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Home My WebLink AboutAgenda Packet 06/10/2014 Utility Advisory Committee Council Chambers Port Angeles, WA 98362 June 10, 2014 @ 3:00 p.m. AGENDA L Call To Order II. Roll Call III. Approval Of Minutes For May 12, 2014 IV. Late Items V. Discussion Items: A. Cable Television Franchise Renewal (verbal report) B. Morse Creek Update C. Clallam County Comprehensive Solid Waste Management Plan VI. Information Only Items: A. 2015 Public Works &Utilities Capital Facilities Plan (verbal report) B. Radio-Frequency Emissions Update (verbal report) C. City Infrastructure Tour Date Scheduling VII. Next Meeting Date: July 8, 2014 VIII. Adjournment N:AUAC\MEETINGS\UAC2014\UAC061014\061014 Agenda.docx Utility Advisory Committee Council Chambers Port Angeles, WA 98362 May 13, 2014 3:00 p.m. L Call To Order Vice Chairman Dan Gase called the meeting to order at 3:00 p.m. IL Roll Call UAC Assigned Councilmembers Present: Sissi Bruch, Dan Gase, Lee Whetham Other Councilmembers Present: Other Councilmembers Absent: Cherie Kidd, Dan Di Guilio, Brad Collins,Patrick Downie Utility Advisory Committee Members Present: Paul Elliott, Betsy Wharton Utility Advisory Committee Members Absent: Lynn Bedford, John LeClerc Staff Present: Dan McKeen (3:17), Craig Fulton, Byron Olson,Phil Lusk, Sondya Wray, Gregg King, Kathryn Neal,Bill Bloor, Tom McCabe, Terry Dahlquist Others Present: 10 Citizens III, Approval Of Minutes Vice Chairman Dan Gase asked if there were any corrections to the minutes of April 8, 2014. Betsy Wharton moved to approve the minutes. Sissi Bruch seconded the motion,which carried unanimously. IV. Late Items: Landfill Cell Stabilization -PowerPoint- (Information only item) Radio Frequency Electromagnetic Fields—(Information only item) V. Discussion Items: A. "Simple Steps—Smart Savings"product promotion with Fluid Market Strategies Gregg King,Power Resources Manager discussed the Simple Steps programs project success. The program is anticipated to spend its 2014 budget by June. Fluid Market Strategies sent Amendment No. 1 to Project Order 01 for an additional amount of$60,000,increasing project program 2014 funding from $65,000 to $125,000. These expenses are fully reimbursed by Bonneville Power Administration,no City funds are used. Paul Elliot moved to recommend City Council to authorize the City Manager to sign the Simple Steps Amendment No. I to Project Order-01 in the amount of$125,000 and to make minor modification as necessary.Dan Gase seconded the motion,which carried unanimously. B. Olympic Memorial Hospital District Interlocal Agreement(verbal report) Craig Fulton, Director of Public Works and Utilities gave an overview of the background information on the interlocal agreement between the City of Port Angeles and Olympic Memorial Hospital District. The City of Port Angeles will be taking over the electric transformers at Olympic Memorial Center. There was a brief discussion. C. Transfer Station and Solid Waste Utility Cost of Service Study Phil Lusk, Deputy Director of Power& Telecommunications Systems, gave a PowerPoint presentation on the FCS Group comprehensive rate studies for the Solid Waste Collection and Transfer Station utilities. The studies will be presented to the Utility Advisory Committee,including the recommended retail rate adjustments. It will be necessary to adjust retail rates at this time to maintain the funds in a financial prudent position. The rate schedules are a requirement for the bonds that will be used to finance the Landfill Bluff Stabilization Project. There was a lengthy discussion. Dan Gase moved to recommend City Council to proceed with a public hearing on the cost of services studies for the Solid Waste Collection and Transfer Stations Utilities, and to adopt the rate ordinance amendments proposed for the Solid Waste Collection and Transfer Station utilities. Sissi Bruch seconded the motion,while Betsy abstained. Vi. Information Only Items A. Landfill Cell Stabilization(verbal report only) Information only. No action taken. B. Radio Frequency Electromagnetic Fields (verbal report only) Information only. No action taken. Vii. 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W A S H I N G T 0 N, U. S. A. ............91 Utility Advisory Committee Memo Date: June 10, 2014 To: Utility Advisory Committee From: Phil Lusk, Deputy Director of Power and Telecommunications Systems Subject: Morse Creek Hydroelectric Project Recommendation Summary: Staff is seeking a recommendation from the Utility Advisory Committee to the City Council to determine the permanent future of the Morse Creek hydroelectric project. Recommendation: Provide a recommendation to City Council to proceed with one of the two following options related to the Morse Creek hydroelectric project: 1. Return to service and continue to operate, or 2. Sell the project and property in their present condition, after declaring them to be surplus to the City's needs, or 3. Retire the project after surrendering the operating license to the Federal Energy Regulatory Committee and maintain ownership Background/Analysis: On June 12, 2012, staff updated the Utility Advisory Committee (UAC) on the cost of operating and maintaining the Morse Creek hydroelectric project. This is slightly after the time it was discovered that the generator bearings require replacement. On July 10, 2012, staff shared that a $100,000 cost estimate was received for the generator repairs necessary to enable operation. Due to the repair costs and future operating risk, staff recommended that the retirement or sale of the project and property be considered. Staff notified stakeholders about possible retirement of the project and requested they share their needs and interests. On August 14, 2012, staff summarized the stakeholder responses received, and the UAC asked staff to complete an economic analysis. On November 13, 2012, staff presented the results of the economic analysis, which determined that the costs of operating the project would be significantly higher than purchasing additional wholesale power from the Bonneville Power Administration. The UAC then recommended to the City Council that it consider options for the project other than continued operation. On November 20, 2012, City Council directed that the project be placed in standby mode to minimize costs, and to return later to the City Council with additional information. On January 7, 2014, staff received a letter from the Federal Energy Regulatory Committee (FERC) requesting the City's plan and schedule for either: 1)Repairing the generator; 2) Selling the project, or 3) Surrendering the operating license issued by them. On March 11, 2014 FERC granted the City an extension date of August 12, 2014 to provide FERC with an action plan. N:\UAC\MEETINGS\UAC2014\UAC061014\Morse Creek Hydroelectric Project Update.docx Morse Creek Hydroelectric Project Recommendation June 10,2014 Page 2 On March 28, 2014 the City hired McMillan LLC to conduct an independent review of the options for Morse Creek and provide a recommendation. Based on their analysis of costs, regulatory requirements, engineering review, and their experience working with other hydro projects, McMillan summarized the alternatives as follows: Option Alternative Assumptions Cost Return to Service and City would make repairs and operate the project #1 Continue to Operate for next 20 years, and decommission it after $599,000 license expires City does not repair generator, and the new owner #2 Sell the Project and responsible for O&M. NOTE: City must offer a $831,000 Transfer the License power purchase agreement to new owner to make project financially attractive Surrender the Project Based on minimal requirements from previous #3 License to FERC and 1999 surrender $348,000 Decommission Staff requests that the Utility Advisory Committee provide a recommendation to City Council to proceed with one of the three options related to the Morse Creek hydroelectric project: 1. Return to service and continue to operate, or 2. Sell the project and property in their present condition, after declaring them to be surplus to the City's needs, or 3. Retire and decommission the project after surrendering the operating license to the Federal Energy Regulatory Committee. N:AUAC\MEETINGS\UAC2014\UAC061014\Morse Creek Hydroelectric Project Update.docx TECHNICAL MEMORANDUM MCMILLEN1 LLC To: Gregg King Project: Morse Creek Evaluation City of Port Angeles FERC P-6461 From: Don Jarrett, P.E. Cc: File McMillen, LLC Date: June 3, 2014 Job No: 14-039 Subject: Executive Summary of the Morse Creek Hydro Alternatives 1.0 INTRODUCTION The Morse Creek Hydroelectric Project (Project)is located approximately five miles southeast of the City of Port Angeles, Washington. The Project is owned and operated (although not currently operating) by the City of Port Angeles (City). The City has retained McMillen, LLC (McMillen) to study the benefits of placing the system back into operation; selling the Project; or surrendering the Project's Federal Energy Regulatory Commission (FERC) license and decommissioning certain Project facilities. This Technical Memorandum summarizes the results of McMillen's evaluation of the alternatives concerning the future of the Morse Creek Hydro Project. Details of each alternative and their benefit/cost are contained in the attached Technical Memorandums. 2.0 BACKGROUND INFORMATION The Project is a run-of-the-river facility with a small screened diversion structure and no storage. The Project has a FERC minor license that was issued in 1985 and has a term of 50 years (license expires in 2035, at which time the Project must either be relicensed or the license surrendered/decommissioned). The water conveyance includes a 750-foot long concrete-lined tunnel, an 11,400-foot long buried mortar-coated and lined penstock (which also runs through two tunnels), and a 1,500-foot long penstock. The powerhouse contains a single 2-jet horizontal impulse turbine that is directly coupled to a 465-kW induction generator. The powerhouse is a small concrete masonry structure located adjacent to Morse Creek. Access to the powerhouse is via a gated gravel road. On April 3, 2014, McMillen visited the Project. The following key observations and recommendations related to potential costs necessary for continued operations were made based on the visit: McMillen,LLC Page 1 City of Port Angeles June 3,2014 Morse Creek Hydro • Along the pipeline access trail and within the project boundary, there is evidence of potential slope instability that should be assessed by a professional geotechnical engineer. • In the powerhouse, the generator requires a bearing repair and the turbine inlet valve requires replacement in order to bring the Project back into working order and restart generation. Additionally, the plant operator indicated there are issues with the new control system, including a lack of as-built documentation/software and problems with optimum turbine operation. Based on this information, there is likely a need to upgrade the control system to achieve proper operation. The intake/diversion structure is located in a narrow canyon accessed by a gated gravel road. There is a small outbuilding and an abandoned dam tender house above the intake/diversion. Clallam County Public Utility District (PUD) provides power to the intake. The diversion and intake were constructed long before the hydro project and were used by the City as an early source of potable water. Presently, water is taken by Clallam County PUD from the penstock (approximately 1 cfs) downstream of the first tunnel for its nearby water treatment plant in exchange for wheeling the project power back to the City. The City will need to ascertain if Clallam County PUD will want to continue to withdraw water if the Project FERC operating license is surrendered. For this analysis, it is assumed that Clallam County PUD would want to take over the diversion and intake with the associated operations. Presently water rights to Morse Creek diversion dam are held by the City, but these could be transferred to the PUD in the event of license surrender. The details of such a transfer are unknown. 3.0 PLACE PROJECT BACK INTO SERVICE A cost/benefit analysis of a "continue to operate" scenario, using the above averages, was performed. The analysis examined the capital costs required for restarting the Project, and annual O&M and generation values. In addition, the cost of surrendering the FERC license and decommissioning certain facilities at the end of the Project's life was also included in the evaluation. 3.1 Assumptions To perform the final analysis, several key simplifying assumptions were necessary: • The capital cost estimate to return the Project into operation would be a total in the range of$215,000 as a single lump sum cost and not amortized over a longer period through the issuance of bonds or other loan mechanism. The capital lump sum investment would include: $100,000 for generator bearing repair. This price was quoted to the City for an off- site repair of the bearing and may be less if the repair can be performed on-site. McMillen,LLC Page 2 City of Port Angeles June 3,2014 Morse Creek Hydro $100,000 for investigation, design, and implementation of slope stabilization along the penstock route (this estimate is a place holder until the area is assessed by professional engineer with expertise in slope stabilization). $15,000 for replacement of the turbine inlet valve. • The Project would operate for another 20 years (until 2035), at which point the Project's FERC license would be surrendered and the Project decommissioned at an approximate minimum cost of$348,000 (2014$). For the analysis, this value was escalated at 2% per year to reach 2035$ of$506,790. This cost is highly speculative at this point in time. It is likely that the cost to relicense would be significantly more expensive than decommissioning, since it would include more study work and mitigations, and would not be cost effective. See the Technical Memorandum for the surrender FERC license and decommission alternative for further details. • O&M operating costs escalate at a rate of 2%per year to compensate for the aging of the Project and equipment. • The purchase price of power from Bonneville Power Administration (BPA) was estimated at an average of $0.03/kWh based on the data provided. It was assumed that this rate would escalate at 3% per year over the Project's life as the cost of power increases. • The borrowing rate for the Project used to determine the Project Net Present Value (NPV)was assumed at 6%. 