Dynamis Energy, the company chosen to design, build and manage a waste-to-energy plant in Ada County, has a three-month wait ahead of it as regulators and the public prepare to weigh in.
The company is operating under intense scrutiny. It faces allegations it has cut corners and operates without the transparency expected during a public contracting process. Those allegations are expected to be investigated by the Bannock County prosecutor.
The company cannot rely on experience to win the trust of local critics. It has either lost or abandoned contracts for two similar plants that were originally scheduled to be completed at around the same time or before the Ada County plant.
Dynamis has estimated it is at least five months behind schedule. It is hurrying to meet deadlines for a federal grant that could cover a portion of the plant’s $70 million to $80 million cost. It could be penalized for missing deadlines with Idaho Power, which has a contract to buy the energy generated by the plant.
The company still has the confidence of the Ada County Commission, however, and continues to publicly state that it will move forward with the project. Company officials note Dynamis has already sunk $10 million of its own funding into the venture.
Dynamis officials did not respond to numerous Idaho Business Review requests for an interview.
Making a buck
Turning municipal garbage into electricity is a tricky business.
Waste-to-energy plants make money in two ways, by selling the energy to a power company – in this case, Idaho Power – and through tipping fees provided by the agency that disposes of garbage.
The minimum tipping fee at the Ada County landfill is $11. Tires cost $3.50 each to dump.
For the first five years of operations for the Dynamis plant, however, the county will not have to pay any tipping fees, which Dynamis claims on its website would save taxpayers $10 to $15 million.
But that also means it would have to rely exclusively on selling energy to Idaho Power to keep revenues high enough to pay for building and running the plant.
Yet energy prices are dropping. That’s partly why Dynamis’ planned waste-to-energy facility in Clark County was scrapped.
William Frederiksen, a Clark County commissioner and chairman of the Eastern Idaho Regional Solid Waste District, said a planned waste-to-energy plant that would serve Bonneville, Madison and Freemont Counties was scrapped when energy rates plummeted.
Under the federal Public Utility Regulatory Policies Act, or PURPA, utilities like Idaho Power are required to contract for the energy produced by developers who qualify under the act’s provisions. Dynamis’ plants would qualify, but the rates for the contracts also are set by federal regulators.
Gene Fadness, the Public Utilities Commission spokesman, said those rates have been dropping due to the depressed prices of natural gas, which are the standard by which the federal government sets PURPA rates.
“That has dropped rather significantly in the last three to four years,” Fadness said.
Frederiksen said that when it came time to sign a PURPA contract with PacifiCorp, which operates Rocky Mountain Power, the rates had fallen too low.
“It made our project undoable as far as we could tell,” he said.
Dynamis has already signed its contract with Idaho Power. That contract has set prices for 20 years, meaning future volatility in PURPA rates will not affect the contract. Idaho Power will be paying an average of about $92 per megawatt over the life of the contract, although actual prices vary in different years and seasons, according to the Public Utilities Commission.
Dynamis negotiated for a slightly higher rate than standard because its energy would be available during peak use seasons and times of day, according to the Public Utilities Commission.
Dynamis stated in a news release that part of the reason for its delay in getting the project off the ground was that the company wants to generate more electricity, its source of revenue. The company didn’t elaborate.
“To accommodate for the additional electricity demand, Dynamis had to redesign and engineer the plant, and resubmit the information to the Idaho (Department of Environmental Quality) in regards to the air quality permit,” the company states in a June 29 release.
More electricity generation means the company can sell more energy to Idaho Power, but it also means the plant will be larger and cost more.
In a feasibility study done for the proposed Clark County project, Whisper Mountain Professional Services in Pocatello estimated it would cost about $3.5 million for each megawatt of energy a Dynamis plant produces. Dynamis’ website states it would produce up to 22 megawatts of energy and process 408 tons of waste per day.
Landfill tipping fees in the region are about $20 per ton, but waste-to-energy plants often have lower tipping fees than landfills.
Kent Pope, director of business development for Outotec Energy Products, a Coeur d’Alene-based company that has built 108 waste-to-energy plants, said he could not comment on Dynamis’ situation. But he said it is very difficult to make waste-to-energy plants profitable in the Northwest.
Cheap hydroelectric power makes it difficult to sell the energy outside of a PURPA contract, he said.
“You have to have a pretty good tipping fee in order to justify one of these plants,” Pope said.
Making a name
The public has also displayed a lack of trust in Dynamis.
One group, Idaho Citizens for a Safe Environment and a Transparent Government, formed to try and block the project altogether.
The group, which includes people who live near the landfill and others, has environmental concerns. Group attorney Andre Schoppe said he plans to sue the county to stop the project.
The group has also asked authorities to investigate whether both Ada County and Dynamis cut corners during the project’s bid phase, implying the two developed a sweetheart deal outside the bounds of Idaho’s contracting guidelines.
