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HomeMy WebLinkAbout03-01-2021 Climate Action CommissionIowa City Climate Action Commission Agenda Monday, March 1, 2021, 3:30 — 5:00 p.m Electronic Meeting, Zoom Platform Electronic Meeting (Pursuant to Iowa Code section 21.8) An electronic meeting is being held because a meeting in person is impossible or impractical due to concerns for the health and safety of Commission members, staff and the public presented by COVID-19. You can participate in the meeting and can comment on an agenda item by going to https:Hzoom.us/meeting/register /tJctdumvrDOsEtFYkP5tonUrC2-Rl4oEEvYD. via the Internet to visit the Zoom meeting's registration page and submit the required information. Once approved, you will receive an email message with a link to join the meeting. If you are asked for a meeting or webinar ID, enter the ID number found in the email. A meeting password may also be included in the email. Enter the password when prompted. If you have no computer or smartphone, or a computer without a microphone, you may call in by telephone by dialing (312) 626-6799. When prompted, enter the meeting or webinar ID. The ID number for this meeting is: 930 1072 66850 Once connected, you may dial *9 to "raise your hand," letting the meeting host know you would like to speak. Providing comments in person is not an option. Meeting Agenda: 1. Call to Order 2. Roll Call 3. Approval of Feb. 1, 2021 minutes 4. Public Comment of items not on the Agenda -Commentators shall address the Commission for no more than 3 minutes. Commissioners shall not engage in discussion with the public concerning said items. 5. Staff Announcements a. Action items from last meeting b. Updated Action Plan report (see attachment) 6. Old Business: a. Continued discussion of the Methane Feasibility Study 7. New Business: a. Request for two commissioners to participate in Climate Action Grant review b. Updates on working groups (see reports in agenda packet) i. Buildings (Krieger, Karr, Soglin, Grimm) ii. Outreach (Krieger, Fraser, Holbrook, Bradley) iii. Equity/Adaptation (Tate, Hutchinson) iv. Adaptation (Bradley, Leckband, Grimm) 8. Recap of actionable items for commission, working groups, and staff 9. Adjourn If you will need disability -related accommodations in order to participate in this meeting, please contact Sarah Gardner, Climate Action Engagement Specialist, at 319-356-6162 or at Sarah-pardner@iowa- cityorq. Early requests are strongly encouraged to allow sufficient time to meet your access needs. MINUTES PRELIMINARY IOWA CITY CLIMATE ACTION COMMISSION F E B RUARY 1, 2021 — 3:30 PM —FORMAL MEETING El octroni c M ooti ng (Pu rsu a n t to to wo Co de se ctio n 21.8) An electronic meeting is being held because a meeting in person is impossible or impractical due to concerns for the health and safety of Commission members, staff and the public presented by C0 1 D-19. ELECTRONIC MEETING MEMBERS PRESENT: Madeleine Bradley, Ben Grimm, Megan Hill, Kasey Hutchinson, John Fraser, Matt Krieger, Jesse Leckband, Becky Soglin MEMBERS ABSENT: Stratis Giannakouros, Grace Holbrook, Eric Tate STAFF PRESENT: Sarah Gardner, Jennifer Jordan, Ashley Monroe, Joe Welter OTHERS PRESENT: Morgan Mays, Marcella Thompson, Jeremy Cook CALL TO ORDER: Fraser called the meeting to order. APPROVAL OF JANUARY 4, 2021 MINUTES: Krieger moved to approve the minutes from January 4, 2021. Grimm seconded the motion, a vote was taken and the motion passed 7-0 (Leckband not present for the vote). PUBLIC COMMENT OF ITEMS NOT ON THE AGENDA: None. STAFF ANNOUNCEMENTS: Action Items from last meeting: Gardner noted there were two action items from the last meeting. One was to include both the working group restructuring discussion and the follow up Climate Action Commission February 1, 2021 Page 2 of 13 questions for the methane study in the agenda. The other item was a call for all working groups to submit updates to staff by the last Monday of the month so that they could be included in the packet. Gardner received updates from the building working group and the outreach working group and those were included in the agenda packet. For the next agenda packet, the last Monday of the month is February 22. Gardner requested to have updates to her by then. Climate Action and Outreach Office Updates: Gardner noted the bi-monthly list of recent activities was included in the agenda packet. Staff activities for the months of January and February included the TIF Funded Climate Action Incentive Program. She said the program is underway, the application has been finalized, and they have received the first application, which they are excited to be reviewing and hopefully moving forward on. They also continued the discussion with MidAmerican Energy to ensure that the projects were not in conflict and received very good news this month that any project participating in the City's energy efficiency program would also be able to participate in the MidAmerican program. Normally, the projects that just participate in MidAmerican are eligible for reimbursement up to 50% of the cost of the project. By combining their program and the City's, MidAmerican is allowing participants to be reimbursed up to 75% of the cost of the project, which is a big savings for companies that hope to move forward and take advantage of both programs. In addition, Wendy Ford and Gardner have been working with the Iowa City Area Business Partnership to prepare four virtual presentations. The February presentation will be given in collaboration with MidAmerican and is focused on getting the word out about energy efficiency rebate options in the City for small commercial properties and large ones. The Green Iowa AmeriCorps team continues to deliver home energy kits. So far, they've done a total of 207 audits or home kit deliveries and 69 education and outreach events. Gardner noted AmeriCorps provides kits to the city of Davenport and some of those kits are included in this number but the majority are for Iowa City. For the energy efficiency and building projects, they have a builder and project identified to showcase in the upcoming Parade of Homes. They also are working with Neighborhood Services on an energy efficiency demonstration rehab project, and have a property identified and are in discussions as to the different energy efficiency elements that will go into that project. They also continue to do work on the Earth Day Neighborhood Energy Blitz plans. It will be a door to door campaign that will utilize the AmeriCorps members as well as high school environmental clubs and the Climate Ambassadors. The pilot program will launch in the South District neighborhood. Staff have been in communication with them as the pilot site and they have agreed to help get the word out to residents to expect the kits. Staff also have formed a staff committee to assist with logistical planning since obviously it is a big undertaking with a lot of moving parts. Staff representing Neighborhood Development Services and Resource Management are serving on that as well as Communication staff. For the marketing RFP, staff are currently in negotiations with the consultant over the finalized scope of the contract. It will be going before Council for approval in February, which means hopefully they'll be able to get underway in March. In order to prepare for that they are in the process of compiling all the climate related communications and marketing collateral. Gardner added the project will include a vulnerability analysis for populations in Iowa City and identify related communication strategy, which is a nice addition to the project. It's not something they necessarily asked for in the RFP, but it does meet another objective they have for the climate action initiatives. 2 Climate Action Commission February 1, 2021 Page 3 of 13 The second Climate Ambassadors cohort is scheduled to begin its training starting this Wednesday and that will carry on through March 24. This cohort of applicants was drawn from the waitlist of applicants who applied for the first training session back in October. All the applicants who had been waiting for an opportunity and were still interested were able to be enrolled into this session with the exception of just one person. When staff reopen the portal in March to begin looking for the third cohort of trainees, they'll be able to once again to solicit applications from the public as a whole. They will also notify the one person who wasn't able to participate this time. With regards to the two ongoing grant projects, Gardner reported the EV Readiness Planning Project has had two virtual stakeholder events held in January. They were both very well attended. The first program had 65 attendees and the second program had 55. The first program was presented as a level -setting webinar and allowed interested parties who were unfamiliar with the project or unfamiliar with EVs to learn more. The second event was a virtual whiteboarding event that allowed the project coordinators to gather input from stakeholders. Gardner noted it was a very lively discussion. They were able to get some great points from the participants on what the perceived barriers to EV adoption are in the state, what kinds of strategies they could employ, and what criteria they should be using to prioritize those strategies. The steering committee will now reconvene and go over the information gathered in that exercise to start figuring out where those priorities lie. In the meantime, the consultant has begun outreach to the multifamily housing landlords and property managers to begin that portion of the study, which is focused on a barrier analysis to figure out how to get more charging stations at rental properties so that renters have equal access to this technology. Gardner noted if anybody would like more detail on this project, to understand where it is, what progress has been made so far, and what information that was presented to stakeholders, a recording was made of that first meeting and is available on the YouTube link included in the staff report. For the Heartland Carbon Sequestration grant, Gardner reported a GIS-based carbon management tool that has been under development is nearing completion. There is also an Excel tool that can be used to make decisions about carbon sequestration strategies that is about to be unveiled and staff will be able to report more on that at the next meeting. Finally, Gardner introduced the new staff member in the climate action and outreach division, his name is Mohsen Vahidzadeh. Mohsen introduced himself and noted today is his first day and he is happy to be here. He noted he is originally from Iran and came to Iowa City to pursue a PhD at the University of Iowa. He graduated in December. He is very excited to work with everyone here at the City of Iowa City and work on different initiatives to reduce emissions and reduce energy consumption. On behalf of the Commission Fraser welcomed Mohsen to the City and Commission. Regarding ongoing projects Gardner noted they have been collaborating with the Equity and Human Rights Division on a Black History Month event. The Climate Action Division is bringing in Richard Mobian, who is a nationally recognized speaker through Project Drawdown, and is going to be speaking about fostering multiracial partnerships for climate action and addressing historically disparate access to sustainability resources. He will be joined by a member of the 3 Climate Action Commission February 1, 2021 Page 4 of 13 Climate Ambassador cohort from the first training series, Ayman Sharif, who is going to complement the national overview with some perspectives from the local area here in Iowa City. That event is going to take place February 25. Soglin asked for Gardner to send the Commission the link for the Smart Series so some of them can sign up for that. She also asked how staff is presenting to the businesses and if there are limited seats for that. Gardner believes that series may be for chamber members only but will look into it, and if it is open to the public she will send the Commission information on how to sign up. Soglin also noted the marketing folks will be doing a vulnerability analysis and that Johnson County Public Health has done some of that type of analysis already, so there may be a way to help each other without taking away from the specific goal. Gardner agreed and stated she would love to connect them and add that analysis to collateral to share what work has been done. Fraser noted the agenda packet is well done and he urges everyone to make sure they spend a fair amount of time on that before these meetings. OLD BUSINESS: Discussion of ideas to restructure working groups: Krieger began the discussion noting there were essentially two ideas outlined in the restructuring proposal. The first takes on a broader based approach and the working groups are really focused on the broad cross cutting ideas. There's the Outreach Working Group, there's the Equity Working Group separate from Adaptation. He likes that approach because when they were more siloed, it was harder to capture all of that. He feels any topic that has enough substance or content to work with should continue and that's why he also thinks the Buildings Working Group should continue. When they first started the working groups one of the things that they wanted to do was not just be a sounding board for what staff are working on, but also generating content and be the communication loop for members of the community as well and bring in other people outside of the Commission, other experts and other stakeholders to be part of those discussions. Krieger believes there's enough content in the ones that are proposed in the document to be effective. Bradley agreed with Krieger that the first one made more sense for the structure. She did not believe that means they could not also add another working group if a project came about and they felt that it was necessary. Fraser discussed a book on leadership he follows. The authors break down leadership into five practices. The first is "Model the way" and the second one is "Inspire a shared vision." To him, making the City plan successful, attaining their goals, is all about being able to paint a picture of the vision they have in mind when they have accomplished all of those goals. The third is "Challenge the process," not just maintaining the status quo, and have leaders that lead the change. Leadership is all about understanding when it is not business as usual any longer. The fourth one is what they're talking about right now, "Enable others to act," and it's not just delegating, it's sticking to the belief that within an organization everyone has the capability of being an exemplary leader. Fraser noted with working groups, they're going beyond the original committee, now a commission, and finding talent and enabling them to really get involved. What they need to do is be able to really take advantage and leverage the working groups. The theory 4 Climate Action Commission February 1, 2021 Page 5 of 13 is they haven't been doing that as successfully as they would like to and didn't hit the goals with working groups. They need to be willing to be flexible and allow these groups to evolve into something more than they are right now. Soglin asked if Fraser is asking about getting at the public involved. Fraser said with the working groups, that is what they are doing — they are bringing in nonmembers of the Commission. Soglin asked if Fraser is wanting the groups to operate the other way, the other option. Fraser said he is not stating his preference at this point. He continued on with the last practice for leadership, which is "Encourage the heart," which is nothing more than celebrating wins, patting people on the back when they do a good job, and encouraging them to keep up the good work. Fraser brought this up because it made him think about enabling others to act and that's really what they're doing with working groups. Going beyond just commission members and garnering more talent within Johnson County and Iowa City, and then figuring out how to best capitalize on their skill sets. Fraser also noted if they chose one option and figure that out in three or four months or six months it isn't working then they can modify so they can't really go wrong with either one of these options. Grimm noted he doesn't have a strong opinion either way, he thinks both would be an improvement over what they're currently doing. He thinks the key thing is not spreading the group too thin and getting unfocused on the central goals. He is flexible either way with the understanding that they're trying to narrow down the focus of what they're looking at and having more defined clear objectives. Fraser wondered which option would be the easiest and the quickest to pull the trigger on or are they about the same. Soglin said she felt the option Krieger and Bradley talked about would be a little bit easier to begin with, because they build more on what some of them have been doing, and while she appreciates that some haven't functioned as well as they could have, the Building Working Group has done a pretty good job. They would like to be allowed to continue as it has only been one year. She noted now the climate ambassadors will be engaged and perhaps some of them could be involved with the groups. Soglin also noted how much time it takes to arrange meetings the Commission members is not insignificant for those who are managing those groups, and to set up agendas and to take notes. All those things have to happen. So while it is their duty to give time, she feels they also need to be mindful of everyone's time realistically, Fraser noted the density greenhouse gas memo created by the Buildings Working Group and all the work that went into that as an example and said it was well done. Fraser asked if anyone has a contrary thought or wants to discuss the downside to the first option. Krieger noted the downside is if it doesn't have a specific goal or set of goals in place, then it can waffle or not go a specific direction. One of the things in the Buildings Working Group that they've challenged themselves with is to be looking at the accelerated actions that were buildings related, and looking at where they can make a contribution without being tasked with something. He believes they can task themselves in the working groups, which maybe wasn't something they were quite doing over the past year entirely. Even in the Buildings Working 5 Climate Action Commission February 1, 2021 Page 6 of 13 Group, they had a lot of effort put into a few topics, and those were specific and prioritized. With any of the working groups progress can be made and they can be reaching out and getting additional stakeholders. He does believe it could be a shortcoming if there's not a lot of rigor around