3.2 Analysis The analysis was performed for the time period over the Project's remaining 20-year life and computed the annual cost/benefit of operating the Project with the assumed purchase price of power from BPA as described above. Once an annual cost or benefit was determined for each year, a net present value (NPV) of the cost or benefit for the Project was calculated. Based on the described assumptions and analysis, an NPV cost of $302,723 was calculated, indicating that the Project costs more to operate than if the power was purchased from BPA. Note that the total cost was estimated to be $599,180 to continue to operate the project. 4.0 SELL THE PROJECT AND TRANSFER THE LICENSE A salability analysis was performed in order determine if selling the Project was a feasible financial option for the City. This analysis examined the capital costs required for restarting the Project, annual O&M and generation values, and the cost of surrendering the FERC license and decommissioning facilities. 4.1 Assumptions In order to perform the final analysis, several key assumptions were required as listed below: McMillen,LLC Page 3 City of Port Angeles June 3,2014 Morse Creek Hydro • The purchaser of the Project would be responsible for the repairs necessary to return the Project to operation. It was estimated that the capital cost of those repairs would total in the range of$215,000, including the following: $100,000 for generator bearing repair. This price was quoted to the City for an off- site repair of the bearing and may be less if the repair can be performed on-site. $100,000 for slope stabilization along the penstock. $15,000 for replacement of the turbine inlet valve. • The Project would operate for another 20 years (until 2035), at which point the Project's FERC license would be surrendered and the Project decommissioned at an approximate cost of $348,000 (2014$). For the analysis this value was escalated at 2% per year to reach 2035$ of $506,970. McMillen believes that the cost to relicense would be significantly more expensive and would not be cost effective. This expense would also be the responsibility of the Project purchaser. See the Technical Memorandum for the surrender FERC license and decommission alternative for further details. • O&M for the Project operating costs escalates at a rate of 2% per year to compensate for the aging of the Project and equipment. • The purchase price of power from Bonneville Power Administration (BPA) for the City was estimated at an average of $0.03/kWh based on the data provided. It was assumed that this rate would escalate at 3% per year over the Project's life as the cost of power increases. • The borrowing rate for the Project used to determine the Project Net Present Value (NPV)was assumed at 6%. • In order to make the Project a financially attractive investment, an Internal Rate of Return (IRR) of 15% would need to be achieved. This is the rate of return that the investor would need to balance the Project risks such as equipment breakdown, slope stability, FERC compliance,power price fluctuations, variations in water availability, etc. • To meet this IRR, it was assumed that the City would develop an agreement with the purchaser to buy power from the Project at an agreed-upon rate. This rate would escalate at 3%per year over the Project's life. 4.2 Analysis The analysis was performed over the Project's remaining 20-year life with the rate at which the City would purchase power from the Project iterated to meet the target IRR of 15%. It was determined that the necessary purchase price of power from the Project by the City would need to start at $0.0425/kWh, escalated at 3% per year. Once the City's purchase price was determined, it was compared to the rate at which the City would buy power from BPA, assumed at $0.03/kWh (current rates). A difference between these two purchase rates was then used to determine the overall cost difference for the City over the life of the Project. Based on the described assumptions and analysis, an NPV cost difference of $424,678 was calculated between the cost of purchasing power from the Project versus purchasing power from BPA. Note that the total cost difference was estimated to be $830,819 to purchase power from the Project. McMillen,LLC Page 4 City of Port Angeles June 3,2014 Morse Creek Hydro 5.0 SURRENDER THE LICENSE AND DECOMMISSION THE PROJECT 5.1 Background A licensee wanting to surrender a license must file an application with the FERC that states the reason for surrender. The surrender application is prepared by the licensee and filed in the same form and manner as the application for license. The surrender application is accompanied by the license and any amendments. The FERC is not the only interested party and state and federal agencies, user groups, ratepayers, Tribes, and the interested public (including affected landowners) would be invited to participate in the surrender application process. This process mimics a relicensing and includes consultation requirements per the Code of Federal Regulations (CFR) at 18 CFR 4.38. In addition to the FERC authorization of surrender, the licensee must also obtain all federal, state, and local permits and approvals for performing any work associated with the surrender. These may include: • U.S. Army Corps of Engineers, Section 404 of the Clean Waters Act—Permit • National Environmental Protection Act(NEPA) Review • Endangered Species Act Section 7 Consultation • National Historic Preservation Act Section 106 Consultation • State Water Quality Certification • State Water Right transfer or surrender • State permits, including Shoreline Permits and any dam safety permits • Local building and traffic permits Recent project surrender/decommissioning costs demonstrate the wide range of project variations and varying removal costs as affected by such parameters as the project size, operational mode, age, sensitivity of environment (watershed, species, etc.), and required permits and permit conditions including monitoring and reporting. The lowest reported cost for removal of only the dam structure was $290,000 (Dillsboro Dam). If other costs such as design, consultation, and permitting are included in that example, the actual total cost of this example is most likely closer to $750,000. We will refer to that as a minimum. The upper range is $7.5 million. For estimating, there is an additional 20% added due to the extreme uncertainty. For this analysis we have assumed a least cost decommissioning would involve sealing off and abandoning the penstock in place (below the PUD withdrawal point). Under this least cost scenario, the powerhouse would also be abandoned in place. Since the powerhouse is on City property, it is reasonable to assume abandonment in place and the sale of equipment. If an agreement is reached with the PUD to acquire the dam as part of their water diversion system, then dam removal would not be necessary. The fate of the penstock alignment from the water diversion to the powerhouse is less certain since it relies on easements and other agreements. McMillen,LLC Page 5 City of Port Angeles June 3,2014 Morse Creek Hydro A much more expensive decommissioning would involve penstock and/or dam removal and long term monitoring or other mitigations. In addition, there is always a possibility of litigation with owners along the penstock right-of-way. There are no clear provisions in the easements for removal of the penstock upon termination or surrender of the license or operations. Future operations, whether they include license surrender or not, should include an assessment of slope stability along the penstock alignment, particularly between STA 103 and 104. The investigation may lead to mitigations such as improvements to drainage, buttressing, and/or other slope stabilizations. 5.2 Cost Estimate This estimate presents the minimum and maximum estimated costs of a license surrender process involving consultation with the FERC, state and federal agencies, the Clallam County PUD, and local stakeholders in pursuit of agreement on a decommissioning plan and an order issuing surrender of license. 5.3 Assumptions To estimate costs, several basic assumptions were made: • The minimum estimated decommissioning activities include those items presently known, reasonably expected, or previously required by the 1999 surrender order. • The maximum estimated decommissioning costs include those items which, until the process is initiated and consultation results in an agreement among parties, are primarily speculative. • The surrender process would begin immediately and is expected to proceed for 1-2 years. FERC, agency, and permitting process costs would be realized during that initial period. The capital project costs (powerhouse, pipeline, tailrace work) would begin following the issuance of the surrender order by FERC and other permits. • No legal or landowner costs are estimated. At this time the identification of environmental and land use issues and associated costs prior to any outreach would be speculative, even for maximum cost estimating. • Estimated costs are in 2014 dollars for a process initiating now or in the near future. Surrender costs and decommissioning requirements 20 years in the future (at license expiration) would contain far greater uncertainty with regard to agency authority, permitting requirements, stakeholder interests, and environmental issues. 5.4 Cost Summary The costs presented in detail in the Technical Memorandum show the range from potential minimum estimated costs ($348,000) for a license surrender and decommissioning mirrored on the 1999 surrender process with added known engineering or safety issues to potential estimated maximum costs ($2,775,000) for full project removal cost estimate of$3,123,000. McMillen,LLC Page 6 City of Port Angeles June 3,2014 Morse Creek Hydro 6.0 SUMMARY The City is faced with a difficult decision for the future of the Project. Small licensed projects such as Morse Creek Hydro have significant liabilities during operation (landslide potential, on- going operation and maintenance costs, capital improvement costs) and towards the end of the project life, relicensing or surrender/decommission costs. Without corresponding cost effective generation, these projects can be only being considered a headache. Presently BPA is able to provide inexpensive electric energy to the City. While the cost of that energy is expected to escalate over time (Federal Columbia River Power System costs will only increase as older projects are refurbished and fish passage projects are implemented), energy produced at the Project is somewhat more expensive than the projected increases in BPA rates, especially when the cost to surrender the license and decommission the project at the end of the FERC license is considered. Selling the project is difficult as there is little incentive for a third party to own the project. The only way to make a sale attractive would be to offer a power purchase agreement to the purchaser. To make the project financially attractive the rate paid by the City to the purchaser would need to be significantly greater than what the City purchases power with BPA. Table 1 below summarizes the costs which were estimated for each alternative. The least expensive alternative is 43 — surrender the license and decommission the Project. Note that the cost shown for this alternative is the minimum expected cost, but we believe it to be a reasonable assumption based on the previous surrender order. It should be noted that alternatives 41 and 42 assume the minimum surrender and decommissioning cost at the end of the FERC license term. Table 1 —Alternative's Cost Summary A1�erria�ue + b��" 41 -Return to Service and $599,000 Continue to Operate 42- Sell the Project and $831,000 Transfer the License 43 - Surrender the License and $348,000 Decommission McMillen,LLC Page 7 City of Port Angeles June 3,2014 Morse Creek Hydro TECHNICAL MEMORANDUM 00 CMI LE , LLC To: Gregg King Project: Morse Creek Hydro Evaluation City of Port Angeles FERC P-6461 From: Don Jarrett,P.E. Cc: File William Zimmerman, P.E. McMillen, LLC Date: May 27, 2014 Job No: 14-039 Subject: Morse Creek Hydro Project—Continue to Operate Cost/Benefit Analysis 1.0 INTRODUCTION The Morse Creek Hydroelectric Project (Project) is located approximately 5 miles southeast of the City of Port Angeles, Washington. The Project is owned and operated (although not currently operating) by the City of Port Angeles (City). The City has retained McMillen-LLC (McMillen) to study the benefits of: placing the system back into operation, selling the Project, or surrendering the Project's Federal Energy Regulatory Commission (FERC) license and decommissioning certain Project facilities. Analysis for selling the Project and surrendering of the FERC license are covered in separate Technical Memorandums (TM). 