A Senate committee’s unanimous stamp of approval on two lease agreements between the government and Alpine Energy Group for the land needed to construct an electrical power plant and waste-processing facility on St. Thomas puts the territory one step closer to the construction of waste-to-energy facilities in both districts.
In August, Government House announced that both the V.I. Water and Power Authority and the Waste Management Authority (WMA) had entered into agreements with Alpine for waste-to-energy facilities that on St. Thomas and St. Croix would, according to officials, allow WAPA to bring down its costs and lower its dependence on fossil fuel, while giving the authority the ability to burn municipal trash and close the territory’s two landfills.
The Public Services Commission approved power purchase and interconnection agreements between WAPA and Alpine early last month. Under the power purchase agreements, WAPA has committed to buying power from Alpine at fixed rates set for the next 20 years.
At the hearing, Alpine said the $440 million project would also require Senate approval on lease agreements with the government for property near the Bovoni Landfill on St. Thomas and along the Martin Marietta Channel on St. Croix, along with various permit approvals from the U.S. Environmental Protection Agency and the territory’s Planning and Natural Resources Department.
The Committee on Appropriations and Budget approved the St. Thomas leases Tuesday and forwarded them onto the full Senate body for final approval. Both leases are for 30 years, with two 10-year options to renew. The first parcel of land — which will house a 264,000-square-foot waste-processing facility — will be leased to Alpine at an annual base rent of $21,477.
The second parcel of land, which will house the electric power plant, is adjacent to the first and consists of about 28.4 acres, which will be leased to Alpine at an annual base rent $100,899.
The base rents can be readjusted after the first five years, and every year after that, to include increases in the consumer price index, according to the agreement.
During Tuesday’s hearing, Alpine President James Beach said that the lease agreements allowed Alpine to keep the power prices "as low as we can make it." He also described the St. Thomas parcels as "optimal" for power production and in terms of overall island aesthetics.
One parcel has access to water, which allows for the construction of a dock that can accommodate small barges bringing the pet coke needed to help fuel Alpine’s generators, along with other materials, such as limestone.
Alpine representatives said that no extra dredging would be needed to accommodate the barges on St. Thomas and that the area has already been scrutinized to make sure there is no impact to the coral, sea grass and other marine life in the area.
Meanwhile, the closest residential neighborhood is a little more than a mile away from the nearest site, preventing the facilities from "being built in anyone’s backyard," he said, adding that only a portion of the stack will be visible on the north side.
Throughout the afternoon, senators’ concerns about the project mainly focused on the potential dangers of using pet coke as a fuel source. Alpine representatives, who spoke abut the issue during last month’s PSC meeting, said the ash produced from the pet coke can be turned into a more solid by-product that’s used on the mainland as a soil additive or substitute for limestone on roadways, among other things.
Michael Lukey, an environmental consultant asked by WAPA to review the proposed facilities’ engineering studies, testified that Alpine’s systems would use "some of the best technology in the U.S. and around the world, removing about 95 percent of the sulfur oxides embedded in the pet coke."
Lukey added that nitrogen oxide emissions would also be reduced by about 75 percent.
According to Lukey, the U.S. Environmental Protection Agency has classified each site as a "major source" of pollution, and in order to get a permit, the project will have to be rigorously vetted during the application and review process.
"Alpine Energy Group will have to provide an analysis of the best available control technology for each emission unit at each proposed facility and demonstrate that there is no better technology being used on these same types of sources in the U.S.," Lukey said.
Alpine estimates that the permitting process could take up to a year, with construction on the facilities beginning in the last quarter of 2012.
When fully operational, it is estimated the two proposed projects will supply about 40 percent of St. Thomas-St John’s peak generation load and 20 percent of St. Croix’s.
Voting to approve the leases were Sens. Craig W. Barshinger, Carlton "Ital" Dowe, Louis P. Hill, Wayne James, Sammuel Sanes and Patrick Simeon Sprauve.
Sen. Terrence "Positive" Nelson was absent for the vote.
Also attending Tuesday’s meeting were Sens. Nereida Rivera-O’Reilly and Michael Thurland.