HomeMy WebLinkAboutResolution - 959 - Consultation Contract -Metcalf And Eddy - Resource Recovery Plant Study - 11/12/1981!' RESOLUTION 959 - 11/12/81
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BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK-.
THAT the Mayor of the City of Lubbock BE and is hereby authorized and
directed to execute for and on behalf of the City of Lubbock a Consultation
Contract for Resource Recovery Plant Study between the City of Lubbock, Texas,
and Metcalf & Eddy, Inc., attached herewith which shall be spread upon the
minutes of the Council and as spread upon the minutes of this Council shall
constitute and be a part of this Resolution as if fully copied herein in detail.+
Passed by the City Council this 12th day of ,1981.
C
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ILL MMICStER7, MAYOR
ATTEST:
Evelyn Ga ga, City S c
PROVED AS TO CONTENT:
arroll McDonald, Director
lectric Utilities
PPROVED AS TO FORM: .,
W. Reagan, AAsiptant City Attorney
RESOLUTION 959 - 11/12/81
CONSULTATION CONTRACT FOR RESOURCE RECOVERY PLANT STUDY
BETWEEN
THE CITY OF LUBBOCK, TEXAS AND METCALF & EDDY, INC.
This contract, entered into by and between the City of Lubbock, Texas,
hereinafter called City, and Metcalf & Eddy, Inc., hereinafter called Metcalf &
Eddy, witness:
Whereas, the City is desirous of obtaining additional studies of a Resource
Recovery Plant whereby waste material would be burned as fuel to produce elec-
tricity by its municipally owned utility known as Lubbock Power & Light, and
Whereas, Metcalf & Eddy represent that they have sufficient experienced
personnel and equipment to perform the study set forth in this contract, and
the City desires Metcalf & Eddy to perform the study herein described in re-
spect to such Resource Recovery Plant.
Now, therefore, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
I. Scope of Services
The study will refine and analyze estimates of the costs and probable
returns of a Resource Recovery Plant which would burn waste material as fuel to
produce electricity. The type of Resource Recovery Plant to be studied consists
of 3 spreader-stroker waterwall boiler units, each rated to burn 400 tons per
day of refuse derived fuel (RDF) from approximately 465 tons per day of unpro-
cessed solid waste. The boiler units are to operate on a 24 hour per day, 7
days per week, 365 days per year schedule. Such boilers are to be equipped
✓ with electrostatic precipitators to meet the Texas Air Pollution Control
codes. There will also be multiple front end shredding trains with ferrous
removal to coordinate with the boiler units. The boiler units are to provide
steam at 600 pounds per square inch gauge (psig) and 750° F. to either of the
two existing 1.1.5 megawatt turbine generator units in the Lubbock Power & Light
Plant No. 2 or in new dedicated turbine generator units.
Metcalf & Eddy will specifically execute and prepare the following studies,
projections, and tasks:
a. Detailed estimates of the construction costs of the Resource Recovery
Plant:.as described above.
b. Detailed estimates of the costs and effects of supplying the steam
produced to the existing 11.5 megawatt turbine generator units in the
Lubbock Power & Light Plant No. 2 including the effects of derating
these turbines from the current 825° F.
C. Detailed estimates of the costs of construction of new turbine gen-
erator units which would be matched to the output of the boilers to gen-
erate electricity from the steam produced in the Resource.'Recovery Plant
described above.
d. For each of the combinations of paragraphs a & b and paragraphs a &
c, operation cost will be estimated including labor, fringe benefits,
normal and expected maintenance costs, and the cost of disposal of ash and
noncombustible materials.
e. For each of the combinations of paragraphs a & b and paragraphs a &
c, estimates will be made of all indirect costs and such costs as engineering,
program management, financing costs, interest during construction, reserve,
and start up costs.
f. Using the information developed in paragraphs a through e, spread
sheets will be prepared showing the yearly costs to operate, expected
returns, and the derived tipping fees for solid waste disposal for the 5
years of 1985 through 1989 for each of the 2 alternatives outlined in
paragraphs a & b and paragraphs a & c. For each alternative, comparisons
will be made based on electric energy sale prices derived from the continued
operation of Lubbock Power & Light Plant No. 2 on gas at the projected
natural gas prices and the sales prices from projected power pool figures.
g. The data from the spread sheets will be plotted on charts showing the
derived tipping fees versus years.
h. A schedule for the design and construction of the Resource Recovery
Plant will be prepared.
i. A table will be prepared showing a suggested distribution of charges.
This table will distribute the cost of the plant operation between revenue
streams from the sale of the electricity and tipping fees.
j. A short report will be prepared summarizing the technology and tables
will be included to shou the costs and returns to City from the Resource
Recovery Plant.
k. The report describd in paragraph j will contain a detailed description
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of the method and the '�stification for the use of such method used in ar-
riving at the projected natural gas prices used in performing the services
and studies outlined inIthis contract.
1. Twenty copies of the studies, tables, charts, and documents prepared
under this contract,.will be sent to the City.
II. Information and Data to be Used.
The following information and data is to be used by Metcalf & Eddy in per-
forming their services and studies under this contract:
1. The total solid waste (residential, commercial and industrial) gen-
eration rates for the current year and the 5 -year study period are as
follows:
Total Solid Wastes
Year TPD (1) Annual, tons
1981 813 297,000
1985 867 316,000
1986 882 322,000
1987 897 327,000
1988 912 333,000
1989 927 338,000
2. The higher heating value for the Paragraph 1 solid wastes is 4,500
Btu (British thermal units) per pound.
3. Natural gas prices are projected as follows (Wellhead average pricing):
Year $/1,000 cu ft
1981 2.65 (City data)
1985 5.00
1986 8.00
1987 9.50
1988 10.75
1989 11.80
4. A site near the existing LP&L power plant is available if the exist-
ing turbine -generator units are to be used.
5. When analyzing the new dedicated turbine -generator alternative, we
will assume a condensing, regenerative feedwater heating type unit
generally similar to the existing units.
6. Our analysis assumes that the City will direct the total solid
wastes listed above to the proposed Resource Recovery Plant.
III. Information and Data provided by City.
The City, by and through its municip al•owned utility Lubbock Power &
Light, will provide the information which is requested in writing by Metcalf &
Eddy on the efficiency of the existing turbines at Lubbock Power & Light Plant
No. 2 and on the prevailing labor rates and fringe benefits for the City.
IV. Compensation.
Metcalf & Eddy will provide the scope of services herein provided for a
firm fixed fee of Five thousand and no/100 Dollars ($5,000.00). The fee or
I
compensation will be paid by the City upon the completion by Metcalf & Eddy of
all services herein to be performed by it.
V. Independent Contractor Relationship.
Nothing herein shall be construed as creating a relationship of employer
and employee between the parties. The City shall not be subject to any obli-
gations or liabilities of Metcalf & Eddy incurred in the performance of this
contract unless otherwise herein authorized. Metcalf &.Eddy expressly agrees
to indemnify and hold harmless the City from any and all liabilities and obli-
gations incurred due to the negligence of Metcalf & Eddy of its employees.
VI. Termination.
Either party hereto may terminate this contract if the other party is
responsible for a breach thereof and fails to correct such breach for a period
of 10 days after receipt of written notice to correct same.
VII. Notice.
Any notices or written requests required under this contract shall be
sufficient if sent by certified mail, return receipt requested, to the City at
the following address, Carroll McDonald, Director of Electric Utilities, P.O.
Box 2000, Lubbock, Texas 79457, and to Metcalf & Eddy at the following address,
Metcalf & Eddy, Inc., 50 Staniford Street, Boston, Massachusetts 02114.
VIII. City Representative.
The City designates as its representative under this contract Carroll
McDonald, Director of Electric Utilities. The City's representative will
conduct all communications, notices and written requests on behalf of the
City with Metcalf & Eddy.
IX. Liability and Cancellation Rights.
Metcalf &'Eddy warrants its work will be performed according to the terms
of this agreement and in the best of its professional.capacity under the con-
ttrol of one or more principals experienced in the services outlined herein.
Metcalf & Eddy warrants that it will apply best efforts to obtain the results
herein contracted for by the City.
X. Law Governing the Contract.
The parties hereto agree that the status of this agreement and the law
governing its interpretation is the State of Texas and the laws of that State.
XI. Time of performance.
The services of Metcalf & Eddy are to commence on or about the date this
contract is entered into and shall be undertaken and completed in such sequence
as to assure the expeditious completion and rendition of such services as re-
quired by this contract. Metcalf & Eddy are to complete all services required
by this contract within 8 weeks from the date of execution of this contract.
Time is of the essence.
Signed and entered this 12th day of November , 1981.
METCALF & EDDn, INC.