1.1 Scope The scope of this TM is to provide an analysis of the benefit of the City continuing to operate the Proj ect. 1.2 Project Background and Site Visit The Project is a run-of-the-river facility with a small screened diversion structure and no storage. The Project has a FERC minor license that was issued in 1985 and has a term of 50 years (license expires in 2035, at which time the Project must either be relicensed or the license surrendered/decommissioned). The water conveyance includes a 750-foot long concrete-lined tunnel, an 11,400-foot long buried mortar-coated and lined penstock (which also runs through two tunnels), and a 1,500-foot long penstock. The powerhouse contains a single 2-jet horizontal impulse turbine that is directly coupled to a 465-kW induction generator. The powerhouse is a small concrete masonry structure located adjacent to Morse Creek. Access to the powerhouse is via a gated gravel road. On April 3, 2014, McMillen visited the Project. The following key observations and recommendations related to potential costs necessary for continued operations were made based on the visit: McMillen,LLC Page 1 City of Port Angeles May 27,2014 Morse Creek Hydro Project • Along the pipeline access trail, within the project boundary there is evidence of potential slope instability that should be assessed by a professional geotechnical engineer. • In the powerhouse, the generator requires a bearing repair and the turbine inlet valve requires replacement in order to bring the Project back into working order and restart generation. Additionally, the plant operator indicated there are issues with the new control system, including a lack of as-built documentation/software and problems with optimum turbine operation. Based on this information, there is likely a need to upgrade the control system to achieve proper operation. The intake/diversion structure is located in a narrow canyon accessed by a gated gravel road. Above the intake/diversion is a small outbuilding and an abandoned dam tender house. Clallam County Public Utility District (PUD) provides power to the intake. The diversion and intake were constructed long before the hydro project and were used by the City as an early source of potable water. Presently water is taken by Clallam County PUD from the penstock (approximately 1 cfs) downstream of the first tunnel for its nearby water treatment plant in exchange for wheeling the project power back to the City. The City will need to ascertain if Clallam County PUD will want to continue to withdraw water if the Project FERC operating license is surrendered. For this analysis, it is assumed that Clallam County PUD would want to take over the diversion and intake with the associated operations. Presently water rights to Morse Creek diversion dam are held by the City, these could be transferred to the PUD in the event of license surrender. The details of such a transfer are unknown. 2.0 DATA SOURCES Data for the cost/benefit analysis were provided by the City and were also obtained during the April 3, 2014 site visit. 2.1 Project Site Visit During the site visit, the entire Project was examined and key information recorded. For complete notes, please see the Morse Creek Hydro Site Visit report dated April 4, 2014. Data for both the turbine and generator nameplates can be found below in Tables 1 and 2. Table 1. Turbine Data Manufactured 1987 Head 111.25m(365 ft) Flow 0.538 m3/sec(19 cfs) Power 702 HP(523 kW) RPM 514 McMillen,LLC Page 2 City of Port Angeles May 27,2014 Morse Creek Hydro Project Table 2. Generator Data Power 500 kW Volts 480V Service Factor 1.15 Temperature Rise 90 deg. C 2.2 Power Generation Data To perform the cost/benefit analysis for the Project, average annual power generation output for the Project, and annual Operations and Maintenance (O&M) costs were developed. The City provided data for both the generation output and O&M costs in previous years. The generation output used for this analysis were averaged over the years 2004 to 2011. This period provides a reasonable representation of the annual output that could be produced by the Project in future years. Due to an unplanned plant outage, the spring 2012 generation data was excluded from developing the monthly averages. Table 3. Project Average Generation (2004 to 2011) January 240,913 February 230,888 March 298,668 April 233,315 May 278,044 June 311,433 July 296,841 August 2,697 September 01 October 63 November 42,290 December 241,420 Avg Annual Total Generation 2,176,572 'No generation allowed in September per License Amendment 2.3 O&M Costs Data The average annual O&M cost based on data from 2006 to 2012 is $68,544. These years were selected for estimating O&M cost because they coincided with years used to estimate generation output. The year 2012 was included in calculating the annual average O&M costs because the McMillen,LLC Page 3 City of Port Angeles May 27,2014 Morse Creek Hydro Project costs were comparable to those of previous full generation years. No O&M data were available for 2004 and 2005. The calculated average annual O&M cost was escalated annually by 2% to represent the anticipated increase in O&M costs as the Project ages. The breakdown of the O&M costs per item can be seen in Table 4 below. Table 4. Project O&M Costs (2004 to 2012) W11„11 1 oifl liea,, 2006 0.00 26,427.06 0.00 3,831.28 0.00 0.00 0.00 30,258.34 2,522 2007 3,615.56 24,467.98 3,654.79 2,165.12 0.00 0.00 0.00 33,903.45 2,825 2008 7,842.41 35,537.30 6,087.21 1,810.82 500.24 0.00 5,105.18 56,883.16 4,740 2009 16,849.50 40,919.82 360.05 706.87 368.75 32.95 2,564.46 61,802.40 5,150 2010 21,570.50 44,310.94 676.53 0.00 500.23 4,768.72 983.99 72,810.91 6,068 2011 24,384.25 54,339.43 6,727.44 2,215.63 500.23 43,316.90 21,485.94 152,969.82 12,747 2012 10,386.50 20,226.96 1,037.61 0.00 500.23 17,775.40 21,251.45 71,178.15 14,236 *All values are in USD(S) **WF008581 Represents capital costs to update the Project SCADA system. ***WF0083311-11 Represents management(vs.direct)labor for the Project. 3.0 COST/BENEFIT ANALYSIS A cost/benefit analysis of a "continue to operate” scenario, using the above averages, was performed. The analysis examined the capital costs required for restarting the Project, and annual O&M and generation values. In addition, the cost of surrendering the FERC license and decommissioning certain facilities at the end of the Project's life was also included in the evaluation. 3.1 Assumptions To perform the final analysis, several key simplifying assumptions were necessary: • The capital cost estimate to return the Project into operation would be a total in the range of $215,000 as a single lump sum cost and not amortized over a longer period through the issuance of bonds or other loan mechanism. The capital lump sum investment would include: $100,000 for generator bearing repair. This price was quoted to the City for an off-site repair of the bearing and may be less if the repair can be performed on-site. $100,000 for investigation, design and implementation of slope stabilization along the penstock route (this estimate is a place holder until the area is assessed by professional engineer with expertise in slope stabilization). $15,000 for replacement of the turbine inlet valve. • The Project would operate for another 20 years (until 2035), at which point the Project's FERC license would be surrendered and the Project decommissioned at an approximate minimum cost of$348,000 (2014$). For the analysis this value was escalated at 2% per year McMillen,LLC Page 4 City of Port Angeles May 27,2014 Morse Creek Hydro Project to reach 2035$ of $506,790. This cost is highly speculative at this point in time. It is likely that the cost to relicense would be significantly more expensive than decommissioning, since it would include more study work and mitigations, and would not be cost effective. See the technical memorandum for the surrender FERC license and decommission alternative for further details. • O&M operating costs escalate at a rate of 2% per year to compensate for the aging of the Project and equipment. • The purchase price of power from Bonneville Power Administration (BPA) was estimated at an average of $0.03/kWh based on the data provided. It was assumed that this rate would escalate at 3%per year over the Project's life as the cost of power increases. • The borrowing rate for the Project used to determine the Project Net Present Value (NPV) was assumed at 6%. 3.2 Analysis The analysis was performed for the time period over the Project's remaining 20-year life and computed the annual cost/benefit of operating the Project with the assumed purchase price of power from BPA as described above. Once an annual cost or benefit was determined for each year, a net present value (NPV) of the cost or benefit for the Project was calculated. Based on the described assumptions and analysis, an NPV cost of $302,723 was calculated, indicating that the Project costs more to operate than if the power was purchased from BPA. Note that the total cost was estimated to be $599,180 to continue to operate the project. See Table 5 below for the cost/benefit analysis summary. McMillen,LLC Page 5 City of Port Angeles May 27,2014 Morse Creek Hydro Project Table 5. Project Cost/Benefit Analysis A�n�aY +�b�f oY Cif 6�f to I"ua$ , "o 6 / neq f ?h,,,, 0 2014 215,000 68,544 2,176,572 0.130 0.030 218,247 1 2015 - 69,915 2,176,572 0.032 0.031 2,659 2 2016 - 71,313 2,176,572 0.033 0.032 2,039 3 2017 - 72,739 2,176,572 0.033 0.033 1,387 4 2018 - 74,194 2,176,572 0.034 0.034 701 5 2019 - 75,678 2,176,572 0.035 0.035 (19) 6 2020 - 77,191 2,176,572 0.035 0.036 (777) 7 2021 - 78,735 2,176,572 0.036 0.037 (1,572) 8 2022 - 80,310 2,176,572 0.037 0.038 (2,407) 9 2023 - 81,916 2,176,572 0.038 0.039 (3,282) 10 2024 - 83,554 2,176,572 0.038 0.040 (4,199) 11 2025 - 85,226 2,176,572 0.039 0.042 (5,161) 12 2026 - 86,930 2,176,572 0.040 0.043 (6,168) 13 2027 - 88,669 2,176,572 0.041 0.044 (7,222) 14 2028 - 90,442 2,176,572 0.042 0.045 (8,326) 15 2029 - 92,251 2,176,572 0.042 0.047 (9,480) 16 2030 - 94,096 2,176,572 0.043 0.048 (10,687) 17 2031 - 95,978 2,176,572 0.044 0.050 (11,948) 18 2032 - 97,897 2,176,572 0.045 0.051 (13,267) 19 2033 - 99,855 2,176,572 0.046 0.053 (14,644) 20 2034 - 101,852 2,176,572 0.047 0.054 (16,082) 21 2035 506,790 103,889 2,176,572 0.224 0.056 452,968 Total 721,970 1,871,175 Total 599,180 NPV 302.723 McMillen,LLC Page 6 City of Port Angeles May 27,2014 Morse Creek Hydro Project TECHNICAL MEMORANDUM 00 MC LLEN, LLC To: Gregg King, Project: Morse Creek Hydro Evaluation City of Port Angeles From: Don Jarrett,P.E. Cc: File William Zimmerman, P.E. McMillen, LLC Date: May 27, 2014 Job No: 14-039 Subject: Morse Creek Hydro Project—Salability Analysis 1.0 INTRODUCTION The Morse Creek Hydroelectric Project (Project) is located approximately 5 miles southeast of the City of Port Angeles, Washington. The Project is owned and operated (although not currently operating) by the City of Port Angeles (City). The City is exploring the benefits of placing the system back into operation, selling the Project, or surrendering the Project's Federal Energy Regulatory Commission (FERC) license and decommissioning certain Project facilities. Analysis for continuing to operate the Project and surrendering of the FERC license are covered in separate Technical Memorandums (TM). 1.1 Scope The scope of this TM is to provide an analysis of the benefit of the City selling the Project and transferring the license to a third-party. 1.2 Project Background The Project is a run-of-the-river facility with a small screened diversion structure with no storage. The Project has a FERC minor license that was issued in 1985 and has a term of 50 years (license expires in 2035, at which time the Project must either be relicensed or the license surrendered/decommissioned). The water conveyance includes a 750-foot long concrete-lined tunnel, an 11,400-foot long buried mortar-coated and lined penstock (which also runs through two tunnels), and a 1,500-foot long penstock. The powerhouse contains a single 2-jet horizontal impulse turbine that is directly coupled to a 465-kW induction generator. The powerhouse is a small concrete masonry structure located adjacent to Morse Creek. Access to the powerhouse is via a gated gravel road. During the Project site visit, one location along the pipeline access trail was observed that indicated a potential slope failure; this location requires further evaluation. In addition, the generator requires a bearing repair and the turbine inlet valve requires replacement in order to McMillen,LLC Page 1 City of Port Angeles May 27,2014 Morse Creek Hydro Project bring the Project back into working order and restart generation. Additionally, the operator indicated that there are some issues with the new control system, including a lack of as-built documentation/software and problems with optimum turbine operation. There is likely a need to upgrade the control system to achieve proper operation. The intake/diversion structure is located in a narrow canyon accessed by a gated gravel road. Above the intake/diversion is a small out building and an abandoned dam tender house. Clallam County Public Utility District (PUD) provides power to the intake. The diversion and intake were constructed long before the Project and were used by the City as an early source of potable water. Presently water is taken by Clallam County PUD from the penstock (approximately 1 cfs) downstream of the first tunnel for its nearby water treatment plant. It seems reasonable to assume that Clallam County PUD would want to continue to withdraw water if the Project is sold. Presently all water rights to Morse Creek water withdrawals at the dam are held by the City. 2.0 DATA SOURCES Data for the salability analysis were provided by the City and were also obtained during the April 3, 2014 site visit. 