Allentown, PA Kills Controversial Waste Incinerator Proposal

- by Emi­ly Opi­lo, Octo­ber 1, 2014, McClatchy-Tri­bune Region­al News

More than two years after the deal’s con­tro­ver­sial approval, Allen­town has ter­mi­nat­ed its con­tract with Delta Ther­mo Ener­gy, end­ing spec­u­la­tion about whether the com­pa­ny would ever build a pro­posed waste-to-ener­gy facil­i­ty in the city.

In a let­ter dat­ed Sept. 26, Allen­town solic­i­tor Jer­ry Sny­der wrote that Bucks Coun­ty-based Delta Ther­mo Ener­gy had “con­sis­tent­ly failed to advance” plans for a 48,000-square-foot facil­i­ty on Kline’s Island that would have burned pul­ver­ized munic­i­pal waste and sewage sludge to gen­er­ate electricity.

While Delta Ther­mo received approval for two per­mits from the state Depart­ment of Envi­ron­men­tal Pro­tec­tion in May 2014, the com­pa­ny repeat­ed­ly failed to meet extend­ed dead­lines to acquire financ­ing for the $49 mil­lion project, the let­ter states. It became clear that Delta Ther­mo could not meet a dead­line of Jan. 1, 2016, to com­plete con­struc­tion of the plant, accord­ing to the letter.

“Under the cir­cum­stances, the city has no rea­son­able alter­na­tive than to declare the agree­ment ter­mi­nat­ed,” Sny­der wrote.

Asked Tues­day if he had a response to the let­ter, Robert Van Naar­den, pres­i­dent of Delta Ther­mo, said he would have a for­mal state­ment in the next sev­er­al days. He then said he did not know what a reporter was ask­ing about.

“I don’t need to speak to you,” Van Naar­den said.

May­or Ed Pawlows­ki said he was dis­ap­point­ed that the con­tract had to be ter­mi­nat­ed, but it was a financ­ing issue, not a prob­lem with the com­pa­ny’s tech­nol­o­gy that killed the deal.

“At this point in time, we need to move on,” he said.

From the time it was first dis­cussed in 2010, the pro­posed plant was a high­ly con­tentious issue for mem­bers of Allen­town City Coun­cil and the pub­lic. The project was panned by local envi­ron­men­tal­ists, and the com­po­nents used in the pro­posed waste-to-ener­gy process have nev­er been used in com­bi­na­tion in the Unit­ed States.

Devel­op­ers ini­tial­ly failed to con­vince coun­cil mem­bers of the mer­its of the project. The plan failed after a 3–3 vote in Feb­ru­ary 2012. One month lat­er, devel­op­ers man­aged to sway Coun­cil­woman Cyn­thia Mota, who cast the decid­ing vote in favor of the pro­pos­al dur­ing a rau­cous March 2012 coun­cil meet­ing attend­ed by more than 400 people.

Since then, Delta Ther­mo has had dif­fi­cul­ty find­ing pri­vate financ­ing for the exper­i­men­tal plan, fuel­ing rumors that it would nev­er be built. The city’s agree­ment with the com­pa­ny paid for up to $500,000 in con­sult­ing fees to explore the project — to be reim­bursed if the plant was built — but put the bur­den of acquir­ing financ­ing on the company.

In Decem­ber 2012, Van Naar­den told The Morn­ing Call that there was “zero con­cern” about not find­ing a finan­cial backer. The city’s let­ter states otherwise.

Delta Ther­mo “con­sis­tent­ly failed to sat­is­fy the financ­ing require­ment” in the agree­ment, Sny­der states in the let­ter. An ini­tial financ­ing dead­line of Jan. 31, 2013, was not met, and mul­ti­ple exten­sions were grant­ed, includ­ing the most recent exten­sion that expired April 1 of this year.

Short­ly before that date, Delta Ther­mo request­ed an addi­tion­al exten­sion for financ­ing, the let­ter states, but city offi­cials asked for addi­tion­al assur­ances that the project could be com­plet­ed by Jan. 1, 2016. Let­ters were exchanged through­out the sum­mer between the city and Delta Ther­mo. In August, city offi­cials denied a request from Delta Ther­mo for access to the Kline’s Island site to begin pre­lim­i­nary work.