that. Fraser noted they could have the same deficiency or lack of rigor with the second model as well, something based on projects has to be pretty specific in order to be professionally executed. [Leckbandjoined the meeting} Krieger offered a motion to stand down the Transportation and Waste Working Groups and continue forward with the Outreach and Buildings Working Groups and subdivide the Equity Working Group to create the new Adaptation Working Group. Fraser noted the people that have now been displaced from those groups can now become members of a new group. Krieger said in the past they have self-selected which groups to be members of. Leckband noted he would be interested in adaptation. Hill said she would also be interested in joining the adaptation group as well. Bradley would be displaced from the Waste group but is also on the Outreach Group. However, if it worked with her class schedule, she would be interested in participating in the Adaptation group as well. Grimm noted he was only somewhat displaced because he was originally on the Transportation and building group, and he is still in the Building Group and is unsure if it is necessarily to join another working group. Gardner noted the only other person who would be displaced is Giannakouros who's not at this meeting today. She said she could reach out to him via email and see if he would be interested in joining the Adaptation Group or some other group. She will then update the list of working groups on the agenda for the next meeting based on what the outcome of the vote is. Krieger moved that as of today's date, February 1, 2021, the active working groups will be Outreach, Buildings, Equity and Adaptation. Grimm seconded the motion. A vote was taken and the motion was passed 8-0. Building Working Group Density GHG Memo: Fraser reiterated the memo was well done, very professional, and overall outstanding. Soglin noted this item was information only. Monroe was going to share this with Council this week and if they hear back from them with questions, they'll bring those to the group. Monroe noted she will need to double check and make sure that it went into the into the Council information packet. She stated typically when they're discussing items during a work session or require feedback about a certain subject they will request that at their meeting and the Commission or staff can present at an upcoming meeting. Fraser stated he would be curious to get feedback from Council on the memo. NEW BUSINESS: Climate Action Commission February 1, 2021 Page 7 of 13 Follow up Discussion with HDR on the Methane Feasibility Study: Fraser first thanked HDR for their very professional presentation and materials that the Commission had to review and now have had some time to think about. Morgan Maw (Project Manger, HDR) thanked the Commission and noted they did their best in the executive summary of that report to summarize the project and would like to know if anyone has specific questions on things. He reiterated this is an initial, high-level study that was done to really assess different options. Ultimately, they were trying to determine what kind of organics diversion is as a viable consideration and what kind of technologies and beneficial uses can be used to go off of that. He said he believes their report does a really good job of summarizing that. There are some paths forward that are considerations or options that are included in there for the city to look at and further study. Ultimately there would be refinements for the best solution to be determined. Fraser noted sometimes after a formal presentation to a large group we tend to think of two or three things we wish we said 30 minutes after the meeting is over. He asked if there were any basic thoughts that they would like to refresh the Commission on or items that maybe came to mind after they were done with the meeting last month. Mays acknowledged there was a lot of information shared and it takes a lot to digest all that information. Overall, they all want to have an action -level plan moving forward. He thinks organics diversion, and some level of diversion, is probably the biggest question that this Commission and the City needs to determine if they want to make the investment on it. All of it was proven to show a greenhouse gas emission reduction that furthers the Climate Action goal. Soglin asked how does actual reduction of organics fit into this. Would there be any issues if at some point 10-15 years down the road the waste that gets produced in the first place is reduced due to a concurrent effort to do so? Marcella Thompson (Director of Sustainability and Resiliency, HDR) noted certainly there would be some impact to landfill gas production. It would take a significant incremental source reduction of organics, though. She noted there is already plenty of organics in the landfill today that will continue to generate landfill gas well into the future. Thompson stated they did a little scenario analysis of diverting organics out of the landfill to see what that impact would be, whether it was the 1500 tons or the low diversion scenario, whether that's diverted to another source or whether that was just a simply a source reduction, i.e. preventing the food waste, organic waste. That gave them an indicator of how that would impact landfill gas generation in the future. Jen Jordan (City of Iowa City Resource Management Superintendent) confirmed that as the perfect answer and added she will never look at this as a reason to stop trying to divert and reduce source food waste. Soglin had another question regarding air quality onsite, particularly at the wastewater treatment plant which is close to housing. They would be cleaning the natural gas there to make it either usable onsite or to pipe it out. Are there things they need to consider for that neighborhood so they aren't disproportionately affected by what gets off -gassed there? Joe Welter (Senior Civil Engineer for the City of Iowa City) wanted to first address Soglin's first Climate Action Commission February 1, 2021 Page 8 of 13 question. He noted the organics in a landfill setting is not an efficient way to deal with organics. He explained what the study is trying to do is to divert those organics to a facility, either an existing digester at the wastewater treatment plant in the 1500 ton diversion scenario, or a new facility at the wastewater treatment plant, That would deal with those through an aerobic digestion process, which is much more efficient with dealing with organics than a landfill cell is. As a result they are not doing anything with the landfill and in a sense not really impacting landfill adversely. He explained what they are doing is actually making the landfill better. Organics in a landfill is never a great scenario and not something that they want to do. This study is showing how to make the landfill better and deal with those organics in a more responsible way. Soglin stated she understood that part of it. What she was not clear on is the additional amount that they brought in versus what they would be using that is already there onsite. Welter reiterated they are not bringing in additional amounts, they're just taking it from one facility and moving into the other. Soglin questioned over time what happens if the waste that gets picked up from the street each week declines. Welter said if the waste is in a multicompartment bin then it is going into the composting operation currently. Jordan added right now the amount that they're talking about is pretty small in the overall scheme of things. On average in a given year the landfill takes in about 130,000 tons of garbage, about a quarter of which is food waste. So they are looking at somewhere around 30,000 tons of organics and are talking about diverting 1500 tons, which is a pretty small amount overall. He said there's always going to be a need for composting and always going to be a need for overall source reduction. That is the piece Soglin doesn't want to miss, the source reduction, because people think they are just going to drag it off their lawn and take it here, whereas anything they can do upstream is better. Jordan and Welter agreed. Welter then addressed Soglin's air quality issues. He noted they have permits at both facilities they have to maintain. He said the good thing about natural gas, the biogas generated at the landfill currently or at wastewater when they're flaring, is that those gases burn very, very clean. The goal of this was to look at three things: greenhouse gas emissions and reductions in greenhouse gas emissions, responsible use of energy, and then the economics of doing so. With these scenarios, especially those scenarios that have a better feasibility, the options are improving air quality in terms of greenhouse gas emissions at both facilities as they are looking at this from a community wide standpoint. Mays confirmed all of these waste handling or different beneficial use solutions they're looking at having to clean that gas to be able to use it for the beneficial use. They are not showing any adverse effects and in fact are improving it at both locations. Soglin trusts that when and if this moves ahead those neighborhoods in particular will be engaged in the changes as this is right in their backyards, particularly when it's residential. She is also concerned about increases in truck traffic or things like that. Thompson acknowledge they did talk about truck traffic specifically and determined that in collaboration with the City that there would be no significant difference Welter also explained anytime they change a permit, and these changes would require them to change multiple permits at the two facilities, there is a public comment period, and they invite people to the public comments. The City is especially concerned about the neighborhoods that Climate Action Commission February 1, 2021 Page 9 of 13 are adjacent to the facilities. Certainly and those citizens and any residents are invited to the public comments. Soglin's last comment is she would prefer an option where the City is not selling the RECs, but where the City gets to retain the GHG credits, so to speak. Fraser said Giannakouros had emailed two key questions that he had about the project. First is whether dried fermentation at the landfill been looked at as an option. Giannakouros noted by the time cells are capped, 50% of the methane generating potential has been lost, so separating organics and keeping them out of the cells will avoid a large part of the climate forcings they would like to avoid. He wanted to know if that is feasible. Mays responded at a high level, yes, it's a feasible consideration. He would look at it more as an alternative to the more traditional wet co -digestion. He said it would not be something that is less expensive than co -digestion, just something that could be considered as an alternative and looked at further down the road. Typically, dry fermentation is more common on the West Coast where there are different end use products that can be used there, but it is something that is feasible and a consideration that could be an alternative to the traditional wet co -digestion. He reiterated costs are going to be pretty similar, though. Frasier said Giannakouros second question was about the low diversion scenario, which requires much higher capital costs at the water treatment plant. It seems that this scenario is optimal for holistic sustainability outcomes but might be non -viable regarding the kind of financial ROI the City will need to see to select this option. Thompson stated the reason they looked at the 1500 scenario was because that's how much the current capacity there is at the existing facility, so they knew that that would be an opportunity to have a little bit more incremental organic diversion and send it to that beneficial reuse of the wastewater plant. At the same time, they recognize that the City also has some ambitious goals around organics management ,so they wanted to also look at alternatives that went above and weren't constrained by infrastructure. They landed on the low diversion scenario as something that was reasonably attainable, but given that it exceeds the current capacity, it entails that higher capital cost. It would require the City to make an investment in a new dedicated digester or co -digestion facility to handle that much more incremental organics diversion. He said while there certainly is an investment that's required to do that, it's simply because of the current infrastructure capacity constraints. Fraser believes that Giannakouros' concern isn't SROI but rather the initial ROI, and that's because they're increasing capacity greater than it is right now. Thompson confirmed that was correct. Fraser asked if they were to calculate a payback period in years, what would that be for this initial investment. When would they break even with the increased initial ROI with the low diversion scenario? Mays said they looked at it in terms of whether it would break even with a 30-year payback period. In appendix B that was provided in the final report, a financial performance and a breakeven analysis was included. The only option that actually had a positive ROI in that 30 year period was alternative one, the pipe pipeline injection at the landfill facility. That had a positive turnaround within about 18 years. For everything else they would need grant support funding to have that break even within a 30-year period. For option three, electricity generation of that low diversion scenario, the City would need almost $19 million worth of additional grant funding to have a turnaround or breakeven on that 30-year period. 9 Climate Action Commission February 1, 2021 Page 10 of 13 Jeremy Cook (Senior Economist, HDR) confirmed what Mays stated. Basically they only had one alternative that was really breakeven without any additional grant funding, and that was just simply because of the capital investment costs up front really do make it tough to achieve the payback period on all the other alternatives, aside from the one alternative mentioned. Thompson acknowledged that question is one that many are up against with ambitious climate goals and how to achieve those goals and balance that with the realities of the financing and economics. She added that is why this study was really focused on SROI and what's the best answer for a greenhouse gas reduction and energy return on investment. Fraser thanked the consultants for their initial report. He noted they would take some time as a Commission and review and get ready to propose a final discussion and perhaps a recommendation at the March meeting. Krieger asked for clarification on what the intent is from this Commission. Is it a recommendation from the options listed in the report or just some discussion notes. Fraser said his understanding is City Council is asking for a recommendation relative to the options. It doesn't mean that they will take the recommendation, but that is what they are looking for. Welter added the recommendation from the Commission could be in phases. For instance, there could be some things that happen at one facility and discussion on what happens at which facilities, or what they would want to do inside of those diversion scenarios, because they can't do one diversion scenario at one facility and another diversion scenario at the other facility. They have to be the same diversion scenario. But inside of those guardrails, there are a lot of different options there and they could happen at the same time, or they could happen at a staggered timeframe. They could go towards the capacity that the current digester at the wastewater treatment plant has and move towards that with the goal of a later idea of building into something bigger. Monroe noted in terms of this project the Commission is the first line of consideration and technical expertise that can help guide the City in planning for, waiting on, or proposing alternatives and options to methane initiatives. To move anywhere further on this item Council would request Commission's feedback and recommendation on how/whether to proceed. Confirm meeting dates for 2021: Fraser noted Eric Tate has a class conflict this semester (until May) and Fraser is uncomfortable not having Tate at four meetings in a row. Staff had asked Tate if he was available at an alternate time, and he said would be available at the same time on Tuesdays for March, April and May. However other Commission members might not be able to meet those days. Grimm noted it would not work for him because when all their projects go in front of the Board and Operations Committee. Krieger noted they had this exact same discussion when they first started the Commission about trying to set the standard day and time. During that discussion they talked about evening versus day meetings, they talked about day of the week, they talked about this issue where student representatives, any professors that might be included, or others who have a typical 10 Climate Action Commission February 1, 2021 Page 11 of 13 eight to five working day may not work. However, at that time they decided they would continue to move forward with the current time, realizing that from time to time they may not be able to get everyone. He also noted they need to keep the meeting date/time consistent for public input and participation. Fraser wondered if they couldn't go to an evening time just for three months -- March, April, May — so that everyone could attend. Krieger noted they need to keep in mind Council meetings are on Monday evenings, so if the public wanted to attend both that would be challenging and certainly some staff are very involved in those meetings. Gardner added that when Tate came to them notifying of this conflict as a result of his teaching schedule staff checked the bylaws, both to see if it would be allowable to move the meeting and also to see if it would disqualify him from further participation on the Commission. She confirmed he is able to remain on the Commission and have these four absences marked as excused absences. They would not have to fill his position. Fraser said he could keep Tate up to speed on what he misses, so one option would be to continue on as currently, not confused the issue and work doubly hard to keep Tate involved. It is just three months, but every month is critical, every meeting is critical, particularly with a new administration and new opportunities. Krieger agreed it is important to keep Tate involved. He personally is in favor of going with the standard set meeting time. Everybody knows what time the meeting is, can count on that time, and he would hate to sacrifice that reliability for kind of a temporary solution. Fraser noted equity is very important and that's a major benefit of Tate's wisdom and his position and academic work. The Commission agreed to leave it the meetings at the current day and time but will keep Tate involved in the Commission happenings. Update on Working Groups: Tabled to next meeting due to time constraints. RECAP OF ACTIONABLE ITEMS FOR COMMISSION, WORKING GROUPS, AND STAFF: Gardner noted the action items she has from this meeting as follows: to add Jen Jordan to the previous minutes as an attendee, to reach out to Giannakouros about the reorganization of working groups and have the working group list updated in the agenda for the next meeting, to send the link to the presentation taking place on February 25, to ask the Chamber if it would be possible for any Commission members to attend the chamber presentation that's going to happen, and finally to add the methane feasibility discussion to as an agenda item to the next meeting. 