Senior V resident
ATTEk:
Assistant Secretary
ATTEST:
E elyn G fga, Cit S ary-Treasurer
APPROVED AS TO CONTENT:
d
Carroll McDonald, birector
Electric Utilities
APPROVED AS TO FORM:
David W. Reagan, Ass ty Attorney
CITY OF LUB
r �
B L Mc ISTE , MAYOR
No Text
TABLE OF CONTENTS
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METCALF & EDDY
Page
LETTER OF TRANSMITTAL
LIST OF TABLES
LIST OF FIGURES
v
LIST OF ABBREVIATIONS
vi
EXECUTIVE SU14MARY
vii
REPORT
CHAPTER 1 - INTRODUCTION
1-1
Background
1-1
Purpose
1-2
Scope
1-2
Introduction to Solid Wastes and RDF
1-3
Organization
1-4
CHAPTER 2 - CONCLUSIONS AND RECODMENDATIONS
2-1
Conclusions
2-1
Recommendations
2-1
CHAPTER 3 - ALTERNATIVE RESOURCE RECOVERY PLANTS
3-1
Introduction
3-1
Background Information
3-2
Alternative No. 1 - 11395 tpd Solid Waste
Processing Plant and Spreader -Stoker Boiler
Plant with Electricity Generation (New
Turbine Generator)
3-13
Alternative No. 2 - 1,395 tpd Solid Waste
Processing Plant and Spreader -Stoker Boiler
Plant with Electricity Generation (Existing
Two Turbine Generators)
3-28
Economic Analysis
3-36
Impact of Projected Power Pool Figures
3-45
Distribution of Charges
3-47
Environmental Impacts
3-48
Land Requirements
3-50
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METCALF & EDDY
TABLE OF CONTENTS (Continued)
APPENDIXES
APPENDIX A - ESTIMATED PERFORMANCE OF EXISTING
TWO TURBINE GENERATORS
APPENDIX B - PROJECTION OF NATURAL GAS PRICES
ii
Page
A-1
B-1
i
LIST OF TABLES
Table
Page
3-1
Estimated Annual Labor Costs for the Proposed
Resource Recovery Facility (Cost in
November 1981 $)
3-10
3-2
Estimated Capital Costs for Alternative No. 1 -
19395 tpd Solid Waste Processing Plant and
Spreader -Stoker Boiler Plant with Electricity
Generation (New Turbine Generator) (x $1,000)
(Cost in November 1981 $)
3-23
3-3
Estimated Total Bond Issue Build -Up Details
for Alternative No. 1 - 1,395 tpd Solid Waste
Processing Plant and Spreader -Stoker Boiler
Plant with Electricity Generation (New Turbine
Generator) (x $1,000)
3-24
3-4
Estimated Annual Income Statement for
Alternative No. 1 - 1,395 tpd Solid Waste
Processing Plant and Spreader -Stoker Boiler
Plant with Electricity Generation (New
Turbine Generator) (x $1,000) (Cost in
November 1981 $)
3-26
3-5
Estimated Capital Costs for Alternative No. 2 -
1095 tpd Solid Waste Processing Plant and
Spreader -Stoker Boiler Plant with Electricity
Generation (Existing Two Turbine Generators)
(x $1,000) (Cost in November 1981 $)
3-32
3-6
Estimated Total Bond Issue Build -Up Details
for Alternative No. 2 - 1,395 tpd Solid Waste
Processing Plant and Spreader -Stoker Boiler
Plant with Electricity Generation (Existing
Two Turbine Generators) (x $1,000)
3-33
3-7
Estimated Annual Income Statement for
Alternative No. 2 - 1095 tpd Solid Waste
Processing Plant and Spreader -Stoker Boiler
Plant with Electricity Generation (Existing
Two Turbine Generators) (x $19000) (Cost in
November 1981 $)
3-34
3-8
Economic Analysis for Alternative No. 1 -
1,395 tpd Solid Waste Processing Plant and
Spreader -Stoker Boiler Plant with Electricity
Generation (New Turbine Generator)
3-40
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METCALF & EDDY
LIST OF TABLES (Continued)
Table
Page
3-9
Economic Analysis for Alternative No. 2 -
1,395 tpd Solid Waste Processing Plant and
-'
Spreader -Stoker Boiler Plant with Electricity
Generation (Existing Two Turbine Generators)
3-42
3-10
Impact of Projected Power Pool Figures on
Economic Analysis of Alternatives No. l and 2
3-46
3-11
Suggested Distribution of Charges for
Alternative No. 1 - 1,395 tpd Solid Waste
Processing Plant and Spreader -Stoker Boiler
Plant with Electricity Generation (New Turbine
--
Generator) (x $1,000)
3-49
APPE14DIX TABLES
B-1
Projected Prices of Crude Oil
B-2
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iv
LIST OF FIGURES
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Figure
Page
3-1
Diagram and Material Balance for a Spreader-
Stoker Boiler Plant with Front End Fuel
Preparation System
3-15
`
3-2
Power Generation Cycle for Alternative No. 1
with New Turbine Generator
3-19
3-3
Estimated Turbine Generator Performance,
Alternative No. 1 - New Unit
3-29
3-4
Estimated Turbine Generator Performance,
Alternative No. 2 - Existing Units at
Reduced Throttle Steam Temperature
3-37
3-5
Comparison of Results of 5-yr. Economic
Analysis for Alternatives No. 1 and 2 and
Disposal in a Sanitary Landfill
3-43
APPENDIX FIGURES
A-1
Estimated Turbine Generator Performance,
Alternative No. 2 - Existing Units at
Present Steam Conditions
A-3
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METCALF & COOY
LIST OF ABBREVIATIONS
bbl barrel
Btu British thermal units
Btuh British thermal units per hour
Btu/lb British thermal units per pound
cf cubic foot
cy cubic yard
deg F degree Fahrenheit
hp horsepower
hr hour(s)
kw kilowatt(s)
kwh kilowatt-hour
lb pounds
lb/hr pounds per hour
LP&L Lubbock Power & Light
M&E Metcalf & Eddy
Mlb thousand pounds
Mlb/yr thousand pounds per year
MMBtuh million British thermal units per hour
psig pounds per square inch gage
RDF refuse -derived fuel
tph tons per hour
tpd tons per day
tpw tons per week
tpy tons per year
yr year
M thousand
MM million
vi
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EXECUTIVE SUMMARY
Metcalf & Eddy has completed a desk -top analysis of the two
proposed options for a resource recovery facility in the City of
Lubbock.
Metcalf & Eddy has utilized the data available from
previous reports together with the latest projections for natural
gas prices, and has generated new cost estimates for equipment and
construction. Metcalf & Eddy has produced comparisons of the
owning and operating costs for the resource recovery facility
generating electricity utilizing Lubbock's solid waste as fuel.
The two options are for a new 30 megawatt turbine generator or for
the use of existing turbine generators in Lubbock Power and Light
Plant No. 2.
A comparison of income streams has been developed, and one
proposed distribution has been presented.
It is the conclusion of Metcalf & Eddy's staff that the
proposed resource recovery facility is technically viable and
economically attractive. Even using the most conservative
estimates of alternative energy costs, the facility will generate
significant income for the City of Lubbock over the initial
5 -year operating period. In future years the economic benefits to
the City will continue to grow.
vii
METCALF 8 EDDY
REPORT
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CHAPTER 1
INTRODUCTION
Background
The City of Lubbock, Texas (City) has been considering
resource recovery for several years for the following principal
reasons:
1. Recognition that increasing stringency of enforcement
of the 1976 Resource Conservation and Recovery Act, and
other Federal legislation, will substantially increase
the cost and complexity of disposal by landfill
methods. These trends suggest that it will become more
economical to recover energy and materials than to bury
solid wastes in landfills.
2. A realization that disposal of solid wastes by burial
is not consistent with national objectives for conser-
vation of scarce energy resources and for recycling or
conversion of those materials that can be recovered
from solid wastes.
3. An appreciation that the City -owned utility, known as
Lubbock Power & Light (LP&L), should consider solid
wastes as a locally generated and dependable fuel
alternative to the presently used natural gas and oil
because of the rapidly rising costs and uncertain
availability of these fuels.
1-1
METCALF, 6 EDDY
1 1 1
In recognition of these and other concerns, the City has
already executed several studies of a solid waste resource -.
recovery project, so that considerable data are available. '
On November 12, 1981, the City engaged Metcalf & Eddy, Inc.
(M&E) of Boston, Massachusetts to perform additional studies of a
Resource Recovery Plant whereby solid wastes would be burned as
fuel to produce electricity for LP&L. ,
Purpose
The purpose of this study and brief report is to submit a
desk -top analysis to assist the City in making a decision relative
to proceeding with a Resource Recovery Plant. This analysis will
use data largely available to M&E now and will refine the first
order estimates of costs and probable returns from the three
boilers, spreader -stoker, electricity generating option selected
by the City as the most appropriate of three options previously
presented by M&E to members of the City Administration.
Scope
The Contract between the City and M&E outlines the scope of
the study. The scope of work is summarized as follows:
1. Make estimates of capital costs, indirect costs,
preliminary total bond issue, operation costs, derived
tipping fees, and spread sheet economic analyses for
the 5 years of 1985 through 1989 for Alternative No. 1
— Solid Waste Processing Plant and Spreader -'Stoker.
Boiler Plant with Electricity Generation (New Turbine
Generator). Make comparisons based on electric energy
1-2
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sale prices derived from the continued operation of
LP&L Plant No. 2 on gas at the projected natural gas
u,.
prices and the sales prices from projected power pool
prices. Plot the data from the spread sheet on a chart
showing the derived tipping fees versus years. Prepare
a table showing a suggested distribution of the cost
of
!! plant operation between revenue streams from the sale
E.
of electricity and tipping fees.
2. Make similar estimates for Alternative No. 2 - Solid
Waste Processing Plant and Spreader -Stoker Boiler Plant
with Electricity Generation (Existing Two Turbine
Generators). The two turbine generators are installed
in the LP&L Plant No. 2.
3. Prepare a schedule for the design and construction of
the Resource Recovery Plant.
4. Prepare twenty copies of the study report and send them
to the City.
Introduction to Solid Wastes and RDF
This study report includes several references to solid
wastes and RDF (refuse -derived fuel). These terms are commonly
r
being used in current publications, technical articles, and
reports.
As used in this study report, solid wastes include all
MM waste materials generated from residential, commercial and
industrial sources and delivered to landfills for disposal. Solid
wastes refer specifically to the variety of waste materials that
1-3
METCALF & EDDY
I II I I
are expected to be delivered to a resource recovery facility for
disposal. Specifically excluded are agricultural wastes, demoli-
tion and construction wastes, stumps, street sweepings and sludge
cake.
