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www.HartfordBusiness.com • August 6, 2018 • Hartford Business Journal 5 Klee decries slow progress on $229M waste-system overhaul By Matt Pilon mpilon@HartfordBusiness.com It's been seven months since the state selected a developer to overhaul the waste-to-energy plant in Hartford's South Meadows and its related network of recycling and transfer facilities, but there's still no contract in place. State officials had hoped developer Sacyr Rooney Recovery Team and the plant's quasi-public owner, the Materials Innovation and Recycling Authority (MIRA), would reach a formal deal on the estimated $229 million redevelopment by Aug. 29, but Connecticut's top energy official recently expressed concern that negotiations are not on track. Department of Energy and Environmental Protection (DEEP) Commissioner Rob Klee says the aging plant is in poor condition and that the state can't afford delays in the negotiating process. Even once a contract is reached, construction and permitting are estimated to take five years. Sacyr Rooney has proposed to implement more cost-efficient waste incineration technology at the plant and reduce the amount of waste it burns by about half. It would also build anaerobic digestion technology and increase the amount of recyclables removed from the waste stream. State officials estimate the modernized plant could help increase Connecticut's recycling and diversion rate from 35 percent to 63 percent. At a July 26 MIRA board meeting, Klee urged the agency to act in "the spirit of cooperation" and to be good ambassadors to the cities and towns Sacyr Rooney will need to convince to sign long-term waste- hauling contracts in order to make the project financially viable. Those towns have not yet seen "term sheets" showing what a contract with the new plant might look like, officials said. Klee said he addressed MIRA in a public forum because he was feeling anxious about the negotiations, which began early this year. He said he left the meeting feeling reassured that MIRA wants the project to move forward. "DEEP understands that both MIRA and Sacyr Rooney must complete the requisite diligence and take the time necessary to form a strong partnership, and we are open to considering a request for more time to complete this process, should it be necessary," Klee said. "But we urge a redoubling of efforts and the establishment of a firm timeframe for next steps." Klee became DEEP's leader in 2014, the same year the legislature ordered the agency to secure a private developer to modernize the plant and its related facilities, which together are referred to as the Connecticut Solid Waste System Project (CSWSP). MIRA President Thomas Kirk said he shares Klee's concerns about the negotiation timetable. "I know [Klee] is very anxious to get this thing done," Kirk said. "He sees it as almost like a legacy project." But Kirk, who has worked at MIRA since 2003, said it would be unfair to blame his agency for the slow pace. The negotiations are complicated and much is at stake, he said, adding that MIRA and Sacyr Rooney have a ways to go before they can agree on key provisions. While negotiations are largely being kept secret, Kirk said one of his biggest desires is maintaining some of the state's control over how much Sacyr Rooney would be able to charge customer towns to accept waste — a per-ton charge known in the industry as a "tipping fee." Sacyr Rooney has said it could charge $65 per ton with scheduled annual increases, which officials say is competitive. But Kirk thinks the developer's financial assumptions may be too rosy, which could force the need for higher tipping fees in order for the company to achieve its desired return on investment. 14 Bobala Road 3rd Floor Holyoke, MA 01040 Tel: 413.536.3970 www.WAdvising.com Headquarters 280 Trumbull St 24th Floor Hartford, CT 06103 Tel: 860.522.3111 One Hamden Center 2319 Whitney Ave, Suite 2A Hamden, CT 06518 Tel: 203.397.2525 With the changes brought about in the new tax law, it's more important than ever to review your tax strategy. Be sure to investigate: • Research and Development Tax Credits • Hiring Incentives • Export Tax Saving Opportunities • Maximizing the Lower Tax Rates A tax planning session can help identify opportunities to manage your tax liability. Contact a Whittlesey Advisor for a tax consultation. 860.522.3111 Have a Tax Strategy? It's not too late. ASSURANCE | ADVISORY | TAX | TECHNOLOGY Materials Innovation and Recycling Authority President Thomas Kirk. PHOTO | HBJ FILE