11 Climate Action Commission February 1, 2021 Page 12 of 13 As a final reminder for the working groups that are meeting in the next month, if they would like their minutes included in the packet, please get them to staff by February 22. Fraser suggested an action item for each one of them doing some deep review of the HDR materials before they discuss them at the next meeting. ADJOURNMENT: Krieger made a motion to adjourn. Grimm seconded the motion. A vote was taken and the motion passed unanimously. CLIMATE ACTION COMMISSION ATTENDANCE RECORD 2021 \ \ \ \ Qq \ \ \ 00 \ W \ I" \ N \ N \ NAME TERM EXP. N 0 NJ 0 NJ 0 NJ 0 NJ 0 N 0 N 0 NJN 0 0 N NJ 0 0 0 Madeleine Bradley 12/31/2022 x x John Fraser 12/31/2020 x x Stratis Giannakouros UI Rep x O/E Megan Hill 12/31/2022 x x Grace Holbrook 12/31/2021 O/E O/E Kasey Hutchinson 12/31/2022 x x Matt Krieger 12/31/2020 x x MidAmerican Jesse Leckband Rep O/E x Katie Sarsfield 12/31/2020 x x Becky Soglin 12/31/2022 x x Eric Tate 12/31/2021 x O/E Ben Grimm 10/31/2022 x x KEY: X = Present O = Absent O/E = Absent/Excused NM No 12 Climate Action Commission February 1, 2021 Page 13 of 13 Meeting -- -- = Not a Member 13 N O U a••' Ln aJ � aJ fa N tvo o E N In O E O O U U N 'N a aJ E > E O E; U 07 N o O +, aJ `� a, L aJ aJ °Ln E °C E aj N O > U w Q E o O N a--+4-0 N ° Q w o ul s N a N o v N O v Q O }' w w C N � •— °Ul s= v s= avi = N Sri N N aJ +, s Q Ln aA ca aJ a.., s= +� N ° a E N E O ° � v N aJ c c Q ca o o m E s= N cn m y vi Q u +, 4-1 U ° ca - U U > _O O L N o o E o � U aJu a) m — >, E � N a)> U N a) E_ - a L �, = M s= o U N W O -1 N Q E s= Q o }' � += oma) o O m cn U to O Q N O U un Ln aJ aJ � aJ cB o v E N taA o E aJ N Ln w O E =3 aJ O U U N _0 'N _0 aJ c� 3 L v N O O -0 N N f6 -0 aJ a � fa a aJ .0 ai _0 >; cC:a LA -0 E aJ -0 = E E +�+ � E O Q � U +0 LA O O � U > i v aJ 0 O >, ca E v L E +, > E O v 0 _ E-o O +' ca O O +, �, U i N O U fB CCf W O Q > N as+ Q Q N v O ca v o 4-1 Ln aJ vi ca bA a.., L U N cr U aJ f6 N aJ v +— V) _0 o � aJ p aJ N E L aJ > aJ aJ a +' O O v E N i N Q >L � }' c L aJ - az O ai aJ aJ c to tjW Q 0 (UaJ .0 `� L aJ O O E O v aJ o� O W E E U = O N v N N O O E aJ 'E -0E U aJ aJ 4-J s cn E N UO L Q = L O O � � 4-O f6 O fa E O N= � O 4-1 0-Q }' -00 O a) aJ O O N aJ aJ �' a) E Q -0> N aJ N ° t�A a 4-1 L }' ° r aJ Ln � 0 a) U U aJ ° E a, w L N-C O N Q }' N m = = o E 0 N s= r-I O a + L O Q ftf m O �O_ o o aJ UO v U N C: -0 U °' aJ ca N QJ L O E U a vNi n O O _ U } `} }' —J s OJ v v E aJ > •j U O t= aJ U U Q m .� fa N L a) U L N aJ L L- aJ 0 -C N aJ N U N � N E cv _O O aC ��, 1 txA s += C +' N N N Q Q a .'^ EFu ca U U `n U Q U OJ cv - 4-� aJ N U 'ca N � � U ci' UQ (a O N tao In Q }, " E v — = U O o o s v O> ca O� E Q +_+ L L Q Q Ln -0 4J Q N U � �; t1A Ln U c c aJ a-•+ 4- 0 .- N N N I N E- O Q > O_ ai }+ O c� r-I U j O L s= X N E LJ Q t o aJ p O - � +_+ aj c� E _�EaJ — aJ ° ca > ca �°n Ln N Q aJ ° fB N = O O aJ Q to o ai `—Un cn = U-0 O m U ._ Q N 0 N i ca 14 co r-I ri r-I U a-�+ a O p 4-E Wu t�/1 J a O v C: J — uo U _0 m aJ N L E ° U L U aJ o }' a. 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Iowa City Iowa December 30, 2020 VERSION: 2 ! l 1 4 r is r IIIJ p CITY OF IOWA CITY 5815 Council Street NE Suite B Cedar Rapids, IA 52402-5893 hdrinc.com (319) 373-2536 Contents ExecutiveSummary.............................................................................................................. ES-1 1 Introduction.....................................................................................................................1 2 Project Background........................................................................................................1 2.1 Climate Action and Adaptation Plan......................................................................1 2.2 Feasibility Study....................................................................................................2 3 Renewable Natural Gas as a Resource.........................................................................4 3.1 Renewable Natural Gas - Environmental Attributes as Vehicle Fuel ....................4 4 Description of Project Alternatives...............................................................................9 4.1 Alternative 1: Natural Gas Pipeline Injection.........................................................9 4.2 Alternative 2: Electricity Generation......................................................................9 4.3 Alternative 3: WWTP Natural Gas Replacement...................................................9 4.4 Alternative 4: Composting...................................................................................10 4.5 Organics Diversion Scenarios.............................................................................10 4.6 Estimated Costs..................................................................................................12 4.7 Description of Impact Categories........................................................................13 5 Summary Economic, and Environmental Impacts of Alternatives ...........................24 5.1 Findings and Insights..........................................................................................27 6 References: .................................................................................................................... 30 Figures Figure 1: SROI Triple Bottom Line Accounting.............................................................................3 Figure 2: EPA RFS Nested RIN Categories and Volumes...........................................................5 Figure 3: Historical RIN values From the EPA from 2015 Through August 2020 .........................6 Figure 4: California LCFS Market History..................................................................................... 7 Figure 5: PhysRNG Value Considerations....................................................................................8 Figure6: Organics Diversion......................................................................................................11 Figure 7: Lifecycle Cost Structure and Logic Diagram................................................................14 Figure 8: RIN Credit Value Structure and Logic Diagram...........................................................15 Figure 9: Renewable Electricity Production Value Structure and Logic Diagram .......................16 Figure 10: Renewable Natural Gas Value Structure and Logic Diagram....................................17 Figure 11: GHG Emissions Structure and Logic Diagram..........................................................23 Tables Table ES-1: Summary and Ranking of Monetary and Non -Monetary Results ..............................3 Table ES-2: Indexed and Weighted Scores for each Alternative..................................................4 Table ES-3: Potential Biogas Utilization Alternatives Combinations.............................................5 Table 1: Summary of the Alternatives and Diversion Scenarios evaluated for Feasibility ..........11 Table 2: Biogas Utilization Alternatives Summary......................................................................13 Table 3: Value of RIN Credits.....................................................................................................15 Table 4: Value of Renewable Electricity Production...................................................................16 Table 5: Estimated Energy Inputs for Each Alternative..............................................................19 Table 6: Estimated GHG Emissions...........................................................................................22 Table 7: Social Costs of GHG Emissions...................................................................................23 Table 8: Summary of Monetary Benefits and Costs ($ Millions, 2019).......................................24 Table 9: Summary of Non -Monetary Impacts.............................................................................25 Table 10: Summary and Ranking of Monetary and Non -Monetary Results................................26 Table 11: Indexed and Weighted Scores for each Alternative....................................................27 Table 12: Potential Biogas Utilization Alternatives Combinations...............................................28 Appendices Appendix A -Low Diversion Scenario Digester Costs Appendix B — Financial Proforma — Breakeven Analysis City of Iowa City I CRAP Methane Recovery Feasibility Study F)7Z Executive Summary Executive Summary In December 2019, the City of Iowa City (City) selected HDR Engineering, Inc. (HDR) to perform a Methane Recovery Feasibility Study to address two specific Action Items included in the Iowa City Climate Action and Adaptation Plan (CARP): Action Number 3.7: Take Action on a Study to Efficiently Capture and Use Methane from Wastewater Operations "After water is used by residents, it flows into the wastewater system and then goes to the City's Wastewater Treatment Facility. While the City currently captures methane gas from the digesters used in the wastewater treatment process, only a portion of the methane is used to offset natural gas usage for the plant. To explore other options for further management of wastewater greenhouse gas (GHG) emissions, the City should conduct a study to determine the feasibility of using all captured methane to create renewable fuel or electricity that can be used to operate the facility, and take specific actions based on the results of this study. " Action Number 3.8: Take Action on a Feasibility Study on Energy Generation from Landfill Methane "The methane produced by decomposition of organic waste in the Iowa City Landfill is currently being flared to transform it into carbon dioxide, which is a less potent GHG. The City has been considering methods to use the methane as a renewable energy source, and to further explore this opportunity, the City will conduct a Feasibility Study in FY2019 and take specific actions based on the results of this study." This Feasibility Report incorporates a number of recently completed Technical Memorandums (TMs) that evaluated current and future biogas generation potential and identified alternatives for utilizing biogas at the Iowa City Wastewater Treatment Plant (WWTP) and/or the Landfill and Recycling Center (Landfill). HDR used its Sustainable Return on Investment (SR01) process to measure the feasibility of the objectives. The Study objectives are to evaluate current and future methane generation, collection, processing, and reuses at the two facilities based on the following three categories for feasibility: • Net GHG emissions, considering both incremental emission sources and direct and indirect reductions; • Net Energy impacting, applying an Energy Return on Energy Invested (EROEI) methodology; • Economics, using HDR's SROI framework to monetize the benefits associated with beneficial reuse of methane sourced from the Landfill and WWTP. HDR analyzed three alternatives to beneficially reuse biogas generated at the WWTP and Landfill, as well as GHG emissions and financial impact of expanding composting operations to handle ES-1 City of Iowa City I CRAP Methane Recovery Feasibility Study F)7Z Executive Summary incremental food waste diverted from the Landfill. The following is a description of each alternative: • Alternative 1: Natural Gas Pipeline Injection. This alternative is divided into two sub - alternatives: o Alternative 1 a — WWTP NG Pipeline Injection. o Alternative 1 b — Landfill NG Pipeline Injection. • Alternative 2: Electricity Generation. This alternative is divided into two sub - alternatives: o Alternative 2a — WWTP Electricity Generation. o Alternative 2b — Landfill Electricity Generation. • Alternative 3: WWTP Natural Gas Replacement • Alternative 4: Composting Recognizing the synergy with another Action in the City's CRAP, Item 3.2 Increase Composting of Organics, the alternatives consider impacts of diverting incremental volumes of food waste from the Landfill to the existing WWTP, a new, dedicated anaerobic digester (AD) located at the WWTP, and expanded composting operations. Each of the alternatives listed except Alternative No. 4 consider three organics diversion scenarios: 1) No incremental organics diversion (No -Diversion) 2) Additional 1,500 tons organics diverted from Landfill, which represents the available capacity at the existing WWTP AD (1,500 tons) 3) 20% of food waste diverted from landfill to a future "new" AD (Low -Diversion) HDR developed an opinion of probable construction costs (OPCC) and opinion of operations and maintenance (O&M) costs for the No -Diversion scenario for each alternative. The No -Diversion scenario costs were then extrapolated to estimate costs for the two diversion scenarios for each alternative. The SROI analysis considers the triple bottom line (i.e., economic, environmental, and social) benefits of methane reuse. This study focuses on the economic and environmental impacts. The analysis took into account: • Estimated reductions in GHG emissions and the associated social cost of carbon; • Value of Renewable Identification Number (RIN) credits under the Renewable Fuel Standard Program; • Value of electricity exported to the grid under net metering and buyback agreements with MidAmerican Energy Company and the Eastern Iowa Light and Power Cooperative; • Value of avoided natural gas purchases; • Capital investment and O&M costs of biogas reuse alternatives; and • Energy Return on Investment (EROEI). The results of this study are intended to help the City assess the viability of, and prioritize, alternatives with the greatest potential to reduce GHG emissions under CARP Action Items 3.7 ES-2 City of Iowa City I CRAP Methane Recovery Feasibility Study F)7Z Executive Summary and 3.8. This Report details technical information on the feasibility analysis and summarizes the previous Technical Memorandums (TMs) that were completed by HDR leading up to the SROI analysis: 1. Evaluation of Existing Facilities TM 2. Wasteshed Analysis TM 3. Biogas Utilization Alternatives TM The monetary and non -monetary results and rankings by metric are presented in Table ES-1. The evaluation of economic and environmental impacts considered a time horizon or study period, which includes project development (construction and implementation) and 30 years of operation and benefit. This extends to 2050 and aligns with the planning horizon of the City's CRAP. All monetary Costs and benefits have been converted to present value using a 3% discount factor and are compared using a benefit to cost ratio (BCR), benefits divided by costs. BCR's exceeding 1.0 indicate that the benefits from the alternative exceed the costs of the investment over a 30 year period. The non -monetary metrics include EROEI and lifecycle change in CO2e emissions. Table ES-1: Summary and Ranking of Monetary and Non -Monetary Results WWTP Alt. 1a - ND 40,500 ME 6.9 0.20 Alt. 1a - 1500 77,800 12 7.9 6 0.22 9 Alt. 1a - LD 436,200 6 7.9 4 0.39 Landfill Alt. 1b - ND 820,500 3 7.5 8 1.62 3 Alt. 1b - 1500 844,500 2 7.6 7 1.63 2 Alt. 1b - LD 931,800 1 7.9 5 1.69 1 WWTP Alt. 2a - ND 191000 16 2.0 13 0.05 16 Alt. 2a - 1500 60,000 13 12.4 3 0.10 15 Alt. 2a - LD 395.0600 7 13.3 1 0.18 12 Landfill Alt. 2b - ND 459,200 5 1.5 15 0.76 6 Alt. 2b - 1500 3861500 8 2.1 12 0.69 7 Alt. 2b - LD 5851200 4 12.6 2 0.89 5 WWTP Alt. 3 - ND 40,900 14 4.6 10 0.11 14 Alt. 3 - 1500 781300 11 3.4 11 0.13 13 Alt. 3 - LD 252,200 10 1.8 14 0.20 10 Compost Alt.4 365.0100 9 0.0 16 0.96 4 The results show that: • Only Alternative 1 b (landfill natural gas) has benefits that exceed the costs; • The highest BCR (1.69) is Alternative 1 b -Low-Diversion. This alternative ranks highest on total lifecycle CO2e emission reductions, and when combined with the value of RIN credits results in the greatest economic benefits; • All of the alternatives result in a net reduction in CO2e over the next 30 years; ES-3 City of Iowa City I CRAP Methane Recovery Feasibility Study F)7z Executive Summary • All alternatives except for composting result in an EROEI of 1.0 or greater (incremental composting of food waste does not generate energy); • Alternative 2a (WWTP Electricity Generation) -Low-Diversion ranks highest on EROEI; • Alternative 1 b -Low-Diversion is ranked 5th on EROEI; and • Changing the value of the SCC was found to have no effect in ranking as the value influences all of the alternatives equally. To aid in the comparison of the monetary and non -monetary metrics and provide insight from this Feasibility Study towards actions under 3.7 and 3.8, the results have been combined into a weighted score as shown below in Table ES-2. Each result was converted to an index (1 to 0) and were then weighted equally into a total score with a maximum value of 1. Table ES-2: Indexed and Weighted Scores for each Alternative Alternative Location Alternative GHG EROEI BCR Total Rank Description Reductions # Score .