RDF refers to a solid fuel prepared as the end product of a
solid waste processing system. The solid waste processing systems
vary widely from simple systems, involving single shredding and
magnetic separation only, to sophisticated systems with such'
additional features as: air classifiers to refine the shredded
fuel by improving the separation of glass, metals, and other non -
combustibles; recovery of the separated materials for recycling or --
conversion; rotary dryers; screens; and double shredding.
The term "refuse" is often used interchangeably with the
term "solid wastes". To avoid confusion, the term "refuse" is not
used in this report except for "refuse -derived fuel" abbreviated
RDF, as explained and defined previously.
Organization
The following study report develops conclusions and
recommendations about the feasibility of the proposed Resource
Recovery Plant. It includes consideration of the subjects
summarized under Scope and arrives .at a "go" recommendation to the
City.
1-4
CHAPTER 2
CONCLUSIONS AND RECOMMENDATIONS
The principal conclusions and recommendations resulting
from this study are summarized below:
Conclusions
1. The proposed resource recovery facility is the
preferred solution for disposal of the City's solid
wastes in comparison with a sanitary landfill.
2. The proposed resource recovery facility would generate
electricity to be used by Lubbock Power & Light.
3. Revenue bonds appear to provide the most favorable
means for financing the resource recovery facility.
4. Disposal of the City's solid wastes in a resource
recovery facility is environmentally more acceptable
than by a sanitary landfill.
5. A site for the resource recovery facility is available
adjacent to Lubbock Power & Light.
Recommendations
1. Alternative No. 1, a 1,395 tpd solid waste processing
plant and spreader -stoker boiler plant producing
electricity with a new 30,000 kw turbine generator, is
recommended as the first choice by the City.
Initially, Alternative No. 1 results in a higher net
tipping fee than Alternative No. 2, which utilizes the
existing two turbine generators in Lubbock Power &
Light Plant No. 2. Within approximately 6 years
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METCALF & EDDY
i i II I i
however, Alternative No. 1 would become more
cost-effective. Also, due to the age of the two
existing turbine generators, problems may be
encountered in the bonding procedure if Alternative No.
2 were chosen. For these reasons, it is recommended
that the City of Lubbock proceed with Resource Recovery
Alternative No. 1.
2. The resource recovery facility should be operated by
the City of Lubbock. '-
3.� The City should expedite the procedure leading to the
construction of the facility. The implementation of
the program should follow as closely as possible a
proposed accelerated schedule for development and
construction which will be submitted shortly as a part -
of our proposal for ongoing services to the City.
2-2
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t CHAPTER 3
ALTERNATIVE RESOURCE RECOVERY PLANTS
Introduction
Two alternative Resource Recovery Plants were stipulated by
the City for technical and economical analysis and are identi-
fied as follows:
Alternative No. 1 - Solid Waste Processing Plant and
Spreader -Stoker Boiler Plant with
Electricity Generation (New Turbine
Generator)
Alternative No. 2 - Solid Waste Processing Plant and
Spreader -Stoker Boiler Plant with
Electricity Generation (Existing Two
Turbine Generators)
The City's selections were based on evaluations of the sev-
eral alternative resource recovery systems in studies previously
executed by the City.
The basis of each plant's size selection is explained under
the description of the specific alternative. The results are used
to size the various process equipment in order to estimate the
capital costs and the annual income statement which presents the
annual expenses, revenues, net disposal costs and net tipping fees
for the base year 1981. Spread sheets are presented showing the
economic analysis for the base year 1981 and for the five years of
1985 through 1989•
3-1
METCALF & EDDY
Background Information
Operating Schedule. For the purpose of this study, steam
generating equipment and turbine generator (or turbine generators)
are assumed to operate 24 hours per day, 7 days per week. The
solid waste processing plant is assumed to operate normally for
two 8 -hour shifts per day, 6 days per week to match the 6 days per
week delivery of solid wastes to the plant. A storage capacity
for RDF from the solid waste processing plant is provided to
synchronize the operating schedules of the two systems.
Equipment Availability. Equipment availability is defined
as the percent of the time in an operating year during which the
equipment can be operated at the rated capacity.
The front end solid waste processing plant consists of two
lines, each capable of processing one-half of the daily load of
solid wastes for the boiler plant in normal operation during two
8 -hour shifts. The actual operating time of the processing lines
for each 8 -hour shift is estimated to be between 5 to 5 1/2 hours
with the balance of each shift allotted to startup and shutdown
time. The actual percent availability of the solid waste --
processing plant is 100 percent at least through 1989, based on
operating one line at its maximum rating for three 8 -hour shifts,
6 days per week, under emergency conditions if the other line is
not available.
For the steam generating units, the quantities of RDF
r-,
burned are based on a boiler unit availability of 85 percent for
the spreader -stoker boilers at rated capacity. Alternatives No. 1
3-2
and 2 consist of three boiler units. With 85 percent boiler unit
availability, each boiler unit is expected to be down for 15
percent of the year or 55 days per year due to scheduled
maintenance and repairs and forced outages. Of the 55 days per
year per boiler unit downtime, approximately 31 days are allowed
for scheduled maintenance and repairs and 24 days for forced
outages. The 31- day period for scheduled maintenance and repairs
assumes one 21- day period for major repairs and inspection
followed in approximately 6 months by a 10 -day period for minor
repairs and inspection. With three boiler units, there are 165
days per year when only two boiler nits 0
y p y y u are operating and 2 0
days per year when the three boiler units are operating. It is
assumed that only one boiler unit is down at any time for
scheduled maintenance and repairs and forced outages.
The turbine generator (or turbine generators) is assumed to
have a unit availability of 96 percent with each unit to be down
for 4 percent of the year or 14 days per year due to scheduled
maintenance and repairs and forced outages.
Solid wastes generated during the turbine generator down-
time or in excess of the plant capacity must be landfilled.
Availability should be recognized as a major factor because
it impacts both project steam and electricity production and solid
waste disposal, and therefore, the overall plant economics. The
net economic effect is a reduction in theoretical steam and
electricity production and solid waste incineration. Availability
is assigned as a result of experience and knowledge of what is
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METCALF 6 EDDY
necessary to properly maintain a particular type of facility in
peak operating condition.
Steam Condition at Boiler Superheater Outlets. The boiler
superheater outlet pressure and temperature are specified at 650
psig and 755 deg F. Based on operating experience and corrosion
theories agreed upon by various authorities, ME is adhering to a
750-755 deg F steam temperature limit for solid waste fired --
boilers to minimize any potential boiler corrosion problems.
The boiler outlet steam pressure and temperature and the
steam pressure and temperature at the steam pipeline's terminal
end (steam and boiler feed pipelines for Alternative No. 2 only)
are specified in the Technical Description of each alternative
plant. The steam and boiler feed pipelines for Alternative -No. 2
are underground type.
Heating Value of Solid Wastes. The higher heating values
of unprocessed solid wastes, RDF and other fuels are used through-
out this study report. An explanation of higher heating value
versus lower heating value follows.
Water vapor is one of the products of combustion for all
fuels, such as solid wastes, which contain hydrogen. The heating
value of a fuel depends on whether this water vapor is allowed to
remain in the vapor state or is condensed to liquid. In the bomb
calorimeter used to obtain the heating value of a fuel by test,
the products of combustion are cooled to the initial temperature
and all of the water vapor formed during combustion is condensed
to a liquid. This gives the higher heating value of the fuel with
3-4
the heat of vaporization included in the report value. For the
lower heating value, it is assumed that all products of combustion
remain in the gaseous state.
Plant Description. Each alternative plant is intended to
be a complete facility and includes at least the following
buildings, areas, roads and equipment:
Enclosed processing building or buildings kept under
negative pressure to prevent dust and odors from escap-
ing outside. The air sweeping the process areas is
used for combustion air for deodorization purposes.
Tipping floor is enclosed. The combined capacity of
the tipping floor and RDF storage facility provides
storage for at least three days' average solid waste
deliveries.
Administration building with office space, locker room
and shower area, maintenance facility, truck storage
and garage area.
Scale house (may be separate or integrated with Process
or Administration buildings). Truck scales for
weighing solid wastes delivered and residues leaving.
Scales will also weigh ferrous metals leaving.
Parking areas for plant personnel, visitors and trucks.
. Suitably landscaped site.
. Plant roads with sufficient capacity to permit packer
trucks to queue during rush hours without disturbing
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METCALF 0 EDDY
traffic on access highways. Roads for use of residue
trucks without disturbing incoming trucks.
Mobile loaders.
Solid waste processing system including flail mills,
magnetic separators, shredders, sizing disc screens,
fine disc screens and conveyors, and dust control
system.
RDF storage and reclaim system with conveyors and dust
control system..
Boilers and equipment as outlined in subsequent brief
descriptions for each alternative plant.
Forced and induced draft fans and overfire air fans, as
required.
Boiler feedwater treatment and supply systems.
Wastewater treatment system.
Two residue conveyors and ash house.
Process control systems.
Steel stack enclosing three individual steel stacks
with height as governed by air quality requirements.
Auxiliary gas firing systems.
Electric systems.
Turbine generator, surface condenser, cooling tower and
associated eqipment for Alternative No. 1. Steam and
boiler feed pipelines for Alternative No. 2 for connect-
ing proposed boiler plant to existing two 11.5 mw
turbine generators in the LP&L Plant No. 2.
3-6
Other equipment, such as air compressors, tools, etc.
Cost Estimates. Capital cost estimates for the two alter-
native systems are based on quotations on major eqipment obtained
from equipment manufacturers. Site preparation work is based on
earthwork and foundation work with no special requirements and
should be supplemented by a geotechnical investigation during the
preliminary design phase of the project.
