Regional government accused of favoritism in choosing Waste Management and city Bureau of Environmental Services to build and operate food scraps processing plant.

TRIBUNE PHOTO: JAIME VALDEZ  - Metro is negotiating a contract with Waste Management and the city Bureau of Environmental Services to process the regions food scraps into renewable energy at the city sewage treatment plant in North Portland, shown here. The bridesmaid in Metro's search for a company to convert the Portland area's food scraps into renewable energy is crying foul.

Paul Woods, president of SORT Bioenergy, sent a three-page letter to elected Metro councilors Jan. 18 saying the regional government is in "a situation of legal jeopardy" by denying his company "due process" in its consideration of the food scraps recycling contract. Woods alleges Metro is colluding with Waste Management — the announced winner of the competitive process — and with Portland's Bureau of Environmental Services (BES), which is teaming with the industry giant.

Metro, Waste Management and BES all declined interview requests and issued only brief statements. Metro procurement officer Tim Collier, who will make the final contract decision, sent a written response to Woods on Jan. 25, saying the process has been "transparent and fair."

Four past Oregon efforts to turn garbage into compost or energy have been controversial, due to neighbors' complaints about foul odors, operational snafus or money issues. (See sidebar.) This time, Metro appears to be handling the selection process "close to the vest" by limiting public involvement in the siting process. Woods' complaint, and his implied threat of legal action, could thwart that effort.

Metro put out a Request for Proposals last spring, seeking a company that could turn food scraps into compost or renewable energy. To guarantee a steady supply of food scraps, the regional government is simultaneously fashioning a new mandate for major producers of food waste in Portland — such as food manufacturers, groceries, restaurants and schools — to separate out their food scraps for recycling, so the waste can be turned into useful energy rather than rot in the landfill and produce potent greenhouse gas emissions.

Two top contenders

Metro winnowed its list of six valid proposals to Waste Management and SORT, which emerged essentially tied, said Ken Ray, Metro spokesman for solid waste matters. After oral interviews with both applicants, Metro told the bidders on Jan. 5 that it would pursue a contract with Waste Management.

As the Tribune reported Jan. 14, Ray said Metro intended to issue a notice of intent to issue a contract in late April, around the time it hoped to wrap up contract negotiations with Waste Management and the BES. Any appeals of that decision would have to be filed within one week, Ray said, and such an appeal would be decided administratively by Collier, not elected Metro councilors.

TRIBUNE PHOTO: JAIME VALDEZ - Waste Management proposes to convert food scraps into a bio-slurry, then truck that to the Columbia Boulevard Wastewater Treatment Plant, shown here, where it would be mixed with sewage to create biogas, a form of renewable energy.  Mixing food scraps with sewage

Under the Waste Management/BES proposal, food scraps would be trucked from a garbage transfer center to a company plant on 701 N. Hunt St. There the food scraps would be processed into what is known as "bio-slurry," then hauled by truck to the city's Columbia Boulevard Wastewater Treatment Plant at 5001 N. Columbia Blvd. In a process known as co-digestion, the slurry would get mixed with treated sewage in an anaerobic digester, which deploys bacteria in an airless container to produce a mixture of methane and carbon dioxide called biogas, an energy source. The biogas would be sold to Northwest Natural, which has a nearby pipeline.

SORT, based in Wilsonville, had proposed building an anaerobic digester next to a garbage transfer center in Wilsonville. Unlike Waste Management, SORT has already received the necessary permits from Metro and the Oregon Department of Environmental Quality.

Metro, via its pending food scraps recycling mandate, controls the feedstock needed to produce energy at either location.

Appeal deadline favors one party

After the Tribune reported last month on Metro's limited appeal process and truncated deadline, Woods decided to take his concerns directly to the elected Metro Council. "We believe the process did not provide a fair and unbiased evaluation," he wrote.

Delaying any possible appeal until late April means SORT won't have time to meet Metro's requirement that the facility be ready to operate by the end of next year, Woods said in an interview.

"Time is a critical component of all this," he explained. "If we do prevail, the challenge is we couldn't meet the commercial operation date of Dec. 31, 2019."

Waste Management, on the other hand, is piggy-backing on the city sewer bureau's existing anaerobic digester, so it may not have as much difficulty meeting the deadline.

A new digester must be "seeded with new bacteria and brought up to operational status, which takes 4-6 months," Woods said.

Woods said the oral interview process was relatively pro forma. "I just don't know what would be the distinguishing information there," he said. He complained that Metro is denying him access to its ultimate scoring of the two projects.

In Collier's response to Woods' complaint, he wrote that Metro did not view the oral interviews to be the "tiebreaker."

Collier further stated that Metro hasn't issued its intent to issue a contract yet, so there can be no appeal of a decision that hasn't been made.

In response to an interview request, Waste Management issued a two-sentence statement.

"Metro's process was rigorous and thorough," wrote Jackie Lang, regional public affairs manager. "The (Waste Management) technology supports Metro's sustainability goals with an innovative solution that diverts food waste from landfills and converts it into renewable energy."

Limited public involvement

Metro earlier refused to release copies of the six projects submitted in response to its Request for Proposals, and says it will only release them once it issues it notice of intent to issue a contract.

By then, residents will have little chance to weigh in on the decision, given Metro has set a narrow seven-day window to file appeals.

Woods argues that the Waste Management/BES and SORT proposals use the same technology and produce the same amount of energy. SORT would produce electricity, while Waste Management and BES would produce biogas.

SORT's facility would be locally owned by Equilibrium Capital, a Portland investment firm.

One reason why Metro prefers the Waste Management/BES proposal could be cost, because the city already has an anerobic digester at its sewage treatment plant.

"I'm guessing the economics are skewed to a municipal facility," said Nora Goldstein, editor of BioCycle, an Emmaus, Pennsylvania, trade journal that focuses on the industry.

Tied to city biogas plans

Interestingly, it was the economics of the BES proposal to produce biogas at its sewage treatment plant that were initially called into question. The Citizens' Utility Board (CUB) of Oregon had reviewed BES's plans, and, in a February 2016 letter to the city's Public Utility Board, questioned whether the project would pencil out without an additional supply of feedstock to supplement treated sewage.

At the time, Waste Management had been talking with the city about supplying that added feedstock.

"Waste Management was viewed as a potential partner for BES pretty early on, based on their effective use of this technology in several other cities," said Janice Thompson, CUB's consumer advocate for Portland public utilities, who authored that letter.

However, there was a timing concern about Waste Management's access to ample food scraps, Thompson said. "CUB was nervous about the food stock option linked to a partnership with Waste Management and a potential Metro project not working out."

CUB's concerns were allayed when BES showed there was an alternate feedstock available that could make the biogas plant pencil out, by adding fats, oils and greases, also collected by the BES, to sewage.

Woods has not offered evidence of collusion between Metro and Waste Management/BES, other than saying he heard Michael Jordan, the BES director, has been pushing for the selection of the Waste Management/BES proposal, and is Metro's former chief operating officer.

The Portland City Council wound up approving the biogas plant last April. A month later, Metro issued its Request for Proposals for a food scraps plant.

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