& Pipeline WWTP Alt. 1a - ND 0.01 0.17 0.04 0.23 13 Injection Alt. 1a - 1500 0.03 0.20 0.04 0.27 11 Alt. 1a - LD 0.16 0.20 0.08 0.43 6 Landfill Alt. 1b - ND 0.29 0.19 0.32 0.80 3 Alt. 1b -1500 0.30 0.19 0.32 0.81 2 � Alt. 1b - LD 0.33 0.20 0.33 0.86 1 Electricity WWTP Alt. 2a - ND 0.01 0.05 0.01 0.07 16 Generation Alt. 2a - 1500 0.02 0.31 0.02 0.35 7 Alt. 2a - LD 0.14 0.33 0.04 0.51 5 Landfill Alt. 2b - ND 0.16 0.04 0.15 0.35 8 Alt. 2b -1500 0.14 0.05 0.14 0.33 9 Alt. 2b - LD 0.21 0.32 0.18 0.70 4 Natural Gas � WWTP Alt. 3 - ND 0.01 0.12 0.02 0.15 14 Replacement Alt. 3 - 1500 0.03 0.08 0.02 0.14 15 Alt. 3 - LD 0.14 0.05 0.04 0.23 12 Expanded Compost AIt.4 Composting 0.13 0.00 0.19 0.32 10 Based on the indexing and weighting exercise: • Alternative 1 b (landfill natural gas) -Low-Diversion has the highest score (0.86). • Alternative 1 b (landfill natural gas) - 1500 ton diversion is ranked second. • Alternative 1 b (landfill natural gas) - No -Diversion is ranked third. E If the City is instead focused on reductions that will be reflected in its municipal and community - scale GHG emission inventory, then evaluation should be narrowed to focus on Alternative 2, Electricity Generation, and Alternative 3, Natural Gas Replacement. While electricity generated at the WWTP or Landfill (2a and 2b, respectively) could very well be pushed to the power grid, contractual agreements with local utilities could allow the City to retain and retire RECs for GHG accounting purposes. Specifically, RECs could be applied to the City's Scope 2 market -based GHG inventory. Using RNG to displace natural gas use at the WWTP would result in lower ES-4 City of Iowa City I CRAP Methane Recovery Feasibility Study F)7Z Executive Summary Scope 1 GHG emissions. Focused on these two alternatives, Alternative 2b - Low -Diversion is ranked highest (fourth overall), followed by Alternatives 2a - Low -Diversion and 2a -1500. These alternatives are ranked 4, 5 and 7 overall. Finally, biogas utilization alternatives can be combined together with others, and some can be incorporated as standalone projects (as shown in Table ES-3). Table ES-3: Potential Biogas Utilization Alternatives Combinations Landfill Location No Diversion 1500 ton/yr Diversion Low Diversion Weighted and Indexed Performance Indicators Total Score, inclusive of: Do Nothing NG Pipeline Injection Electricity Generation NG Pipeline Injection Electricity Generation NG Pipeline Injection Electricity Generation GHG Reduction, EROI, and BCR Alt lb -ND Alt 2b-ND Alt 1b-1500 Alt 2b-1500 Alt lb-LD Alt 2b-LD Do Nothing 0 0.80 0.35 0.81 0.33 0.86 0.70 �' �• NG Pipeline Injection Alt la -ND 0.23 1.02 0.58 ><><><><e. Electricity Generation Alt 2a-ND 0.07 0.87 0.42 ><><><>< NG Replacement Alt 3-ND 0.15 0.95 0.50 ><><><>< EP z oe• o o NG Pipeline Injection Alt 1a-1500 0.27 ><>< 1.08 0.60 ><>< Electricity Generation Alt 2a-1500 0.35 [,><>< 1.16 0.68><>< NG Replacement Alt 3-1500 0.14 >< 0.95 0.47 ><>< 73 Q. NG Pipeline Injection Alt la-LD 0.43 >< >< 1.30 1.13 Electricity Generation Alt 2a-LD 0.51 >< >< 1.37 1.21 r(u' r NG Replacement Alt 3-LD 0.23 ><><><I 1.09 0.93 There are 18 unique possible combinations of alternatives, boxes in Table ES-3 with blue numbering indicate the individual alternative scenarios at either the Landfill or at the WWTP. The individual alternatives can be combined together, but must be done so following the same waste diversion scenario from the Landfill. Specifically, an alternative from No -Diversion scenario cannot be combined with an alternative from the Low -Diversion scenario. When combining the alternatives the scores from the Landfill and WWTP alternatives can be added together to identify the optimal combination of actions under each of the waste diversion scenarios. The highest scored individual alternatives are consistently Alternative 1 b - NG Pipeline Injection (landfill alternatives for each of the No -Diversion, 1500 ton diversion, and Low -Diversion scenarios). Identifying the optimal combination of actions may be approached as follows: select the highest scored alternative from the desired waste diversion scenario (shown to be from the Alternative 1 b - NG Pipeline Injection landfill alternatives) then work down the column to the corresponding green shaded boxes. Select the highest scored, or desired, combination. Corresponding capital costs for each individual alternative are also additive when combined. For example, if choosing ES-5 City of Iowa City I CRAP Methane Recovery Feasibility Study F)7Z Executive Summary from Alternative lb — NG Pipeline Injection (at the Landfill, Total Score of 0.81), with 1500 ton diversion to the WWTP, work down the column (or "diversion lane") to the desired combination scenario. In this case, combining with Alternative 2a — Electricity Generation at the WWTP, results in a combined score of 1.16. As capital costs are also additive, consideration should be given to the seemingly minor weighted score differential. In the example of combined Alt 1 b-1500 with Alt 2a-1500, there is an estimated $6.21VI savings to select Alt 1 b-1500 with Alt 1 a-1500. Path Forward HDR recognizes that incremental food waste diversion is not an instantaneous process, but the SROI analysis provides an assessment of the resulting impact when achieved. This Report provides decision tools to support the City's further consideration and decision making. Consequently, the City might consider the following path forward to further evaluate and implement the preferred alternative(s): i. City decision on desired diversion scenario and methane utilization at the WWTP to narrow the field of alternatives. (0-6 months) ii. Further technical analysis to develop organics management strategies to achieve a targeted diversion scenario and further evaluate life cycle costs of co -digestion (if desired) and biogas utilization to generate electricity or RNG. Consideration of impacts to planned digester rehab project. (3-6 months) iii. Conceptual Design Development of the selected alternative(s), providing basis of design parameters and implementation planning. (3-6 months) iv. Detailed Design Development. (TBD) V. Bidding and Construction. (TBD) It may be prudent for the City to complete items i) and ii) within the next 6-months for capital planning purposes. ES-6 City of Iowa City I CRAP Methane Recovery Feasibility Study F)7Z Introduction 1 Introduction In December 2019, the City of Iowa City (City) selected HDR Engineering, Inc. (HDR) to perform a Methane Recovery Feasibility Study to address Action Items 3.7 and 3.8 included in the Iowa City Climate Action and Adaptation Plan (CARP). The CARP contains objectives for conducting a study that would determine the feasibility of methane generation, collection, processing, and potential re -use at the Iowa City Wastewater Treatment Plant (WWTP) and/or the Landfill and Recycling Center (Landfill). HDR used its Sustainable Return on Investment (SROI) process to measure the feasibility of the objectives. This Feasibility Report evaluates alternatives for methane gas recovery and beneficial reuse of biogas at the City WWTP and/or Landfill as part of the City's CAAP objectives. This evaluation focuses on monetizing the benefits associated with the reuse of methane sourced from either the WWTP and/or the Landfill. The SROI analysis considers the triple bottom line (i.e., economic, environmental, and social) benefits of methane reuse. This study focuses on the economic and environmental impacts. The analysis took into account: • Estimated reductions in Greenhouse Gas (GHG) emissions and the associated social cost of carbon; • Value of Renewable Identification Number (RIN) credits under the Renewable Fuel Standard Program (RFS); • Value of electricity exported to the grid under net metering and buyback agreements with MidAmerican Energy Company and the Eastern Iowa Light and Power Cooperative; • Value of avoided natural gas purchases; • Capital investment and O&M costs of biogas reuse alternatives; and • Energy Return on Investment (EROEI). The results of this Study are intended to help the City assess the viability of alternatives with the greatest potential to reduce GHG emissions under CARP Action Items 3.7 and 3.8. This Report details technical information on the feasibility analysis and summarizes the previous Technical Memorandums (TMs) that were completed by HDR leading up to the SROI analysis: 1. Evaluation of Existing Facilities TM 2. Wasteshed Analysis TM 3. Biogas Utilization Alternatives TM 2 Project Background 2.1 Climate Action and Adaptation Plan In September of 2018, the City Council approved its Climate Action and Adaptation Plan. CAAP included specific actions to achieve GHG emissions targets. The plan's targets are in accordance with the Paris Agreement and include city-wide carbon emissions reductions of 25-28% over 2005 City of Iowa City I CRAP Methane Recovery Feasibility Study F)7z Project Background levels. On August 6th, 2019, the City passed Resolution 19-218 declaring a climate crisis and requesting accelerated action toward carbon emissions reductions in an effort to meet the Intergovernmental Panel on Climate Change (IPCC) target of limiting global warming to 1.5 Celsius. CRAP identified 35 actions related to buildings, transportation, waste, adaptation, and sustainable lifestyle to help the City achieve its goals for reducing carbon emissions. Furthermore, these 35 actions were broken into 3 phases with phase 1 actions to be initiated by the end of 2020. Under waste actions 3.7 and 3.8 the City is looking to explore ways to recover and beneficially reuse methane from landfill and WWTP. The importance of these actions were reiterated in the Accelerating Iowa City's Climate Action Plan, published in April 2020. As noted in the CARP: Action Number 3.7: Take action on a feasibility study to efficiently capture and use methane from wastewater operations: "After water is used by residents, it flows into the wastewater system and then goes to the City's Wastewater Treatment Facility. while the City currently captures methane gas from the digesters used in the wastewater treatment process, only a portion of the methane is used to offset natural gas usage for the plant. To explore other options for further management of wastewater greenhouse gas (GHG) emissions, the City should conduct a study to determine the feasibility of using all captured methane to create renewable fuel or electricity that can be used to operate the facility, and take specific actions based on the results of this study. " Action Number 3.8: Take action on a feasibility study on energy generation from landfill methane. "The methane produced by decomposition of organic waste in the Iowa City Landfill is currently being flared to transform it into carbon dioxide, which is a less potent GHG. The City has been considering methods to use the methane as a renewable energy source, and to further explore this opportunity, the City will conduct a feasibility study in FY2019 and take specific actions based on the results of this study." 2.2 Feasibility Study The objective of this Feasibility Study is to evaluate alternatives developed to support actions 3.7 and 3.8. To conduct this study, HDR applied its SROI framework to evaluate alternatives. The following sections of this report detail: • The approach used. • The alternatives considered. • The economic analysis methods used to evaluate alternatives. • A summary of the economic analysis results. • Recommendations for waste actions 3.7 and 3.8. 2 City of Iowa City I CRAP Methane Recovery Feasibility Study F)7z Project Background 2.2.1 SROI Background SROI evaluates whether the public value of a project is sufficient to justify the money required to develop the project and which alternative provides the greatest financial and societal return relative to the project cost. SROI process is an enhanced form of benefit cost analysis (BCA) that involves a systematic comparison of the benefits and costs of projects in ways that communicate a project's triple -bottom line outcomes, (i.e. its full range of environmental, social and economic impacts). SROI originated from a commitment by HDR to develop a new generation of public decision support metrics for the Clinton Global Initiative (CGI) in 2007. SROI was developed with input from Columbia University's Graduate School of International Public Affairs and launched at the 2009 CGI annual meeting. Since then, the SROI process has been used by HDR to evaluate the monetary value of numerous sustainability programs and projects for water and wastewater infrastructure utilities around the country. 2.2.2 Methodology of SROI Process The SROI process draws from standard economic BCA methods and the best available data to systematically calculate and compare the benefits and costs of project alternatives. The process addresses sustainability goals and outcomes from a triple bottom -line perspective, meaning the range of potential environmental, social, and economic impacts (see Figure 1). In this Feasibility Study, impacts are associated with the economic and environmental benefits related to the value of RIN credits to the City as well as the social cost of carbon associated with changes in GHG emissions. In addition, the EROEI and tons of GHG emissions are estimated as non -monetary metrics. Figure 1: SROI Triple Bottom Line Accounting Community Development Emissions Energy Health &Safety Life -Cycle Costs Mobility Risks Waste Water 0 0 Environmental Ivey Performance Indicators Economic Value The SROI process builds on best practices in benefit -cost and financial analysis methodologies, complemented by advanced risk analysis and stakeholder elicitation. Typically, the SROI process is implemented in four steps, which include: 1. Develop the structure and logic diagrams (S&L's): Structure and logic diagrams are useful to display the understanding of how key variables within an analysis interact to influence the intermediate or final outputs being measured. These diagrams provide a 3 City of Iowa City I CRAP Methane Recovery Feasibility Study F)7z Renewable Natural Gas as a Resource transparent view of the calculations being made in the analyses for key stakeholders and subject matter experts to review and understand the process better. 2. Assign values to inputs: Values are assigned to inputs based on logic established in the S&L's. In some instances, ranges for inputs are established to enable the analysis to capture how an input will impact the project with the potential variability of its value essentially simulating real world conditions. 3. Develop consensus among stakeholders to validate inputs: The S&L's and inputs are then presented to stakeholders for validation. This is a key step in the SROI process. Stakeholders and subject matter experts are consulted regarding the values used to understand their view on these inputs. This step is critical for getting stakeholder buy -in on the process and seeking out additional knowledge that may not have been captured previously. 4. Evaluate impact on agency goals (e.g. cost, environmental impact, public perception, etc.), including simulation if applicable: These inputs will then be added into the model structure detailed with the structure and logic diagrams to evaluate the agency goals, specifically the costs or environmental impact. The alternative that best meets these criteria will be the one that is the most desirable alternative. 3 Renewable Natural Gas as a Resource Renewable Natural Gas (RNG) is biogas or landfill gas that has been treated or refined to natural gas (NG) quality. The resulting RNG can be used interchangeably with NG, but is considered renewable as it doesn't rely on petroleum and can therefore provide additional environmental attributes through federal and state programs. 3.1 Renewable Natural Gas - environmental Attributes as Vehicle Fuel 3.1.1 EPA - Renewable Fuel Standard The United States Congress created the Renewable Fuels Standard (RFS) through the Energy Policy Act of 2005 and revised the program with the Energy Independence and Security Act in 2007. The RFS is a renewable fuels program within the Clean Air Act which mandates that large fuel producers and blenders (Obligated Parties) must include within their fuel mix a growing portion of renewable fuels. The quotas required of the Obligated Parties are referred to as Renewable Volume Obligations (RVOs) and are established and tracked by the United States Environmental Protection Agency (EPA) through the use of renewable credits, also known as, Renewable Identification Numbers (RINs). The original program was designed to increase the RVOs until 2022 and then level off beyond that point unless Congress issued another amendment. The EPA can lower or raise the RVOs up to the maximum RVO quota set for 2022, but Congressional action would be required to eliminate the RFS program. The RFS program has pressure against it from the Oil and Gas Industry, but also has a strong support from the Corn Ethanol Industry, who represent half of the RIN market. 4 City of Iowa City I CRAP Methane Recovery Feasibility Study F)7Z Renewable Natural Gas as a Resource As the EPA's RFS, RVOs are developed by categorized RIN types based on their environmental benefit and the production pathway. These categories, D3 through D7, encompass lower value biofuels like corn -based ethanol (D6) up to high value biofuels like cellulosic biodiesel or ethanol (D3) (see Figure 2). RNG produced from landfill gas is considered D3 cellulosic biofuel in the RFS. RNG produced from wastewater biogas production from anaerobic digestion or co -digestion is considered D3 cellulosic or D5 advanced biofuel depending on the feedstocks used to production. The biogas produced from the digestion of municipal biosolids will be considered D3 cellulosic and have the highest value. However, any biogas produced by the co -digestion of municipal solids with hauled in or high strength wastes will be considered D5 advanced, unless each individual feedstock has a 75% or higher cellulosic content. Figure 2: EPA RFS Nested RIN Categories and Volumes Fi_. ure 3 presents the historical RIN values as reported by the EPA from 2015 through August 2020. 5 City of Iowa City I CRAP Methane Recovery Feasibility Study F)7z Renewable Natural Gas as a Resource Figure 3: Historical RIN values From the EPA from 2015 Through August 2020 s: �0 u 1wV„ �U.�w�w,,-� 15 N 16 2017 2018 2019 Me TranA rN`iN byWEz-. - -=-tr- .:.= Source: https://www.epa.gov/fuels-registration-reporting-and-compliance-help/rin-trades-and-price-information 3.1.2 California Low Carbon Fuel Standard In addition to RINs, carbon offset credits are also available through California's Low Carbon Fuel Standard (LCFS) program. The LCFS market has become a healthy market with more transactions and higher values throughout the last seven years (see Figure 4) and is not anticipated to end until 2032. LCFS credits can be obtained in addition to RIN credits as long as the renewable fuel is contracted for sale to an Obligated Party with end use in California. City of Iowa City I CRAP Methane Recovery Feasibility Study F)7Z Renewable Natural Gas as a Resource Figure 4: California LCFS Market History H 250 200 150 Q- 10G a� U 50 0 Monthly LCFS Credit Price and Transaction Volume vo lu rn e of Cred its Transacted (MT- — AR B Monthly Average Credit Price Argu s Med is Mo nthly I ndex Credit Price — OPIS Monthly Average Credit Price {— — — _ _ N a} JFPVIA 1JJASONDJFMAMJ JA50NCJFMAMJ JASONDJFM15MJ J A 5 0 N D J FMAMJJAS0NDJFMAMJ JA50NDJFMAMJ JASONDJFMAMJ J 2013 2014 2015 2016 2D17 2019 2019 2020 el. 5CG. DCC 4.0CT. ()Cc 3.500.000 a 3,0cc,0 0 0 2.5CG,CC C-•L- W E 2,CCCFCCC &P c� 1,5CC,CCC E 3 t,ccG,ccc 5Cc, OCC Iasi LI.odoted811212020 This chart tracks credit prices and transaction VOILImes over time. 