St. John OKs trash-to-ethanol agreement

2012-06-28T23:00:00Z St. John OKs trash-to-ethanol agreementBY LU ANN FRANKLIN Times Correspondent
June 28, 2012 11:00 pm  • 

ST. JOHN | The Town Council on Thursday approved the interlocal cooperation agreement with the Lake County Solid Waste Management District for the proposed $450 million privately owned trash-to-ethanol plant.

St. John is the fifth municipality to sign the agreement, joining Munster, Dyer, Lowell and Merrillville. The Griffith Town Council rejected the ethanol agreement June 19.

St. John Town Council President Michael Forbes represents the town on the Lake County Solid Waste Management District Board, which is composed of representatives from all Lake County municipalities. Forbes brought the resolution for approval to the council as part of an amended agenda at Thursday’s meeting.

The solid waste district signed a contract with developer Earl Powers of Powers Energy of America in November 2008 to construct the plant in Schneider.

However, Powers has yet to secure outside financing for the venture, which has become a sticking point. In April, the waste district board gave Powers 90 days to resolve that breach, ultimately requiring him to secure financing for the plant by the end of that period.

Powers has since passed two benchmarks set by the district. He showed proof of a license for the patented trash-to-ethanol process and has contracted with the financial firm of Raymond James to secure financing.

Communities throughout Lake County are being asked to sign the interlocal agreement with the waste district to participate in the biofuel plant. This will allow the waste district to estimate how much garbage initially will be available for processing.

“We will be committing our trash to the ethanol plant if and when it’s ever built,” Forbes said.

“This is a non-binding agreement that will be used as collateral to attempt to complete a financing agreement,” he said. “If we find that it is not cost-effective for us, we can without penalty back out of the agreement (to send all garbage to the biofuel plant).”

Municipalities that sign the interlocal agreement before July 18 will receive benefits, including a share of a $2.50-per-ton rebate that the solid waste district will get from the ethanol plant.

In addition, early agreement signers will be guaranteed a reduced “tipping fee,” or dumping fee, of $17.25 per ton of garbage processed by the plant for 20 years.

During discussions, Councilman Gregory Volk asked if the town took any risk in signing the interlocal agreement.

Forbes said, “There is no risk. We can opt out.”

David Austgen, St. John’s town attorney, told the Town Council before the vote that the agreement is for 20 years.

Council Vice President Mark Barenie did not attend the meeting.

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