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Division of Environment Bureau of Water Municipal Programs Section Curtis State Office Building 1000 SW Jackson, Suite 420 Phone: 785-296-5527 Fax: 785-296-0086 rgeisler@kdheks.gov www.kdheks.gov Topeka, KS 66612-1367 Robert Moser, MD, Secretary Department of Health & Environment Sam Brov..n back, Governor MEMORANDUM DATE: September 15, 2010 Updated March 28, 2012 - Updated January 15, 2013 TO: Pratt 2.1 File 2010 Funding EPA CWSRF KWPCRF Project No.: C20 1799 01 /J /;Z Sectio~74~~~ FROM: Rod Geisler, PE, Chief Municipal Programs SUBJECT: Pratt, Kansas Project to Upgrade Sludge Wasting, Digestion, Thickening, Dewatering, Storage, and Disposal. EPA Green Project Reserve Similar to the ARRA funding effort, the Federal Clean Water SRF funding provided in FFY 2010 requires a 20% "Green Project Reserve" (GPR) for use of the federal funds. EPA wrote new guidance to define qualifying uses for the Green Project Reserve requirements for the FFY 2010 funding, dated April 21, 2010 (copy attached). As stated on page 1, paragraph "II. GPR Goals." The "intent" is "to guide funding toward projects that...enhance water and energy conservation ... ". The project at Pratt, Kansas, achieves this goal by substantially reducing energy usage in the sludge handling and disposal processes. The project being funded will remove the primary clarifiers, add improved SCADA controls for wasting activated sludge from the SBR system and add an upgraded waste activated sludge pumping station, convert the existing anaerobic digesters to aerobic digesters with the addition of a high purity oxygen infusion aeration process, add belt press sludge dewatering equipment in a new building, and an open building to store dewatered sludge prior to disposal to landfill and/or land application reuse of biosolids. A review of the FFY 2010 GPR guidance as presented below indicates this project meets the requirements to qualify as a Green Project Reserve project in accordance with these Federal guidelines. 0.1 All GPR projects must otherwise be eligible for CWSRF funding. The project at Pratt is eligible. 0.2 All Section 212 projects must be consistent with the definition of "treatment works" as set forth in Section 212 of the Clean Water Act (CWA). The project at Pratt is a "Section 212" project, the wastewater treatment plant is publicly owned, and the project will have a direct water quality benefit by improving the Pratt 2.1 File Memo September 15, 2010 Updated March 28, 2012 Page 2 efficiency and flexibility of waste sludge wasting, storage, disposal, and potential reuse of biosolids from the treatment process, and also improving biosolids quality. 0.3 Eligible non-point source projects ... NA. This is not a non-point source project. 0.4 Eligible projects under Section 320 ... NA. This is not a Section 320 project. 0.5 GPR projects must meet the definition of one of the four GPR categories. See below 0.6 GPR project must further the goals of the Clean Water Act. CWSRF Technical Guidance 1.0 Green infrastructure NA 2.0 Water Efficiency NA 3.0 Energy Efficiency 3.1 Definition: Energy efficiency is the use of improved technologies and practices to reduce the energy consumption of water quality projects, use energy in a more efficient way, and/or produce/utilize renewable energy. -The project at Pratt achieves this goal by reducing energy consumption in sludge treatment, storage, and disposal, and improved biosolids quality for potential reuse. 3.2 3.2.1 Categorical Projects Renewable energy projects such as wind, solar, geothermal, micro-hydroelectric, and biogas combined heat and power systems (CHP) that provide power to a POTW. (http:///www.epa.gov/cleanenergy). Micro-hydroelectic projects involve capturing the energy from pipe flow. NA 3.2.2 Projects that achieve a 20% reduction in energy consumption are categorically eligible for GPR 4 Retrofit projects should compare energy used by the existing system or unit process to the proposed project. The energy used by the existing system should be based on name plate data when the system was first installed, recognizing that the old system is currently operating at a lower overall efficiency than at the time of installation. New POTW projects or capacity expansion