In Sep­tem­ber, Delta Ther­mo offi­cials told the city that they were no longer work­ing with their pre­vi­ous finan­cial backer, and planned to have the financ­ing under­writ­ten by Stern Bros. A let­ter from Stern Bros. to the city stat­ed its “con­fi­dence” in financ­ing the project if the dead­line were extend­ed to June 1, 2016, accord­ing to Sny­der’s letter.

Allen­town’s garbage con­tract will be rebid in 2015, Pawlows­ki said. There was no way the plant was going to be oper­a­tional in time for that process.

“We pro­vid­ed every oppor­tu­ni­ty for them to make the deal; there were a num­ber of exten­sions,” Pawlows­ki said. “We got to a point where we could­n’t move any fur­ther. I have to have some sort of a com­mit­ment in place before I bid out this con­tract in 2015.”

Pawlows­ki said he is com­mit­ted to the idea of find­ing an alter­na­tive place for Allen­town’s trash. It may still be pos­si­ble to find anoth­er com­pa­ny that could build a waste-to-ener­gy facil­i­ty in the city, he said.

“I see this as one of the most crit­i­cal issues for us, and we’re going to work for it,” Pawlows­ki said. “We’ve set the ground­work and a plat­form for us to con­tin­ue to look for tech­nolo­gies for solve our garbage problem.”

The ter­mi­na­tion of the con­tract means Allen­town will have to eat the near­ly $500,000 it spent on con­sul­tants to vet the finan­cial and tech­no­log­i­cal aspects of the waste-to-ener­gy plan. Two con­sul­tants pro­vid­ed con­flict­ing reports to city offi­cials about the tech­nol­o­gy need­ed, one say­ing he was con­fi­dent the plan would work, the oth­er stat­ing there were “a num­ber of tech­no­log­i­cal, per­for­mance, oper­at­ing and envi­ron­men­tal risks.”

Pawlows­ki said he did­n’t view the mon­ey as wast­ed. The city now has a “tem­plate” that can work for a poten­tial con­tract mov­ing for­ward, he said.

“I would have been crit­i­cized high­ly if I did­n’t bring in the best pro­fes­sion­als,” Pawlows­ki said.

Coun­cil Vice Pres­i­dent Ray O’Con­nell, who cast one of the two no votes on the pro­pos­al in 2012, said it became clear in recent months that the com­pa­ny was nev­er going to be able to build the facil­i­ty on time. The city should try to recoup con­sult­ing fees, he said.

“My bot­tom line, No. 1, is that I’m extreme­ly hap­py that it’s not going to be built,” he said. “No. 2, let’s go after the $500,000 that was spent.”

In addi­tion to pub­lic out­cry, Delta Ther­mo’s con­tro­ver­sial pro­pos­al prompt­ed a failed bal­lot ques­tion in 2013. The ques­tion, which would have asked vot­ers if they want­ed real-time mon­i­tor­ing of new air-pol­lut­ing facil­i­ties and live dis­clo­sure of emis­sions data, was thrown out by the Lehigh Coun­ty Board of Elec­tions for lack­ing DEP approval. The deci­sion was upheld by Lehigh Coun­ty Court, and an appeal was lat­er dis­missed by Com­mon­wealth Court.

Dan Poresky, one of the activists who opposed the plan and helped orga­nize the bal­lot ques­tion, said a group of activists was work­ing on rais­ing $25,000 to pay two attor­neys to take fur­ther legal action chal­leng­ing a pre­vi­ous court rul­ing and the DEP for issu­ing per­mits to Delta Ther­mo. Despite rumors that financ­ing was not in place, orga­niz­ers did not want to take a chance that the plant would be built, he said.

“The city has been saved both envi­ron­men­tal­ly and finan­cial­ly from a major mis­take,” Poresky said when asked about the ter­mi­na­tion. “This is not the way to han­dle trash and sewage sludge.”

Coun­cil­woman Jeanette Eichen­wald, who vot­ed against the pro­pos­al, said Delta Ther­mo’s pro­posed tech­nol­o­gy was unproven and envi­ron­men­tal­ly unsafe. It was not sur­pris­ing that investors could not be found, she said.

City offi­cials should treat the expe­ri­ence as a les­son, Eichen­wald said, and take a clos­er look at how the city spends mon­ey on consultants.

“I’m grat­i­fied that this phase of Allen­town city life has come to an end,” she said. “I feel vindicated.”