000; at $30 per ton, the cost calculates to be $18,000.
We believe New Jersey and the non-complying counties have a responsibility in the state mandate. After all, Union County (and others like us) complied with the state mandate. Our trash burners are depressing the landfill costs for those non-complying counties.
Could it be as simple as having the New Jersey State Public Utilities Commission set a higher payment rate for the electricity generated from trash burning. Then, the added electric purchase cost would be appropriately dispersed equally throughout the state. In a sense of all fairness, what do you think?
Horace R. Corbin
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October 25, 1997
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