'P'Jonthly average credit prices reported b�v Argris INIedia and CPI [used o.flth permission] are shown along with CARB monthly average pric.e- 3.1.3 Requirements and Pathways A requirement to be aware of for both of these programs (RFS and LCFS) is that they are specifically renewable fuels for transportation programs. As such, the fuel must ultimately be used as a transportation fuel in order for the renewable attribute to be recognized. A renewable fuel producer is not required to explicitly find a transportation end user of the fuel it produces, however, at some point along the fuel supply pathway, it must be used as transportation fuel so that an Obligated Party can claim the RIN and/or the LCFS credit and meet its obligation with the EPA or with California. The production and sale of RNG and environmental attributes like RINs and/or LCFS occurs in two pathways; the physical pathway and the contractual pathway for the attributes. The physical pathway is the sale of the RNG by the producer to end user of the gas via the natural gas grid. The contractual pathway for the attributes is separate and handled by third party which verifies that the RNG is truly renewable and markets the attributes to Obligated Parties. Figure 5 illustrates the two pathways of RNG and RIN/LCFS sales. It is important to note that the molecules of natural gas don't actually have to be used as vehicle fuel, but the physical pathway needs to be verified through the grid system. 7 City of Iowa City I CRAP Methane Recovery Feasibility Study F)7z Renewable Natural Gas as a Resource Figure 5: PhysRNG Value Considerations - Landfill 1astewaterip o'1ect Owner wris one or 0 more RNG Treatment Plant upgrading nd injection facilities APL - Waste Digester I J FAIf_ITIES MUST BE REGISTEREDWITH r � THE REGULATORS - � EPA. CARB, ETC Facility injects purified RNG into utility pipeline Gas is co -min led with pipeline gas. Project owner sells the physical gas to gas marketer. utility or local end user. Pipeline is paid for transport. Environmental aspects are separated. CNG Endilk — 1 1 1 1 CNG End User � i j Gas is CNG End User I extracted — anywhere on the grid for � I use as CNG CNG End User I Project owner holds multiple contractual pathways for CNG end use for generation and trade of environmental aspects The value of RNG should take into account following: � I l � � I I CNG End User i 1 r I � CNG End User - - - - - - _ _ - - - - - _ - J 1. The value of the RNG as natural gas based on the natural gas commodity market. 2. The value of environmental attributes obtained through the RFS (D3 or D5) 3. The value environmental attributes obtained through the LCFS. 4. The cost of compliance with the RFS and LCFS. 5. The cost of marketing the environmental attributes to Obligated Parties. Items 1-3 should be considered as ranges (low, median, high) to account for the variability in future market values. The biogas revenues at the WWTP need to be divided into D3 and D5 categories. The biogas produced in the anaerobic digesters handling municipal biosolids will produce D3, but biogas produced at the co -digestion facility will be D5, but may be eligible for LCFS depending on the carbon intensity score. Items 4 and 5 are included to reflect the cost of bringing the gas to market within the environmental attribute programs. The RFS is highly regulated, so market RIN values are typically reduced by 15% and the LCFS values by 15-30% to account for the third part cost of compliance and marketing the environmental attributes to Obligated Parties. The third parties are either gas marketing companies or the Obligated Parties themselves, and are typically selected by a Request for Proposal (RFP) process. The resulting contractual arrangement specifies the City's share be based on either a fixed price or percentage of total revenue and the term of the agreement. The third party will qualify the RINs with EPA, qualify with California for LCFS credits, develop QA programs for certification, and administer the program. The City is then paid by the third party for both the natural gas commodity value and the associated renewable attributes based on a monthly or quarterly invoice. City of Iowa City I CAAP Methane Recovery Feasibility Study F)7Z Description of Project Alternatives 4 Description of Project Alternatives Three beneficial reuse alternatives were analyzed for current and future biogas generated at the WWTP and Landfill. For a complete and detailed assessment, please refer to the Biogas Utilization Alternatives Analysis Technical Memorandum previously provided by HDR, dated July 171 2020. Recognizing synergy with another action in the City's CRAP, Action Item 3.2 Increase Composting of Organics, HDR also considered impacts of diverting incremental volumes of food waste from the Landfill to the existing WWTP, a new, dedicated anaerobic digester, and expanded composting operations. The following is a description of each alternative. Alternative 0 • Natural Gas Pipeline Injection Biogas Utilization Alternative 1 assumes that the City purchases and operates equipment to condition the biogas to natural gas quality (RNG) for injection into the natural gas pipeline. To provide an interconnection point, the natural gas utility (MidAmerican Energy Company) would route a new pipeline from the existing natural gas distribution system to the City's property. The City would be required to reimburse the utility for the cost of the connecting pipe, and also pay an annual pipeline usage fee. This pipeline usage fee is dependent on the amount of RNG injected into the natural gas pipeline by the City. Assuming natural gas quality meets the RFS Program, the City would sell RIN credits and surrender any downstream GHG emissions reductions that would be realized by the Obligated Party purchasing the credits. Alternative 1 is applicable to both the WWTP and Landfill, presented as alternatives 1a and 1 b, respectively. Alternative 2- Electricity Generation Biogas Utilization Alternative 2 assumes that biogas is conditioned and utilized in engine generators owned and operated by the City to produce renewable electricity. The electric power utility (MidAmerican Energy or Eastern Iowa Light & Power) would establish a connection to the grid, enabling the City to sell the renewable power. The City would be required to reimburse the electric utility for all system upgrades required to accommodate the connection. Under this alternative, HDR assumes that the City's contract with the electric power utility would allow the City to retain Renewable Energy Credits (RECs) to offset GHG emission associated with electricity use in their buildings and facilities. Alternative 2 is applicable to both the WWTP and Landfill, presented as alternatives 2a and 2b, respectively. Alternative 3: WWTP Natural Gas Replacement Biogas Utilization Alternative 3 involves conditioning biogas to natural gas quality with the intent of using the RNG in place of the natural gas at the WWTP. Biogas would be conditioned to natural gas quality by equipment owned and operated by the City to be installed at the WWTP. The WWTP RNG produced will exceed the amount of natural gas used at the plant. As such, the City would need to either: find a use for the excess RNG produced, flare the excess gas, or the City would only condition the amount of biogas needed and the excess biogas would be flared. For this analysis, it was assumed that RNG production would be capped at 62,848 standard cubic feet per day. Alternative 3 is only applicable to the WWTP as natural gas is not consumed at the landfill. 9 City of Iowa City I CAAP Methane Recovery Feasibility Study F)7Z Description of Project Alternatives Alternative 4: Composting Alternative 4 consists of diverting organic waste that would typically be placed in the landfill to a new or expanded composting facility. Because the existing composting operation is at capacity, this alternative assumes the City would utilize existing owned -land and purchase equipment to expand composting capacity. This alternative is only relevant for the Low -Diversion scenario, further described in the section below. 4.5 Organics Diversion Scenarios Recognizing the synergy with the City's goal to increase composting of organics, HDR evaluated the relative cost and GHG emissions impact for each of the four alternatives under three food waste diversion scenarios. HDR's previous technical analysis determined the impact on future biogas generation quantity when some of the City's organic matter is diverted from the Landfill for co -digestion or composting. The three organics diversion scenarios include: 1) No Organics Diversion. The No Organics Diversion scenario assumes that all organics material is disposed of in the Landfill (i.e. current operation). 2) 1,500 tons. The 1,500 tons scenario assumes that an additional 1,500 tons of food waste material will be diverted from the Landfill to the existing WWTP anaerobic digester each year. This quantity represents the current available capacity in the WWTP anaerobic digester; therefore, no additional digester capacity is required for this diversion scenario. This scenario is not applicable to composting, as the existing facility is operating at capacity. 3) Low -Diversion. The Low -Diversion scenario assumes that 20% of organic material (7,960 tons/year) currently disposed of at the Landfill is diverted to new anaerobic digesters or an expanded composting facility. For GHG emissions modeling purposes, HDR assumed that the additional diverted organic material is entirely comprised of food waste. The required anaerobic digester volume required for the Low -Diversion scenario is 1.4 million gallons (MG). For purposes of this study, HDR assumed that the new waste receiving station and standalone anaerobic digesters required to accept the additional diverted food waste would be located at the WWTP. A standalone digester facility for the diverted organic waste was assumed because the RIN credits for RNG produced in a municipal WWTP digester will have a higher value than those for RNG produced by a diverted waste digester. Additionally, the WWTP digester gas contains high levels of siloxanes. It is beneficial to keep the two sources of biogas separated until the siloxanes are removed from the WWTP biogas. Over the course of the Study development, discussion with City staff supported retaining digester capacity within the existing complex to support municipal biosolids. Therefore, for a planning level, Feasibility Study, an independent system to support new low -diversion digesters is proposed. Implementation would include independent operation, and not an expansion of the existing digester facility. However, as the plan is refined, a more detailed evaluation and conceptual design should be conducted to further determine the best approach for the City. 10 City of Iowa City I CAAP Methane Recovery Feasibility Study F)7z Description of Project Alternatives Figure 6: Organics Diversion lt.e, ORGANICS DIVERSION MEMO Blia I I I III CO -DIGESTION COMPOSTING LANDFILL A summary of the alternatives and diversion scenarios selected for the SROI analysis are listed in Table 1. Table 1: Summary of the Alternatives and Diversion Scenarios evaluated for Feasibility Alternative Description Facility Scenario Name am &W Location Pipeline Injection Sell RIN credits, & no additional organics WWTP Alt. 1a - ND (Alt. 1) diversion Landfill Alt. 1b - ND Sell RIN credits, & 1,500 TPY organics WWTP Alt. 1a - 1500 Div diverted from landfill Landfill Alt. 1b - 1500 Div New AD facility, sell RIN credits, & 7,960 WWTP Alt. 1a - LD TPY organics diverted from landfill Landfill Alt. 1b - LD Electricity No additional organics diversion WWTP Alt. 2a - ND Generation Landfill Alt. 2b - ND (Alt. 2) 1,500 TPY organics diverted from landfill WWTP Alt. 2a - 1500 Div Landfill Alt. 2b - 1500 Div 7,960 TPY organics diverted from landfill WWTP Alt. 2a - LD Landfill Alt. 2b - LD Natural Gas No additional organics diversion WWTP Alt. 3 - ND Replacement 1,500 TPY organics diverted from landfill WWTP Alt. 3 - 1500 Div (Alt. 3) New AD facility, & 7,960 TPY organics WWTP Alt. 3 - LD diverted from landfill Expanded Composting 7,960 TPY organics diverted from landfill Compost Alt. 4 (Alt. 4) Some of the alternatives listed in Table 1 can be constructed as standalone alternatives. Additionally the alternatives can be constructed together in various combinations provided the same waste diversion scenario is followed. For example, Alternative lb — NG Pipeline Injection at the Landfill may be constructed at the Landfill with no improvements at the WWTP. 11 City of Iowa City I CAAP Methane Recovery Feasibility Study F)7Z Description of Project Alternatives Alternatively, Alternative 1 b could be selected for utilization of the biogas at the Landfill, with Alternative 2a (Electricity Generation) selected for biogas utilization at the WWTP. A more detailed explanation and associated matrix table of possible combination scenarios is included later under Section 5.1. 4.5.1 Impacts to Existing Wastewater Treatment Plant Implementation of anaerobic digestion for organics diversion can result in impacts to the existing WWTP. The diverted organics need to be incorporated into a mixture with a target feed total solids (TS) content of 6 percent. This requires the use of makeup water to create the mixture in a receiving station. Typically, the makeup water is a combination of digester recycle and WWTP effluent. The total water feed rate into the digester is estimated near 90,000 gallons per day, and the makeup water stream would be small. A more important impact to the existing WWTP is the return stream from the diversion digester. After dewatering of the digested solids, some of the excess water must be returned to the plant as recycle. Digestion of organics results in the release of nutrients, nitrogen and phosphorus in the forms of ammonium and phosphate, respectively. After dewatering, the nutrients are divided between the solids and liquids residuals. A fraction of the nutrients would remain with the solids to their ultimate disposal (e.g. land application or landfilling). The remaining fraction is recycled with the liquid residuals to the WWTP. Recycled nutrients then consume part of the nitrification and nutrient removal capacities of the treatment facility. In addition, the carbon to nutrient ratio is skewed and biological nutrient removal becomes less favorable. This means that carbon addition may be needed to support biological nutrient removal. Further, liquid treatment capacity and cost must be reevaluated with potential increases to nutrient loading. Organic waste nutrient content varies considerably. The nitrogen content can vary between 5 and 50 percent of the TS, and the phosphorus content can vary between 1 and 10 percent of the TS. This analysis used typical food waste values of roughly 10 percent for nitrogen content and 5 percent for phosphorus for the analysis. The result is an additional 150 to 200 lb-N/d nitrogen load and an additional 30 to 50 lb-P/d phosphorus load estimated for the WWTP for every ton/d of organics diversion. In all, every 1 ton/d of diverted wastes results in a recycle containing between 2 and 3 percent of the WWTP's nitrogen capacity. The Low -Diversion scenario is based on about 4 ton/d of organics diversion, which could use between 8 and 12 percent of the WWTP's TKN capacity'. Estimated Cos' A detailed opinion of probable costs and opinion of O&M costs was developed for the No - Diversion scenario for each alternative. The No -Diversion scenario costs (gas conditioning system and electricity generation equipment) were then extrapolated to estimate costs for the two diversion scenarios for each alternative. For the Low -Diversion scenario, costs were added for a new anaerobic digester and waste receiving station. The estimated biogas quantities for each 1 Design TKN capacity of WWTP identified as 6,311 lb-N/d based on NPDES permit issued 05/01/2020 12 City of Iowa City I CAAP Methane Recovery Feasibility Study F)7Z Description of Project Alternatives scenario as a basis for the extrapolation. Equipment proposals were also obtained for the No -Diversion scenario for each alternative. Table 2 contains a summary of the capital and O&M costs for each alternative selected for the detailed SROI analysis. Table 2: Biogas Utilization Alternatives Summary Opinionl 11111111111110 "_.. F Opinion of �- Alternative Probable DesignationAlternative scenario I AMW Wk AMIL M&Ost- O&M Costs No Diversion 1A - ND $81600,000 $1,353,000 la: WWTP NG 1,500 Ton Year 1A - 1500 $10 800 000 $1 815 000 p J Pipeline Injection / ' Low Diversion 1A - LD $41,400,000 $3,112,000 No Diversion 113- ND $29,200,000 $2,292,000 1b: Landfill NG 1,500 Ton Year 1B - 1500 $29,000,000 2 282 000 Pipeline Infection Low Diversion 1B - LD $28,000,000 $2,200,000 2a-2: WWTP No Diversion 2A - ND $13,500,000 $1,067,000 Electricity 1,500 Ton/Year 2A - 1500 $17,000,000 $1,432,000 Generation Low Diversion 2A - LD $50,000,000 $2,538,000 2b-2: Landfill No Diversion 2B - ND $20,500,000 $1,288,000 Electricity 1,500 Ton/Year 2B - 1500 $20,300,000 $1,282,000 Generation Low Diversion 2B - LD $19,600,000 $1,236,000 No Diversion 3 - ND $71700,000 $867,000 3: WWTP NG 1 500 Ton Year 3-1500 $9 700 000 $1 163 000 p Re lacement / ' Low Diversion 3 - LD $39,800,000 $2,136,000 4: Composting Low Diversion 4 $51700,000 $495,000 Description of Impact Categories The effect of an alternative differs across the individual impact categories (individual economic and environmental benefits and/or costs) and depends on the design of the project alternative, site conditions where the project is implemented, and characteristics in the community. Estimation of benefits and costs from a project depends on the degree to which linkages can be quantified between alternatives and a benefit or cost, and then available economic literature to value this change. This section develops the general assumptions and inputs used in the SROI analysis framework and describes the impacts. 4.7.1 General Assumptions and Inputs The SROI analysis measures benefits and costs throughout a 30-year period of analysis from 2021 to through the year 2050 representing the GHG emissions reduction goal year in the City's 13 City of Iowa City I CAAP Methane Recovery Feasibility Study F)7Z Description of Project Alternatives CARP. The methodology makes several important assumptions and seeks to avoid overestimation of benefits and underestimation of costs. Specifically: • Input prices are inflated to 2019 dollars; • The analysis period begins in 2021 and ends in 2050. It includes twenty-nine years of operations (2022-2050); and • A constant 3 percent real discount rate is assumed throughout the period of analysis. 4.7.2 Impact Categories Each of the evaluated impacts is discussed in detail in the following sections. The impacts are organized by their respective triple bottom line categorization (economic and environmental). 