projects should be designed Pratt 2.1 File Memo September 15, 2010 Updated March 28, 2012 Page 3 to maximize energy efficiency and should select high efficiency premium motors and equipment where cost effective. Estimation of the energy efficiency is necessary for the project to be counted toward GPR. If a project achieves less than a 20% reduction in energy efficiency, then it may be justified using a business case. 4 The 20% threshold for categorically eligible CWSRF energy efficiency projects was derived from a 2002 Department of Energy study entitled United States Industrial Electric Motor Systems Market Opportunities Assessment, December 2002 and adopted by the Consortium for Energy Efficiency. Further field studies conducted by Wisconsin Focus on Energy and other States programs support the threshold. 5 A unit process is a portion of the wastewater system such as the collection system, pumping stations, aeration system, or solids handling, etc. The project at Pratt meets this GPR qualifying criteria as the consulting engineer has conducted a comparison of energy use of the solids handling components of the existing wastewater treatment facility to the proposed upgrade alternatives. Copies of pages 12 and 13 of the Engineering Report dated August 2010 are attached to this memo. Copies of several pages from the Design Memorandum dated March 2012 are also attached to this memo. The consulting engineer compared energy use in all forms - electricity, natural gas, and motor (diesel) fuel - by the "common denominator" of cost in dollars. The current treatment project is spending $28,834 (2010) per year on energy costs for solids handling. The selected alternative is estimated to require $17,822 per year for energy costs for solids handling. The energy costs of 7¢ per kW.h electricity, $7.33 per MCF natural gas, and $4.50 per gallon for diesel fuel are actual 2010 year costs. These energy costs are sure to increase in the future but this "future inflationary pressure" was not considered. If this were to be considered, the future energy costs saving would be increased. By these numbers, the project at Pratt will reduce energy usage by ($28,834- $17,822) I 28,834 = 38.2% for sludge handling, which exceeds the minimum 20% threshold in the EPA guidance. 3.2-3 Collection system Infiltration/Inflow (1/1) detection equipment NA 3.2.4 POTW energy management planning ... NA 3.3 Projects that do not meet the definition of Energy Efficiency. NA 3.4 Decision Criteria for Business Cases NA Pratt 2.1 File Memo September 15, 2010 Updated March 28, 2012 Page 4 3.5 Examples of Projects Requiring a Business Case NA 4.0 Environmentally Innovative NA Therefore, the project at Pratt meets the EPA definition of being "categorically" green. The loan agreement will provide 15% principal forgiveness for all engineering and construction costs, and will also provide an additional 25% principal forgiveness for the cost of construction of the qualifying "green design components" based on the approved bid form and a proportionate amount of the engineering costs, up to a maximum amount provided for principal forgiveness of $656,800. Based on information presently available, nearly the entire project qualifies as "green design components". The updated estimated total cost of the project is $2,118,200. Nearly the entire cost is considered a "green design" contributing to energy use reduction with those components eligible for 40% principal forgiveness, subject to final review of design plans and specifications. A follow up memo will provide the final eligibility review based on actual bid costs for the record. Attached Excerpts from the Engineering Report dated August 2010 (2 pp) Excerpts from the Design Memorandum dated March 2012 (4 pp) January 15, 2013 Memo Enclosures FFY 2010 EPA GPR Guidance Pc: Larry Molder, II, Rod Geisler (Memo Only) ENERGY ANALYSIS FOR SLUDGE JIANDLING WASTEWATER TREATMENT FACILITY UPGRADE f'RATI, KANSAS Discount Rate 4.40% Design Period 40 Cost per KWH $0.07 Discount Rate From 2010 Federal Register OMB Circular ,A-94 Years ~ Typical design life of Sewage Treatment Plant Process EXISTING WASTEWATER TREATMENT FACILITY ENERGY COSTS (FOR REFERENCE ONLY) Present 40 Cost Annual Yeru- Unit per Unit Cost FV Electric Moton; Annu