In a June 27 letter to U.S. Attorney Wendy J. Olson, Attorney General Lawrence Wasden and Ada County Prosecutor Greg Bower, Schoppe writes that the county and Dynamis “may have engaged in fraudulent and/or unlawful conduct in connection with the project.”
The group bases its accusations on the legal statements of a former county employee, Pam Woodies, and an engineer, Chas Ariss.
Woodies alleges the county made decisions about the project while violating the open meetings act by using a rolling quorum – or a series of meetings with commissioners to make a decision outside the public view designed specifically to avoid having any one meeting where a quorum is present.
Ariss, who was listed as a consulting engineer in Dynamis’ agreement with the county, never worked for the project, he said. The group also alleges that other engineers listed on the agreement were not licensed to work in Idaho when the document was signed.
County officials have countered that the opposition is stoked by political games during an election year.
“The controversy surrounding this issue has become extremely political, and allegations are being fueled by a former Ada County employee and a vendor who was not hired by Dynamis to perform work on the proposed project,” said outgoing Ada County Commissioner Sharon Ullman July 10. “I welcome the inquiry from the Bannock County Prosecutor just as I would welcome a formal investigation from the Idaho Attorney General because I am confident that everything has been done by the book.”
Further hampering the image of Dynamis is the company’s loss of another waste-to-energy project, two planned garbage-burning plants in Puerto Rico.
Synergy Renewables, a Texas company, had originally announced it would be working with Dynamis’ technology to build the plants.
It has since dropped Dynamis from the picture.
Synergy Renewables spokeswoman Judy Shelton said in an interview that the company is “no longer partnering with Dynamis on that project,” but plans to build the plants anyway, with work starting late this year or early 2013.
The company would not disclose why it broke ties with Dynamis.
Another company, Brazil-based Planova, announced in October 2011 that it was planning to build waste-to-energy plants in South America with Dynamis. No further news has been announced about the projects and it is unclear if Dynamis is still involved.
Planova did not respond to an Idaho Business Review request for an interview.
Dynamis has a rocky past in Idaho as well.
Company president Lloyd Mahaffey and vice president John Johnston are owners in the Southfork Landing development in Garden Valley. The development has struggled with financial problems.
It came up more than $60,000 short on a tax payment to Boise County for about $123,000 in delinquent 2008 taxes, Boise County Treasurer April Hutchings said. The county took 61 parcels of land — the developers’ payment covered 54 parcels — to cover the remaining parts of the overdue bill.
Southfork Landing will face a similar deadline for its 2009 taxes, with a similar price tag, Hutchings said. In total, developers still owe more than $300,000 in back taxes for the project.
Southfork Landing developers were fined $7,150 in 2008 by the U.S. Environmental Protection Agency for failing to adequately address erosion and sediment controls and failing to manage water from fire hydrant flushing and dust control discharges, as well as minor self-inspection deficiencies.
Pollution worries remain a top concern for people fighting the Ada County waste-to-energy plant.
The plant’s process takes garbage and burns it cleanly, using the created steam to create energy in a similar fashion to a coal-fired plant.
It can leave leftover waste, however, in the form of dioxins, which are toxic if ingested – usually through food – and have been known to increase the risk of cancer.
The Idaho Citizens group and others have said they don’t believe that the plant has adequate safeguards for dioxins.
Dynamis countered with a paper that revealed part of its technology in an effort to show that the plant would exceed all state and EPA requirements on dioxin control. The company allows little access to its technology, saying the information is proprietary.
Pope said that the dioxin concerns started in the 1970s when burning technology was not advanced. There were problems with dioxins left behind by waste-to-energy plants, he said.
But new technology allows plants to turn almost all of the waste into carbon dioxide, leaving very few dioxins behind, he said. The dioxins that are still created can be easily regulated and kept away from the public, he said.
Pope said that the alternative, a landfill, creates far more methane from decaying waste over the long term. That’s far worse for the environment than the carbon and leftover dioxins, he said.
“It’s hundreds of times better to cleanly burn something than to put it in the landfill,” Pope said.
Outotec and others in the business voluntarily share their technology with the communities where they work, Pope said. He said they still get patents for any proprietary technology, but that it would be very difficult to get new contracts if the company wasn’t able to share how the process would work – from beginning to end – with the people who would have to live near it.
The next step
Ada County has a 30-year deal with Dynamis to run the plant. Dynamis officials want to break ground as soon as they receive air quality permits from the state Department of Environmental Quality. DEQ spokesman Jess Byrn said the Dynamis application has been complete since July 9.
The company will now have to wait through a process that can take up to two months as DEQ decides whether to grant the company a clean air permit and solid waste permit. It will then have to go through a 30-day public comment period regarding DEQ’s decision.