2.1 ECONOMIC IMPACTS Economic benefits include impacts that are created by the project after deducting the cost of all inputs, including the cost of the capital expenditures (CAPEX) and annual operations and maintenance (O&M) costs (lifecycle costs of the project alternatives). Economic benefits include value of RIN credits to the City. Additionally anon -monetary measure of economic efficiency includes energy return on investment. 4.7.2.1.1 Lifecycle Costs Lifecycle costs include CAPEX and annual OW for each alternative. The costs are estimated as a 30 year life -cycle costs as shown below in the S&L diagram. Figure 7: Lifecycle Cost Structure and Logic Diagram. 4.7.2.1.2 RIN Credit Benefits RIN credits provide a potential unique revenue source to Alternative 1. RINs are the credits that the US Environmental Protection Agency (EPA) uses to track and enforce compliance with the renewable fuels mandates set by the federal RFS Program. The City may be able to generate and sell RIN credits to Obligated Parties by producing RNG from biogas and injecting it into the pipeline for blending with conventional, non-renewable natural gas. Figure 8 illustrates the value of RIN credits. 14 City of Iowa City I CAAP Methane Recovery Feasibility Study F)7z Description of Project Alternatives Figure 8: RIN Credit Value Structure and Logic Diagram. The potential value of RIN credits beyond 2020 is shown below in Table 3. Based on this information and discussions between the City and HDR, the median D3 value ($16.18) was used in the SROI analysis for alternatives involving gas produced from the landfill. For alternatives located at the WWTP and food waste diversion scenarios the D5 value ($7.70) was used presuming the mix of a lesser quality gas. Table 3: Value of RIN Credits RIN and Carbon Market2 Units Total for D3 +Commodity $/MMBTU Total for D5 +Commodity $/MMBTU Total for D5 +Commodity + LCFS ' $/MMBTU Value Most Low likely Median High $16.18 $8.20 $11.69 $25.15 $12.37 $5.71 $6.71 $9.70 $7.70 $5.71 $11.69 $19.70 4.7.2.1.3 Renewable Electricity Production Revenue from electricity sales are assumed to be captured from both net metering and negotiated buyback agreements with MidAmerican Energy Company and Eastern Iowa Light and Power Cooperative. MidAmerican Energy Company (which supplies the electricity to the Iowa City Landfill) allows for net metering agreements for a facility nameplate generation capacity of up to 1 megawatt (MW) or 110% of its annual load. Credits from net metering agreements are paid out at the average locational marginal price (LIVIP) from the Midcontinent Independent System Operator (MISO) based on the generation profile of the resource. For energy produced beyond a nameplate capacity of 1 MW or 110% of its annual load, energy can be sold to MidAmerican Energy at a negotiated buyback rate. The Eastern Iowa Light and Power Cooperative allows for buyback agreements for facilities with a nameplate generation capacity exceeding 20 kilowatts (kW). Figure 9 illustrates the value of renewable electricity production. 2 HDR is NOT providing a revenue projection or analysis of financial feasibility of alternatives. Such projections are highly dependent on open market commodity pricing, political volatility, and local, state, and federal programs and policies. 15 City of Iowa City I CAAP Methane Recovery Feasibility Study F)7Z Description of Project Alternatives Figure 9: Renewable Electricity Production Value Structure and Logic Diagram Electricity production was monetized under the assumptions shown in Table 4. The landfill is assumed to export 110% of its 2019 electricity usage at the net metered rate offered by MidAmerican Energy Company, and any excess generation is monetized at the negotiated buyback rate. The wastewater treatment plant receives the Eastern Iowa Light and Power Cooperative avoided cost rate for all of its electricity generation. Table 4: Value of Renewable Electricity Production Electricity Sales Assumptions Units Value MidAmerican Energy Net Metering Rate C/kWh 2.6C3 MidAmerican Energy Negotiated Buyback Rate C/kWh 2.6C4 Eastern Iowa Light and Power Cooperative Avoided Cost RaW. C/kWh 4.2C5 2019 Iowa City Landfill Electricity Usage MW kWh 278,882 4.7.2.1.4 Value of Avoided Natural Gas Purchases The WWTP RNG produced will exceed the amount of natural gas used at the plant. As such, the City would need to either: find a use for the excess RNG produced, flare the excess gas, or the City would only condition the amount of biogas needed and the excess biogas would be flared. Production of RNG would prevent the facility from needing to purchase natural gas. For this analysis, it was assumed that RNG production would be capped at 62,848 standard cubic feet 3 The net metered rate is assumed to be a weighted average LMP based on 2019 hourly real-time LMP prices for the Illinois hub and the MISO load. Calculated based on data from Midcontinent Independent System Operator's market reports. ***********. misoenergy.org/markets-and-operations/real-time--market-data/market-reports/#nt=. MISO historical load data was gathered from EnergyOnline from January 1, 2019 to December 31, 2019. energyonIine.com/Data/GenericData.aspx?DataId=17. 4 Negotiated buyback rate is assumed to be equivalent to the average LMP price calculated for the net metering rate. 5 Weighted average calculation based on Eastern Iowa Light and Power Cooperative's posted avoided cost of generation during peak and off-peak hours. 16 City of Iowa City I CAAP Methane Recovery Feasibility Study F)7Z Description of Project Alternatives per day and valued at the delivered cost of natural gas at the facility assumed to be $3.166 per MMBtu. The value stream is shown in Figure 10. Figure 10: Renewable Natural Gas Value Structure and Logic Diagram 4.7.2.1.5 Energy return on energy investment Energy return on energy investment is the ratio of the amount of usable energy delivered from a particular energy resource to the amount of energy used to obtain that energy resource as illustrated below. Eo EROEI = Ei Where: Eo = Energy output Ei = Energy input The resulting ratio demonstrates the relative energy inputs necessary to produce the energy output for each alternative. The higher the EROEI, the greater the amount of energy that is yielded for the amount of energy produced. EROEI was estimated for each alternative except for Alternative 4, because composting does not generate energy. Energy output was based on the quantity of RNG produced or electricity generated. In addition to energy generated, HDR also factored in lifecycle energy use reduction using the USEPA Waste Reduction Model (WARM), which compares GHG emissions reductions and lifecycle energy savings from baseline and alternative waste management scenarios. HDR estimated change in lifecycle embodied energy by utilizing WARM to compare the baseline conditions to both 1,500 tons and Low -Diversion scenarios. Specifically, the output of the WARM model estimated the lifecycle energy use reduction by co -digesting or composting additional diverted food waste as compared to the baseline of landfilling this material. Because WARM is a lifecycle assessment tool, meaning impacts are estimated from cradle -to -grave, the estimated energy use reduction 6 Calculated based on natural gas delivered and delivery charges from the wastewater treatment plant's bill for the month of October 2020. 17 City of Iowa City I CAAP Methane Recovery Feasibility Study F)7z Description of Project Alternatives occurs outside of the City's reporting boundary and would not be evident in annual GHG emissions inventories. Direct energy input is based on the parasitic load of new equipment installed for the purposes of generating RNG or electricity, and does not include base load energy use required to operate the WWTP and Landfill Facilities based on current conditions. Specifically, direct energy input includes the parasitic load of the biogas conditioning equipment and electric generators. All energy output and input measures were converted into million British thermal units (MMBtu) to allow a relative comparison of alternatives. Table 5 provides details on each energy output and input value. The resulting EROEI's are presented in the results section of this report. 18 d� W — Ln M Q0 m m M Ln O r-I qzl- Q0 M�q;t 00 O O r--: 110 r-� r-� r-� r-� rl N N N rV M 4 cM r4 O w r-I r-I r-I W r4 1,0 Ln Ln � � r', r',4 Q0 Q0 � r14 0 O ^ _ V �, +•+ H to O qt O r-I Ln I� -4 � O O -zT 00 r-I M -4 M qt al lD Ln a) I� Ln I � 00 r -I O V 4A "WLn C m . l0 . I� . m . l0 . Q0 . � . � . � . M . r-I . O . l0 . M . M . wuw m '::I- al O M O N M 00 00 Ln M IZ. O !L- = = O q;l- M O r-i r-i lqt lD N M% Ifi I� lD I� O V —A W O r-i r-i N o0 00 00 r-I M m M r-I O O ^ O O lD qt O �D R::I- O l0 qt O t0 I�t lA qt O O I%� O I� O I� O I� O I� O O w V H al . � . a1 . � . al . . al N.. � al . Rt . O iA > aA V m al qt al qt al R;i- al I;t al q;t W V L- G� G1 G I*� fV q;l- I� N I� N I� N I� fsl O >, O C W r J W O CTN 4-0 O - O ^ N O r-I R;I- O O l0 M Itt M N O N lD l0 Q0 O O •— V G1 lD O I� O r-i r-I I� I� O O O r-I 00 r i M O M N m I� I� I� rl� A r l0 I� r1 lD w O I� I� m r-I O N M M + V 0 Ln O r-I qt N r-I m O N O r-I I� O � � m r-I 00 M m O m w M Ln w w Ln w O N >' W r-I r-I N 00 m I� M M M 10 :>_ M CL O O O O O O � N�MM O O O> CO>N � a1 �0 a1 L(i l0 a1 N (6 s r-I r-I N m m 00 cy) M M fV r-I W Ln O O O O O O r-I Ln N O >NU) Z Lo (D M a) N I� I� I� O r-I N O E V H 00 W O M w N m I� M I� M I� a) M M w o0 m N m N m N w W O M w 00 U 4-0 � M /f 1• W mow/ \ r-I I;t 1 I� 1 W M \ W N \ W N \ W N \ M I� \ W \ N o0 \ 00 \ � 00 \ � M \ r-i -;I- \ I� \ N 00 (n L �LJ a) Q c r1 r-I CV M O O O (V r-I M M CV CV CV r-i r-i CV MLon O Q ~ � m i 00 M Lfi Lf� Lf� In Lfi M O I� I� I� 00 M O O O Lf i I� O m m r-I r-I r-I m Ll') LO W \ r-I N M r-I r-I r-I M M W M M M r-i N W r-Itd C/) M c0 _ cn cn N > > > > L C O c6 H > p Q p p .> Q }' cv Q O Q O Q O Q O N It > i d .— Z r-I Q J Z r-I Q J Z r1 Q J Z r-I Q J Q O Ln Q L 0 a � 1 1 1 1 1 1 1 Z i r-I i J i --§ E N r a LM fa r-i f0 r-I C6 r-I r-I r-I r-I C6 N Ca N f6 N fV N N M M M � 1 U > W � a a-+ Q a-+ Q a-+ Q a-+ Q a-+ Q a-+ Q a-+ Q a-+ Q a-+ Q a-+ Q a-+ Q a-+ Q a-+ Q a-+ Q �-' Q �-' Q uj •- G L I�LI ^ (D IA C Q U o aO _ — — � 0- O L O L 4+ O J J J U cn C: LU E E 0.0 O O O • L } +' O •� �7 �+ " L- t� o > 0.� �_ V 'i �, i O > > W }+ m ++ Q Q � v QJ i V fa Q Q s` s` O O a = uw O Z LLJ v iii a) a) a o O H Z N City of Iowa City I CAAP Methane Recovery Feasibility Study F)7Z Description of Project Alternatives 4.7.2.2 ENVIRONMENTAL IMPACTS Environmental benefits include impacts that are valued based on the project's change in natural resource quality or quantity. The environmental included in this analysis include the social cost of carbon measured by changes in the emissions of carbon dioxide equivalents (CO2e). 4.7.2.2.1 Social Cost of Carbon GHG Emissions Impact Assessment: HDR understands that a key driver for decision -making is understanding the relative GHG emissions impact associated with each alternative and making progress towards the City's climate action goals. GHG emissions were estimated for each alternative included in the SROI analysis, and considered both direct and lifecycle impacts, as well as avoided emissions resulting from the beneficial reuse of biogas. Calculation methodologies align with best practices described in the Global Protocol for Community -Scale Greenhouse Gas Emission Inventories (GPC) and Local Government Operations Protocol (LGOP) for GHG assessment. These considerations are described below and cumulative GHG emissions impacts for each alternative are presented in Table 6. • Direct GHG emissions were based on the incremental emissions resulting from processes required to beneficially reuse biogas. Specifically, direct GHG emissions are based on the parasitic load of new equipment installed for the purposes of generating RNG or electricity, such as energy consumed by the biogas conditioning equipment and electric generators. It is important to note that direct emissions do not include base load energy use required to operate the WWTP and Landfill Facilities based on current conditions, rather, the Feasibility Study analyzes the incremental change from current operations. At the City's direction, HDR assumed that there would not be a material change in transportation - related GHG emissions associated with diverting food waste for the 1,500 tons and Low - Diversion scenarios. Lastly, it should be noted that GHG emissions associated with combustion of biogas/RNG is considered biogenic (CO2(b)), and per the GPC, is to be reported separately outside of Scope 1, 2, and 3 GHG emission categories. Biogenic emissions are those related to the natural carbon cycle, as well as those resulting from the combustion, harvest, digestion, fermentation, decomposition or processing of biologically based materials. • Lifecycle GHG emissions were estimated using the EPA WARM, which compares GHG emissions reductions and lifecycle energy savings from baseline and alternative waste management scenarios. HDR estimated change in lifecycle embodied carbon by utilizing WARM to compare the baseline conditions to both 1,500 tons and Low -Diversion scenarios. Specifically, the output of the WARM model estimated the lifecycle energy use reduction by co -digesting or composting additional diverted food waste as compared to the baseline of landfilling this material. Because WARM is a lifecycle assessment tool, meaning impacts are estimated from cradle -to -grave, the estimated GHG emissions reduction occurs outside of the City's reporting boundary and would not be evident in annual GHG emissions inventories. • Avoided GHG emissions were estimated based on the beneficial reuse of biogas, including pipeline injection, electricity generation, and natural gas displacement, assuming: o Biogas injected into the natural gas pipeline would be utilized to generate and sell RIN credits, ultimately being used as a renewable fuel for mobile source 20 City of Iowa City I CAAP Methane Recovery Feasibility Study F)7Z Description of Project Alternatives combustion. RNG is a market driver for commercial fleets to transition away from conventional diesel trucks to compressed natural gas (CNG)/RNG alternate fueled -vehicles. GHG emission reductions were estimated using a diesel fuel emissions factor published by the EPA. o Biogas used to generate electricity would ultimately offset electricity generated by local electric power utilities (MidAmerican Energy or Eastern Iowa Light & Power). Emission factors were provided by the City. While MidAmerican Energy does have a public goal related to 100% of retail sales being served by renewable energy, this is not equivalent to a net zero carbon production goal. Absent of either electric utility having a publicly stated carbon emissions reduction goal, GHG emission reductions were estimated using the emission factor provided by the City, held constant for the study period. o Biogas used as onsite fuel at the WWTP would displace natural gas on a 1:1 unit basis. GHG emission reductions were estimated using a natural gas emissions factor published by the EPA. 21 V �� w O w m r M � Ln � � M M rl a)'i Ln m rl m � m M O tD O 00 O (D l0 O lD — •- +� m Ln m m� O 0 QO m M w m m m rI - M H � rl N (V N I� � I� � 00 � rl 1 � N N m N I. n ^ N ^ m N rl N M . m N N O r O I I I cv N m ' ' rl rl rl ' ' rl rl V O V O lD O lD O rI l0 O rI (Z O rI l0 O a Ict 0) rn R:t rn 4::1- rn 1::1- rn � •— G1 W a) a) a) a) a) a) a) a) a) a) l0 b O u Z a W V m V t7 r-i o Ln m IZI- O N rl*l (.0 q* 00 Ln m r*-. r--. N O H O rI O m m Ln W 110 N w O O O N N -t N CV O rl N M l0 M M [NI I I I I I I m � � i i O N� O O O O N� O O O O N w O_ . .V O rl rl I� O N s > .O �-0 O O O O O m O O O O O l0 I� O V l0 q::I- R::I- q::I- 00 R::I- Ict lD N qzlm > l0 00 00 00 N M M m lD O rl Vf iArl rl i (1) O O I*_ Ln O O O O (N 00 O O O O O rl rl i N 00 a) � N N •� — — 0 O Ln I� N fV rl rl rl N I� I� m V J > � MENEM 70 U) > > > > p p > — O O O O p (n = p� p p� p p� p p� p p C O Z rl J Z r� J Z rl J Z rl J z Lf) p I I I I I I I I I I I I L O a rl rl rl rl rl rl CV CV fV CV N fV M M M O . +-+ . +-+ . +-+ . +-+ . +-+ . +-+ . +-+ . +-+ . a-; . a-; . a-; . a-; . a-; . a-; . a-; . a-; N Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q ry N C N co .� � L 0_ N m VO ILL ,`� 0_.