The County of Union has directed the Union County Utilities Authority to explore new opportunities that could involve the potential for a sale, or extended lease of the Union County Resource Recovery Facility. The goals are to continue the low rate of waste disposal to the public, while ensuring significant tax relief.
The UCRRF, located in Rahway, currently generates electricity while disposing of all municipal solid waste generated in Union County at rates which are already among the lowest in the region. The Freeholder Board recently received a briefing in executive session from the Union County Utilities Authority, which governs the facility, concerning significant national and international business interest in exploring opportunities in waste management.
The Facility is currently leased and operated by Covanta Energy of Union Inc. and the Board of Chosen Freeholders hopes to identify additional sources of revenue from Covanta or other qualified firms which would be used for property tax relief in the County. The Union County Utilities Authority has been instructed to meet with Covanta and other qualified companies to discuss the possibility of a lease extension, or sale. Any such discussions will have to be conducted in accordance with the requirements of the Local Public Contract Law and the New Jersey Solid Waste Management Act.
A private sector owner could avail themselves of Federal tax investment credits, which enhances the value of the asset to the private sector. The County, as a governmental entity, cannot qualify for the tax credits.
County Manager George W. Devanney has recommended a thorough and diligent exploration to the Board of a sale or lease of the UCRRF. "This is a win-win situation for taxpayers and those who use the facility to dispose of their waste," County Manager Devanney said. "We have an asset that has reached peak value and has become more attractive to private sector operation and in this economic environment; we owe it to our taxpayers to explore a plan which could provide additional tax relief."
Freeholder Chairman Alexander Mirabella agreed. "In meeting with the administration, the Freeholders are always open to an opportunity to provide tax relief while guaranteeing that our municipalities maintain low disposal rates at the Resource Recovery Facility," Freeholder Chairman Mirabella said.
The State originally mandated all 21 of New Jersey’s County governmental entities to build their own incinerators during the early 90s, a mandate Union County reluctantly complied with at the time. The UCRRF, which originally began operation in 1994, has delivered significant economic value to the County.
The average cost of municipal solid waste disposal in the County in 1995 was around $120 per ton. In 2008, the average cost was only around $75 per ton. The taxpayers of the County have already realized well in excess of $100 million in savings when compared with other waste disposal options in the 15 years UCRRF has been in operation, Mirabella noted.
Ed Kahn, the Chairman of the Union County Utilities Authority, stated that "the process which the Freeholder Board has assigned to the Authority will enable the County to further understand both the value and the future of the Resource Recovery Facility as an asset. In these economic times, we have an obligation to explore any source of revenue which will provide lower cost options to the citizens of the County."
At the UCRRF, municipal solid waste is burned at high temperatures in combustion chambers, and the heat is used to generate steam which drives a turbine to produce 45 mega watts of clean, renewable electricity enough to satisfy energy needs of 35,000 homes annually.