THUNDER BAY — A prediction that a methane-powered generating station at the Mapleward Road landfill site would produce millions of dollars in revenue for Thunder Bay Hydro turned out to be extremely optimistic.
When the $10 million dollar plant was opened in 2010, officials said Thunder Bay Hydro Renewable Power—a company set up to operate the plant—would "conservatively" net $14 to $15 million over the course of a 20-year contract to sell electricity to the Independent Electricity System Operator.
But Rob Mace, president of Synergy North (formerly Thunder Bay Hydro and Kenora Hydro), says the recent returns are "not even close" to the projections that were made based on a consultant's report.
"The first three years of operation were financially great. We made a lot of money. After that we've been challenged with the gas supply coming out of the landfill," Mace said in an interview with Tbnewswatch.
The plant is fuelled by methane produced by deteriorating garbage.
Mace said the gas supply "is not close" to what was forecast in the study commissioned by the city before the plant was built.
As a result, for the last four years Thunder Bay Hydro Renewable Power essentially has been barely breaking even.
"We're paying the bills. We're able to pay back Infrastructure Ontario because we borrowed 75 per cent of the capital cost,' Mace said.
He said that while the engineering report may not have been accurate, increased diversion of waste from the landfill site is also a factor because it's leading to reduced methane production.
"Since that report, the province has mandated diversion of organics from the landfill, so you see the composting that's going on there."
According to the city's Solid Waste and Recycling Services, the amount of all waste going to the landfill is declining at a rate of about two per cent a year.
Mace said the utility "continues to be disappointed" by the gas supply but is working closely with the city, which owns the gas collection system, to make improvements.
The city is in the process of adding five to eight methane gas collection wells to the system.
City officials did not respond to inquiries from Tbnewswatch about the revenue shortfall.
The city is the principal shareholder in Thunder Bay Hydro Corporation, a holding company which owns 90 per cent of Synergy North.
Although the methane plant itself is not generating money, information published by the city indicates the city currently earns about $60,000 a year, after deducting for expenses, from the sale of the methane gas to Thunder Bay Hydro Renewable Power.
Mace also noted that "If nothing else, we're producing some green electricity and we're keeping harmful greenhouse gases from going into the atmosphere."
