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January 30, 2013

Pyrolyzer recommended for new LMU plant

Company proposes lower initial rate with no investment from city

INDIANAPOLIS — After weeks of deliberation, the study team of consultants assisting with proposals for Logansport Municipal Utilities’ new refuse-derived fueled power plant have recommended Boca Raton, Fla.-based energy company Pyrolyzer LLC to take on the project.

According to a submission review released by consulting firm William-Lynn-James, the study team went with Pyrolyzer’s proposal for a number of reasons, including the company’s intentions to guarantee electricity generation at nearly half the current rate, a satisfactory total project cost with a solid financial backing that doesn’t require contributions from the city and the use of existing LMU staff to operate the plant and a shorter implementation schedule.

Through its proposal, Pyrolyzer has stated it would acquire feedstock, or the trash necessary to develop the refuse-derived fuel, from locations in Indiana and Illinois.

This feedstock would be transported to a material recovery facility, or MRF, where it would be separated and sorted. Recyclable materials like metal and glass would be stored for sale while the remaining material would be shredded and formed into pieces less than two inches in diameter, ultimately becoming the fuel that will power the plant.

The fuel would then enter a conversion reactor to go through a heating process called pyrolysis, heating the fuel into a gaseous state which is then ridded of chlorine, sulfurs and other particles dangerous to the environment. The gas will ultimately fuel turbine engines, creating electricity much the same way gas procured from heating coal would.

According to the proposal, the entire process is cyclical in that it is powered by fuel the plant creates itself and aided by oils and tars left over from a separation process. The proposal also assures that the process will meet current and estimated future EPA and Indiana environmental regulations.

“If the process works as its designed to, it will create a gas that’s similar to natural gas, which is a very clean burning fuel,” said Bernie Paul, the study team member consulting on environment and permitting.

The ultimate design has seen fruition in two cases in Germany. One is a pilot plant that has been operated solely for 10 to 15 tests per year since 1999. The other was completed in 2002 and ran for “1,600 hours before the contract was canceled for non-technical financial reasons,” according to Pyrolyzer’s proposal.

Frank Canterbury, president of Pyrolyzer LLC, defended the design at an LMU board meeting Tuesday night by saying the separate technologies that make up the process have been proven to work, adding that the company is willing to take the risk and that it has already begun the process of getting investors and becoming properly insured.

As LMU Superintendent Paul Hartman, Mayor Ted Franklin and consultants have said in the past, they think it is this method that will allow LMU to avoid future EPA sanctions associated with burning coal as well as free it from the 8.5 cents per kilowatt-hour rate it’s currently getting from supplier Duke Energy. Pyrolyzer’s proposal states that the plant it would develop will allow for an initial rate of 5.5 cents per kilowatt-hour, which would eventually change due to energy inflation and other economic factors.

Pyrolyzer estimates the total project cost to be $566,034,258, within previous estimations by Hartman, Franklin and consultants, who gave figures ranging from $500 million to $600 million.

The proposal also states Pyrolyzer will fund the entire cost of the project. After 20 years, as part of the proposed Build Own Operate Transfer partnership, which is subject to change in negotiations, LMU would assume ownership at no cost.

According to a subject-to-change draft of a memorandum of understanding between the city and Pyrolyzer, the plant will be finished Oct. 6, 2017 or sooner.

Pyrolyzer’s proposal also states it will train existing LMU staff to run the plant, which would be operated by an extensive computer system.

LMU will present its decision on the study team’s recommendation to City Council at its monthly meeting at 5 p.m. Monday. A City Council meeting and public hearing will take place Feb. 14 where residents will be able to state their opinions. City Council will have a first reading of the draft ordinance regarding LMU’s recommendation at this meeting. City Council will make its final vote at its monthly meeting March 4.

Mitchell Kirk is a staff reporter at the Pharos-Tribune. He can be reached at 574-732-5130 or mitchell.kirk@pharostribune.com.

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