Turning Trash into Ash And Dollars into Cinders

posted in: October 1990 | 0

The year: 1980. The Mayor: Frank Fasi. The newspaper: The Honolulu Advertiser: “City officials have chosen a proposal from Amfac and a Connecticut firm as the lowest bid for a massive project to turn Honolulu`s garbage into electricity. The winning proposal could save taxpayers $894 million over 20 years because the city would no longer have to bury its garbage and could sell the electricity, city officials said… Cost of building … would be about $90.4 million: officials say it would generate $5.7 million in profit in its first year of operation.”

The year: 1990. The Mayor: Frank Fasi. The newspaper: The Honolulu Advertiser: “First the bad news. A lot of the stuff that ends up in your household garbage … could be recycled. The good news is that Honolulu’s trash is not going entirely to waste.”

In one short decade, H-POWER went from being touted as a virtual license to print money to a $600 million facility costing $1.75 million a month to run, and of which the best that could be said was that the trash it took in was “not going entirely to waste.”

So what, exactly, are the economics of H-POWER now that it is up and running? A clue: The City is not going to see $7.5 million in profit. It is not going to see anything in profit. The cost of generating a kilowatt hour of electricity at H-POWER (15 cents) is more than double what Hawaiian Electric pays for that electricity (about 7 cents). And the revenue that was expected from the sale of scrap metal salvaged from the debris has yet to materialize. No potential buyer wants the gunked-up mix of ferrous metals that is pulled out of H-POWER, so it ends up being landfilled – some 70 tons a day.

How do we figure the costs? In June, H-POWER produced 28,224,000 kilowatt hours of electricity or roughly 5 percent of O`ahu’s monthly demand of 571 million kilowatt hours (based on the 1989 State of Hawai`i Data Book). The operating costs, paid to HRRV, the Amfac/Combustion Engineering partnership that runs the facility, were about $1.75 million. Costs of debt service and capital were another $2.5 million. To generate those 28,224,000 kilowatt hours, the City sent $4.25 million – 15 cents a kilowatt hour.

To be sure, at the time of the rosy forecasts a decade ago, the price of oil was expected to rise exponentially. No one foresaw the glutted world oil market and resulting lower electricity prices of the late 1980s.

H-POWER’s champion may at this point say that the plant was not designed primarily to produce electricity. Its chief purpose was to avoid rising landfill costs.

Okay. Let’s compare H-POWER to landfilling. At the city’s newest landfill, tip fees paid by the City to the landfill operator, Waste Management of Hawai`i Inc., are $19 a ton. Accepting that as a reasonable cost of running a state-of-the-art landfill (on land owned by the City and County of Honolulu), H-POWER still comes up a wash.

Here’s how we figure it: At $19 a ton (the cost to the City), tipping fees at Waimanalo Gulch are a third of what they are at H-POWER ($54 a ton). This means that, for the cost of dumping a ton of trash at H-POWER, the City can dump three tons at Waimanalo Gulch.

Again the defenders of H-POWER might note that regardless of cost of H-POWER or of landfilling, space for landfills is in short supply on O`ahu. Since H-POWER reduces the volume of material by incineration, there is an “avoided cost” for landfill space that should be factored into the H-POWER equation.

Yes – and no. Yes, if one assumes that the only choice is between incineration and landfilling. No, if one recognizes that reuse, recycling (including composting), and source minimization can reduce the demand for landfill space by at least as much as incineration – without wasting resources in the process.

But can H-POWER coexist with these other approaches?

In the early 1980s, the Department of Planning and Economic Development forecast that by the year 2000, Honolulu would be discarding a million tons a year. The City is contractually obligated to provide H-POWER with more than half of that – some 600,000 tons of “acceptable waste” a year. In 1989, the City Council passed an ordinance setting a goal of 75 percent waste reduction by the end of the century. Add it up – and H-POWER once again comes up short. If Honolulu reaches its 75 percent recycling goal, that leaves just a quarter of a million tons of discards for H-POWER. If the tonnage to H-POWER goes down, tipping costs must rise proportionately, so that HRRV still gets what the City owes on its operating contract.

Frank Doyle, director of the Division of Refuse within the City’s Department of Public Works, is not worried. Waste is still a growth industry, in his eyes. Even if recycling takes off and the city’s demonstration composting the project, just now going out for bid, proves successful, Doyle believes that any reductions effected by efforts will be more than offset by an overall increase in waste caused by expanding population.

Also, Doyle sees the markets for Hawai`i’s recyclables shrinking as more and more Mainland cities get into the act. “We may have a very good source of paper” on the island, Doyle said in an interview with Environment Hawai`i. “But what happens when every major city in the United States comes on line with a recycling program, and also has a very good source of paper?”

The City’s 75 percent recycling goal was unrealistic, Doyle said; goals of between 35 and 50 percent would be more likely to be achieved. But even a reduction in overall refuse along those lines might result in the City being unable to meet its delivery obligations to H-POWER. What then? Will Honolulu have to import waste from the neighbor islands?

“Looking at it. Truly looking at it,” Doyle replied when asked that. “Talking to Maui about it. I think it’s a matter of economics… Maui only has to operate a transfer station. They can recycle everything that they can possibly recycle, if they think that it’s good for them. Put the rest in a transfer trailer, close it up…, put it on a barge, ship it over here, a truck picks it up, dumps it off at H-POWER, and goes back.”

A matter of economics indeed. The cost of disposal at H-POWER is already more than $54 a ton (and will almost certainly rise each year); for refuse shipped from other islands an additional fee would have to be paid for barging it to O`ahu, as well as costs of operating the transfer station and pick-up and delivery on each end. No other county has tip fees even approaching half of H-POWER’s.

John Harder, solid waste coordinator for Kaua`i County, said he and Doyle had discussed this possibility – “jokingly.” “I told him if he’d take our waste for free and pay for shipping, he could have all he wanted,” Harder said. “If he wanted us to pay shipping fees plus $54 a ton, that’s a different story.”

Bruce McClure, chief engineer at Hawai`i County’s Department of Public Works, said no one had approached him about the idea but, with all the problems Hawai`i County is experiencing in the siting of new landfills, barging trash to Honolulu “might be a godsend.” Brian Hashiro, chief of Maui County’s Solid Waste Division, said Doyle had mentioned this possibility to him. “We need to explore it a little more to see the cost to the county of Maui. At this point, we’ve just spoken about it – haven’t looked into the economics, so I really can’t comment more.”

Volume 1, Number 4 October 1990