2.1 Project Site Visit During the site visit, the entire Project was examined and key information recorded. For complete notes, please see the Morse Creek Hydro Site Visit report dated April 4, 2014. Data for both the turbine and generator nameplates can be found below in Tables 1 and 2. Table 1. Turbine Data Item Description Manufactured 1987 Head 111.25m(365 ft) Flow 0.538 m3/sec(19 cfs) Power 702 HP(523 kW) RPM 514 Table 2. Generator Data Item Description Power 500 kW Volts 480V Service Factor 1.15 Temperature Rise 90 deg. C McMillen,LLC Page 2 City of Port Angeles May 27,2014 Morse Creek Hydro Project 2.2 Power Generation Data To perform the salability analysis for the Project, average annual power generation output for the Project, and annual Operations and Maintenance (O&M) costs were developed. The City provided data for both the generation output and O&M costs in previous years. The generation output used for this analysis were averaged over the years 2004 to 2011. This period provides a reasonable representation of the annual output that could be produced by the Project in future years. Due to an unplanned outage, the sping 2012 generationd ata was exluded from developing the monthly averages. The Table 3 below provides the average monthly generation for the Proj ect. Table 3. Project Average Generation (2004 to 2011) Month Generation(kWh) January 240,913 February 230,888 March 298,668 April 233,315 May 278,044 June 311,433 July 296,841 August 2,697 September 01 October 63 November 42,290 December 241,420 Avg Annual Total Generation 2,176,572 'No generation allowed in September per License Amendment 2.3 O&M Costs Data The average annual O&M cost based on data from 2006 to 2012 is $68,544. These years were selected for estimating O&M cost because they coincided with years used to estimate generation output. The year 2012 was included in calculating the annual average O&M costs because the costs were comparable to those of previous full generation years. No O&M data were available for 2004 and 2005. The calculated average annual O&M cost was escalated annually by 2% to represent the anticipated increase in O&M costs as the Project ages. The breakdown of the O&M costs per item can be seen in Table 4 below. McMillen,LLC Page 3 City of Port Angeles May 27,2014 Morse Creek Hydro Project Table 4. Project O&M Costs (2004 to 2012) Monthly Year Equip Labor Material Other Mise WFO108581 WF0083311-11 Total Mean 2006 0.00 26,427.06 0.00 3,831.28 0.00 0.00 0.00 30,258.34 2,522 2007 3,615.56 24,467.98 3,654.79 2,165.12 0.00 0.00 0.00 33,903.45 2,825 2008 7,842.41 35,537.30 6,087.21 1,810.82 500.24 0.00 5,105.18 56,883.16 4,740 2009 16,849.50 40,919.82 360.05 706.87 368.75 32.95 2,564.46 61,802.40 5,150 2010 21,570.50 44,310.94 676.53 0.00 500.23 4,768.72 983.99 72,810.91 6,068 2011 24,384.25 54,339.43 6,727.44 2,215.63 500.23 43,316.90 21,485.94 152,969.82 12,747 2012 10,386.50 20,226.96 1,037.61 0.00 500.23 17,775.40 21,251.45 71,178.15 14,236 *All values are in USD($) **WF008581 represents capital costs to update the Project's Supervisory Control and Data Acquisition(SCADA)system. ***WF0083311-11 represents management(vs.direct)labor for the Project. 3.0 SALABILITY ANALYSIS A salability analysis was performed in order determine if selling the Project was a feasible financial option for the City. This analysis examined the capital costs required for restarting the Project, annual O&M and generation values, and the cost of surrendering the FERC license and decommissioning facilities. 3.1 Assumptions In order to perform the final analysis, several key assumptions were required as listed below: • The purchaser of the Project would be responsible for the repairs necessary to return the Project to operation. It was estimated that the capital cost of those repairs would total in the range of$215,000, including the following: $100,000 for generator bearing repair. This price was quoted to the City for an off-site repair of the bearing and may be less if the repair can be performed on-site. $100,000 for slope stabilization along the penstock. $15,000 for replacement of the turbine inlet valve. • The Project would operate for another 20 years (until 2035), at which point the Project's FERC license would be surrendered and the Project decommissioned at an approximate cost of$348,000 (2014$). For the analysis this value was escalated at 2%per year to reach 2035$ of $506,970. McMillen believes that the cost to relicense would be significantly more expensive and would not be cost effective. This expense would also be the responsibility of the Project purchaser. See the technical memorandum for the surrender FERC license and decommission alternative for further details. • O&M for the Project operating costs escalates at a rate of 2% per year to compensate for the aging of the Project and equipment. • The purchase price of power from Bonneville Power Administration (BPA) for the City was estimated at an average of $0.03/kWh based on the data provided. It was assumed that this rate would escalate at 3%per year over the Project's life as the cost of power increases. McMillen,LLC Page 4 City of Port Angeles May 27,2014 Morse Creek Hydro Project • The borrowing rate for the Project used to determine the Project Net Present Value (NPV) was assumed at 6%. • In order to make the Project a financially attractive investment, an Internal Rate of Return (IRR) of 15% would need to be achieved. This is the rate of return that the investor would need to balance the Project risks such as equipment breakdown, slope stability, FERC compliance,power price fluctuations, variations in water availability, etc. • To meet this IRR, it was assumed that the City would develop an agreement with the purchaser to buy power from the Project at an agreed-upon rate. This rate would escalate at 3%per year over the Project's life. 3.2 Analysis The analysis was performed over the Project's remaining 20-year life with the rate at which the City would purchase power from the Project iterated to meet the target IRR of 15%. It was determined that the necessary purchase price of power from the Project by the City would need to start at $0.0425/kWh, escalated at 3% per year. Once the City's purchase price was determined, it was compared to the rate at which the City would buy power from BPA, assumed at $0.03/kWh (current rates). A difference between these two purchase rates was then used to determine the overall cost difference for the City over the life of the Project. Based on the described assumptions and analysis, an NPV cost difference of $424,678 was calculated between the cost of purchasing power from the Project versus purchasing power from BPA. Note that the total cost difference was estimated to be $830,819 to purchase power from the Project. See Table 5 below for the salability analysis. McMillen,LLC Page 5 City of Port Angeles May 27,2014 Morse Creek Hydro Project Table 5. Project Salability Analysis Capital City Cost to City Cost to Improvements& Purchase Purchase Surrender Annual Annual Power from Annual Plant Power from Net Cost of Decommissioning O&M Generation New Owner Cost to Operate BPA Power for Year ($) Costs($) (kWh) ($/kWh) /Revenue($) ($/kWh) the Cit ($) 0 2014 215,000 68,544 2,176,572 0.0425 (191,039) 0.0300 27,207.15 1 2015 _ 69,915 2,176,572 0.0438 25,365 0.0309 28,023.36 2 2016 _ 71,313 2,176,572 0.0451 26,825 0.0318 28,864.07 3 2017 _ 72,739 2,176,572 0.0464 28,343 0.0328 29,729.99 4 2018 _ 74,194 2,176,572 0.0478 29,920 0.0338 30,621.89 5 2019 _ 75,678 2,176,572 0.0493 31,560 0.0348 31,540.54 6 2020 _ 77,191 2,176,572 0.0507 33,264 0.0358 32,486.76 7 2021 _ 78,735 2,176,572 0.0523 35,033 0.0369 33,461.36 8 2022 _ 80,310 2,176,572 0.0538 36,872 0.0380 34,465.20 9 2023 _ 81,916 2,176,572 0.0555 38,781 0.0391 35,499.16 10 2024 _ 83,554 2,176,572 0.0571 40,764 0.0403 36,564.13 11 2025 _ 85,226 2,176,572 0.0588 42,822 0.0415 37,661.06 12 2026 _ 86,930 2,176,572 0.0606 44,959 0.0428 38,790.89 13 2027 _ 88,669 2,176,572 0.0624 47,177 0.0441 39,954.62 14 2028 _ 90,442 2,176,572 0.0643 49,479 0.0454 41,153.26 15 2029 _ 92,251 2,176,572 0.0662 51,868 0.0467 42,387.85 16 2030 _ 94,096 2,176,572 0.0682 54,346 0.0481 43,659.49 17 2031 _ 95,978 2,176,572 0.0702 56,918 0.0496 44,969.27 18 2032 _ 97,897 2,176,572 0.0724 59,585 0.0511 46,318.35 19 2033 _ 99,855 2,176,572 0.0745 62,352 0.0526 47,707.90 20 2034 _ 101,852 2,176,572 0.0768 65,221 0.0542 49,139.14 21 2035 470,550 103,889 2,176,572 0.0791 (438,774) 0.0558 50,613.31 Total 685,550 1,871,175 Total 231,639 Total 830,819 IRR 15.3% NPV 424,678 McMillen,LLC Page 6 City of Port Angeles May 27,2014 Morse Creek Hydro Project TECHNICAL MEMORANDUM 00 M C ,MLLE 1, LLC To: Gregg King Project: Morse Creek Hydro Evaluation City of Port Angeles FERC P-6461 From: Don Jarrett,P.E. Cc: File Catrin van Donkelaar, P.E. Heidi Wahto, M.P.A. McMillen, LLC Date: May 27, 2014 Job No: 14-039 Subject: Morse Creek Hydro Project—FERC License Surrender and Decommissioning 1.0 INTRODUCTION The Morse Creek Hydroelectric Project (Project) is located approximately 5 miles southeast of the City of Port Angeles, Washington. The Project is owned and operated (although not currently operating) by the City of Port Angeles (City). The City has retained McMillen-LLC (McMillen) to study the benefits of: placing the system back into operation, selling the Project, or surrendering the Project's Federal Energy Regulatory Commission (FERC) license and decommissioning certain Project facilities. Analysis for continuing to operate the Project and the salability of the Project are covered in separate Technical Memorandums (TM). 1.1 Scope The scope of this Technical Memorandum is to 1) provide a summary of the process and potential costs of the City surrendering the Project's FERC license and decommissioning certain Project facilities and 2) provide a cost comparison of recent decommissioning projects covering a range of removal requirements from certain facilities to full dam removal. This memo accompanies the two analyses of continuing to operate the Project and selling the Project. 1.2 Project Background and Site Visit The Project is a run-of-the-river facility with a small screened diversion structure and no storage. The Project has a FERC minor license that was issued in 1985 and has a term of 50 years (license expires in 2035, at which time the Project must either be relicensed or the license surrendered/decommissioned). The water conveyance includes a 750-foot long concrete-lined tunnel, an 11,400-foot long buried mortar-coated and lined penstock (which also runs through two tunnels), and a 1,500-foot long penstock. The powerhouse contains a single 2-jet horizontal impulse turbine that is directly coupled to a 465-kW induction generator. The powerhouse is a McMillen,LLC Page 1 City of Port Angeles May 27,2014 Morse Creek Hydro Project small concrete masonry structure located adjacent to Morse Creek. Access to the powerhouse is via a gated gravel road. On April 3, 2014, McMillen visited the Project. The following key observations and recommendations related to potential costs necessary for continued operations were made based on the visit: Along the pipeline access trail, within the project boundary there is evidence of potential slope instability that should be assessed by a professional geotechnical engineer. In the powerhouse, the generator requires a bearing repair and the turbine inlet valve requires replacement in order to bring the Project back into working order and restart generation. Additionally, the plant operator indicated there are issues with the new control system, including a lack of as-built documentation/software and problems with optimum turbine operation. Based on this information, there is likely a need to upgrade the control system to achieve proper operation. The intake/diversion structure is located in a narrow canyon accessed by a gated gravel road. Above the intake/diversion is a small outbuilding and an abandoned dam tender house. Clallam County Public Utility District (PUD) provides power to the intake. The diversion and intake were constructed long before the hydro project and were used by the City as an early source of potable water. Presently water is taken by Clallam County PUD from the penstock (approximately 1 cfs) downstream of the first tunnel for its nearby water treatment plant. The City will need to ascertain if Clallam County PUD will want to continue to withdraw water if the Project FERC operating license is surrendered. For this analysis, it is assumed that Clallam County PUD would want to take over the diversion and intake with the associated operations. Presently all water rights to Morse Creek are held by the City, these would be transferred to the PUD in the event of license surrender. The details of such a transfer are unknown. 