HARTFORD, Conn. (AP) — Gov. Dannel P. Malloy's administration is considering a proposal that would allow the state to purchase electricity from Connecticut's largest regional trash authority, a move that could temporarily help the financially struggling entity while giving it time to come up with a long-term plan.
The Connecticut Resources Recovery Authority, which manages garbage and recyclables for 75 of the state's 169 cities and towns, has been hit hard by depressed wholesale energy prices. Officials warn they will have to close CRRA's trash-to-energy plant in Hartford at the end of the 2014 fiscal year unless they come up with a viable, alternative plan.
The proposed arrangement with the state would buy CRRA time to come up with a sustainable business model, CRRA Chairman Don Stein said during a conference call Monday with town officials who are members.
"I think if we don't buy that time, there's a foregone conclusion that we will very shortly start going down the path of converting the plant or the real estate into a transfer station and I think most of us are very unhappy with that possibility," Stein said.
Malloy's legal counsel, Luke Bronin, told CRRA officials that the governor is committed to helping the trash-to-energy plant model in Connecticut, which he said is a more environmentally sound way to dispose of garbage than landfills. He said the proposed arrangement could be a win-win for the state and the trash authority.
"The possibility of a bilateral contract (between the state and CRRA) may present a short-term way, both to meet the state's energy needs at an appropriate price, and to provide some revenue stability for CRRA in the short-term as CRRA figures out its future," Bronin said.
Under the proposed arrangement, he said, the state would purchase electricity over a 2-year period "at a price that's advantageous to the state." However, the governor wants certain conditions included in the deal to make sure the state is not "supporting an unsustainable business model." For example, there must be a thorough audit of CRRA's finances, a plan to reduce costs and come up with a sustainable business model, or else a plan to sell off some or all of CRRA's assets.
Bronin said the administration will have to work with state lawmakers to pass legislation this session authorizing such an arrangement.
"We are hopeful that that provides a short-term solution to the challenge so that the state need not prematurely abandon the trash-to-energy model, which has served us well over many years and has the potential I think to serve the state well for many years to come," Bronin said. "But clearly, some deep examination of CRRA and some serious reflection on the future of CRRA is important at this time."
Local officials are worried about the financial consequences for their taxpayers if the Mid-Connecticut Project closes.
"None of us wants to find ourselves in a position where, because of the cost of disposal, we are going to be trucking our garbage, or rail-shipping our garbage out-of-state, to a large landfills with some potential exposure to protracted liabilities down the road when these facilities close," said Lyme First Selectman Ralph Eno.
He said steps need to be taken to make sure that other trash-to-energy plants remain financially viable as well.
"It's not just an issue for the CRRA Mid-Connecticut folks," he said, adding that other trash plants in Connecticut will be subject to the same market conditions once their current energy contracts expire.
This possible electricity deal is the latest CRRA-related matter being considered by the Malloy administration.
The Democrat's budget proposal calls for transferring $30 million from CRRA to the state Department of Energy and Environmental Protection to cover the planned transfer and care of five CRRA landfills to the state. Bronin said the state is in a "very good position to care and control" those landfills, "perhaps at lower costs and perhaps with greater comfort."