BOARD MEETING DATE: May 2, 2003
AGENDA NO. 6

Execute Contract to Cost Share Demonstration Project Utilizing Compost and Digester Gases for Operation of Low Btu Microturbine for Electricity Generation

SYNOPSIS:

The Board previously approved Rule 1309.1 - Priority Reserve PM10 mitigation fees to be used for the purchase and installation of microturbines at various locations within AQMD. Staff is requesting the Board’s approval to redirect $100,000 of this funding towards the demonstration of an innovative, catalytic combustor-equipped, microturbine generator to burn waste gases from a composting facility. The proposed project will control fugitive VOCs and ammonia gases that are precursors to ozone and PM10. The contractor, FlexEnergy, Inc. is also receiving a $300,000 funding from the Department of Energy and the California Energy Commission for a total project cost of $400,000.

COMMITTEE:

Technology, April 25, 2003, Recommended for Approval

RECOMMENDED ACTIONS:

1. Authorize the Executive Officer to redirect $100,000 from the Rule 1309.1 - Priority Reserve PM10 Mitigation Fees (Fund 36) to cost share the demonstration of an innovative, catalytic combustor-equipped, microturbine generator to burn waste gases from a composting facility.
    
2. Authorize the Executive Officer to execute a contract with FlexEnergy, Inc. to cost share a demonstration project utilizing compost and digester gases for the operation of a low Btu microturbine for electricity generation in an amount not to exceed $100,000.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

Composting is a beneficial use of waste materials that would otherwise be placed in landfills. However, the composting process itself, especially co-composting with manure or biosolids is a significant source of ammonia and volatile organic compounds (VOCs) gases that are precursors to ozone and PM10. In January 2003, the Board adopted Rule 1133.2- Emissions Reductions from Co-Composting Operations which will require co-composting facilities to reduce these emissions.

In October 2001, the Board approved $6.2 million from Rule 1309.1 - Priority Reserve PM10 mitigation fees for the purchase and installation of microturbines at various locations within the SCAQMD. Rule 1309.1 requires the mitigation fees to be used to fund PM10 emission reduction projects. Because of cost-sharing by facilities installing the microturbines, not all of these funds will be required.

Proposal

Staff is requesting the Board’s approval to redirect $100,000 of the Rule 1309.1 - Priority Reserve PM10 mitigation fees (Fund 36) previously authorized for microturbines to cost share the demonstration of an innovative, catalytic combustor-equipped, microturbine generator to burn waste gases from a co-composting facility. This project will control fugitive VOCs and ammonia gases that are precursors to ozone and PM10.

Staff also requests that the Board authorize the Execute Officer to execute a contract with FlexEnergy, Inc. to cost share a demonstration project utilizing compost and digester gases for the operation of a low Btu microturbine for electricity generation in an amount not to exceed $100,000 with the remaining $300,000 of funding to be provided by the Department of Energy and the California Energy Commission for a total project cost of $400,000.

FlexEnergy, in conjunction with Capstone Turbine Corporation has developed the Flex-Microturbine power plant. This prototype 30 kilowatt electric generator uses catalytic combustion to run at full power on low-Btu, waste gases with no more than 1.5 percent methane concentration by volume. Such waste gases are well below the threshold of traditional combustion. And with the low peak operating temperatures, the Flex-Microturbine has very low NOx emissions.

For this project the waste gases from the Inland Empire Utilities Agency's (IEUA) RP-5 indoor composting facility in Chino, California, supplemented with digestor gas, will be used to power the Flex-Microturbine and generate electricity for the facility. IEUA's RP-5 facility composts animal manure from the dairies in Chino. Several existing and future waste gas streams that are venting the storage warehouse, mixers, transfer points and drains will be diverted to the Flex-Microturbine, with its VOCs and ammonia being consumed. If additional fuel is needed, digester gas from the facility's manure digestors will be used to supplement the waste gas.

Benefits to AQMD

If successful, the proposed Flex-Microturbine project may provide co-composting facilities and other low-Btu gas producing activities a way to remove VOC and ammonia emissions, while at the same time using the heating value of the waste gas to produce electricity in a clean manner and reduce the facilities' electricity costs.

Sole Source Justification

Section VIII.B.2 of the Procurement Policy and Procedure identifies four major provisions under which a sole source award may be justified. This request for sole source award is made under provision B.2.c, because the desired services are available from only the sole-source based upon one or more of the following reasons:
 

(1)	The unique experience and capabilities of the proposed microturbine supplier
	and
(2)	The project involves the use of proprietary technology.

FlexEnergy represents the optimum choice for quick deployment of this innovative microturbine generator technology. FlexEnergy and Capstone holds multiple patents to protect their proprietary microturbine technology, which leads to superior performance at extremely low emissions.

Resource Impacts

The proposed funding for this project is from Rule 1309.1 - Priority Reserve PM10 mitigation fees (Fund 36) previously authorized by the Board to be used for the purchase and installation of microturbines at various locations within AQMD. It has been determined that sufficient savings have been generated from the purchase and installation of microturbines to allow for the redirection of $100,000 to cost-share the demonstration of the flex-microturbine project. The proposed actions will only redirect existing funding and will not result in increased funding.

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