2.0 BACKGROUND DATA Information regarding the Project license and amendment history and the FERC's surrender/decommissioning process was obtained from the FERC's online database (eLibrary) and supplemented by the City. Information regarding water rights, water use/supply, and land ownership was provided by the City. 2.1 License Surrender and Decommissioning Costs A licensee wanting to surrender a license must file an application that states the reason for surrender. The surrender application is prepared by the licensee and filed in the same form and manner as the application for license. The surrender application is accompanied by the license and any amendments. The FERC is not the only interested party and state and federal agencies, user groups, ratepayers, Tribes, and the interested public would be invited to participate in the surrender application process. This process mimics a relicensing and includes consultation requirements per the Code of Federal Regulations (CFR) at 18 CFR 4.38. McMillen,LLC Page 2 City of Port Angeles May 27,2014 Morse Creek Hydro Project Further, where project facilities have been constructed on federal lands (i.e. USFS if applicable), the licensee must restore the project lands to the agreed-upon condition (restoration); and continue paying annual charges until the effective date of the FERC order accepting surrender. In addition to the FERC authorization of surrender, the licensee must also obtain all federal, state and local permits and approvals for performing any work associated with the surrender. These may include: • U.S. Army Corps of Engineers, Section 404 of the Clean Waters Act—Permit • National Environmental Protection Act(NEPA) Review • Endangered Species Act Section 7 Consultation • National Historic Preservation Act Section 106 Consultation • State Water Quality Certification • State Water Right transfer or surrender • State permits, including Shoreline Permits and any dam safety permits • Local building and traffic permits • Forest Service Special Use Authorization, if applicable The table below provides a number of dam decommissioning examples. These projects demonstrate the wide range of project variations and varying removal costs as affected by such parameters as the project size, operational mode, age, sensitivity of environment (watershed, species, etc.), and required permits and permit conditions including monitoring and reporting. The lowest reported cost for removal of only the dam structure was $290,000 (Dillsboro Dam). If other costs such as design, consultation and permitting are included in that example, the actual total cost of this example is most likely closer to $750,000. We will refer to that as a minimum. The upper range is $7.5 million. For estimating we add an additional 20% due to the extreme uncertainty. Table 1. Summary of Recent Decommissioning Projects Lxbj� ocati6tt Embry Dam,VA 1925/1938 22 ft 2004 $7.45m Fish/eel passage (P-7490) Sediment management Edwards Dam,ME 1837 24 ft 1999 $7.25m Fish passage 3.5 MW Denial of license Dillsboro Dam,NC 12 ft $290,000 Result of relicensing (P-2602) 1913/1927 225 kW 2010 (contt.costs Fish passage only) Recreation Mill Pond Dam, 55 ft Surrendered Result of relicensing WA(P-2225) 1911 4 MW(until 2013 $7.5m—$14m Fish passage,sediment 1956) removal Marmot&Sandy Marmot-47 ft Fish passage Dams,OR(P-477) 1912 Sandy-16 ft 2007-2008 $17m Aging equipment 22 MW Chose not to relicense Condit Dam,OR 125 ft $13.65m— Relicense rejected (P-2342) 1913 14 MW 2011 $37m Fish pa ssage Kilarc-Cow,CA(P- 1904-07 5 diversion Surrendered $14.5 m Fish passage 606) dams,4.6MW 2011 McMillen,LLC Page 3 City of Port Angeles May 27,2014 Morse Creek Hydro Project Ft.Halifax 29 ft Fish passage (P-2552) 1908 1.5 MW 2008 $800,000 Watershed settlement negotiation Morse Creek 1920s 20 ft TBD $3.1 m Economics (P-6461) Aging infrastructure Unless indicated otherwise, it is assumed that the publically-available cost information shown above includes FERC process, other permitting, and legal costs as well as costs associated with the dismantling and partial or full removal of project features, sediment removal, river restoration, and required environmental protections during construction activities. As shown in the table, the costs associated with FERC license surrender and decommissioning are highly variable and project specific. In the case of the City's FERC license there are several critical unknowns that will affect costs. These include but are not limited to: 1. The formal FERC license surrender process and consultation. 2. Aggrements with easement granters along the penstock route from the water supply diversion to the powerhouse. 3. Aggreements with the PUD regarding the water diversion diversion and associated civil works. 4. Decommissioning, mitigation and ongoing monitoring costs. For this analysis we have assumed a least cost decommissioning would involve sealing off and abandoning the penstock in place (below the PUD withdrawal point). Under this least cost scenario, the powerhouse would also be abandoned in place. Since the powerhouse is on City property it is reasonable to assume abandonment in place and the sale of equipment. If an agreement is reached with the PUD to acquire the dam as part of their water diversion system, then dam removal would not be necessary. The fate of the penstock alignment from the water diversion to the powerhouse is less certain since it relies on easements and other agreements. A much more expensive decommissioning would involve penstock and/or dam removal and long term monitoring or other mitigations. In addition, there is always a possibility of litigation with owners along the penstock right-of-way. There are no clear provisions in the easements for removal of the penstock upon termination or surrender of the license or operations. Future operations whether they include license surrender or not, should include an assessment of slope stability along the penstock alignment, particularly between STA 103 and 104. The investigation may lead to mitigations such as improvements to drainage, buttressing and/or other slope stabilizations. McMillen,LLC Page 4 City of Port Angeles May 27,2014 Morse Creek Hydro Project 3.0 COST ESTIMATE This estimate presents the minimum and maximum estimated costs of a license surrender process involving consultation with the FERC, state and federal agencies, the Clallum County PUD, and local stakeholders in pursuit of agreement on a decommissioning plan and an order issuing surrender of license. 3.1 Assumptions To estimate costs, several basic assumptions were made: • The minimum estimated decommissioning activities include those items presently known, reasonably expected, or previously required by the 1999 surrender order. • The maximum estimated decommissioning costs include those items which, until the process is initiated and consultation results in an agreement among parties, are primarily speculative. • The surrender process would begin immediately and is expected to proceed for 1-2 years. FERC, agency, and permitting process costs would be realized during that initial period. The capital project costs (powerhouse, pipeline, tailrace work) would begin following the issuance of the surrender order by FERC and other permits. • No legal or landowner costs are estimated. At this time the identification of environmental and land use issues and associated costs prior to any outreach would be speculative, even for maximum cost estimating. • Estimated costs are in 2014 dollars for a process initiating now or in the near future. Surrender costs and decommissioning requirements 20 years in the future (at license expiration) would contain far greater uncertainty with regard to agency authority, permitting requirements, stakeholder interests, and environmental issues. 3.2 Cost Summary The costs presented in Table 2 show the range from potential minimum estimated costs ($348,000) for a license surrender and decommissioning mirrored on the 1999 surrender process with added known engineering or safety issues to potential estimated maximum costs ($2,775,000) for full project removal cost estimate of$3,123,000. McMillen,LLC Page 5 City of Port Angeles May 27,2014 Morse Creek Hydro Project Table 2. FERC Surrender and Decommissioning Cost Estimate lbinrunf��triifa�ecl>T�ecc�mi� s�6nr�i,,^�cts�`2t1�4 ,, FERC license surrender,agency consultation,permits $100,000 Pipeline slope stabilization sta 130-140 Geotechnical study' $50,000 U slo e drainage im rovements2 $28,000 Slope stabilization' $50,000 Monitoring(2 ears) $10,000 Pipeline decommissioning Plug pipeline at end of first tunne14 $10,000 Install penstock drain at powerhouse s $10,000 Powerhouse Remove transformer and oils from powerhouse 6 $10,000 Fill in tailrace $75,000 Install gate and powerhouse lock $5,000 Sub-total $348,000 Pipeline&penstock removal? $2,080,000 Powerhouse removal $300,000 Dam removal Mobilization $75,000 Cofferdam&care of water $100,000 Ogee removal $30,000 Right abutment removal $50,000 Left abutment removal $50,000 Plug tunnel $30,000 Plantings and hydroseeding $10,000 Plans andspecifications $25,000 FERC Portland Regional Office(dam safety)review and authorization $25,000 Sub-total $2,775,000 Total $3,123,000 Notes: 1. Assumes that geotech develops drawings and slope stabilization requirements. 2. Replace half pipe up slope drainage. 3. Extremely speculative. Could be much higher depending on what is deemed necessary. 4. Assumes easy access to penstock and no penstock integrity issues. Welded pipecap to plug penstock. 5. Assumes installation of blind flange and welded pipe nipple. 6. Assumes no hazardous waste disposal and no additional permitting or remediation is required. 7. Based on Youngs Creek Hydro Project penstock installation cost. McMillen,LLC Page 6 City of Port Angeles May 27,2014 Morse Creek Hydro Project i X Ib� � �, '. �' � �lewcfif9' r f� f�"� �M /O/2// y✓" Y d � p P � 1 p t y, H ;i �CMIL . Gm� DESIGNVIIIIIIIIIIIIIIIItIIIIIIIIIIIIIIIVi Integrity. soon.BUILD with;, Morse Creek Hydro Evaluation • McMillen reviewed three alternatives: — Place project back into service and continue to operate through the term of the FERC license — Sell the Project and transfer the license — Surrender the license and decommission the project Place Project Back Into Service • Site visit indicated that there are several issues which need to be repaired/investigated : — Generator bearing needs to be replaced — Turbine inlet valve needs to be replaced — Slope stability along penstock needs geotechnical review and possibly work to minimize the chance of a land slide. Place Project Back Into Service • Analysis of the cost of power produced at Morse Creek indicates operation will be more expensive than buying from BPA for several years. • BPA power cost is expected to rise over time and eventually Morse Creek cost of production will be less than purchase from BPA. • At the end of the FERC license the project must either be surrendered or relicensed. Relicense cost is thought to be too expensive to be practical. • Total cost to repair and continue to operate is estimated to be nearly $600,000. Sell the Project and Transfer the License • Cost of production from Morse Creek is presently in excess of the cost to purchase power from BPA. • Purchaser needs to receive a financial return on the Project to compensate for operational risks and to pay end of life costs. • Without a power purchase agreement from the City or some other utility a private party cannot justify a purchase. • Analysis indicates that to make the project attractive the City would have to offer to purchase power from the project at a premium over the BPA rates. Cost for this would be more than $830,000 over the life of the license. Surrender and Decommission the Project • Surrender of the FERC license requires a FERC filing application. This application begins a process which includes consultation with agencies and other interested parties. At the end of the process the FERC issues an Order which stipulates the extent of decommissioning. • The surrender process would begin after the filing and last for one to two years. • City previously obtained a surrender of the license, which required minimal decommissioning of the project facilities. Surrender and Decommission the Project • Analysis: — A cost for a range of surrender and decommissioning costs was developed. Costs range from an estimated minimum of $348,000 to in excess of $3,000,000 (full project removal). — Decommissioning costs are highly speculative and will depend on the outcome of the consultations with the agencies and other stake holders. Summary sa3� o0 Questions ? P 111IRT NGELES W A S H [ N G T O N, U. S. A. � Utility Advisory Committee Memo Date: June 10, 2014 To: Utility Advisory Committee From: Craig Fulton, Director of Public Works and Utilities Subject: Comprehensive Solid Waste Management Plan (CSWMP)Update Summary: The CSWMP addresses solid waste management throughout Clallam County. Since March 2013, a local consultant and the Solid Waste Advisory Committee (SWAG) have been developing an update to this plan. The plan update is complete and is awaiting adoption by the various jurisdictions covered by the plan. Recommendation: Forward a favorable recommendation to City Council to adopt the CSWMP Update. Background/Analysis: The Comprehensive Solid Waste Management Plan (CSWMP) addresses solid waste management throughout the county. The existing plan was adopted in 2007. The Washington State Department of Ecology (DOE)requires the plan to be reviewed and updated every five years per RCW 70.95.110(2). Meggan Uecker was hired by Clallam County Public Works in March 2013 to prepare the update in coordination with the SWAC. The SWAC membership is comprised of the cities of Forks,Port Angeles, and Sequim, along with Clallam County, a citizen at large, a waste hauler, a local industrial/business representative, and a representative from the Makah, the Quileute, the Lower Elwha Klallam, or the Jamestown S'Klallam Tribes. The plan has been updated and was reviewed by DOE and the Washington State Utilities Transportation Commission. This month, Meggan is providing a presentation to the Clallam County Commissioners, the City of Port Angeles Utility Advisory Committee, and the City of Sequim City Council. A presentation will also be given at the June 17, 2014 Port Angeles City Council meeting, along with a resolution for adoption of the plan. Recommend that a favorable recommendation by the UAC member to City Council to adopt the CSWMP Update. N:AUAC\MBBTINGS\UAC2014\UAC061014\CSWMP UAC Memo.docx Final Draft-Comprehensive Solid Waste Management Plan Clallam County EXECUTIVE SUMMARY INTRODUCTION Since the first solid waste management plan was prepared for Clallam County in 1972, the County's programs have expanded to meet the needs of its residents, and to comply with the state and federal mandates regarding solid waste. Various changes have included the shift to waste export systems, collection of household hazardous waste, curbside and drop-off collection of recyclables and yard debris, composting of biosolids and yard debris, and many other efforts to improve waste management. This Comprehensive Solid Waste Management Plan(CSWMP) was prepared in a cooperative effort by consultants and staff from Clallam County, the City of Port Angeles, the City of Sequim, the City of Forks, the Clallam County Solid Waste Advisory Committee (SWAC), and the Washington State Department of Ecology (Ecology). The SWAC members represent not only the interests of their respective agencies and businesses, but as residents and members of the community they also represent the public's interest. Renewing and continuing the commitments established in the 2006 CSWMP, the objectives of this updated plan are to: • Review the recommendations of the previous plan. • Describe current characteristics of the solid waste system, including the recent transition at the Makah reservation from landfilling to a transfer station and waste export. • Review current solid waste regulations and policies giving particular attention to waste stream reduction,recycling, and future disposal