2013-04-24T00:00:00Z GAS-TO-POWERBy LuAnn Franklin
April 24, 2013 12:00 am  • 

For nearly a century, land along Calumet Avenue south of 45th Street served as an industrial dumping ground and then a sanitary landfill. Today, those 220 acres have blossomed into Centennial Park, an award-winning environmental and recreational facility.

However, a byproduct of the landfill – methane gas – has created a new opportunity for the Town of Munster to produce electricity and reduce its own energy costs.

A groundbreaking ceremony at the Centennial Park Clubhouse on Oct. 19, 2012, signaled the start of a gas-to-energy project that has been long-anticipated. At that ceremony, Town Manager Tom DeGiulio credited U.S. Rep. Pete Visclosky, D-Merrillville, and U.S. Senate Richard Lugar, D-Ind., for helping Munster obtain the federal grants.

Funding for the project came through two grants from the U.S. Department of Energy and the Munster tax increment financing fund. The Munster Redevelopment Commission authorized $2.5 million from the TIF fund to pay ESG. Centennial Park is part of Munster’s TIF district.

Visclosky joined the Munster Town Council and other local officials, NIPSCO representatives, Indiana Department of Energy personnel and a team from Evansville-based Energy Systems Group at the October groundbreaking to tout the beginning of the $4.3 million electric generation project.

Visclosky praised the town leaders for "working hard" to leverage local money and federal taxes.

“This means that $1 of local money is creating a synergy that returns $5 of federal money to the local community to solve one of the greatest national issues -- what Sen. Lugar says is a national security issue - where we get our energy sources," Visclosky said in October.

Although the project took years to finalize, "you have actually moved very quickly compared with other communities. This is a great use of a product that needs to be dealt with," ESG President Greg Collins said during the Oct. 19 event.

“This has been in the works for a long, long time," DeGiulio said at those ceremonies. “It has been a vision for town councils and staff for almost two decades."

ESG, the project manager, installed a GE Jenbacher engine/generator which uses methane from the closed landfill at Centennial Park to produce approximately 1.1 megawatts of electricity. The project also installed a, a new flare and blower to replace the unit installed in 1994. This increases the collection capacity and reduces some problems with odors wafting from the capped landfill site because the flare creates a better vacuum.

This is especially important because the flare was moved south, closer to Calumet Avenue and adjacent subdivisions, DeGiulio says.

Less than two months later, on Dec. 16, the Centennial Park landfill methane gas-to-energy project was fully operational and the Town Council signed the final acceptance certificate.

That officially moves the project from the construction phase to the operation-and-maintenance phase, says Clay Johnson, assistant town manager.

A new GE Jenbacher engine/generator turns the methane gas into electricity. What isn’t used to power the entire Centennial Park facility will be sold to NIPSCO at 10 cents per kilowatt hour through the fee-in-tariff program the utility company instituted in 2011.

“ESG has been running final checks on the system and after making a repair in the waste heat converter unit, the construction portion of our partnership with ESG has been completed,” Johnson told the Town Council in December

ESG also has an agreement with the Town Council to operate and maintain the unit at Centennial Park for a five-year period at a cost of $.0324 per kilowatt hour plus a 2 percent annual escalator.

The methane gas-to-energy project is an environmentally sound and fiscally responsible effort, said David Nellans, Town Council president and Munster Redevelopment Commission chairman.

During the ribbon-cutting ceremony, Lawrence Roth, vice president of new markets with Energy Systems Group, said the project will produce about 1.1 megawatts of electricity.

Munster will send an invoice to NIPSCO for the electricity the town sells to the utility company, which will be paid monthly, Nellans said.

The amount of money the town is slated to receive from NIPSCO for the electricity produced has increased dramatically since initial negotiations began, DeGiulio says. Called "cost of avoidance," the revenue is paid by the utility company for electricity put back into the grid.

The town's new electric utility fund went into effect Jan. 2 of this year

Munster Town Council members established that fund to collect revenue from the generation and sale to NIPSCO of electricity produced by the methane gas-to-energy project at Centennial Park.

Municipalities can’t sell electricity on the open market because they are not utilities. The town can, however, sell the electricity generated to NIPSCO. The tariff the utility company must pay is 7 cents per kilowatt hours, according to the Indiana Utility Regulatory Commission.

All expenses related to the operation and maintenance of the electric generating plant will be paid from this fund. Other expenses paid by the fund will include:

• 100 percent of expenses for all power and natural gas expenses used to irrigate Centennial Park, $120,000;

• 100 percent of all expenses for electric power at Community Park and other parks, estimated at $45,000;

• 100 percent of all energy-related expenses for traffic control devices, an estimated $20,000;

• A minimum of $270,000 of related expenses for street lighting;

• Expenses for air permit compliance;

• Funding for non-covered repairs and supplies for operation of the project.

As money becomes available, the electric utility fund will also be used to pay other electrical costs from non-utility operating funds. In addition, an amount will be set aside annually for depreciation.

Until revenue is produced, the council will appropriate money to be placed in the fund to pay those expenses. That spending authority and additional appropriations was authorized at the Jan. 14 Town Council meeting.

“In future years, as we close out the fiscal years, we can consider reallocating unspent (fund assets) toward the debt retirement program currently underwritten by the tax increment financing fund,” saysTown Manager Tom DeGiulio.

“Another option for the council would be to direct more savings toward operating funds to pay more energy-related expenses,” he says.

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