Assumptions. With regard to capital cost, annual expense,
revenue, disposal cost, and tipping fee estimates, the following
assumptions are made consistently throughout the study:
1. All of the above estimates for 1981 are based on
November 1981 dollars. One hundred percent of the
total plant cost is financed by tax exempt industrial
development revenue bonds. The finance costs to be
raised in the total bond issue are taken as 40 percent
of the total plant cost and include interest during
construction; front end costs including the
underwriter's fee at 2.5 percent of bond issue and
miscellaneous finance costs; an amortization reserve
fund of one year's amortization; an 0&M reserve fund,
and earnings on unexpended net bond proceeds.
2. Equipment cost estimates include the costs of
equipment, delivery, and erection. Where a
` subcontractor is used, the cost of the equipment to the
( subcontractor is added to the subcontractor's labor
cost and the sum is increased by 15 percent to cover
3-7
METCALF & EDDY
the subcontractor's overhead and profit. An additional
10 percent to allow for startup and working capital is --
added to the total cost of the equipment erected,
piping, electrical and instrumentation, connecting ,
pipelines (if required), and building and site
development cost to compute the installed plant cost.
3. Piping is taken at 18 percent of total erected equip-
ment cost. Electrical and instrumentation are taken at
12 percent of total erected equipment cost.
4. Site development and buildings are taken at 20 percent
of the installed plant cost for Alternative No. 1 and
at 20 percent of the cost obtained by deducting the
steam and boiler feed pipelines' cost from the
installed plant cost.
5. Design engineering, construction services and construc-
tion management estimated costs are for this specific
project. These costs are added to the installed plant
cost to arrive at the total erected cost.
6. Contingency costs are taken at 10 percent of the total.
erected cost.
7. Amortization for the revenue bonds is based on 11
percent interest over a 20 -year period, corresponding
to a capital recovery factor of 0.12558. Amortization
is computed by multiplying the total bond issue by the
capital recovery factor.
3-8
a
g-
Note: Items 8 through 11 represent annual costs for
operation and maintenance of the -facility.
8. The personnel requirements of the proposed facility
require the capability of burning solid wastes and RDF
on a continuous 24-hour basis, while front-end
processing requires operating personnel for two 8 -hour
shifts per day, 6 days per week. Table 3-1 lists the
personnel and salary rates and annual labor costs for
the two alternatives. The staffing and costs are
assumed to be the same for the two alternatives to
allocate charges consistently even though operators for
the existing two turbine generators will continue to be
station n
ed i Plant No. 2. The salary rates. were
r•
provided by the City. Fringe benefits at 40 percent of
annual total wages are added to compute annual total
r
labor costs. The fringe benefit's percentage covers
r�
the cost of statutory and customary benefits; such as:
allowances for sick leave; vacation and holiday pay;
w
t;
taxes and insurance premiums based upon payroll; and
..r
medical and retirement benefits. Labor includes
„
administration, operation and maintenance.
9. Landfill costs are estimated at $4.10 per ton based on
escalating the $3.75 per ton as calculated from the
Battelle report, dated September 30, 1980, at 8 percent
per year to November 1981. The Battelle report gave a
landfill cost of $0.9375 per cubic yard which
METCALF & EDDY
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3-10
corresponds to $3.75 per ton at the assumed 4 cubic
yards per ton. All bypassed solid wastes are assumed
to go directly to the sanitary landfill so that no
additional haul cost is required.
Residue disposal costs of $2.76 per ton consist of
estimated $0.71 per ton haul cost for the 14 -mile,
one-way, haul distance to Site No. 3 from the Battelle
report plus an adjusted landfill cost of $2.05 per ton.
The landfill cost of $4.10 per ton is adjusted by the
ratio of average density of compacted solid wastes
(approximately 1,000 pounds per cubic yard) in the
landfill and residue (approximately 2,000 pounds per
cubic yard).
10. Annual cost of utilities is based on the following
assumptions:
Average overall cost of electricity,
$/kwh = 0.040
Water, $/Mgal. = 0.90
Diesel oil, $/gal. = 1.20
Gas, $/MMBtu = 2.65
11. Annual maintenance cost is taken as 2-1/2 percent of
the installed plant cost for Alternative No. 1. The
maintenance cost for Alternative No. 2 is assumed to
be the same as for Alternative No. 1 to allocate
charges consistently to include the existing two
turbine generators and associated equipment located
in Plant No. 2.
3-11
METCALF & EDDY
12. Based on assumed 4.9 percent ferrous metals, by weight,
in the solid wastes and 90 percent recovery of these
metals, 0.044 tons of ferrous metals could be recovered
per ton of solid wastes processed.
13. The alternative plants have areas reserved to receive
"white goods" from the bulky solid wastes. The "white
goods" are landfilled.
14. The estimated heating value of the solid wastes is
4,500 Btu/lb, as fired, in 1981 and this same value is
used for performance estimates for the study period.
The corresponding estimate of heating value of the RDF
is 4,988 Btu/lb, as fired. The boilers are designed
with thermal input capability to maintain rated solid
waste capacity continuously with a solid waste heating
value of 5,000 Btu/lb, which yields an estimated
heating value of the RDF of 5,542 Btu/lb.
15.. Land costs are excluded.
16. The annual operating expenses are exclusive of any
taxes.
17. The procurement procedure for the facility is assumed
to be the Architect -Engineer Approach i.e., engage an
engineer to prepare plans and specifications, call for
competitive bids for construction and arrange for LP&L
to operate the plant.
18. Annual revenues are calculated in November 1981 dollars
and are based on the following assumptions:
3-12
Electricower, $/ kwh = 0.040
P
Ferrous metals, $/input ton
solid wastes = 0*
Alternative No. 1 - 1,395 t d Solid Waste Processing Plant and
Spreader - Stoker Boiler Plant with Electricity Generation New
Turbine Generator
General Description. Alternative No. 1 considers the use
t of a spreader -stoker boiler plant with a front end RDF prepara-
tion unit as shown in Figure 3-1 Diagram and Material Balance for
a Spreader -Stoker Boiler Plant and Front End Fuel Preparation
System. The tpd quantities, identified in the material balance,
do not apply specifically to the proposed plant; however, the.
percentage values of the various materials relative to the input
unprocessed solid wastes are used in the calculations for the
proposed plant.
Each of the two processing trains is described as follows:
the solid wastes are transferred from the tipping floor by front
end loaders to a conveyor which feeds a flail mill. The flail
mill is a grateless low horsepower shredder used to perform
OM_ primary sizing functions, open trash and garbage bags and break up
[j: agglomerated and compacted materials. A magnetic separator is
installed downstream of the flail mill to recover ferrous metals.
The ferrous metals could be sold, given to a scrap metal dealer,
or landfilled.* The coarsely shredded wastes are then conveyed to
a shredder where they are shredded to a maximum size compatible
Approximately 0.044-- tons of ferrous metals could be salvaged per
input ton of solid wastes, but no income is assumed from the sale
of these materials.
3-13
METCALF & EDDY
r-.
with the boiler manufacturer's requirements (usually an RDF
particle size in the range of 4 -inch to 5 -inch dimensions in any
direction). The shredded RDF is conveyed to a sizing disc screen
with 4 -inch spacing. Oversized material passes over the screen
and returns to the shredder for further size reduction. RDF
passing through the disc screen continues to the fine disc screen
for further processing. Properly sized RDF passes over a fine
disc screen to reduce the glass, grit, and dirt content. The disc
screen has 3/8 -inch spacings and particles sized less than that --
pass through and are rejected to landfill. The "accepts" pass
over the disc screen and are conveyed to an RDF storage facility.
The RDF from the two processing trains is stored in a bin
with large enough capacity to maintain boiler firing during
weekend periods when the solid waste processing plant is not in
operation. The bin is equipped with reclaim conveyors which
transport the RDF into the boiler surge bins. Each boiler is
equipped with a surge bin which is of the live center screw type
and which supplies a metered quantity of RDF to the boiler for
burning.
Heat from combustion is used to generate high pressure
superheated steam. Gaseous products of the combustion process
Pass through an electrostatic precipitator for removal of
entrained particulate matter to comply with air pollution control
codes, prior to being discharged into the atmosphere. The inert
residue from the processing plant and bottom ash and fly ash from
the boiler plant are landfilled.
3-14
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The high pressure superheated steam is supplied to a
turbine generator which operates in the power generation cycle
presented in Figure 3-2. The turbine generator is of the con-
densing type and has four uncontrolled extraction points to
extract steam to heat feedwater being returned to the boilers.
The exhaust steam is condensed in a surface condenser by cooling
water and the condensate is pumped through two closed heaters to
a deaerator where it is deaerated to remove dissolved oxygen and
free carbon dioxide to control corrosion of the boilers. The
deaerated feedwater, including demineralized make-up water
added to the deaerator, is pumped through a third closed heater
and through the economizers into the boilers for steam generation.
Hot cooling water is discharged to a cooling tower (not shown)
for evaporative cooling and pumped back to the condenser. This
power cycle is generally similar to those of your existing
�.' turbine generators.
Plant Sizing. The plant is designed for a maximum
continuous capacity of 1,395 tpd of unprocessed solid wastes at
a heating value of 5,000 Btu per pound or a nominal capacity of
1,186 tpd, based on an 85 percent availability factor. The
projected initial input to the plant is 867 tpd in 1985, increas-
ing to 927 tpd in 1989 and to 1,152 tpd in 2004. The additional
capacity is designed into the plant to provide a high degree of
redundancy through 1989 (two boilers operating and one boiler in
reserve) and adequate capacity through 2004.. The usual 20 -year
3-17
METCALF & EDDY
design period is assumed
to start with 1985 as
the first
project
year
and extend through
2004.