needs. • Extend the planning period to 2034 and develop current waste generation data. • Review existing facilities and solid waste handling practices, and identify additional needs. • Assess alternatives and develop recommendations for future action, incorporating the most recent reviews of studies, statistics, and drivers of solid waste issues in Clallam County. • Give particular consideration to alternatives that involve the expertise of private industry wherever those capabilities are available. • Develop capital cost estimates and implementation schedules for required improvements with emphasis on those improvements required within a six-year period. • Provide guidelines for an equitable balance between convenience, expense, environmental quality, and public health and welfare. • Incorporate flexibility to anticipate future needs. • Encourage cooperative and coordinated efforts among government agencies, private companies and the public, to achieve effective management of solid waste. May 2014 EXECUTIVE SUMMARY Final Draft-Comprehensive Solid Waste Management Plan Clallam County BACKGROUND There are a number of conditions which should be considered as a backdrop to solid waste management in Clallam County. These include: (1) the economic conditions in Clallam County, including the impact of the 2008 economic downturn; (2) the Port Angeles Landfill Bluff Stabilization Project, an environmental legacy dilemma demanding urgent response; and (3)the State's continued direction for managing waste as represented in Ecology's 2009 State Solid and Hazardous Waste Beyond Waste Plan. Economic Challenges Consistent with trends observed across the United States, Clallam County has been impacted by the economic downturn of 2008. This slowdown included a significant reduction in waste generation rates, as consumers began buying and building less. Municipal solid waste generation rates dropped 17% in Clallam County between 2005 and 2011, a decrease of thousands of tons. Uncertainty over economic recovery rates continues. Clallam County's solid waste system relies heavily on revenue from tipping fees, the price per ton a customer pays for waste disposal. Therefore, less waste generation has meant a reduction in revenue. Variable costs such as transportation remain or have increased. Critical special operations at the closed Port Angeles Landfill require unexpected funding from the solid waste budget. Other factors could also affect this economic picture. Population growth rates in Clallam County have slowed and are expected to remain as such, with implications for solid waste generation and tipping fee revenue relative to existing populations. The Port Angeles Landfill Bluff Stabilization Project At the closed Port Angeles Landfill, a marine bluff acts as the sole buttress between the Strait of Juan de Fuca and large quantities of garbage between 60 and 80 feet deep. In the summer of 2011 during maintenance inspections, City of Port Angeles staff observed that the bluff face had experienced localized failure at one location along the unprotected eastern half, exposing some refuse at the top of the bluff. Subject to severe wave action, failures of this unstable bluff are expected to be sudden and episodic. The City of Port Angeles Public Works and Utilities Department has developed a number of alternatives to reduce or eliminate the risk of refuse entering the marine environment; in which waste would be removed from the East 304 Cell, in part or completely, and relocated on-site or transferred off-site. Some alternatives also would decrease the rate of bluff erosion. The City has been working with consultants and Ecology to perform initial studies and design and to obtain funding for initial phases of work. Funding will occur by bonds repaid through solid waste tipping fees and other sources. Beyond Waste Objectives Beyond Waste is the Washington state plan for managing hazardous and solid waste. The clear and simple goal of this 30-year plan is to eliminate wastes and toxics whenever we can and use the remaining wastes as resources. For an effective and cheaper approach to waste management, the Beyond Waste Plan shifts from a reactive approach, focusing on management and clean-up, to a proactive approach, with an emphasis on preventing waste in the first place. The Beyond Waste Plan is aligned with Ecology priorities of mitigating climate change,protecting Washington waters, and reducing toxic threats. May 2014 1 EXECUTIVE SUMMARY Final Draft-Comprehensive Solid Waste Management Plan Clallam County The Beyond Waste Plan focuses on five areas or initiatives: • Significantly reduce most wastes and the use of toxic substances in Washington's industries. • Significantly reduce small-volume hazardous wastes from businesses and households. • Expand the recycling system in Washington for organic wastes such as food wastes, yard waste, and crop residues. • Reduce the negative impacts from the design, construction, and operation of buildings. • Develop a system to measure progress in achieving our goals. Reduce, reuse, recycle is a central tenet of solid waste management systems. Clallam County's solid and hazardous waste reduction goals demonstrate its commitment to the state Beyond Waste Plan. SUMMARY OF CONDITIONS AND RECOMMENDATIONS An overview of existing conditions and a narrative summary highlighting some of the recommendations of this CSWMP are provided below. A table follows that identifies lead agencies, implementation schedules, and funding sources for each recommendation. The full text of the recommendations is provided as Appendix A. RCW 70.95.090(3)(c) requires that the plan identify a six-year construction and capital acquisition program for solid waste facilities that may be considered. However, no new public facilities are identified in this CSWMP or expected in the next six years, as documented in the recommendations below. RCW 70.95.090(3)(d) requires that the plan provide information on the financing of both capital costs and operational expenditures of the proposed solid waste management system. As described above, no major capital projects are proposed. Operational expenditures and associated financing are described in Chapter 10 of this CSWMP. Solid Waste Collection, Transfer, and Disposal Collection and Transfer- There are six garbage collection operations in Clallam County. These operations, and residents who opt to self-haul, currently take municipal solid waste (MSW) to (1) the Regional Transfer Station, (2) the Makah Transfer Station, (3) the Blue Mountain Drop Box and Recycling Center or (4) the privately owned West Waste Transfer Station in Forks prior to export out of the County for disposal. Refuse collection is mandatory within the cities of Port Angeles & Sequim and is available curbside in those areas; curbside recycling and yard waste collection is also available. As a low-cost strategy to make recycling easier, and increase participation rates, it is recommended that Clallam County consider a combined service ordinance for curbside recycling pick up where curbside garbage collection occurs throughout the county. Recycling currently may be put in drop boxes at the Regional Transfer Station and Blue Mountain Drop Box and Recycling Center at no charge. Clallam County will consider user fees at the transfer and drop box facilities for recyclable materials if the cost of service determines that collection of recyclables becomes a significant net loss for the transfer stations. Based on population projections, Clallam County has estimated future MSW quantities and infers that the existing collection system, transfer stations and drop box facilities should be May 2014 1 EXECUTIVE SUMMARY iii Final Draft-Comprehensive Solid Waste Management Plan Clallam County able to handle the future expected quantities of solid waste. As a contingency, the hours of operation or number of containers at a facility could be increased, or additional drop-box facilities could be considered. A waste characterization study or periodic monitoring of MSW at the Regional Transfer Station is recommended to provide a better picture of the Clallam County waste stream composition in order to apply the best strategies for ongoing management of solid waste. Disposal- Although incineration of municipal solid waste provides an alternative to waste export, the cost could likely not compete with the cost of waste export. There are two biomass burners in Clallam County which utilize hog fuel made from wood waste. Clallam County will continue to evaluate opportunities for the incineration of select waste streams, energy recovery from landfill gas, biomass-to-energy, and biogas-to-energy operations on a case-by-case basis. While Clallam County has entirely changed over to a waste export system, issues remain at two local, closed landfills. The Port Angeles Landfill, as discussed above, requires urgent action to reduce or eliminate the risk of refuse from entering the marine environment, due to erosion of the bluff which stands between exposed cells of garbage and the Strait of Juan de Fuca. The Makah Nation, which closed the Neah Bay Landfill in 2011, is still pursuing funding for post-closure activities. Waste Prevention, Recycling and Composting Waste reduction can be a cost-competitive, pollution-preventing solid waste management strategy. Waste prevention, recycling, and composting, all methods of waste reduction, are employed in a variety of ways in Clallam County to reduce environmental burden, create jobs and save money, and meet waste reduction goals. Waste Prevention -Waste prevention is defined as those methods and activities that avoid the creation of waste. The focus of waste prevention will continue to be public information and education with themes of reducing the weight and volume of waste collected; increasing material and product life through repair and reuse; reducing or eliminating packaging; and decreasing product consumption. Waste prevention activities range from exchanges such as the web-based 2good2toss.com, where participants buy, sell or give away items they can't use anymore, to commercial deconstruction projects, to donations of unsold food from stores to charities. Continued efforts such as these, paired with recognition, promotion and other support from public and private entities, can further realize waste prevention gains. Opportunities for waste prevention at the commercial level can be supported through business waste audits or new prevention programs. This CSWMP encourages the pursuit of funding and opportunities for public/private partnerships and programs that target organic waste reduction in specific. As well, Clallam County and its municipalities can provide an example for businesses by adopting existing or developing their own waste reduction programs. Recycling - Clallam County currently recycles approximately 26 percent of its solid waste. The SWAC recommends a goal of a 30 percent recycling rate within the next 5 years,with an eventual goal of 40 percent recycling for the County in the long term. These goals do not include the numerous categories of waste that are diverted from disposal but don't fall into the traditional definition of municipal recycling such as asphalt, even though diversion is also a significant method of waste reduction. Recycling options include drop-off sites, household (curbside) collections, commercial collections, and various collection or buy-back centers. As with waste prevention, existing recycling efforts will continue. Ensuring the public knows what and where materials are accepted is a key to increasing the recycling rate. Expanding May 2014 1 EXECUTIVE SUMMARY iv Final Draft-Comprehensive Solid Waste Management Plan Clallam County the types of materials collected or adding additional recycling drop boxes will be considered on a case by case basis. Outreach, education, and technical support for recycling will be especially focused on specific groups such as residents of multi-family properties,businesses, schools, and areas where residents currently do not receive curbside recycling services. Another service that will be considered is providing recycling in public places. This is a highly visible way to promote and educate about recycling, impress visitors and attract business. This often complements new infrastructure and development and demonstrates values around waste reduction,resource conservation, and state and local mandates. In 2007, a law was passed in Washington requiring that vendors provide recycling at all events held within ajurisdiction where curbside recycling programs exists. Efforts to educate and help event vendors abide by this law will occur where applicable in Clallam County. Clallam County and cities will consider revising their purchasing policies to encourage or require the use of recycled materials. In so doing, the County and cities would help to build the local market for recycled materials and promote the idea of purchasing recycled products. Composting - Composting can be defined as the controlled biological decomposition of yard debris, food, sewage, or other organic waste to produce a beneficial product. Current practices in Clallam County include: composting of yard debris from self-haul and curbside collections (in the cities of Sequim and Port Angeles) at the Port Angeles Composting Facility, yard debris composting at private facilities from self-haulers, composting of food and yard waste by commercial generators for on-site use, and home composting supported through education and outreach. The amount of yard debris and biosolids processed at the Port Angeles Composting Facility has been generally increasing since its inception. The Composting Facility is operating at 74% capacity, although some yard waste is imported to maintain material levels needed for composting of biosolids suggesting adequate processing capacity at the Composting Facility for the five year planning window addressed in this plan. In 2007, the City of Port Angeles began marketing the product from the Composting Facility as "Garden Glory", a