The Metropolitan Council is moving forward on a new partnership with two local food producers, focused on how to more efficiently and sustainably treat the wastewater being produced by the two companies.
The Council approved financing agreements this month with Michael Foods in Chaska and Kemps dairy company in Rosemount. The agreements incentivize both companies to design, install and operate equipment at their locations to pretreat high-strength industrial wastewater before it’s released in the regional wastewater treatment system.
Public-private partnership yields multiple benefits
The benefit is twofold: for the company, the program saves money through reduced wastewater charges from the Council. For the Council, it means avoiding or delaying the need to expand its own treatment plants. It also reduces operational costs. For all, it provides a sustainable solution.
“The program is a great example of the kind of collaboration that has made this region so successful,” said Met Council Chair Alene Tchourumoff. “Through innovation and partnership, we’re able to seek solutions that benefit local companies, our environment, and the public. It’s the kind of thing that we do behind the scenes to support the health and prosperity of the region, and ensure an economically competitive economy.”
The lease contracts with Michael Foods and Kemps provides low-interest financing from the Council, to cover the initial capital costs of the pretreatment equipment. The companies will then pay lease payments to the Council; at the end of a 10-year lease, the companies will assume ownership of the equipment.
Michael Foods has been a key partner as program developed
Michael Foods has been a key partner in this project since the very beginning. Shane Menefee, Director of Environmental Affairs for the company, said he had been working with Council staff about how to do more efficient wastewater treatment—while allowing the company to grow—when they developed this idea.
PROGRAM BENEFITS
- Low-cost financing for the companies.
- Lower costs to the company for wastewater treatment because they’ve reduced the strength of their effluent
- Lower costs to the Council, including energy costs, because lower-strength wastewater costs less to treat
- Lower maintenance costs to the Council and partner communities by reducing potential corrosion and odors
- Allows Council to delay capital costs of expansion that would be needed to treat more industrial wastewater
- Helps to constrain wastewater rates charged to other users, including residents, by helping to reduce costs of treatment and avoiding need for capacity expansion.
“This system is truly unique and a win for everyone involved,” said Menefee. “It’s rare that you get such a great public-private cooperation that really benefits both sides, but this program makes possible something that would otherwise not be feasible for us. Through this program, we’ll be able to reuse 200,000 to 300,000 gallons of water a day, putting it back into the process. It’s an environmentally friendly solution, in that it allows us to grow our business while consuming less resources to do so.”
Creating efficiencies in wastewater treatment as region grows
The Council first approved this effort in January 2015, nearly three years ago. At that time, it was a novel approach to thinking about how to handle increasing wastewater treatment needs as the region grows. Rather than investing in its own facilities, Council staff believed this program would encourage private companies to think about how they could play a role in solving that problem and doing so in a way that didn’t pass the cost along to ratepayers.
Treating the effluent (liquid waste or sewage) to remove solids, organic matter and other chemicals from the wastewater will reduce the companies’ wastewater charges. In addition to the regular municipal wastewater charges that all users pay, industrial users, like Kemps and Michael Foods, pay an industrial charge for treatment of wastewater that is more heavily contaminated than normal household waste. The program would help reduce that industrial charge.
As companies are successful, Council will waive some financing costs
The Council will further incentivize success by waiving up to 30 percent of the financing costs if the companies meet goals of reducing the strength of their effluent before releasing it into the regional treatment system.
Michael Foods and Kemps were two of the five companies that applied to be part of the program. A third company is expected to sign a contract with the Council in the coming months.
The Metropolitan Council owns and operates the regional wastewater treatment system, which includes eight treatment plants and more than 600 miles of interceptor pipes. The system treats about 250 million gallons of wastewater a day from 109 metro area communities. It serves 2.6 million residents who pay rates that are about 40 percent lower than the national average.