The solid waste generation
projections
(residential,
com-
mercial and industrial)
on a seven days per week
basis are
taken
from
the Battelle report
and are as follows:
Total
Residential
'Comm.'/Ind.
Year
tpd
tpd
tpd
tpy --
1981
236
577
813
297,000
1985
249
618
867
316,000
1986
253
629
882
322,000
1987
256
641
897
327,000
1988
26o
652
912
333,000
1989
263
664
927
338,000
2004
316(1)
836(1)
1,152(1)420,0000)
1. ME projections.
One 30,000 kw turbine generator is proposed. If the
turbine generator is sized for the projected solid waste quanti-
ties for the design period through 2004 and based on solid wastes �-
having a heating value of 5,000 Btu per pound to the processing
r
plant, the required turbine generator rating is estimated to be
32,000 kw or 39,000 kw, if sized for the maximum continuous
capacity of 1,395 tpd. The larger ratings are believed to be too
conservative; however, a decision could be made as to the final
selection after making a future more detailed review during the
design phase.
Technical Description. A brief technical description
follows:
3-18
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METCALF & EDDY
METCALF 6 EDDY
Processing Plant
('
1.
Number of front end fuel preparation lines: 2.
2.
Number of flail mills: 2.
3.
Flail mill throughput: nominal 50 tph each.
maximum 60 tph each.
4.
Flail mill horsepower: 500 each.
5.
Number of magnetic separators: 2.
6.
Number of shredders: 2.
7.
Shredder throughput: nominal 50 tph each.
maximum 60 tph each.
8.
Shredder horsepower: 1,000 each.
9.
Shredder discharge product size: nominal 4 in.
10.
Number of sizing disc screens: 2.
11.
Number of fine disc screens: 2.
12.
Number of RDF storage bins: 1.
13.
Operation: 16 hours per day, 6 days per week.
Boiler Plant
1.
Number of units: 3.
2.
Operation: 24 hours per day, 7 days per week.
3.
Availability factor: 85 percent each unit.
4.
Maximum continuous unprocessed solid waste capacity:
465 tpd each unit.
5.
Nominal unprocessed solid waste plant capacity at 85
k
percent availability factor: 432,800 tpy.
6.
Boiler outlet pressure and temperature: 650 psig and
755 deg F (as required for the turbine generator
throttle steam condition).
•-
1'
3-21
METCALF 6 EDDY
7. Maximum continuous rated steam generation: 134,100
lb/hr each boiler at RDF heating value of 5,542
Btu/lb as obtained from unprocessed solid wastes with
heating value of 5,000 Btu/lb.
8. Boiler feed mode: RDF approximately 400 tpd at
465 tpd unprocessed solid waste.input, each spreader -
stoker unit.
9. Auxiliary fuel: natural gas for startup and infre-
quent use with high moisture content RDF. Gas is not ^'
required for normal operation.
Turbine Generator Plant
1. Number of units: 1.
2. Operation: 24 hours per day, 7 days per week.
3. Availability factor: 96 percent.
4. Turbine generator rating: 30,000 kw, 0.83 pf, 3 phase,
60 Hz, 13,800 v, throttle pressure 600 psig, throttle
temperature 750 deg F. exhaust pressure 3 in. Hg abs, _
four point regenerative feedwater heating.
5. Number of cooling towers: 1 (wet -dry type).
Estimated Capital Costs, Total Bond Issue and Annual
Income Statement. The estimated capital costs and total bond
issue for this alternative are shown in Table 3-2. Table 3-3
gives the estimated total bond issue build-up details. It is
understood that the City's investment banker will develop a
comprehensive financing program, including total bond issue,
•3-22
t
-2 T COSTS FOR ALTERNATIVE
TABLE 3 ESTIMATED CAPITAL
NO. 1
1,395 TPD SOLID WASTE PROCESSING PLANT AND SPREADER
-STOKER
BOILER PLANT WITH ELECTRICITY GENERATION (NEW TURBINE
GENERATOR) (X $1,000) (COST IN NOVEMBER 1981
$)
Cost
Item
Weigh scale system
$ 61
Mobile loaders and turbine crane
826
Dust control system
621
RDF processing system
2,583
�.,
RDF storage and reclaim system
.2,121
Waterwall boilers (surge bins through stack)
12,170
(
Boiler auxiliary equipment
1,331
Residue removal system
1,748
Turbine generator and condenser
5,817
Cooling tower and circulating pumps
740
Total erected equipment
28,018
Piping
5,043
Electrical and instrumentation
3,362
Site preparation and buildings
9,106
Installed plant cost
45,529
.
Design engineering
3,500
Construction services
2,000
Construction management
2,500
Total erected cost
53,529
Contingency
5,353
Total
plant cost
58,882
�•+
Total bond issue
$822435
3-�3
METCALF d EDDY
TABLE 3-3. ESTIMATED TOTAL BOND ISSUE BUILD-UP DETAILS FOR
ALTERNATIVE NO. 1- 1,395 TPD SOLID WASTE PROCESSING PLANT
AND SPREADER -STOKER BOILER PLANT WITH ELECTRICITY
GENERATION (NEW TURBINE GENERATOR)
(X $1,000)
Line
No. Item Cost
1 Total plant cost as erected $583882
2 Construction financing 22,670
3 Front end costs 2,804
4 Depreciable assets 84,356
5 Amortization reserve 10,352
6 0&M reserve 300
7 Earnings on unexpended NBP 12,573
8 Total bond issue $82,435
Explanation of line items:
1 Taken from Table 3-2.
2 Funds required to finance the total bond issue during the
construction period = 11 percent per year of the total
bond issue.
3 Front end costs include such items as bond rating fees,
commissions to underwriter, accountant fees, and printing
and engraving costs. Frond end costs were taken as 3.4
percent of the total bond issue.
4 The sum,of lines no. 1 through 3.
5 Amortization reserve equals the capital recovery factor
(.12558) times the total bond issue.
6 Operating and maintenance reserve assumed to be $1 per
annual ton of solid waste available for the plant.
7 Earnings on unexpended net bond proceeds are based on 30 _
equal monthly payments for the construction of the plant
during the construction period., Remaining funds are in-
vested at a rate of return equal to the coupon rate of the
bond. Payments are made at the beginning of the month and
earnings are deposited at the end of the month.
8 The total bond issue is given by the sum of lines No. 4
through 6 minus line No. 7.
3-24
when the project is implemented. Estimated annual income state-
ment is shown in Table 3-4.
Footnote 1 in Table 3-4 refers to a separate calculation
procedure for electric power for sale. This procedure is as
follows:
Step 1. Calculate heat absorbed by boilers,
MMBtuh = 285,618 x 2,000 x 4,500 x 0.953 x 0.73
8,424 x 10
= 212.3
where: solid wastes processed, tpy = 285,618
Conversion tons to lb = multiply by 2,000
Heating value solid wastes, Btu/lb = 4,500
Fractional thermal efficiency of front end(l) _
0.953
Fractional efficiency of boilers = 0.73
Annual operating time of turbine generator
hr/yr(2) = 83424
Conversion Btuh to MMBtuh = divide by 106
3-25
METCALF & EDDY
TABLE 3-4. ESTIMATED ANNUAL INCOME STATEMENT
FOR ALTERNATIVE NO. 1 - 19395 TPD SOLID WASTE
PROCESSING PLANT AND SPREADER -STOKER BOILER
PLANT WITH ELECTRICITY GENERATION (NEW TURBINE
GENERATOR) (x $1,000) (COST IN NOVEMBER 1981 $)
(,)
Annual total solid wastes - 297,000 tpy,
Item Cost
Expenses
Labor (2) $ 2,015
Maintenan a and repairs 1,138
Utilities 3)
339
Residue disposal(4) (5) 265
Landfill ofpassed solid wastes 47
Amortization��1 10,352
Total expenses $14,156
Revenues.
Electric power sale�8�) 5,387
Ferrous metal sales (9) 0
Interest on amortization reserve 1,242
Total revenues 6,629
Net disposal costs $ 7,527
Net tipping fee, $/ton(10) 25.34
1. Of this total, 285,618 tpy are processed to supply 134,683
Mkwh electric power for sale. See separate calculation
procedure for electric power for sale.
2. 2 1/2 percent of installed plant cost: 0.025 x $45,529,000 =
$1,138,000.
3. Exclusive of in -plant power usage which is deducted from
turbine generator gross output to calculate turbine generator
net output for sale.
4. 46055 tpy of residue x $2.76/ton plus 28,505 tpy of incom-
bustible fines x $4.81/ton = $265,000.
5. 11,382 tpy (landfilled during 2 -week shutdown of turbine
generator) x $4.10/ton = $47s000-
6. 0.12558 x total bond issue: 0.12558 x $82,435,000 =
$10052,000.
7. 134,683 Mkwh x 1,000 x $0.040/kwh = $5,387s000-
8. Assume no income from the sale of ferrous metals.
9. 12 percent interest on amortization reserve fund: 0.12 x
$103352,000 = $1,242,000.
10. $7,527,000 net disposal costs divided by 297,000 tpy annual
total solid wastes = $25.34/ton.
3-26
1. From Figure 3-1, the fractional ratio of RDF to input
solid wastes = tons
512.6 day = 0.86
tons
598.5 day
Solid wastes with heating value of 4,500 Btu/lb are esti-
mated to yield RDF with heating value of 4,988 Btu/lb with
this fuel preparation system. Therefore, fractional thermal
eff. = Btu
0.86 lb RDF x 4,988 =
Btu
1.0 lb solid wastes x 4,500 lb
= 0.953
2. Number of hours in a 50 -week year to account for the 2 -week
period of plant shutdown due to the maintenance of the
turbine generator.