`� LL CL Q p .N j > j i j E _ U V N — J J J U _ � +�+ LU v CD c� o _ o 0 •> .0 =O u +� > w w W V H N N City of Iowa City I CAAP Methane Recovery Feasibility Study F)7z Description of Project Alternatives Value of GHG Emissions: Scientific studies in the United States and internationally have widely concluded that GHG emissions are closely linked with climate change, a condition that has been determined to lead to future economic impacts from more extreme weather events and damaging conditions on coasts. The impact is estimated from the change in energy production and net embodied carbon in each of the waste diversion scenarios. In alternatives of I and 1 B (pipeline injection), RIN credits are counted as an economic benefit and the environmental attributes would therefore be sold to Obligated party who purchases the RIN credits. As such, the value of the social cost of carbon (SCC) is not counted for the associated changes in GHG emissions to avoid double counting. GHG impacts were estimated using: • EPA WARM model for the change in metric tons of COZe from embodied carbon in the waste stream; • an electricity conversion factor (converts megawatt hours to tons of pollution for each emission type); and • a cost of emission (monetizes the impact). The logic for the estimating impacts of changes in GHG emissions is illustrated in Figure 11. Figure 11: GHG Emissions Structure and Logic Diagram. For CO2e; the value from the Interagency Working Group on the Social Cost of Carbon (IWGSCC) was used in the analysis. This value is then escalated annually at 2% using rates derived from the Federal Interagency Working Group on Social Cost of Carbon. All values are in 2019 US dollars per ton. Table 7: Social Costs of GHG Emissions GHG Emissions CO2e Unit Value Source $/Ton $46 IWGSCC (2013) 23 City of Iowa City I CAAP Methane Recovery Feasibility Study F)7Z Summary Economic, and Environmental Impacts of Alternatives 5 Summary Economic, and Environmental Impacts of Alternatives The evaluation of economic and environmental impacts considered a time horizon or study period, which includes project development (construction and implementation) and 29 years of operation and benefit. This extends to 2050 and aligns with the planning horizon of the City's CARP. Costs and benefits have been converted to present value using a 3% discount factor. Total benefits and costs are compared using a benefit to cost ratio (13CR), benefits divided by costs. BCR's exceeding 1.0 indicate that the benefits from the alternative exceed the costs of the investment over a 30 year period. Results are shown below in Table 8. Consideration should be given to the implementation schedule of alternatives and potential for a phased approach. Revising the economic framework to account for a phasing of projects over 5-10 years would affect all of the alternatives equally and would not change the overall ranking or comparison of the alternatives. Furthermore, there is limited impact to the capital and O&M cost considerations as long as the period of study remains over 30-years. The more significant cost impacts are observed with a minimum delay of 8-10 years out of the study period. A number of implementation scenarios are possible, but the CIP planning impact is often similar from a planning perspective. Table 8: Summary of Monetary Benefits and Costs ($ Millions, 2019) Alternative Location Alternative Total Total Description Cost Social Pipeline WWTP Injection Landfill Electricity WWTP Generation Landfill Natural Gas WWTP Replacement Expanded Compost Composting Alt. 1a - ND Alt. 1a - 1500 Alt. 1a - LD Alt. lb - ND Alt. lb - 1500 Alt. lb - LD Alt. 2a - ND Alt. 2a - 1500 Alt. 2a - LD Alt. 2 b - ND Alt. 2 b - 1500 Alt. 2 b - LD Alt. 3 - ND Alt. 3 - 1500 Alt. 3 - LD Alt. 4 $35.92 $47.44 $104.23 $75.47 $75.07 $72.42 $35.04 $45.91 $101.24 $46.50 $46.18 $44.55 $25.20 $33.18 $82.92 $15.69 Cost of Carbon $1.67 $3.21 $18.01 $33.87 $34.86 $38.46 $0.78 $2.48 $16.33 $18.96 $15.95 $24.16 $1.69 $3.23 $16.60 $15.07 Total Value for RIN Credit and Energy Revenues $5.48 $7.35 $23.09 $88.14 $87.37 $83.93 $1.58 $2.71 $2.77 $27.16 $26.91 $25.75 $1.09 $0.93 $0.15 Total Benefit $7.15 $10.56 $41.10 $122.01 $122.23 $122.39 $1.91 $4.41 $18.31 $35.23 $32.08 $39.58 $2.78 $4.16 $16.75 Benefit -Cost Ratio 0.20 0.22 0.39 1.62 1.63 1.69 0.05 0.10 0.18 0.76 0.69 0.89 0.11 0.13 0.20 $0.00 $15.07 0.96 24 City of Iowa City I CAAP Methane Recovery Feasibility Study F)7Z Summary Economic, and Environmental Impacts of Alternatives The results show that only Alternative 1 b (landfill natural gas) has benefits that exceed the costs. The highest BCR is Alternative 1 b — Low -Diversion. This alternative ranks highest on total lifecycle CO2e emission reductions, and when combined with the value of RIN credits results in the greatest economic benefits. However, the City should be aware that the CO2e emission reduction when RINs are sold to an Obligated Party will occur outside of the City's municipal and community -scale GHG inventories. This alternative has the sixth highest cost of the 15 alternatives presented. The net result, of Alternative 1 b, is a BCR of 1.69 dollars of benefit per dollar of cost invested. A sensitivity test was conducted to test the impact of key monetary values (RIN credits and SCC values) on the ranking of the alternatives. Changing the value of the SCC was found to have no effect in ranking as the value influences all of the alternatives equally. Conversely, the RIN credit value only affects the BCR of pipeline injection alternative (Alternative 1) and would have an impact on alternative ranking. The sensitivity analysis showed that the realized RIN credit value would need to be below $6.00 per MMBTU, or 5% greater than the low value of D5 RIN credits shown Table 3 for the BCR ranking of alternatives to change. Perhaps as important for consideration in CARP are non -monetary considerations. The non- monetarymetrics (EROEl and lifecycle change in CO2e emissions) are shown in Table 9. Perhaps the most important measure related to CAAP action objectives is CO2e reductions. All of the alternatives result in a net reduction in CO2e over the next 30 years. Alternative 1 b — Low - Diversion results in the greatest net reduction. Table 9: Summary of Non -Monetary Impacts Alternative Location Description ML Pipeline Injection WWTP Electricity Generation Landfill WWTP Landfill Natural Gas WWTP Replacement Expanded Compost Composting Alternative Alt. 1a - ND Alt. 1a - 1500 Alt. 1a — LD Alt. lb - ND Alt. lb - 1500 Alt. lb - LD Alt. 2a - ND Alt. 2a - 1500 Alt. 2a - LD Alt. 2 b - ND Alt. 2 b - 1500 Alt. 2 b - LD Alt. 3 - ND Alt. 3 - 1500 Alt. 3 - LD Alt. 4 Lifecycle Change in CO2e Emissions J6 40,500 77,800 436,200 820,500 844,500 931,800 19,000 60,000 395,600 459,200 386,500 5851200 40,900 78,300 2521200 365,100 Lifecycle EROEI 6.9 7.9 7.9 7.5 7.6 7.9 2.0 12.4 13.3 1.5 2.1 12.6 4.6 3.4 1.8 M 25 City of Iowa City I CAAP Methane Recovery Feasibility Study F)7z Summary Economic, and Environmental Impacts of Alternatives Finally, all alternatives, except for composting, result in an EROEI of 1.0 or greater. Incremental composting of food waste does not generate energy. Opposite of the economic and GHG measures, Alternative 2a (WWTP Electricity Generation) - Low -Diversion ranks highest on EROEI. Meanwhile Alt 1 b - Low -Diversion is ranked 5th on EROEI. The overall ranking of the alternatives for the monetary (BCR) and the two non -monetary results are shown below in Table 10. Table 10: Summary and Ranking of Monetary and Non -Monetary Results Alternative Location Alternative GHG GHG EROEI EROEI BCR BCR Description Reduction Rank Rank Rank Pipeline WWTP Alt. 1a - ND 40500 15 6.9 9 0.20 11 Injection Alt. 1a - 1500 77800 12 7.9 6 0.22 9 Alt. 1a - LD 436200 6 7.9 4 0.39 8 Landfill Alt. 1b - ND 820500 3 7.5 8 1.62 3 Alt. 1b - 1500 844500 2 7.6 7 1.63 2 Alt. 1b - LD 931800 1 7.9 5 1.69 1 Electricity WWTP Alt. 2a - ND 19000 16 2.0 13 0.05 16 Generation Alt. 2a - 1500 60000 13 12.4 3 0.10 15 Alt. 2a - LD 395600 8 13.3 1 0.18 12 Landfill Alt. 2b - ND 459200 S 1.5 15 0.76 6 Alt. 2b - 1500 386500 9 2.1 12 0.69 7 Alt. 2b - LD 585200 4 12.6 2 0.89 5 Natural Gas WWTP Alt. 3 - ND 40900 14 4.6 10 0.11 14 Replacement Alt. 3 - 1500 78300 11 3.4 11 0.13 13 Alt. 3 - LD 402000 7 1.8 14 0.20 10 Expanded Compost AIt.4 365100 10 0.0 16 0.96 4 Composting 26 City of Iowa City I CAAP Methane Recovery Feasibility Study F)7Z Summary Economic, and Environmental Impacts of Alternatives 5.1 Findings and Insights To make recommendations for actions under 3.7 and 3.8, the monetary and non -monetary results are combined into a weighted score as shown below in Table 11. Each result was converted to an index (1 to 0). The indexed results were then weighted equally into a total score with a maximum value of 1. Table 11: Indexed and Weighted Scores for each Alternative Alternative Location Alternative GHG EROEI BCR Total Rank Description Reducti Score on Pipeline WWTP Alt. 1a - ND 0.01 0.17 0.04 0.23 13 Injection Alt. 1a - 1500 0.03 0.20 0.04 0.27 11 Alt. 1a - LD 0.16 0.20 0.08 0.43 6 Landfill Alt. 1b - ND 0.29 0.19 0.32 0.80 3 Alt. 1b - 1500 0.30 0.19 0.32 0.81 2 Alt. 1b - LD 0.33 0.20 0.33 0.86 1 Electricity WWTP Alt. 2a - ND 0.01 0.05 0.01 0.07 16 Generation Alt. 2a - 1500 0.02 0.31 0.02 0.35 7 Alt. 2a - LD 0.14 0.33 0.04 0.51 5 Landfill Alt. 2b - ND 0.16 0.04 0.15 0.35 8 Alt. 2 b - 1500 0.14 0.05 0.14 0.33 9 Alt. 2 b - LD 0.21 0.32 0.18 0.70 4 Natural Gas WWTP Alt. 3 - ND 0.01 0.12 0.02 0.15 14 Replacement Alt. 3 - 1500 0.03 0.08 0.02 0.14 15 Alt. 3 - LD 0.14 0.05 0.04 0.23 12 Expanded Compost Alt.4 0.13 0.00 0.19 0.32 10 Composting As noted previously, the Alternative 1 b-LD (Landfill RNG Pipeline Injection) - Low -Diversion has the highest BCR. It also has the highest GHG reduction over 30 years. This is driven by the assumption that biogas injected into the natural gas pipeline would be utilized to generate and sell RIN credits, ultimately being used as a renewable fuel for mobile source combustion. Further, RNG is a market driver for commercial fleets to transition away from conventional diesel trucks to compressed natural gas (CNG)/RNG alternate fueled -vehicles. However, the City should be aware that when RINs are sold to an Obligated Party, the CO2e emission reduction will occur outside of the City's municipal and community -scale GHG inventories. Opposite of the economic and GHG impacts, Alternative 2a (WWTP Electricity Generation) - Low -Diversion ranks highest on EROEI. Meanwhile Alternative 1 b - Low -Diversion is ranked 5th on EROEI. Based on the indexing and weighting exercise, Alternative 1 b (Landfill Natural Gas) - Low - Diversion has the highest score (0.86). Alternative 1 b (landfill natural gas) -1500 ton diversion is ranked second. Alternative 1 b (landfill natural gas) - No -Diversion is ranked third. Again, CO2e emission reduction associated with pipeline injection and used as a renewable fuel will occur outside of the City's municipal and community -scale GHG inventories. 27 City of Iowa City I CAAP Methane Recovery Feasibility Study F)7Z Summary Economic, and Environmental Impacts of Alternatives If the City is instead focused on reductions that will be reflected in its municipal and community - scale GHG emission inventory, then evaluation should be narrowed to focus on Alternatives 2 (Electricity Generation) and 3 (Natural Gas Replacement). While electricity generated at the WWTP or Landfill (2a and 2b, respectively) could very well be pushed to the power grid, contractual agreements with local utilities could allow the City to retain and retire RECs for GHG accounting purposes. Specifically, RECs could be applied to the City's Scope 2 market -based GHG inventory. Using RNG to displace natural gas use at the WWTP would result in lower Scope 1 GHG emissions. Focused on these two alternatives, Alternative 2b -Low-Diversion is ranked highest (fourth overall), followed by Alternatives 2a -Low-Diversion and 2a - 1500. These alternatives are ranked 4, 5 and 7 overall. If total GHG emissions reduction is the ultimately priority, Alternatives 1 b (Landfill Pipeline Injection) offers the greatest potential, simply due to the volume of biogas generation and associated potential for renewable electricity generation. Finally, biogas utilization alternatives can be combined together with others, and some can be incorporated as standalone projects (as shown in Table 12). Table 12: Potential Biogas Utilization Alternatives Combinations Landfill Location No Diversion 1500 ton/yr Diversion Low Diversion Weighted and Indexed Performance Indicators Do Nothing NG Pipeline Electricity NG Pipeline Electricity NG Pipeline Electricity Total Score, inclusive of: Injection Generation Injection Generation Injection Generation GHG Reduction, EROI, and BCR Alt lb -ND Alt 2b-ND Alt 1b-1500 Alt 2b-1500 Alt 1b-LD Alt 2b-LD Do Nothing 0 0.80 0.35 0.81 0.33 0.86 0.70 NG Pipeline Alt la -ND 0.23 1.02 0.58 ><>< o Injection Electricity Alt 2a-ND 0.07 0.87 0.42 o Generation 0 z NG Alt 3-ND 0.15 0.95 0.50 ><><><><NG 0 0 Replacement Pipeline Alt 1a-1500 0.27><>< 1.08 0.60 ><>< 0 Injection 0. 0 o "� Electricity Alt 2a-1500 0.35 0.68 >< � o > Generation o o NG -:><:><1.16 Alt 3-1500 0.14 ><>< 0.95 0.47 >< Replacement NG Pipeline Alt la-LD 0.43><><><>< 1.30 1.13 Injection Electricity Alt 2a-LD 0.51 >< >< >< >< 1.37 1.21 o Generation o NG Alt 3 -LD .2 0 3><1><><1><1 1.09 0.93 Replacement 1 1 There are 18 unique possible combinations of alternatives, Table 12 has been developed to more appropriately showcase combinations and the "diversion lanes" in which decisions would need to be maintained with a decision. Boxes with blue numbering indicate individual alternative scenarios 28 City of Iowa City I CAAP Methane Recovery Feasibility Study F)7Z Summary Economic, and Environmental Impacts of Alternatives at either the Landfill or at the WWTP. The boxes are also color coded in a "heat map" format, to show the overall ranking of the individual scenarios. The individual alternatives can be combined together, but must be done so following the same waste diversion scenario from the Landfill. When combining the alternatives the scores from the Landfill and WWTP alternatives can be added together to identify the best combination of actions under each of the waste diversion scenarios. From Table 11 above, the higher the score the better the alternative. The highest scored alternatives are: Alternative 1 b — NG Pipeline Injection landfill alternatives for each of the No -Diversion, 1500 ton diversion, and Low -Diversion scenarios. Identifying the best combination of actions works as follows: select the highest scored alternative from the desired waste diversion scenario (shown to be from the Alternative 1 b — NG Pipeline Injection landfill alternatives) then work down the column (or "diversion lane") to the desired combination scenario. In the case of combining with Alternative 2a — Electricity Generation at the WWTP, a resulting combined score of 1.16. As capital costs are also additive, consideration should be given to the seemingly minor weighted score differential. In the example of combined Alt 1 b-1500 with Alt 2a-1500, there is an estimated $6.21VI savings to select Alt 1 b-1500 with Alt 1 a-1500. 5.1.1 Path Forward HDR recognizes that incremental food waste diversion is not an instantaneous process, but the SROI analysis provides an assessment of the resulting impact when achieved. This Report provides decision tools to support the City's further consideration and decision making. Consequently, the City might consider the following path forward to further evaluate and implement the preferred alternative(s): i. City decision on desired diversion scenario and methane utilization at the WWTP to narrow the field of alternatives. (0-6 months) ii. Further technical analysis to develop organics management strategies to achieve a targeted diversion scenario and further evaluate life cycle costs of co -digestion (if desired) and biogas utilization to generate electricity or RNG. Consideration of impacts to planned digester rehab project. (3-6 months) iii. Conceptual Design Development of the selected alternative(s), providing basis of design parameters and implementation planning. (3-6 months) iv. Detailed Design Development. (TBD) V. Bidding and Construction. (TBD) It may be prudent for the City to complete items i) and ii) within the next 6-months for capital planning purposes. 29 City of Iowa City I CRAP Methane Recovery Feasibility Study F)7z References: 6 References: City of Iowa City (2018), Climate Action and Adaptation Plan, https://www.icgov.org/promect/climate-action. City of Iowa City (2019), City Resolution 19-218, https://www.icgov.orq/proiect/climate-action. City of Iowa City, (2020), Accelerating Iowa City's Climate Action Plan, https://www.ic oq v.org/project/climate-action. Clinton Global Initiative, (2007), https://www.clintonfoundation.orq/clinton-global- initiative/commitments/creating-sustainable-return-investment-sroi-tool. Interagency Working Group on Social Cost of Carbon (IWGSCC), United States Government. (2010). Technical Support Document: Social Cost of Carbon for Regulatory Impact Analysis Under Executive Order 12866. U.S. Environmental Protection Agency (2019). Environmental Protection Agency Waste Reduction Model (WARM) version 15. https://www.epa.gov/warm/versions-waste- reduction-model-warm#15. 30 City of Iowa City I CAAP Methane Recovery Feasibility Study F)7z Appendix A Appendix A Low -Diversion Scenario Digester Costs F— U) O V Z O F— V H Z O V LU J m Q m O w a. LL O Z O Z a O 0 0 0 0 0 0 0 O O O o Ln m l0 N Ol O Ol 01 �, N O rn m rn N m -V} r-I -V} M w N m cry {h ca O V) ca .a ca U 4- 0 0 Ln r-I O coif '— O m V x m Q O E O V L 3 � i 3 a a, m o m o � .V .V w .0 to Q W Q -W /i^� L tko H z a� t cv a .-. oc , .O 3 06 0 ONO Mo 3 -0 3 O _ N ._. O L � ti O or N V — � O V � co O L � .> � V � � � Q O J City of Iowa City I CAAP Methane Recovery Feasibility Study F)7z Appendix 6 Appendix B Financial Proforma Breakeven Analysis City of Iowa City I CAAP Methane Recovery Feasibility Study F)7z Appendix B - Memo I Financial Proforma - Breakeven Analysis Appendix B - Memo Date: Wednesday, December 23, 2020 Project: CAAP Methane Recovery Feasibility Study (HDR #10203725) To: City of Iowa City (PM — Joseph Welter) From: HDR (PM — Morgan Mays; Marcella Thompson; Serguei Kouznetsov; Jeremy Cook) Subject: Financial Proforma - Breakeven Analysis Building on the Sustainable Return on Investment (SROI) and the Energy Return on Energy Invested (EROEI) analysis performed by HDR, a high-level breakeven financial analysis was performed for each of the options identified in the Final Feasibility Report. The financial analysis examines the impact of cash flows to Iowa City (the City) to compare the revenues (inflows) and costs (outflows). The purpose of the analysis was to identify the length of time for each alternative to break-even. This memorandum outlines the cash flows evaluated, key assumptions, and the results of the analysis. Key Assumptions The financial analysis examined revenue streams for the various alternatives. For the pipeline injection alternatives, the revenue is derived from the Renewable Identification Number (RIN) credits under the Renewable Fuel Standard Program. For the electricity generation alternatives, the revenue is derived from electricity sales through an agreement with the utilities and Renewable Energy Credits (RECs). For natural gas replacement alternatives, revenue or rather savings are derived from avoided natural gas purchases. Revenue from electricity sales are assumed to be captured from both net metering and negotiated buyback agreements with MidAmerican Energy Company and Eastern Iowa Light and Power Cooperative. MidAmerican Energy Company (which supplies the electricity to the Iowa City Landfill) allows for net metering agreements for a facility nameplate generation capacity of up to 1 megawatt (MW). Credits from net metering agreements are paid out at the average locational marginal price (LIVIP) from the Midcontinent Independent System Operator (MISO) based on the generation profile of the resource. For energy produced beyond a nameplate capacity of 1 MW, energy can be sold to MidAmerican Energy at a negotiated buyback rate. The Eastern Iowa Light and Power Cooperative allows for buyback agreements for facilities with a nameplate generation capacity exceeding 20 kilowatts (kW). RECs are earned for each megawatt -hour (MWh) of electricity generated. For the purposes of this analysis, an average LMP of 2.6¢' per kilowatt- hour (kWh) was calculated based on the 2019 LMP prices for the Illinois hub and the 2019 1 Real time LMP prices gathered from Midcontinent Independent System Operator (MISO)'s historical LMPs for real-time markets from January 1, 2019 to December 31, 2019. ***********.misoenergy.org/markets-and-operations/real-time--market-data/market-reports/#nt=. MISO historical load data was gathered from EnergyOnline from January 1, 2019 to December 31, 2019. energyonIine.com/Data/GenericData. aspx?Data Id=17. City of Iowa City I CAAP Methane Recovery Feasibility Study Appendix B - Memo I Financial Proforma - Breakeven Analysis MISO load. This was assumed to be the price paid per kWh for MidAmerican Energy's net metering agreements. It was also assumed that the negotiated buyback rate for electricity generation in excess of 1 MW was equivalent to the average LMP price of 2.6¢ per kWh. Eastern Iowa Light and Power Cooperative posts its avoided cost of generation during peak and off-peak hours online from which a weighted average rate of 4.2¢ per kWh was calculated for energy sales from the wastewater treatment plant. Renewable energy credits were monetized at an average rate of $17 per MWh based on the latest auction prices of $16.93 per MWh in and the approximate band of prices over the past couple of years (see figure below). The analysis assumed that prices would remain at that price for the full 30 years of the analysis. Figure 1: Historical Auction Prices for Renewable Energy Credits2 Posted 1)ecember 4, 2020 Carbon Allowance Prices 16 Ls 1ff 0 U1 13 12 $1z. a� S 12_10 512.21 11 10 B 9 A Current Auction Settlement Price Auction Reserve Price -Secondary- Market Price N otes: 1. California and Qu6bec held their first joint auction in November 2014. 