Utility Commission Approves Gas Contract at Hanes Mill Road Landfill

Utility Commission - March 12, 2007
Contact: David Saunders, 727-8418

The Utility Commission of Winston-Salem and Forsyth County today agreed to a contract amendment with Winston Gas Producers LLP that is projected to net the commission about $95,000 this year, by recovering methane gas released from the landfill and using it to produce electricity.

Winston Gas Producers has been collecting methane produced from decomposing waste at the landfill since 1996. The gas fuels a turbine that produces electricity, which is sold to Duke Energy Corp. The amendment approved today extends the company’s right to operate at the landfill for 15 years and restructures the terms to account for changes in the Clean Air Act and federal tax credits.

Under the amended contract, the commission will install gas wells and collection pipes in future portions of the landfill, as it did in 2005 in a 37-acre expansion area. Previously, Winston Gas Producers installed the gas wells and collection pipes. With this change, Winston Gas Producers will pay for the gas extracted from wells installed by the commission. Winston Gas Producers will operate the gas-collection system for all landfill wells and the turbine plant, and be responsible for compliance monitoring.

The company will pay the commission an annual licensing fee of $65,000, plus an additional fee for the gas extracted from the wells the commission installed. Commission officials estimate the total annual income to be about $95,000 this year, based on the current extraction rate of 1.2 million cubic feet of gas per day from the wells the commission installed in 2005. Winston Gas Producers will also pay a one-time fee of $30,000 for the gas it has already extracted from these wells. Future payments will be based on the amount of gas collected.

Methane is a potent contributor to global climate change and is more than 20 times as effective at trapping heat in the earth’s atmosphere as carbon dioxide, according to the Environmental Protection Agency. Using methane to produce electricity at the landfill prevents the gas from being released into the atmosphere, and avoids the cost of flaring the gas. Producing electricity from recovered methane also reduces the need to use non-renewable resources such as coal, oil, or natural gas to produce energy. The amount of electricity produced at the landfill would require approximately 15,000 tons of coal to be burned annually, if produced at a traditional coal-fired power plant.