Step 2. Obtain turbine generator average gross output
from Figure 3-3 using the heat absorbed by boilers from Step 1 to
enter the "Heat Absorbed by Boilers vs kw" curve. Read kw =
18,700.
Step 3. Calculate turbine generator average
net output, kw = Step 2 minus in -plant power usage
= 18,700 - 2,712
= 15,988
This is average net output over the 1 -year period with
seasonal excursions of approximately minus 26 percent to plus 30
percent in maintaining this average.
3-27
METCALF 6 EDDY
Step 4. Calculate actual exported power,
Mkwh/yr = Step x 8,424
10
_
15,988 x 8 424
10
= 134,683
Alternative No. 2 - 1,395 tpd Solid Waste Processing Plant and
Spreader-Stoker Boiler Plant with Electricity Generation (Existin
Turn Tii"M rP apraratnrG
General Description. Alternative No. 2 considers the
use of a spreader -stoker boiler plant with a front end RDF
preparation unit the same as Alternative No. 1 except furnishing
steam to existing two turbine generators in LP&L Plant No. 2
rather than to a dedicated new 30,000 kw turbine generator in
the proposed plant.
Each of the existing two turbine generators is assumed
to operate in a power generation cycle similar to that in
Figure 3-2. Steam from the proposed plant is transported to -the
existing two 11,500 kw turbine generators in Plant No. 2 by an
underground pipeline assumed to be approximately 1,000 -feet long
and fabricated of 16 -inch, Schedule 80 steel pipe. Boiler
feedwater from the existing two feedwater systems is transported
to the proposed plant by an underground pipeline fabricated of
8 -inch steel pipe. Some piping changes will be needed in the
existing systems.
The proposed plant will include its own feedwater
system for startup and emergency service in the.event of a
failure of the existing system in Plant No. 2.
3-28
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Plant Sizing. The plant is designed for the same
capacity as Alternative No. 1.
Technical Description. A brief technical descrip-
tion follows:
Processing Plant and Boiler Plant
Same as Alternative No. 1.
Existing Turbine Generators to be Served in Plant No. 2
1. Number of units: 2 (LP&L Units No. 4 and 5).
2. Operation (proposed): 24 hours per day, 7 days per
week. �
3. Availability factor: 96 percent (assumed).
4. Turbine generator rating (present): 11,500 kw,
throttle pressure 600 psig, throttle temperature
825 deg F, exhaust pressure 1 1/2 -in. Hg abs, four
point regenerative feedwater heating.
5. Turbine generator rating (estimated rerate with steam
from proposed plant): 10,850 kw, throttle tempera-
ture 735 deg F, otherwise same as present.
Estimated Capital Costs, Total Bond Issue and Annual
Income Statement. The estimated capital costs and total
bond issue for this alternative are shown in Table 3-5.
Table 3-6 gives the estimated total bond issue build-up
details. Estimated annual income statement is shown in
Table 3-7.
3-31
METCALF & EDDY
I
TABLE 3-5• ESTIMATED CAPITAL COSTS FOR ALTERNATIVE NO. 2
1,395 TPD SOLID WASTE PROCESSING PLANT AND SPREADER -STOKER
BOILER PLANT WITH ELECTRICITY GENERATION (EXISTING TWO
TURBINE GENERATORS) (X $1,000) (COST IN NOVEMBER 1981 $)
Item
Cost
Weigh scale system
$ 61
Mobile loaders
160
Dust control system
621
RDF processing system
2,583
RDF storage and reclaim system
2,121
Waterwall boilers (surge bins through stack)
12,170
Boiler auxiliary equipment
830
Residue removal system
1,748 —
Total erected equipment
20,294
Piping
3,653
Electrical and instrumentation
2,435
Site preparation and buildings
6,596
Steam and boiler feed pipelines
1,181
Installed plant cost
34,159
Design engineering
2,800 --
Construction services
1,700
Construction management
2,100
Total erected cost
40,759
Contingency
4.,076
Total plant cost
44,835 —
Total bond issue
$62,769
3-32
I
TABLE 3-6. ESTIMATED TOTAL BOND ISSUE BUILD-UP DETAILS FOR
ALTERNATIVE NO. 2- 1,395 TPD SOLID WASTE PROCESSING PLANT
AND SPREADER -STOKER BOILER PLANT WITH ELECTRICITY
GENERATION (EXI STIIU TWO TURBINE GENERATORS)
(X $1,000)
Line
No. Item Cost
1 Total plant cost as erected $44,835
2 Construction Financing 17,250
3 Front end costs 2,100
4 Depreciable assets 64,185
5 Amortization reserve 7,860
6 0&M reserve 300
7 Earnings on unexpended NBP 9,576
8 Total bond issue $62,769
Explanation of line items:
1 Taken from Table 3-5.
2 Funds required to finance the total bond issue during the
construction period = 11 percent per year of the total
bond issue.
3 Front end costs include such items as bond rating fees,
commissions to underwriter, accountant fees, and printing
and engraving costs. Frond end costs were taken as 3.4
percent of the total bond issue.
4 The sum of lines no. 1 through 3.
5 Amortization reserve equals the capital recovery factor
(.12558) times the total bond issue.
6 Operating and maintenance reserve assumed to be $1 per
annual ton of solid waste available for the plant.
7 Earnings on unexpended net bond proceeds are based on 30
equal monthly payments for the construction of the plant
during the construction period. Remaining funds are in-
vested at a rate of return equal to the coupon rate of the
bond. Payments are made at the beginning of the month and
earnings are deposited at the end of the month.
8 The total bond issue is given by the sum of lines No. 4
through 6 minus line No. 7.
3-33
METCALF & EDDY
TABLE 3-7. ESTIMATED ANNUAL INCOME STATEMENT FOR
ALTERNATIVE NO. 2 - 13395 TPD SOLID WASTE PROCESSING
PLANT AND SPREADER -STOKER BOILER PLANT WITH
ELECTRICITY GENERATION (EXISTING TWO TURBINE GENERATORS)
(x $1,000) (COST IN NOVEMBER 1981 DOLLARS)
Annual total solid wastes - 297,000 tpyr}T
Item Cost
Expenses
Labor (2) (2) $ 23015
Maintenan a and repairs 1,138
Utilities 3) 1X 122
Residue disposal(4) (5) 265
Landfill oft��assed solid wastes 47 --
Amortization 7,883
Total expenses 12,470
Revenues
Electric power sale�8�) 5,597
Ferrous metal sales0
(9)
Interest on amortization reserve 946
Total revenues 6,543
Net disposal costs $ 5,927
Net tipping fee, $/ton(10) 19.96
1. Of this total, 285,618 tpy are processed to supply 139031 Mkwh
electric power for sale. See separate calculation procedure
for electric power for sale.
2. Assumed the same as for Alternative No. 1 to allocate charges
consistently.
3. Inclusive of in -plant power usage (new resource recovery plant).
4. 46,355 tpy of residue x $2.76/ton plus 28s505 tpy of incom-
bustible fines x $4.81/ton = $265,000.
5. 11,382 tpy (landfilled during one 2 -week shutdown for each
turbine generator $4.10/ton = $47,000.
6. 0.12558 x total bond issue: 0.12558 x $62,769,000 = $7,883,000.
7. 139,931 Mkwh x 1,000 x $0.040/kwh = $5,597,000.
8. Assume no income from the sale of ferrous metals.
9. 12 percent interest on amortization reserve fund: 0.12 x
$72883,000 = $946,000. _
10. $5,927,000 net disposal costs divided by 297000 tpy annual
total solid wastes = $19.96/ton.
3-34
Footnote 1 in Table 3-7 refers to a separate calculation
. procedure for electric power for sale. This procedure is as
• follows:
Step 1. Calculate heat absorbed by boilers for each
turbine generator,.
MMBtuh 285,618 x 2,000 x 4,500 x 0.953 x 0.73 x 0.994
8,242 x 10 x 2
= 105.5
f'
E where: The values for the first 5 terms of the
numerator and the first 2 terms of the denomi-
nator are the same as defined for Alternative
No. 1.
l
Fractional efficiency of the steam pipeline =
' 0.994
Number of existing turbine generators served = 2
_Step -2. Obtain each turbine generator average gross output
from Figure 3-4 using the heat absorbed by boilers for each tur-
bine generator from Step 1 to enter the "Heat Absorbed by Boilers
' vs kw" curve.
The derivation of Figure 3-4 is given in Appendix A.
Read kw = 8,500
Step 3. Obtain total turbine generator average gross
output, kw = Step 2 x 2
= 8,500 x 2
= 17,000
3-35
METCALF & EDDY
Step 4. Calculate total turbine generator average
net output, kw = Step 3 minus in -plant power usage(l)
= 179000 - 389
16, 611 -'
Step 5. Calculate actual exported power,
Mkwh/yr =
Step 4 x 8,424
10
163,611x8424
10
139931
1. Estimated power.usage for feedwater pumps, condensate pumps
and condenser circulating water pumps serving the two
existing turbine generators in the existing plant.
Economic Analysis
The economic analysis projects the annual net disposal
costs (or revenues) and the derived net tipping fee (or revenue)
of the proposed resource recovery plant for the 5 years of 1985
through 1989. The annual net disposal costs are the sum of the
annual operating and maintenance expenses and the amortization
as offset in whole or in part by the annual resource recovery
and other revenues which are projected to result. The net
tipping fee (or revenue) is derived from the annual net disposal
costs. The amortization is projected over a 20 -year financing
period of 1985 through 2004 as explained previously.
The overall objective of the economic analysis is to
investigate the 5 -year performance of the resource recovery
3-36
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plant for a predefined set of assumptions. This set of assump-
tions refers primarily to the rates by which each of.the param-
eters contributing to the facility's expenses or revenues is
escalated over the term being analyzed.
