Covanta will continue operating for at least 4 more years
PITTSFIELD — For at least four more years, Covanta will take trash and recyclables of Pittsfield and surrounding communities.
By a vote of 10-1, Councilor-at-Large Melissa Mazzeo opposed, the City Council Tuesday night backed Mayor Linda Tyer's request to give $562,000 in Pittsfield Economic Development funds so the solid waste-to-energy and recycling facility can make the necessary upgrades to meet state and federal environmental standards and remain profitable.
Covanta announced in early July that it planned to close the Hubbard Avenue trash burning plant because the high operating costs and the size of the plant made it unprofitable. Tyer and her administration immediately began working on a financial package to entice the New Jersey-based company to forgo its plan to cease operation in March.
"I think it's great you came to the table early and didn't wait until the deadline," said Ward 1 Councilor Lisa Tully.
The city money will pay for a state-mandated recycling enclosure and upgrades to the fossil fuel boiler to help keep the facility afloat. The financial package includes state energy tax credits and would allow Covanta to continue to sell steam energy to Crane Currency in Dalton and Neenah Technologies of Pittsfield.
The averted shutdown of the plant saves 25 jobs and Pittsfield avoids having its trash and recyclables hauled out of county at an estimated first-year price tag of $462,000, according to city officials. In addition, the closure, over the first four years, would cost Pittsfield $960,000 annually in property taxes, water/sewer user fees and host community fees, the latter allowing Covanta to take solid waste from surrounding communities.
The four year reprieve coincides with Covanta receiving a four-year contract extension with the city until June 30, 2020.
Covanta officials said they want to stay longer, but can't commit beyond the company's municipal agreement with Pittsfield.
The city can breathe easier knowing it can thoroughly develop alternatives should the company pull out when the four years are up.
"What we need is a back-up plan and this [funding plan] buys us some time," said Ward 2 Councilor Kevin Morandi.
Mazzeo was uncomfortable with forking over the $562,000, believing the money should be more of a long-term investment, calling on Covanta for at least a 10-year commitment to stay in Pittsfield.
"That would be palatable," she said.
Should Covanta close before the four-year period, the company would have to pay back a portion of the economic development grant, depending on when it closed. For example, if it shut down in two years, half the $562,000 would be returned to city coffers.
Ward 4 Councilor Christopher Connell suggested the out-of-town haulers who dump 65,000 of the 80,000 tons of trash at the plant each year, be charged $2 more per ton so the city could recoup the majority of the city funds.
Such a rate hike could backfire, according to Covanta's Pittsfield Business Manager Ken Ryan.
"If we set the market price too high, they will go to another facility," he said.
Currently, the Pittsfield Economic Development fund has $5.2 million, almost half of the original $10 million General Electric paid Pittsfield as part of the corporate giant's PCB cleanup of the Housatonic River.
The Hubbard Avenue facility, built in 1981 by Vicon Construction Co., has been run by Covanta since 2007. Covanta took over the structure when it purchased Energy Answers, which bought the facility from Vicon in 1994. Pittsfield's energy-from-waste facility is one of the oldest such plants in the country. Covanta operates 45 total energy-to-waste plants
Contact Dick Lindsay at 413-496-6233
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