Debt Solution Tips

Having been saddled with a money-sucking waste-to-energy incinerator for years, Bay County finally may be seeing a pinprick of light at the end of a long, dark tunnel.

From its inception two decades ago, the incinerator has burned county taxpayers more than it has dry trash. It has never come close to being self-sufficient and has bounced between being private and public ownership, with costs - and losses - continuing to escalate. The county still owes $35 million on the facility, its debt payments alone consuming more than $10 million of Bay's annual budget.

On top of that, the darn thing keeps catching on fire. A recent blaze shut the facility down for a month while repairs were done. It's like living in Cleveland in the 1970s.

But just as that punch line of a city eventually rebounded, there is a ray of hope for the incinerator. Despite years of county missteps and mismanagement, EnGen LLC, the facility's new operator, has it pointed in the right direction.

The County Commission this week approved a contract with Gulf Power that, if it receives a final OK from the Florida Public Service Commission, would substantially increase the price of energy that the company purchases from the incinerator. The facility currently charges $53 for each megawatt hour of energy that is generated by burning municipal waste, which has produced between $2.5 million and $3 million in revenue. However, Gulf Power has agreed to pay $72.50 per megawatt hour, which could increase the incinerator's take to as much as $5 million annually.

EnGen has promised to earmark $3.2 million a year to pay down the incinerator's debt. At that rate, the facility will be out of the red in 11 years. That doesn't erase years of misguided county policies that inflated incinerator costs, but it at least presents a potential path out of this fiscal wilderness.

One of the keys is to produce more energy that can be sold, which involves needing more trash to burn. Thus, EnGen is hoping to boost the incinerator's capacity from 56,000 megawatts of electricity each year to 66,000. The more refuse it burns, the more juice it can produce to sell and the more money it can rake in - and the sooner the county can remove the albatross that has been wrapped around the taxpayers' necks.

The trick has always been finding enough waste to dump into the facility's maw. To that end, earlier this year EnGen persuaded the county to spend $1.2 million to be used for a metal-recovery system. The company estimates that the garbage system produces about 500 tons of metal each year that sits in landfills, when it could be used by the incinerator to produce electricity.
Of course, garbage isn't the only thing that's being recycled. Gulf Power has requested an 11.3-percent rate hike, which if approved by the PSC means that some of the money that Bay County customers will be paying in higher energy bills will be used by Gulf Power to buy electricity from the county incinerator. Talk about a closed circuit.

Setting It Straight: Thursday's editorial "Burning solution" erroneously reported the annual debt payments on the Bay County incinerator. The debt payment is $3.2 million a year.