Cities & towns in regional trash disposal coop exploring their options as contract nears end

LACONIA — With the Concord Regional Solid Waste/ Resource Recovery Cooperative (Coop), and Wheelabrator Concord Company, L.P. , operator of the trash incinerator in Penacook, in agreement on a new contract, it remains for the 25 member municipalities — among them Laconia, Belmont, Gilford Gilmanton and Tilton — to determine if it serves their best interests.
The current contract, in place since 1989, expires in 2014, prompting member municipalities to explore alternatives in search of lower disposal costs, raising prospects that some municipalities might abandon the coop. Wheelabrator, seeking assurance of sufficient tonnage for its trash-to-energy operation, expects the member municipalities to decide by June 30.
Laconia City Manager Scott Myers said yesterday that the coop has provided its members with an analysis of how they would be affected by the terms of the proposed contract and they are pursuing "due diligence" to compare the costs of Wheelabrator's offer with other options. He said that while the coop has operated very successfully the expiration of the contract provides its members with an opportunity and a responsibility to explore alternatives.
Jim Presher, director of the coop, said last week that the offer on the table is an eight-year agreement, running through 2022. It includes a tipping fee of $64 a ton, which is indexed to the rate of inflation, plus an administrative fee of $2. Currently, the tipping fee consists of Wheelabrator's charge of $51, property taxes of $11, an administrative fee of $6 and costs to operate the ash landfill in Franklin of $20, amounting to $88, which is offset by a subsidy from the coop's cash reserves, leaving a total of $66.80. The closure of the ash landfill in 2015 will spare $20 in costs, enabling the Coop to withdraw its subsidy while maintaining the tipping fee around $66.
In anticipation that Concord, which has issued a request for proposals for disposing of its trash, might leave the coop, the contract specifies that the remaining members will deliver 60-percent of the current tonnage of approximately 87,000 tons without Concord and 75-percent of the current tonnage with Concord.
The primary current alternatives to the coop are landfills in Bethlehem, Berlin and Rochester. Myers said that whether or not they are feasible depends chiefly on transportation costs, which in turn are affected by the size of loads. Laconia, he explained, by trucking 27 tons or more of trash with each load has lower hauling costs than smaller communities that may transport only seven or eight tons at a time.
Presher stressed that although the landfills offer competitive tipping fees, the transportation costs must be weighed together with the disposal costs to make sound decisions.
Wheelabrator, which through 2019 will receive 15 cents per kilowatt hour for the electricity it generates at Penacook — more than twice the market rate of six or seven cents — has incentives to price competitively. With the sour economy and increased recycling, the tonnage of trash has shrunk. In 2005, the incinerator burned 145,237 tons compared to some 87,000 tons last year, a drop of 40-percent. Competitive pricing is necessary if Wheelabrator is to assure itself of the tonnage its requires.