Class A compost. State and County waste reduction goals mandate a significant focus on removing organic material from the waste stream. To that extent, the County and its cities will continue to develop end-use markets for compost, hog fuel, and mulch, and lead by example by maximizing its own use of these products. Other strategies for reducing organics in the waste stream include investigating options for handling food waste in a rural area, encouraging home composting through education and outreach, and considering expansion of curbside or drop box services for yard waste in areas that currently don't have these services. SPECIAL WASTES Special wastes generally require special handling and disposal for one or more reasons, such as potential toxicity, large quantities, or size and weight problems. Most of these wastes are best disposed of somewhere other than in a municipal solid waste disposal system. Eighteen special wastes and waste problems are identified in the CSWMP, and specific recommendations are developed for eleven special wastes (agricultural wastes, animal carcasses, ash, auto hulks, construction and demolition wastes, contaminated soils, electronic wastes, marine debris, pharmaceutical wastes, and wood wastes). Conditions and recommendations for four of the special wastes are summarized below. May 2014 1 EXECUTIVE SUMMARY v Final Draft-Comprehensive Solid Waste Management Plan Clallam County Construction, Demolition, and Land-Clearing (CDL) Wastes Construction, demolition and land-clearing (CDL) wastes are defined simply as the wastes that are generated from construction and demolition activities and include new and used building materials, concrete, asphalt, soil, stumps, and brush that is generated at construction or demolition sites. These wastes are usually generated at a rate proportional to construction activity, which dropped significantly beginning with the 2008 economic downturn. Yet CDL waste remains a large component of the waste stream in Clallam County and presents an opportunity for environmentally preferable recycling and reuse,including cost benefit. Private and public entities promote, provide and utilize options for recycling and reusing CDL waste in Clallam County. These range from the retailing of used building materials to crushing asphalt for road aggregate. Clallam County will continue to promote existing opportunities for the reduction,reuse, and recycling of CDL wastes; enhance the recycling of CDL wastes by establishing expanded markets for the materials; and only consider the development of a limited purpose disposal site for non-recyclable CDL wastes if existing methods for disposing or diverting the waste are inadequate, especially for big demolition projects. Electronic Wastes In 2006, the State of Washington passed a law which required companies that make and sell certain electronic products to take back and recycle their products. This law created a program, E-Cycle Washington, which designates locations in every county to accept used electronics from households, small businesses, schools & school districts, small governments, special purpose districts, and charities- free of charge. There are three current E-Cycle locations in Clallam County accepting TVs, computers, monitors, tablet computers and e- readers. Recycling of electronic wastes has increased over the years per capita, but the amount of electronic waste generated per capita in Washington State has increased even faster. This is likely due to the increasing ubiquity of electronic wastes as such products increase in popularity and affordability. These wastes contain components of value such as rare earth metals, as well as toxic materials, therefore it is imperative that they are recycled. Clallam County will continue to work with and educate the public on how to handle electronic waste. As well,it will consider additional E-Cycle locations, especially on the west end. Marine Debris With 250 miles of shoreline, Clallam County has been tackling the issue of washed up marine debris such as styrofoam, plastic, treated wood, nylon rope, glass, and metal for decades. The 2011 Japanese earthquake and tsunami brought this issue to international attention, sweeping an estimated 5 million tons of debris into the Pacific Ocean. Marine debris from this event began appearing on Clallam County beaches in 2012 and is predicted to continue for some years. National, state and local organizations operate a variety of marine debris management efforts; including drafting the 2012 Washington State Marine Debris Response Plan which identifies key tasks and cooperative stakeholder response. This CSWMP recognizes the unique issues regarding marine debris. Clallam County will provide outreach and education to the public on proper response and prevention of marine debris and coordinate communication and outreach efforts with state and federal partners for consistent messaging. May 2014 1 EXECUTIVE SUMMARY vi Final Draft-Comprehensive Solid Waste Management Plan Clallam County Wood Waste The forest products industry in Clallam County generates wood shavings, chips, sawdust, log ends, bark, hog fuel, sorting yard wastes, pulp and paper mill sludges, and boiler ash. Wood waste is also accumulated through the operation of marine terminals and adjacent log yards. Many of the major producers of wood waste already recycle it through private companies for use as a soil amendment,hog fuel, and paper making. Clallam County will explore the possibility of recovering additional amounts of wood waste through uses like compost feedstock or hog fuel. If necessary, Clallam County and its municipalities will increase the market for landscaping mulch produced from log yard waste through public procurement programs. Clallam County will also consider proposals for alternative methods for managing wood waste. REGULATION AND ADMINISTRATION Oversight of the solid waste system in Clallam County ranges from federal and state rules and regulations to local management and enforcement activities. The Clallam County Road Department manages activities such as litter clean up while the Environmental Health Department issues permits and inspects facilities. Other authorities include the County and Cities' Public Works Departments, including Tribal Councils and Tribal Public Works Departments. Local codes contain solid waste rules. The Clallam County Solid Waste Advisory Committee, (SWAG) assists in the implementation of programs and policies concerning solid waste handling and disposal, and reviews and comments on proposed changes to the CSWMP. Its membership is comprised of nine representatives; one from each of the incorporated cities, the waste industry, tribal councils, Clallam County, state and federal agencies,private industry, and one at-large. A 2007 Interlocal (ILA) agreement between Clallam County and the cities of Port Angeles and Sequim established roles and responsibilities of the signatories to provide for competitively-priced Regional Solid Waste Export and Transfer System facilities and services. It also centralized responsibility for operating and administering this System with the City of Port Angeles, established an enterprise fund for deposit of revenues from operation and management, and established the Joint Solid Waste Advisory Board, which reviews policies, procedures, costs, rates and operates as an advisory group to the Port Angeles City Council and SWAC. Alternatives for solid waste administration include establishing a solid waste district, or establishing a special district based on Home Rule Charter. Further investigation of the benefits and drawbacks of the former alternative is recommended. It is recommended that Clallam County and the Cities of Port Angeles and Sequim continue to meet their respective commitments as specified in the ILA for the Regional Solid Waste Export and Transfer System. Also, to provide stronger coordination of county-wide solid waste management activities in Clallam County, it is recommended that an annual, comprehensive analysis assessing the solid waste system be completed; and the formation of a Solid Waste Planning Lead position at the County level be considered. It is also recommended that Clallam County consider a flow control ordinance. May 2014 1 EXECUTIVE SUMMARY vii Final Draft-Comprehensive Solid Waste Management Plan Clallam County THE CLALLAM COUNTY HAZARDOUS WASTE MANAGEMENT PLAN The first hazardous waste plan for Clallam County was developed in 1991 to comply with The Hazardous Waste Management Act Chapter 70.105 of the Revised Code of Washington (RCW). A 2012 update is included as part of this CSWMP as Appendix D. In this revision, there is new emphasis on waste reduction, product stewardship, and other strategies outlined in Ecology's Beyond Waste Plan. The Hazardous Waste Management Plan develops a plan for managing small quantities of hazardous waste in Clallam County. The goal of the Hazardous Waste Management Plan is to provide safe disposal options for hazardous waste to protect the stormwater, ground water, environment and human health in Clallam County. These materials should not be poured down a household or storm drain or transported in the garbage to a landfill. Clallam County Environmental Health and the City of Port Angeles, together with other private and public entities addressing hazardous waste,provide program elements such as the collection of household hazardous waste at the Moderate Risk Waste Facility (MRWF), household hazardous waste education and outreach, small business technical and collection assistance, enforcement, and used oil collection. Strategic goals of the plan for the next five years include further integration of product stewardship programs such as mercury-containing lights and e-waste recycling; considering the acceptance of small business hazardous waste at the MRWF, and development of an online clearinghouse for businesses to work together on their hazardous waste disposal. May 2014 1 EXECUTIVE SUMMARY viii Table ES-1.Summary of Recommendations 'Activity Lead,Agency Schedule Bund �Source* Solid Waste Collections: C01) Consider a combined service ordinance for Clallam County for Clallam County,Cities, As needed Collection Fees curbside recycling pick up where curbside garbage collection occurs. JSWAB,collection companies CO2) Clallam County should further investigate the impacts of instituting Clallam County,SWAC As needed Collection Fees universal collection service across the county. In-County Transfer and Drop Box: T1)The Clallam County SWAC,JSWAB,and other governmental agencies Clallam County,others Ongoing Tipping fees should continue to work together to develop plans and programs,while also continuing to explore viable alternatives,for waste export and transfer and related options,such as extended hours of operation,additional drop boxes, and additional facilities. T2)Study the possibility of placing additional containers at all transfer and drop Clallam County,others Ongoing Tipping fees box sites to collect source-separated yard wastes and to collect additional recyclable materials. T3)Obtain funding for a waste characterization study at the Regional Transfer Clallam County,City of Every 2 years Tipping fees,grants Station. Alternately,develop a plan for periodically monitoring municipal solid Port Angeles, waste received at transfer and drop box facilities,with an emphasis on noting collection companies significant quantities of potentially-recyclable materials(yard waste,scrap metals,textiles,etc.). T4) Consider user fees at the transfer and drop box facilities for recyclable JSWAB& As needed Tipping fees materials if the cost of service determines that collection of recyclables collection companies becomes a significant net loss for the transfer stations. Incineration&Energy Recovery: 11)Evaluate new proposed incineration projects for select waste streams Clallam County, SWAC As needed Tipping fees and/or locations based on an objective review of the potential impacts to and JSWAB human health and environmental quality,as well as a comparison to alternative disposal methods. ER1) Investigate and develop proposals for energy recovery methods, on a City of Port Angeles As needed Grants/tipping fees case by case basis ER2)Work with City of Port Angeles staff to continue to evaluate a range of City of Port Angeles As needed Permit fees and private opportunities to use the LFG produced at the City-owned landfill. funds Final Dr ft-Comprehensive Solid Waste Management Plan Clallam County 'Activity Lead,A eq Schedule fund �Source* In-County Landfilling: LF1) Consider the range of alternatives necessary to reduce or eliminate the City of Port Angeles, 2014-15 Bonds,other risk of refuse from entering the marine environment and to slow down the rate JSWAB of bluff erosion at the Port Angeles Landfill. LF2)Maximize the development of appropriate state and federal grant funding City of Port Angeles, 2014-15 Other to reduce impacts to utility ratepayers when implementing corrective actions at JSWAB the Port Angeles Landfill. LF3)Consider reopening the existing WAC 351-compliant MSW disposal cell at City of Port Angeles, 2014-15 Bonds,other the Port Angeles Landfill necessary to accommodate partial or complete JSWAB removal of waste from the 304-compliant cell to reduce or eliminate the risk of refuse from entering the marine environment. LF4)Support post-closure activities at the Neah Bay Landfill. Makah Nation,Clallam Ongoing Grants Count LF5)Consider proposals and options to develop special-purpose landfills,such CCEH and JSWAB Ongoing Permit fees as wood waste or construction and demolition waste landfills, as they are proposed. Waste Export/Import WE1) Continue to export solid and other permitted waste from the Regional City of Port Angeles Ongoing Tipping fees Transfer Station to an out of county regional landfill. WE2)Encourage West Waste to continue their waste export activities and to Clallam County,SWAC Ongoing Collection fees possibly expand these activities as needed to serve additional west end customers. WE3)In