Guam Company Defends Waste-To-Energy Incinerator

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GRRP claims license to build incinerator preceded law banning them

By Gaynor Dumat-ol Daleno

HAGÅTÑA, Guam (Pacific Daily News, March 28, 2014) – A project to burn Guam’s trash and use the heat to generate electricity for part of Guam’s power needs isn’t covered by Guam’s law that bans incinerators, a representative for the developer said yesterday.

"They don’t want to say this," said Dave Sablan, a representative for Guam Resource Recovery Partners, "but under the contracts clause of the U.S. Constitution, when the law is passed subsequent to the contract," the ban can’t be retroactively applied to a contract that already is in place.

The company has tried to build the project for more than two decades.

The government of Guam authorized a waste-to-energy plant project under then-Gov. Paul Calvo in 1982, to IEEI, a company based in New York, GRRP stated. GRRP acquired the license from the New York company during then-Gov. Joseph Ada’s administration, according to the company.

A 1990 amended license for the waste-to-energy project also was signed before the Guam law passed in 2000 banned incinerators, Sablan said.

The company yesterday clarified that money that will be borrowed from private bond investors for the project won’t be a debt in GovGuam’s name, or a GovGuam liability. GRRP will be the borrower of bonds that will finance the project, worth approximately $200 million, he said.

Private investors will get local and federal tax exemptions for the return on their investment in the project, which serves a public purpose, and that’s why the Guam Economic Development Authority will be part of the process for certifying the GRRP bonds as tax-exempt for private investors, Sablan said.

GRRP’s project has resurfaced after GEDA recently submitted a proposed revised agreement with GRRP to the Guam Legislature for review and approval.

Sablan said the revised agreement is a result of mediation that began last year between GRRP representatives and GEDA.

The court-sanctioned mediation allowed GRRP to negotiate that GovGuam agree to remove a clause in the contract which would expose GovGuam to financial liabilities from the project’s continued delay. The removal of that provision of the contract would address the reason for a 1996 court decision declaring the agreement invalid, Sablan said. If the clause is severed, the rest of the contract stands, he said.

Gov. Eddie Calvo’s communications director, Troy Torres, said yesterday, as long as incineration is illegal on Guam, "the governor has no authority or no inclination to sign" the proposed contract revision.

Torres said the governor has yet to see proof that GRRP has a valid contract that was signed before the incinerator ban went into effect.

Sablan said the project would result, ultimately, in savings to residential and commercial trash customers because it would no longer require the construction of additional landfill cells at Layon six to eight years from now when the current cells fill up. And because the heat from the incinerator will be used to generate electricity, power from the plan will help offset the cost of trash collection, he said.

He also said the company would not continue to spend money to proceed with the contract if U.S. EPA wouldn’t approve of the project.

While U.S. EPA hasn’t approved the GRRP project, similar projects in Florida, Hawaii and other places in the United States are operating because their emissions are lower than what a fuel-oil-burning power plant would release into the air, he said. There are more than 142 waste-to-energy facilities across the nation, Sablan said.

"We are an island and we cannot continue to build (landfill cells) every eight years," Sablan said.

Concerns linger

Sen. Tom Ada, chairman of the legislative committee on infrastructure, and Simon Sanchez, chairman of the Consolidated Commission on Utilities, remain concerned.

Ada, D-Tamuning, said he received a copy of the draft contract on Feb. 20. Ada said the agreement seems to resemble a previous procurement contract which has provisions conflicting with local procurement law.

Sanchez said, prior to the Guam Power Authority review, the agreement "seems to want to charge (GPA) far more than 19 cents to 20 cents per kilowatt hour, the cost we would pay from other sources."

Sablan said GRRP can negotiate so that the rate would be less than 20 cents per kwh, not 23 cents per kwh as earlier estimated by the company.

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