2, Current Auction Settlement Price is the rice at which current vintage allowances sold at auction_ CALIFORNIA l} � SIR RESOURCES 9flARQ 3, Auction Reserve Price is th-e minimum price at which allowances can be sold at auction, 4. Secondary Market Prices are a c o m posite of commodity exchange futures contract prices for near month delivery and a survey of OTC brokered transactions for California Carbon Allowances. Secondary market prices ar-e provided with permission ofA(gus Media Inc_ 5, Secondary Mark -et Price data drawn o n December 4, 202-0, As mentioned in the main report, the WWTP RNG produced will exceed the amount of natural gas used at the plant. As such, the City would need to either: find a use for the excess RNG produced, flare the excess gas, or the City would only condition the amount of biogas needed 2 California Air Resources Board. California and Quebec Carbon Allowance Prices, December 4, 2020. ********ww2.arb.ca.gov/sites/default/files/2020-09/carbonallowanceprices_O. pdf. 2 City of Iowa City I CAAP Methane Recovery Feasibility Study Appendix B - Memo I Financial Proforma - Breakeven Analysis and the excess biogas would be flared. For this analysis, it was assumed that RNG production would be capped at 62,848 standard cubic feet per day and valued at the delivered cost of natural gas at the facility assumed to be $3.16 per MMBtu. Results High level results of the financial analysis are presented in the tables below. Projects were assumed to be bonded at a 3% interest rate and the breakeven term represents the minimum financing term that would be needed for the project to break even financially. Many alternatives have a payback term that is longer than 30 years, making them infeasible without grant funding support. Table 1: Lifecycle Financial Breakeven Analysis Results, Millions of 2019$ Pipeline "W10TP Alt. 1a - ND $35.92 $5.48 EW30.44 N/AW InjectionAlt. 1a - 1500 Div $47.44 $7.35 -$40.10 N/A Alt. 1a - LD $104.23 $23.09 -$81.14 N/A Landfill Alt. 1b - ND $75.47 $88.14 $12.67 17.9 years Alt. 1b - 1500 Div $75.07 $87.37 $12.30 18.0 years Alt. 1b - LD $72.42 $83.93 $11.52 18.2 years Electricity WWTP Alt. 2a - ND $35.04 $1.58 -$33.47 N/A GenerationAlt. 2a - 1500 Div $45.91 $2.71 -$43.21 N/A Alt. 2a - LD $101.24 $2.77 -$98.47 N/A Landfill Alt. 2b - ND $46.50 $27.16 -$19.34 N/A Alt. 2b - 1500 Div $46.18 $26.91 -$19.28 N/A Alt. 2b - LD $44.55 $25.75 -$18.81 N/A NaturalWWTP Alt. 3 - ND $25.20 $1.09 -$24.11 N/A Replacement Alt. 3 - 1500 Div $33.18 $0.93 -$32.25 N/A Alt. 3 - LD $82.92 $0.15 -$82.77 N/A Expanded Compost Composting Alt. 4 $15.69 $0.00 -$15.69 N/A Table 2: Annual Financial Breakeven Analysis Results WWTP Alt. 1a - ND $0.44 $1.35 '49 $0.27 M$1752 Alt. 1a - 1500 Div $0.55 $1.82 $0.36 -$2.00 Alt. 1a - LD $2.11 $3.11 $1.14 -$4.08 Landfill Alt. 1b - ND $1.49 $2.29 $4.37 $0.58 Alt. 1b - 1500 Div $1.48 $2.28 $4.33 $0.57 Alt. 1b - LD $1.43 $2.20 $4.16 $0.53 WWTP Alt. 2a - ND $0.69 $1.07 $0.08 -$1.68 3 City of Iowa City I CAAP Methane Recovery Feasibility Study Appendix B - Memo I Financial Proforma - Breakeven Analysis Alt. 2a - 1500 Div $0.87 $1.43 $0.13 -$2.17 Alt. 2a - LD $2.55 $2.54 $0.14 $4.95 Landfill Alt. 2b - ND $1.05 $1.29 $1.35 -$0.99 Alt. 2b - 1500 Div $1.04 $1.04 $1.33 -$0.74 Alt. 2b - LD $1.00 $1.24 $1.28 -$0.96 WWTP Alt. 3 - ND $0.39 $0.87 $0.05 -$1.21 Alt. 3 - 1500 Div $0.49 $1.16 $0.05 -$1.61 Alt. 3 - LD $2.03 $2.14 $0.01 -$4.16 Compost AIt.4 $0.29 $0.50 $0.00 -$0.79 Given that many of the alternatives do not generate enough financial benefits to break even in a reasonable time frame, the HDR team considered whether grant funding support could make the project feasible. The table below presents the minimum amount of grant funding required for each project to break even within specific time frames. Since grant funding is used to support up -front project capital costs, amounts above the initial capital costs are highlighted in red as not feasible. Amounts in green are feasible with the specified amount of grant funding. Table 3: Grant Funding Support Necessary for Projects to Break Even Pipeline WWTP Alt. 1a - ND $8.60 N/A $30.44 InjectionAlt. 1a - 1500 Div $10.80 N/A JJW $40.10 Alt. 1a - LD $41.40 N/A $81.14 4 Landfill Alt. lb - ND $29.20 17.9 years $0 Alt. 1b - 1500 Div $29.00 18.0 years $0 Alt. lb - LD $28.00 18.2 years $0 Electricity WWTP Alt. 2a - ND $13.50 N/A $33.47 Generation Alt. 2a - 1500 Div $17.00 N/A $43.21 Alt. 2a - LD $50.00 N/A $98.47 Landfill Alt. 2b - ND $20.50 N/A $19.34 Alt. 2b - 1500 Div $20.30 N/A $19.28 Alt. 2b - LD $19.60 N/A $18.81 NaturalTP Alt. 3 - ND $7.70 N/A $24.11 Replacement Alt. 3 - 1500 Div $9.70 N/A $32.25 Alt. 3 - LD $39.80 N/A $82.77 Expanded Compost Compo• Alt. 4 $5.70 N/A $15.69 4 City of Iowa City I CAAP Methane Recovery Feasibility Study Appendix B - Memo I Financial Proforma - Breakeven Analysis In general, pipeline injection and electricity generation at the landfill are the only options that generate enough revenues to pay for the operating costs on an ongoing basis. Pipeline injection is feasible with bonding terms of about 18 years, while electricity generation would require around $19 million in grant funding support to be financially viable within 30 years. That said, the electricity generation revenues are currently limited by the net metering and buyback agreements in place. This analysis has assumed that MidAmerican Energy Company (which provides electricity to the Iowa City Landfill) will negotiate a buyback agreement similar to the LMP-based rates they offer under their net metering agreement. However, if the City were able to negotiate a higher rate, it could make the alternatives financially viable. Specifically, an electricity sales rate of 5.70 per kWh would make all three of the alternatives financially viable within the 30-year time frame. Grant Funding A few federal and state grant programs could potentially be leveraged to reduce the City's financial contribution and make the alternatives financially viable. The table below summarizes a few options based on literature review of the biggest programs which have had funding cycles within the past year. Table 4: Grant Funding Opportunities P70 9 ra rndingmi7igible Eligibility --. uirementim Funding Adminil7stratojr ogram ApplicantMNL__� AIIM Federal Programs Varies based on year. FY2020 included area of Waste to Energy Varies based on Strategies for the Bioeconomy, topic. Based on the US Department Individuals, focusing on projects addressing FY20 grant of Energy Bioenergy entities, state topics such as advanced application Office of Energy Technologies or local preprocessing of feedstocks, documentation, Efficiency and Multi -Topic governments, conversion of wet wastes to energy minimum award was Renewable FOA corporations, and products, and synergistic $1,000,000 and Energy etc. integration of algal biomass maximum award for technologies with municipal most topics was wastewater treatment for greater between $2,000,000 energy efficiencies and lower costs. and $4,000,000. 20% cost share required. Biorefinery, Renewable Individuals, entities, state Must be for development and Maximum loan Chemical, or local construction or retrofitting of a guarantee of 80% of US Department and Biobased governments, commercial scale biorefinery using an project costs or $250 of Agriculture Product corporations, eligible technology for the production million. Term length Manufacturing institutions, of advanced biofuels and biobased of the lesser of 20 Assistance public power products. Majority of production must years or the useful life Program entities, etc. be an advanced biofuel. of the project. State Programs Iowa Projects must provide benefit to Iowa businesses, ratepayers and aid in one of the key colleges and focus areas of the Iowa Energy Plan: Iowa Energy Iowa Energy universities, 1) technology -based research and Minimum award of Center Center Grant and private development, 2) energy workforce $10,000, maximum nonprofit development, 3) support for rural and award of $1,000,000. agencies and underserved areas, 4) biomass foundations conversion, 5) natural gas expansion in underserved areas, 6) electric grid 5 City of Iowa City I CAAP Methane Recovery Feasibility Study Appendix B - Memo I Financial Proforma - Breakeven Analysis Program Administrator Funding •• Eligible Applicants • • Requirement sAEF modernization, 7) alternative fuel vehicles. Funding Eligible technologies and resources Businesses, include solar, wind, waste Minimum loan of individuals, management, resource recovery, $25,000, up to 50% Alternate water and refuse -derived fuel, agricultural crops of eligible project Iowa Energy Energy wastewater and residue, and wood burning, costs. Maximum loan Center Revolving utilities, rural hydroelectric facility at a dam, energy of $1,000,000 per Loan Program water districts storage, anerobic digestion, biogas, project. Loans offered and sanitary combined heat and power, wind o at 0 /o interest. districts repower. Facility must be in Iowa and be wholly owned by the borrower. Projects to reduce the amount of solid First 0 is Any unit of waste generated and landfilled in eligibllee aas a s a Iowa Solid Waste local Iowa. Funds can be used for waste forgivable loan, next Department of Alternatives government, reduction equipment and installation, $50,000 is eligible as Natural Program public or recycling, collection, processing or azero-interest loan, Resources private group, hauling equipment, purchase and and 3 /o loan on the or individual installation of recycled content remainder. products. 25% cash match required. r ,� CITY OF IOWA CITY "��� MEMORANDUM Date: December 28, 2020 To: Climate Action Commission From: Ashley Monroe, Assistant City Manager Re: Methane Feasibility Study Documents At the January 4, 2021 Climate Action Commission meeting, HDR will be presenting the results of the Methane Feasibility Study conducted in 2019 and 2020. This study was conducted to meet the Climate Action and Adaptation Plan initiatives 3.7 and 3.8. (https://www8.iowa- city.org/weblink/0/edoc/1803121/Climate%20Action%20Plan.pdf). Two of the resulting reports, Feasibility Report and Facility Evaluation provide good overviews of the project and are provided for your reference in this packet. The HDR team evaluated current and future biogas generation potential and identified alternatives for utilizing biogas at the Iowa City Wastewater Treatment Plant (WWTP) and/or the Landfill and Recycling Center (Landfill). HDR used its Sustainable Return on Investment (SR01) process to measure the feasibility of the objectives. The study was based on three categories for feasibility: net greenhouse gas emissions; net energy impact; and economics. Three alternatives were evaluated at each facility with three different scenarios for diversion of organic wastes from the Landfill. These study parameters led to seventy different combinations of alternatives and scenarios between the two facilities, of which, they will present an overview of the project and highlight top recommendations. HDR will present their findings and be available for questions in order to assist the Commission, City Council, staff, and other interested parties with any next steps. If you have specific questions, Joseph Welter, Senior Civil Engineer, managed this project and has offered his contact information. Please feel free to email or call Joe at joe-welter(C-D-iowa- cit .or and 319-356-5144. Outreach Working Group, Meeting Agenda Wednesday, Feb. 17, 2020, noon — 1 p.m. Zoom Meeting Link: https://zoom.us/i/97398387268?pwd=Mmo2alAOT1 E2MytgUOZia2Uxa3FHZz09 Members: Sarah Gardner, Matt Krieger, John Fraser, Madeleine Bradley, Grace Holbrook, Marcia Bollinger, Deb Schoelerman, Blake Rupe, Cheryl Miller (JCED) 1. Welcome and Introductions 2. Updates • Ambassador program: Training sessions are underway for the second cohort of Ambassadors, who had a virtual meeting with NOAA climatologist Ray Wolf last week and will be meeting with recycling coordinator Jane Wilch this week. The group seems very engaged with the discussions so far. • Neighborhood Energy Blitz: The budget for the project has been approved and both the neighborhood association and environmental club school coordinator have agreed to the plan. Logistics planning is underway to map out the routes volunteers will follow to deliver the kits and to figure out how best to coordinate re -supplying teams throughout the route. Outreach to landlords at multi -unit rental properties will begin next month. 3. Follow up on active transportation discussion from previous meeting • Sustainability Newsletter: Space has been reserved to help get the word out about the Bike Library's Raise It Up series of bike rides in the April -July issues of the newsletter • Bike to Work Month: A workaround has been identified to help solicit ideas for Bike to Work Month events in the March issue • Bike Friendly Business: While looking into this program, staff learned that applying for the designation involves a 20 page application and a minimum $50 filing fee, which has been identified as potential barriers to area business involvement. Staff is following up with a conversation with ICAD to learn more about other barriers and benefits businesses have identified when approached about participating, in hopes of applying the lessons learned to an alternative transportation initiative the City has begun designing. The hope is create something with a lower bar for entry and higher rewards on the local level. 4. Climate Action Grants: The application period for the Climate Action Grants will open March 1 and close April 1. Grants of up to $10, 000 will be awarded this year, with $500 mini -grants available for student -led projects. Staff would like to ask Climate Action Commission members to participate in the grant review and selection process alongside staff. An item will be placed on the March agenda to ask for 2 commissioners to do so. 5. Other Items • Talking points against alternative energy that have emerged following recent extreme weather events in Texas serve as reminders of the importance of ongoing education and outreach efforts. Next Meeting Wed, 3/17 Active Transportation Community Outreach Ideas (from Bob Opplinger) 1. Create an active transportation advisory committee and/or hire an active transportation coordinator. This is long overdue. The advisory committee or coordinator would work with IC transit services, neighboring communities, and Johnson county as well as the MPO. 2. Promote more widely the Bike to Work Month activities. There will be a dozen or more events. The calendar is just being put together. 3. Work with the schools to promote Safe Routes to Schools. This is a nationally funded project to promote active transportation to schools. The Iowa Bike Coalition has a staff person dedicated to promoting this and will host their annual, virtual workshop for it on Thursday, January 28. (It's FREE.) The IC South District and the Bike Library were ramping up a biking version last spring. Garner school in NL has promoted this idea too and maybe Longfellow. 4. Help promote IC South Districts ambitious schedule of biking actives. Because of all the trails, ICSD want to become the biking mecca of IC. 5. Assuming live farmer's markets resumes, more actively promote Move Naturally to the Market. This promotion goes back to the Blue Zones Project and was hosted by BIC in May. People who biked or walked to the Saturday market received a $2 coupon for the market. (Vendors were reimbursed at the end of each market.) It was well received by vendors as well as patrons and attracted up to 250 people on a sunny Saturday. 6. Promote more widely, the League of American Bicyclists Bike Friendly Business initiative. This is a companion program with the Bike Friendly Community & Bike Friendly University programs. Our metro area has about a dozen BFBs. Tom Banta and I were able to persuade about 6-8 area business/worksites to apply. (It does not require everyone in the workplace to ride a bike to work.) IC Civic Center, Robert Lee Rec Center & Public Library collectively hold a silver -level designation, Johnson County offices a gold -level and we have one platinum -level business. 7. Develop a promotion that rewards bikers or walkers patronizing local businesses. There is a national program Bike Benefits (bb2.bicyclebenefit ), that offers specified discounts, e.g. 10% off purchases, for patrons who bike to their business sporting the program's decal. 8. Learn to Bike classes. Work with BIC and IC rec services to set-up classes. We can teach an adult to ride a bike in 2-3 hours. NYC hosts clinics around town and annually teaches about 30K new bikers. Young kids take a little longer. We should have available soon a short pamphlet "Teaching your Child to Ride a Bike; A Guide for Parents and Caregivers." 9. Street Biking Classes. Street biking would take proficient riders further in offering them help to gain confidence using bike lanes and "safe streets" to commute. 10. Create a promotion that runs through the summer. For example, Iowa City Active Transportation Challenge. Beginning in May and running thru September create a challenge like the National Bike Challenge (https://www.lovetoride.net/usa). In its simplest form, a person who walks or bikes to work or on an errand instead by car would receive a credit. Accumulate 20 credits and receive a $10 gift card for area businesses. This is an ambitious idea. Some things to workout. a. The threshold for the number of points to receive a gift card. Twenty equals about one/week and the size of the reward b. How to record points. Is honesty an issue; considering the reward amount, I'd say no. c. How to underwrite expenses. Maybe offer only 500 cards and the number of gift cards an individual can receive, e.g. two. The biking community would offer financial support. d. Soliciting cooperation with area businesses. These days I don't think that'd be hard. e. Could you offer weekly super "raffle prizes" to people enrolled, e.g. a gift certificate to Film Scene. f. Promotion