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HomeNewsArchivesRefuse-Derived-Fuel Plant Lease Goes To Senate

Refuse-Derived-Fuel Plant Lease Goes To Senate

Bringing waste-to-energy plans in the territory to a head, Government House sent a 30-year lease with AEG Bovoni for a refuse-derived-fuel processing facility in Estate Bovoni to the V.I. Legislature Wednesday for approval.

The V.I. Waste Management Authority and the V.I.Water and Power Authority entered into an agreement with AEG Bovoni parent Alpine Energy Group (AEG) for it to build trash processing facilities on St. Croix and St. Thomas, to make refuse-derived fuel pellets to feed a trash-to-energy plant it will build on St. Croix. The goal is to expand the territory’s energy base away from its current exclusive reliance on pricey fuel oil, while disposing of trash cheaply and allowing WMA to close the territory’s two landfills. Instead of burying trash at the landfill, the territory would ship much smaller quantities of ash off-island for disposal.

The government owns the proposed site in Bovoni and by law, the Legislature must approve all leases of government land that extend more than one year and so must weigh in. The two proposed St. Croix facilities are on private land: a 16-acre parcel on St. Croix’s southern shore within St. Croix Renaissance Park.

This is the second time the lease has come before the Legislature. Plans put forward in 2010 called for a second, larger power plant on St. Thomas, and for both plants to supplement the trash-based fuel with cheap petroleum coke from the Hovensa refinery.

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But, in the face of stiff environmental opposition, the V.I. Legislature voted down a lease for the St. Thomas RDF facility in March 2010. Senators and residents objected principally to using the very inexpensive but potentially dirty petroleum coke as a fuel. These new plans eliminate the St. Thomas plant and plans to use the money-saving petroleum coke.

Gov. John deJongh Jr. endorsed the new scaled-back plans in August, while the finer points were still being hammered out.

"This project has represented an alignment of WAPA and WMA combining their efforts to jointly address problems that we have not had solutions for over two decades," deJongh said in a joint statement with WMA and WAPA officials at the time. "It is a project that requires constant education and awareness by all, but most importantly a commitment to address energy sources and costs, garbage disposal, landfill closures and the long-term operation of the Rolshen airport on St. Croix.”

Once completed, the facilities will replace the use of 400,000 barrels of oil each year and help meet a U.S. Environmental Protection Agency mandate to close the Anguilla and Bovoni landfills, according to Government House.

WAPA Executive Director Hugo Hodge Jr.and AEG officials have both testified before the V.I. Legislature that the new plant’s technology would be cleaner than WAPA’s current oil-fired generators, for a net reduction in emissions. Some residents have continued to voice concern about the potential environmental impact of the plan, however.

AEG will fund the entire $210 million price tag for the project up front and will get revenue both from disposing of the territory’s solid waste and from selling low-cost electricity to WAPA.

In August, Hodge said WAPA will enter into a power purchase agreement with AEG that will guarantee electricity at 10 to 15 cents per kilowatt hour – roughly a quarter of the current retail price of 41 cents per kilowatt hour. Because the plant, if built, will only provide a fraction of total power generation in the territory, ratepayers will see smaller reductions in their actual bills.

The lease sent to the Legislature is for 1A-7 Estate Bovoni, St. Thomas. AEG Bovoni Power President James Beach signed it on Nov. 3. DeJongh signed December 8. The lease is for a term of 30 years, with options to renew for two 10-year periods. Rent would be $35,700 per year for the first five years, then adjusted based on market rates. As part of the lease, the company is to build the fuel-making facility, offices and warehouses.

If the Legislature approves the lease, AEG Bovoni will then re-apply for permits. The company withdrew its permit requests in April, pending the approval of the Bovoni lease.

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Bringing waste-to-energy plans in the territory to a head, Government House sent a 30-year lease with AEG Bovoni for a refuse-derived-fuel processing facility in Estate Bovoni to the V.I. Legislature Wednesday for approval.

The V.I. Waste Management Authority and the V.I.Water and Power Authority entered into an agreement with AEG Bovoni parent Alpine Energy Group (AEG) for it to build trash processing facilities on St. Croix and St. Thomas, to make refuse-derived fuel pellets to feed a trash-to-energy plant it will build on St. Croix. The goal is to expand the territory's energy base away from its current exclusive reliance on pricey fuel oil, while disposing of trash cheaply and allowing WMA to close the territory's two landfills. Instead of burying trash at the landfill, the territory would ship much smaller quantities of ash off-island for disposal.

The government owns the proposed site in Bovoni and by law, the Legislature must approve all leases of government land that extend more than one year and so must weigh in. The two proposed St. Croix facilities are on private land: a 16-acre parcel on St. Croix's southern shore within St. Croix Renaissance Park.

This is the second time the lease has come before the Legislature. Plans put forward in 2010 called for a second, larger power plant on St. Thomas, and for both plants to supplement the trash-based fuel with cheap petroleum coke from the Hovensa refinery.

But, in the face of stiff environmental opposition, the V.I. Legislature voted down a lease for the St. Thomas RDF facility in March 2010. Senators and residents objected principally to using the very inexpensive but potentially dirty petroleum coke as a fuel. These new plans eliminate the St. Thomas plant and plans to use the money-saving petroleum coke.

Gov. John deJongh Jr. endorsed the new scaled-back plans in August, while the finer points were still being hammered out.

"This project has represented an alignment of WAPA and WMA combining their efforts to jointly address problems that we have not had solutions for over two decades," deJongh said in a joint statement with WMA and WAPA officials at the time. "It is a project that requires constant education and awareness by all, but most importantly a commitment to address energy sources and costs, garbage disposal, landfill closures and the long-term operation of the Rolshen airport on St. Croix.”

Once completed, the facilities will replace the use of 400,000 barrels of oil each year and help meet a U.S. Environmental Protection Agency mandate to close the Anguilla and Bovoni landfills, according to Government House.

WAPA Executive Director Hugo Hodge Jr.and AEG officials have both testified before the V.I. Legislature that the new plant's technology would be cleaner than WAPA's current oil-fired generators, for a net reduction in emissions. Some residents have continued to voice concern about the potential environmental impact of the plan, however.

AEG will fund the entire $210 million price tag for the project up front and will get revenue both from disposing of the territory's solid waste and from selling low-cost electricity to WAPA.

In August, Hodge said WAPA will enter into a power purchase agreement with AEG that will guarantee electricity at 10 to 15 cents per kilowatt hour – roughly a quarter of the current retail price of 41 cents per kilowatt hour. Because the plant, if built, will only provide a fraction of total power generation in the territory, ratepayers will see smaller reductions in their actual bills.

The lease sent to the Legislature is for 1A-7 Estate Bovoni, St. Thomas. AEG Bovoni Power President James Beach signed it on Nov. 3. DeJongh signed December 8. The lease is for a term of 30 years, with options to renew for two 10-year periods. Rent would be $35,700 per year for the first five years, then adjusted based on market rates. As part of the lease, the company is to build the fuel-making facility, offices and warehouses.

If the Legislature approves the lease, AEG Bovoni will then re-apply for permits. The company withdrew its permit requests in April, pending the approval of the Bovoni lease.