After a 45-minute discussion Tuesday, the Sherburne Count Board decided not to move any further on a proposal to take over the Great River Energy (GRE)    Resource Recovery Project in Elk River.

 

The project, which converts trash into energy, has been losing money for years. In July, plant manager Matt Herman told the board they lost over $11 million in 2017, and company officials were considering closing the operation if a solution couldn’t be found to make the plant at least break even.

 

The plant, which opened in 1989, generates energy that can power up to 25,000 homes burning municipal solid waste from Sherburne, Anoka and Hennepin counties. It relies on revenues from that waste to cover its costs. 

 

The plant’s bottom line depends on burning 320,000 tons  a year, but hasn’t reached that goal. It’s highest tonnage has been 287,357 in 2013. And GRE currently has contracts with haulers totalling 140,000 just tons.

 

Last month GRE made a proposal for the counties to take over the operation for a two-year term, which would give GRE an opportunity to negotiate a sale with a private company. They are currently talking with Enerkem, a Canadian company that converts waste to ethanol. But that company isn’t ready to step forward yet and make a deal.

 

At last month’s meeting, the board decided it didn’t have enough time or information to make a decision. GRE was looking for a commitment by Nov. 15. They directed Solid Waste Administrator Dave Lucas to work with GRE on the timeline and get more specific numbers on what it would cost the county to do due diligence.

 

Tuesday, GRE Vice President and Chief Generation Officer Rick Lancaster said it was time to make a decision.

 

“Because of changes in the wholesale power market, the plant is more valuable as a solid waste management facility than as a power production facility,” he said. “We are prepared to write off the $36 million book value and transfer the project to the county for $1.”

 

He said without the burden of depreciation and interest, GRE believed the county could break even in operating the project.

 

“We think this is a unique opportunity to keep 85 jobs within the community and to keep about 300,000 tons out of municipal solid waste out of landfills,” he told the board.

 

But members of the board were still wary about the shortfall of committed municipal waste, which would keep the plant operating in the red.

 

Commissioner Tim Dolan felt the board could still attempt to keep a dialogue open with Hennepin and Anoka counties, hoping to bring them in as potential partners. Commissioner Barbara Burandt felt the same way.

 

But Commissioner Felix Schmiesing said signing a resolution to support the proposal, to do due diligence and to work to obtain assurances for the delivery of sufficient annual waste streams, would just be giving GRE and all the employees false hope.

 

Board Chair Lisa Fobbe said the project is bigger than what the county can do by itself, and with such a short timeline, it was unlikely they would be able to secure additional waste tonnage contracts.

 

The board took no action on the resolution. Now it is up to GRE to decide if and when they will close operations.