Table 3-8 presents the results of the economic analysis for
Alternative No. 1 - 1,395 tpd Solid Waste Processing Plant and
Spreader -Stoker Boiler Plant with Electricity Generation (New
Turbine Generator), based on electric energy sale prices derived
from the continued operation of LP&L Plant No. 2 on gas at the
projected natural gas prices. The methodology for projecting
natural gas prices is explained in Appendix B.
r The economic analysis results are presented for the
t reference year 1981 and for 1 -year intervals for the 5 years of
1985 through 1989 with 1985 as the first project year. All 1981
values are taken from Table 3-4. The projected landfill costs for
solid wastes are based on the pessimistic scenario (high cost end
of the range) in the Battelle Report for 1985 through 1987, and
projected by ME for 1988 and 1989.
The resource recovery plant's expenses and revenues are
based on a project implementation schedule which assumes the
completion of plant construction and subsequent startup by October
1, 1984 and the initiation of normal plant operation approximately
January 1985. A more refined project schedule for design and
construction is currently under implementation and will be
submitted shortly as a part of our proposal for ongoing services
to the City.
3-39
METCALF & EDDY
s
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3-40
�ti
Figure 3-5 depicts a graphical presentation of the pro-
jected variation of the net tipping fee for Alternative No. 1 in
comparison with the pessimistic and optimistic (low cost end of
the range) scenarios of the projected costs of the present solid
waste disposal system involving disposal by sanitary landfill.
The projected costs for 1985 through 1987 are taken from the
Battelle report and are estimated by ME for 1988 and 1989.
The results indicate that, with the resource recovery
plant, the net disposal costs and net tipping fee for Alternative
No. 1 are expected to decline continuously from 1985, the year of
initiation of normal plant operation. The net disposal costs and
net tipping fee are projected to turn into credits to the City
midway through 1987. The total net disposal costs with the
resource recovery plant are estimated at $4,492,000 for 1985
through 1989, compared to $17,412,000 for the optimistic landfill
scenario and $26,067,000 for the pessimistic landfill scenario.
Therefore, total net disposal cost savings for the period are
projected in the range of $12,920,000 to $21,575,000. These
savings are exclusive of the additional savings which will
probably be obtained because of the reduction in haul costs to the
proposed resource recovery plant compared to the new landfill
sites under consideration.
Table 3-9 presents the results of the economic analysis for
Alternative No. 2 - 19395 tpd Solid Waste Processing Plant and
Spreader -Stoker Boiler Plant with Electricity Generation (Existing
Two Turbine Generators).
3-41
METCALF 6 EDDY
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r
r
The explanation is the same as for Table 3-8 except that
all 1981 values are taken from Table 3-7 which applies to
Alternative No. 2.
As for Alternative No. 1, the projected variation of the
net tipping fee for Alternative No. 2 in comparison with the
pessimistic and optimistic landfill scenarios is plotted in
Figure 3-5.
The results indicate that, with the resource recovery
plant, the net disposal costs and net tipping fee for Alternative
No. 2 are expected to decline continuously from 1985. The
net disposal costs and tipping fee are projected to turn into
credit to the City early in 1987. The total net disposal costs
with the resource recovery plant are estimated at $560,000 for
1985 through 1989, compared to $17,412,000 for the optimistic
r landfill scenario and $26,067,000 for the pessimistic landfill
scenario. Therefore, total net disposal cost savings for the
period are projected in the range of $16,852,000 to $25,507,000.
Impact of Projected Power Pool Figures
Tables 3-8 and 3-9, discussed previously, present the
economic analyses for Alternatives No. 1 and 2 respectively
based on electric energy sale prices derived from the continued
operation of LP&L Plant No. 2 on gas at the projected natural
gas prices.
Table 3-10 shows the impact of electric energy sale
prices from projected power pool figures by listing the
results from Tables 3-8 and 3— compared to th
9 ared p e results with
3-45
METCALF & EDDY
3-46
TABLE 3-10. IMPACT OF PROJECTED POWER POOL FIGURES
ON
ECONOMIC ANALYSIS OF ALTERNATIVES NO.
1 AND 2
LP&L Plant No.
2
Power Pool
Net
Net
Net
Net
Power
disposal
tipping
Power
disposal
tipping
sale
costs
fee
sale
costs
fee
price,
(revenues),
(revenue),
price,
(revenues),
(revenue),
Year
$/kwh
$M/yr
$/ton
$/kwh
$M/yr
$/ton
Alternative No.
1 - New Turbine Generator
1985
0.075
4,935
15.62
0.062
6,820
21.58
1986
0.090
2,973
9.23
0.089
3,121
9.69
1987
0.105
949
2.90
0.099
1,854
5.67
1988
0.120
(1,118)
(3.36)
0.108
728
2.19
1989
0.135
(3,247)
(9.61)
0.111
516
1.53
Alternative No.
2 - Existing
Two Turbine
Generators
1985
0.075
3,618
11.45
0.062
5,317
16.83
1986
0.090
1,909
5.93
0.089
2,042
6.34
1987
0.105
150
0.46
0.099
965
2.95 ..,
1988
0.120
(1,639)
(4.92)
0.108
20
0.06
1989
0.135
(3,478)
(10.29)
0.111
(99)
(0.29)
1.
Based on continued operation of LP&L
Plant No. 2
on gas at the
projected _
natural gas
prices.
2.
Based on sale of power from proposed
resource recovery
plant to the power
pool.
3-46
r
the projected power pool figures. The projected power pool
figures are based on an analysis of data received from the
Public Utility Commission of Texas and the Texas Industrial
Commission together with projections of fuel costs for gas,
oil, coal, water and nuclear.
The datareceived from r m the Public Utility commission
included data on the generating capacity in Texas, both
existing and proposed, distributed by fuel types, and
information on the status of the Public Utilities Regulatory
,. Policies Act notes and reserve capacity. The Texas Industrial
Commission provided some projections of the
growth in popula-
tion in Texas between now and 1995.
The results indicate that the electric energy sale
prices from the power pool figures do not significantly harm
the proposed resource recovery plant's economics.
Distribution of Charges
!" The standard method of determining the economic viability
i
of a resource recovery project relies on estimating expenses
and revenues and then deriving a tipping fee. M&E has used
this method and the results are shown in Tables 3-8 and 3-9 for
Alternatives No. 1 and 2 respectively. In some instances where
the City will be both operator and customer for the produced
energy, a different distribution of revenue streams and charges may
be preferable.
By distributing the charges to operate the plant between the
tipping fee and the charge for
pp g g produced electric energy, it is
3-47
METCALF 6 EDDY
possible to hold both costs below that which would be forecast if
the solid waste stream were handled by landfilling and the
equivalent amount of electricity were generated using natural gas
as a fuel.
Table 3-11 shows one such possible method for the distrib-
tion of charges as applying to Alternative No. 1 - 1095 tpd Solid
Waste Processing Plant and Spreader -Stoker Boiler Plant with
Electricity Generation (New Turbine Generator). In this case, the
tipping fees for the disposal of the solid waste stream can be
held essentially constant and below projected landfill costs,
r-,
while the charge for the electricity generated in the plant is
also held well below electric energy costs derived from the �.
continued operation of LP&L Plant No. 2 on gas at the projected
natural gas prices.
Within the study period, and with the exception of the
first year, both costs are well below those projected for the
alternative methods.
Environmental Impacts
The project would comply with State of Texas and Federal
limitations regulating the emission of gaseous, liquid and solid
materials; odor, and noise, and therefore its impact on the
environment is expected to be minimal. The overall environmental
quality is expected to improve as the resource recovery facility
would replace a large portion of the sanitary landfill. The --
environmental emissions of a sanitary landfill are fugitive in
nature and, therefore, are both difficult and costly to control.
3-48
TABLE 3-11. SUGGESTED DISTRIBUTION
OF CHARGES
FOR ALTERNATIVE NO. 1-
1,395
TPD SOLID WASTE
PROCESSING PLANT AND SPREADER -STOKER BOILER PLANT WITH
ELECTRICITY
GENERATION (NEW TURBINE GENERATOR) (x
$1,000)
Item
1989
1985
1986
1987
1988
Total expenses
17,177
17,652
18,160
18,706
19,286
Interest on amortization
reserve
1,366
1,366
1,366
1,366
1,366
Net disposal
15,811
costs
16,286
16,794
17,340
17,920
Power sale price
0.080
0.090
0.091
0.092
0.093
Electric power sales
11,601
13,312
13,733
14,251
14,682
Net tipping fee
13.50
10.00
10.00
10.00
10.00.
Tipping fee
revenue
4,266
3,220
3,270
3,330
3,380
('
Total
revenues
15,867
16,532
17,003
17,581
18,062
Profit (Loss)
56
246
209
241
142
r+
I
3-49
METCALF & EDDY
In contrast, the environmental emissions of a resource recovery
facility originate from point sources. Although, they are more
concentrated in comparison with the emission of a sanitary
landfill, they are also easier to control with available pollution
control equipment to any desirable extent.
Land Requirements
It is estimated that approximately 15 acres would be
required for the proposed resource recovery project. This acreage
would include all roads, access and egress, parking areas,
buildings, and buffer zones.
Respectfully submitted,
METCALF & D Y. INC.
A
John Podger
Senior Vice President
3-50
APPENDIXES
r
APPENDIX A
ESTIMATED PERFORMANCE OF EXISTING
TWO TURBINE GENERATORS
r
APPENDIX A
ESTIMATED PERFORMANCE OF EXISTING
TWO TURBINE GENERATORS
Alternative No. 2 - 1,395 tpd Solid Waste Processing Plant
and Spreader -Stoker Boiler Plant with Electricity Generation
(Existing Two Turbine Generators) considers the use of the two
11,500 kw turbine generators, identified as Units No. 4 and 5, in
LP&L Plant No. 2.