preparation for natural disaster,require any contracts with private Cities,SWAC,CCEH As needed Tipping and/or permit businesses for waste export services to identify alternative disposal plans, fees including alternative routes and modes of transportation. Waste Prevention: WP1) Continue public information and education with themes of reducing the City of Port Angeles,and Ongoing Tipping fees and grants weight and volume of waste collected; increasing material and product life CCEH through repair and reuse; reducing or eliminating packaging; and decreasing product consumption. WP2)Encourage the formation of citizen advisory/action groups to help with SWAC Ongoing Tipping fees for staff public education efforts. time May 2014 1 EXECUTIVE SUMMARY s Final Dr ft-Comprehensive Solid Waste Management Plan Clallam County Activity LeadAgency Schedule fundin Source* Waste Prevention(contd) WP3)Use existing county and city websites to promote waste prevention. Clallam County&Cities Ongoing Tipping fees WP4)Conduct waste audits,targeting small to medium-sized businesses first, on the assumption that the larger businesses have the staff and other City of Port Angeles and Ongoing Grants resources to best meet their needs.Consider the idea of waste exchanges and citizen committees similar activities directed specifically at businesses for future implementation. WP5)Provide an example for the above businesses by adopting WasteWi$e or City of Port Angeles& 2016 Grants developing waste reduction programs within the county and its municipalities Clallam County WP6)Recognize businesses that do a good job of implementing waste SWAC Ongoing Grants reduction programs and practices. WP7)Pursue funding and opportunities for public/private partnerships and Clallam County,Cities, Ongoing Grants,private funds programs that target organic waste reduction. others WP8)Support reuse events organized and implemented by others. Clallam County,Cities, Ongoing Grants and tipping fees others Recycling: R1)30%near-term and 40%long-term waste recycling goal. Clallam County,cities, Annually Utility rates and tipping others fees R2)Continue to collect designated recyclables.Review the list of recyclables Clallam County,SWAC, Utility rates and tipping annually to ensure the proper materials are being targeted by recycling JSWAB Annually fees revenue programs and expand amounts and grades of materials as markets allow. R3)Promote recycling at multi-family properties and consider restructuring City of Port Angeles Utility rates and tipping commercial rates to make recycling an economical alternative for these Ongoing fees revenue properties as well as commercial businesses. R4)Continue public education,modeling new programs after existing efforts. City of Port Angeles Ongoing Tipping fees and grants R5) Consider additional curbside collections where they don't exist, and Clallam County,Cities, Ongoing Collection rates opportunities to establish drop-off or curbside collections in Tribal Reservations Tribes should be supported. R6)Maintain existing drop-off sites and consider additional sites in the county. Clallam County,Cities, Tipping fees and Tribes Ongoing revenues from commodities R7)Continue and improve school recycling collection and education programs. Public and Private School funds and Schools and City of Port Ongoing avoided disposal costs; Angeles;citizen grants committees May 2014 1 EXECUTIVE SUMMARY si Final Dr ft-Comprehensive Solid Waste Management Plan Clallam County 'Activity Lead,A tq ScWdile Bund �Source* Recycling(contd.) R8)Continue to educate about the requirement for recycling at special events Tipping fees,permit such as sport activities and public festivals.Cooperate with private haulers, Clallam County,cities Ongoing fees,revenue festival organizers,and volunteers to provide recycling bins and collection. R9)Monitor and consider any proposals for the processing of recyclables within the county that may reduce the cost of exporting materials while creating SWAC Ongoing Tipping fees and grants jobs within the county. R10)Lead by example. Consider expanded recycling programs and adopting policies such as environmentally preferred purchasing of recycled materials Clallam County,cities Ongoing Collection fees and within county and city departments. grants R11)Encourage all companies and agencies collecting recyclables and other Clallam County,cities and Annually Public and private funds diverted materials in Clallam County to report their data to Ecology. collectors for staff R12)Establish outdoor public space recycling as a pilot program at select city Clallam County,cities Ongoing Collection fees,grants and county parks,downtowns,and at public transit bus stops as a cooperative venture between government,hauling companies,and business owners. Composting: Cl)Continue curbside collection,processing,and composting yard waste at the City of Port Angeles Ongoing Tipping fees Port Angeles Composting Facility.Increase the amount of materials processed to the extent of the facility's capacity. C2)Work to eliminate illegal dumping and burning of yard waste,therefore Clallam County Code Ongoing Grants,public funding increasing diversion to compost facilities. Enforcement,ORCAA C3)Continue to develop end uses such as mulch,hog fuel,and compost,and other uses that may also be identified.Lead by example.The county and cities Clallam County,cities Ongoing Tipping fees should maximize use of these products in their own projects. C4)Consider separate collection of yard debris by Murrey's Olympic Disposal Clallam County and and West Waste in their respective solid waste collection service areas collection companies Ongoing Collection fees customers demand it and yard waste is found in the garbage. C5)Encourage neighborhood chipping services. Clallam County,City of Ongoing Grants and user fees Port Angeles C6)Investigate economical and efficient options for handling food waste. Clallam County,cities, Ongoing Grants,private funds others C7)Continue public education to encourage residents to handle yard debris and food waste separately through home composting and mulching.Continue Clallam County,cities Ongoing Tipping and collection to offer the Master Composter and other outreach programs. fees,grants May 2014 1 EXECUTIVE SUMMARY sii Final Dr ft-Comprehensive Solid Waste Management Plan Clallam County Activity, head Agency! Srhedule Fundi g Source* Special Wastes: AG1)The Clallam Conservation District and National Resource Conservation Clallam Conservation Ongoing Conservation Service should continue to work with producers around the County to District and National Commission implement Best Management Practices to minimize the potential contamination Resource Conservation of surface waters with agricultural waste. Service AG2)Monitor and consider any proposals for processing of agricultural wastes CCEH,Clallam County, Ongoing Grants within the County that may increase the ability to process additional amounts of cities organic wastes while reducing greenhouse gas output. AN1)Monitor aquaculture industries for waste management issues. CCEH and SWAC Ongoing Grants ASH1) Continue to encourage the ash-producing companies to explore SWAC,ash producers, Ongoing Grants and private recycling or other disposal alternatives first. For example, encourage them to and regulatory agencies funding investigate land application and industrial applications such as cement. AUTO1)Continue to identify ideas and alternatives for managing the disposal SWAC,Clallam County, Ongoing Grants and private or accumulation of auto hulks.One option may be to support stronger and cities sources enforcement of the County ordinance regarding auto hulks. BW1)Monitor disposal of biomedical wastes by small biomedical waste CCEH Ongoing Grants generators for potential problems or risks. Provide increased education or other services as necessary CDL1)Promote existing opportunities for recycling of CDL wastes as part of the Clallam County,cities, public education efforts conducted for waste reduction and recycling.In citizen committees,North Ongoing Grants particular,the County and its municipalities should help promote the Built Green Peninsula Builders concept. Association CDL2)Enhance the recycling of CDL wastes by establishing expanded markets for the materials.These markets include using processed concrete and asphalt Clallam County,CCEH, Ongoing Private sources concrete for county and municipal public works projects,especially roads and SWAC and JSWAB utilities,and processing clean wood material as hog fuel for area boilers. CDL3)Consider the development of a limited purpose disposal site for non- recyclable CDL wastes if existing methods for disposing or diverting the waste Clallam County,CCEH, As needed Permitting fees and are inadequate.If a separate site is developed and if sufficient quantities of SWAC and JSWAB private funding recoverable materials are observed being disposed at this site,additional recycling operations should be considered for those materials. CS1 Explore new technologies for managing contaminated soil. Clallam County Ongoing Private sources EW1)Continue to work with and educate the public on how to handle electronic CCEH,Cities Ongoing Grants and tipping fees waste through the state E-Cycle collection program. EW2)Clallam County should consider additional E-Cycle locations,especially CCEH,Ecology,City of Ongoing Grants on the west end. Forks May 2014 1 EXECUTIVE SUMMARY siii Final Dr ft-Comprehensive Solid Waste Management Plan Clallam County 'Activity Lead,A eq Schedule Bund �Source* Special Wastes contd MD1)Continue to provide outreach and education to the public on proper CCEH,cities,NOAA Ongoing Grants response and prevention of marine debris. Coordinate communication and &partners outreach efforts with state and federal partners for consistent messaging. PW1)CCEH should continue to work with the two hospital districts,law CCEH,community Ongoing Tipping fees and enforcement,retail suppliers,and other healthcare providers to maintain public partners grants education programs on how to properly dispose of pharmaceutical waste. PW2)Clallam County and the City of Forks should consider establishing a CCEH,City of Forks 2015 Tipping fees and pharmaceutical take back program for west end residents. grant s WD1)Explore the possibility of recovering additional amounts of wood waste Public sector Ongoing Private sources through composting,hog fuel,and biomass-to-energy. WD2)Consider proposals for alternative methods for managing wood waste, Clallam County, Ongoing Grants,private such as biogas to energy,on a case by case basis. CCEH,SWAC and sources. JSWAB WD3)Should the amount of wood waste managed in the solid waste stream Tipping fees and increase substantially due to markets,regulations,or other outside influences, Clallam County,SWAC, TBD grants collaborate with private companies to develop new ideas for managing this private companies waste stream. Regulation&Administration RA1)Clallam County and the Cities of Port Angeles and Sequim should JSWAB,Clallam County, continue to meet their respective commitments,as specified in the ILA for the cities Ongoing Tipping fees Regional Solid Waste Export and Transfer System. RA2) Develop a consistent methodology for assessing effectiveness and needs of solid waste program,including such measurements as greenhouse Clallam County, Annually Tipping fees gas emissions of the solid waste system and cost analyses.Provide a JSWAB,SWAC comprehensive analysis of solid waste activities in an annual summary of the Regional Solid Waste Export&Transfer System. RA3)Clallam County should consider adopting a flow control ordinance. Clallam County,Board of 2014 N/A Count Commissioners RA4) Clallam County should consider establishing a position of Solid Waste Clallam County 2014 Tipping fees Planning Lead to coordinate county-wide solid waste activities.. RA5) Investigation into the benefits and drawbacks of creating a solid waste Clallam County,JSWAB, Ongoing Tipping fees disposal district in Clallam County SWAC Tipping fees will be supplemented when necessary and appropriate with financial or in-kind contributions from jurisdictions not using the regional facilities. May 2014 1 EXECUTIVE SUMMARY siv 0 P IRT .;; NGELES ........... "A W A S H [ N G T 0 N, U. S. A. Utility Advisory Committee Memo Date: June 10, 2014 To: Utility Advisory Committee From: Maher M. Abed, Deputy Director of Public Works and Utilities Subject: Set-up a date for a tour of the Port Angeles Operations Facility (Corp. Yard) Summary: Staff would like input from the UAC board members on setting up a date for a tour of the Port Angeles Operations Facility (Corp. Yard). Recommendation: Select either June 27th or July 11th to tour the Corp. Yard. Background/Analysis: Over the last two months, selected UAC members participated in a staff guided tour of the City's transfer station, water treatment plant, wastewater treatment plant and the Combined Sewer Overflow (CSO) control facilities. Input from these visits was positive. Based on your interest, staff would like to set-up a tour of the City Corp. Yard next. Based on previous preferences, Fridays seem to work the best for the majority of the UAC members. Therefore, two dates of June 27th or July 11th, 2014 are recommended for this purpose. Staff can accommodate either date. We asking for the UAC members to set-up the next visit date. As we have done before, the pick-up and the drop off for this visit will be at City Hall. Please plan on starting at 9:00 am and the tour will be completed around 12:00 pm. The tour will include an overview of the Corp. Yard layout; an actual tour of the Street & Stormwater facility, Wastewater Collection facility, Water Distribution facility, Fleet facility, and the proposed future Electrical facility. No hard hats or vests will be required, but please dress appropriately for field condition. It is recommended that the UAC members select either June 27th or July I It', 2014 for a tour of the Corp. Yard. N:\UAC\WETINGS\UAC2014\UAC061014\UAC Site Visit Memo.docx