Because it is proposed to operate these turbine generators
with the throttle temperature revised from the present 825 deg F to
approximately 735 deg F while maintaining the throttle pressure at
the present 600 psig, it is necessary to estimate the performance
of the turbine generators at the reduced throttle temperature.
The methodology in making this estimate follows.
Estimated Performance
LP&L letter, dated November 23, 1981 to M&E, enclosed test
heat rate data, dated October 1981, at three load points for Units
No. 4 and 5, based on gas firing. The test data were used to
develop Figure A-1 which gives the estimated performance at pre-
sent steam conditions. The "Heat Absorbed b Unit 4
y No. Boiler
vs Kw" and the "Heat Absorbed by Unit No. 5 Boiler vs Kw" curves
were developed by applying an assumed 80 percent boiler efficiency
to the test fuel heat input in Btuh at the highest loads in calcu-
lating the heat absorbed by the boilers in 8tuh with the assumed
boiler efficiencies tapering to 72 to 73 percent at the lightest
A-1
METCALF & EDDY
loads. These calculated values of heat absorbed by the boilers
were plotted against the corresponding test gross generation in
kw and extrapolated to 11,500 kw. The "Flow to Throttle Unit
No. 4 vs Kw" and the "Flow to Throttle Unit No. 5 vs Kw" curves
were developed by dividing the heat absorbed by the boilers in
Btuh by the estimated enthalpy rise in Btu per pound across the
boilers. These calculated values of throttle flow were plotted
against the corresponding test gross generation in kw and extra-
polated to 11,500 kw. The "Feedwater Temperature vs Kw" curve
was based on performance of a typical four point regenerative
feedwater heating cycle similar to the existing cycle.
An example of the calculation procedure for Unit No. 4
at the highest gross generation of 10,950 kw in the test
follows:
Step 1. Calculate heat absorbed by boiler,
MMBtuh = 156.5 x 0.80
= 125.2
where: Fuel heat input, MMBtuh = 156.5 (from LP&L data)
Fractional efficiency of boiler = 0.80 (assumed
for gas firing)
Step 2. Calculate flow to throttle,
lb/hr = 125.2 x 106
1.,420.8 - 30870
= 112,500
where: Enthalpy of turbine throttle steam at 600 psig
and 825 deg F. Btu/lb = 1,42008
A-2
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r
Enthalpy of feedwater (saturated liquid at
assumed 337 deg F feedwater), Btu/lb = 308.0
Conversion MMBtuh to Btuh = multiply by 106
Unit No. 4's performance was slightly poorer than that of
Unit No. 5. To be conservative, Unit No. 4's performance was
used as typical of the two units. It is assumed that no changes
will be made to Units No. 4 and 5, so that it is only necessary
to estimate the performance and capacity based on the reduced
throttle steam temperature. An example of the calculation
procedures in developing Figure 3-4 Estimated Turbine Generator
Performance, Alternative No. 2 - Existing Units at Reduced
Throttle Steam Temperature, used previously in Chapter 3, for
each turbine generator follows:
Step 1. Calculate maximum throttle steam flow at the
reduced throttle steam temperature,
lb/hr =
118,000 x (1/1.0858)0.5
--
(1/1.1868)
= 123,40o
where: Maximum throttle steam flow at the present
throttle steam temperature, lb/hr = 118,000
(from Figure A-1 at 11,500 kw)
Specific volume at the reduced throttle
steam temperature, cf/lb = 1.0858.
Specific volume at the present throttle
steam temperature, cf/lb = 1.1868.
A-5
METCALF & EDDY
Step 2. Calculate gross heat rate at the reduced throttle
steam temperature,
Btu/kwh = 11,390 x 6.9953
6.578
12,039
where: Gross heat rate at the present throttle steam
temperature, Btu/kwh = 11,390.(from Figure A-1
at 11,500 kw)
Theoretical steam rate at the reduced throttle
steam temperature, lb/kwh = 6.953.
Theoretical steam rate at the present throttle
steam temperature, lb/kwh = 6.578.
Step 3. Calculate maximum gross generation at the reduced
throttle steam temperature,
kw = Step 1 (1,370.4 - 311.0)
Step 2
123,400 (1,370.4 - 311)
12,039
10,850
where: Enthalpy of turbine throttle steam at 600 psig
and 735 deg F. Btu/lb = 1,370.4.
Enthalpy of feedwater (saturated liquid at
assumed 340 deg F), Btu/lb = 311.0.
A-6
Step4. Heat absorbed by the boiler at the
reduced throttle
steam temperature
and 10,850 kw gross generation,
j`
MMBtuh
= Step 2 x Step 3
1— 0�+
!
= 12,039 x 10,850
10
= 130.6
Step 5. The values for Steps 1, 3 and 4 at
10,850 kw are
Plotted in Figure
3-4.
Step 6. A
similar procedure is followed to
calculate the
5,425 kw (50 percent load) points assuming that the
gross heat
rate in Step 2 is
increased by 9 percent.
The results
indicate that each turbine generator
will be
rerated to 10,850
kw with the performance as shown
in Figure 3-4.
f
A-7
METCALF 6 EDDY
APPENDIX B
PROJECTION OF NATURAL GAS PRICES
APPENDIX B
PROJECTION OF NATURAL GAS PRICES
The projection of the future price of natural gas is a
critical step in the calculation of revenue from the proposed
resource recovery plant. Since the City generates electricity
using natural gas and since the City's existing facilities do
not have provisions to burn a substitute lower cost fuel for
electric generation, it is reasonable to set the value for
steam or electricity generated by the proposed resource recovery
plant at least equal to the equivalent replaced natural gas.
All projections of the future value of natural gas under
decontrol rely on two basic assumptions:
1. Natural gas will rise in price to be at least
equivalent to oil when measured on a dollar per
MMBtu basis.
2. Oil will continue to rise in price at a rate at
least equivalent to the general inflation rate.
Since natural gas has a heating value of approximately
1 MMBtu per Mcubic feet, the first comparison is made by
reviewing the projection of crude oil prices. Table B-1 shows
the average projected prices of crude through 1990 if one starts
with the 1981 price of $32.00 per barrel and assumes an escala-
tion rate of 10 percent together with the cost per MMBtu.
B-1
METCALF & EDDY
These estimates fall within the main stream of projections.
Some sources project a faster rise with prices reaching the
$60 per barrel level by 1985. We know that the base price of
Saudi crude was raised to $34.00 per barrel at the last OPEC
meeting and the world average price is now in the $35-$36 range.
There have been several projections made based upon
different methods for decontrol and various estimates of in-
creased production. No matter which projection one uses, one
finds a common end point: i.e., the price of natural gas by
1990 will be higher than the 1981 price by a factor of 3 to 5
and will at least reach the equivalent oil price.
The cost projections M&E used in the first presentation
were based on data from the Resource Analysis and Management
B-2
TABLE B-1. PROJECTED
PRICES OF CRUDE OIL
Year
bb 1
MP,ZB t u
1981
$32.00
$5.33
1982
35.20
5.86
1983
38.72
6.45
1984
42.59
7.09.
1985
46.85
7.80
1986
51.54
8.58
1987
56.69
9.44
1988
62.36
10.39
1989
68.59
11.43
1990
$75.45
$12.57
These estimates fall within the main stream of projections.
Some sources project a faster rise with prices reaching the
$60 per barrel level by 1985. We know that the base price of
Saudi crude was raised to $34.00 per barrel at the last OPEC
meeting and the world average price is now in the $35-$36 range.
There have been several projections made based upon
different methods for decontrol and various estimates of in-
creased production. No matter which projection one uses, one
finds a common end point: i.e., the price of natural gas by
1990 will be higher than the 1981 price by a factor of 3 to 5
and will at least reach the equivalent oil price.
The cost projections M&E used in the first presentation
were based on data from the Resource Analysis and Management
B-2
Group and published in the "Oil and Gas Journal" on July 13, 1981.
Since that time, we have obtained projections of costs from
American Cyanamid Co. (Corporate Fuel Cost Projections). In
addition, four other projections have been obtained. These pro-
jections are for industrial use in 1990 and were given in con-
stant 1981 dollars.
Source
1990 (1981 Dollars)
(per MMBtu)
National Energy Policy Plan
$8.00
Data Resources Inc.
6.62
American Gas Association
6.56
Department of Energy
$5.23
These can then be factored
to 1990 dollars using the same
inflation rates used in projecting
the price of oil and they
can further be factored by 0.9 to
bring the 1981 price in line
with the current City costs. The
seven projections would then
show the following as estimates per
Mcubic feet or MMBtu as
City fuel costs in 1990.
Source
1990
National Energy Policy Plan
$16.40
Data Resources Inc.
13.57
American Gas Association
13.45
Department of Energy
10.72
American Cyanamid Co. (Low)
12.09
American Cyanamid Co. (High)
14.95
Resource Analysis (Well head)
$12.00
B-3
METCALF & EDDY
_ t.
The spread among the projections is typical of long
range complex economic estimates. None of these, even the
National Energy Policy Plan, is out of line when one considers
that contracts have been signed in 1981 for uncontrolled
gas in the $9-$10 range. In our opinion, the projections of
the Resource Analysis Group, which fall in the low middle range,
are the best to use for planning of a resource recovery project. r
M&E has deliberately discounted all projected natural gas prices
after 1985 in order to provide an extremely conservative esti-
mate of the revenue from the proposed resource recovery plant.
NATURAL GAS PRICE PROJECTIONS
$/M14BTU _
Year Resource analysis ME
1985 $ 5.00 $5.00
1986 8.00 6.00
1987 9.50 7.00
1988 10.75 8.00
1989 11.80 9.00
B-4