City could cancel Plasco deal

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Waste-to-energy facility missed third deadline to prove it has financing

By Laura Mueller, Ottawa Community News

Plasco missed its third deadline to prove it has funding, putting its deal with the city for a waste-to-energy facility at risk.

The city’s environment committee will meet on Feb. 17 to get more information about how the company was not able to prove it had financial backers for the technology by Dec. 31, the second extension the city had granted Plasco in order to prove the facility could become a reality.

When the city signed a contract with Plasco in 2011, council hoped it would make Ottawa the first city in the world to use Plasco’s plasma gasification technology to take leftover residential garbage and use a novel plasma process to turn it into electricity.

Now, after the third deadline passed with no proof of financing, city manager Kent Kirkpatrick sent a memo to city councillors on Jan. 2 to remind them of the terms of the contract, which stipulates that council can now vote to terminate the deal if it wishes.

It also means the environment committee will receive a report on Feb. 17 detailing the results of a call for expressions of interest from companies offering other waste technologies the city could shift its focus to, Kirkpatrick wrote in the memo.

The situation might actually be a “blessing in disguise” for the city, said the newly appointed chairman of the environment committee, Capital Coun. David Chernushenko. It will give city council an opportunity to pause, review what the best options are and ensure it moves forward with the best possible option.

“What’s a nicer story than a local technology, local business, solves the world’s waste problems starting right here in Ottawa. That would be a fabulous story,” Chernushenko said. “Is it too good to be true? At this point, I’d have to say, probably. But that doesn’t mean there is nothing good in it. There might still be a silver lining.”

Plasco’s failure to meet its deadline means the city can seriously take a look at alternatives, which may prove more promising, Chernushenko said. While the city would have wasted a bit of time on Plasco if it decides to abandon that project, the landfill still has another 15 to 20 years of capacity left. And unlike most infrastructure, waste technologies can actually become more affordable as time goes on due to advances and innovations, Chernushenko said, so even if the city cancels the Plasco contract, that time might not have been “wasted.”

“It’s a fascinating moment for us to be able to pick the ‘best of,’” he said.

Chernushenko said he is open to that option being Plasco, but he said if the company were to suggest any different terms for its deal with the city, he would want a whole new contract drawn up and voted on by the city.

“If they are the best option on the table at this time, we would be silly, just out of spite, to reject them if they are the best option,” Chernushenko said. “On the other hand, we can quite happily say, ‘We gave you many chances, we were very patient and now we’ve found something better.’”

A representative from Plasco was not available for an interview before this newspaper’s deadline.

When former CEO Rod Bryden was last in front of the environment committee in August of 2013, he said he was confident the financing would come through because the firms Plasco was in talks with have a view towards the potential global market for the technology.

The Ottawa facility is expected to cost around $200 million for Plasco to build. The company has invested $350 million towards developing the technology, Bryden said in 2013. The city’s side of the deal would see it pay a tipping fee of $82.25 for each tonne of trash delivered to Plasco for processing. That would amount to $9.1 million per year.

In 2012, Bryden told the Ottawa South News that if the city and Plasco don’t end up proceeding with their partnership, Plasco could always take the “modules” of equipment it planned to use for its Ottawa plant and re-purpose them for other facilities it has in the works in China, California, the United Kingdom and the Bahamas.

Before agreeing to the last deadline extension in 2013, the previous environment committee head, former River Ward Coun. Maria McRae, said she was “anxious” to see Plasco succeed. But she supported Moffatt’s motion to look at other options in the event that the Plasco plant was not viable.

“Essentially I see this as the ‘patience is running out’ motion,” McRae said of Moffatt’s proposal in 2013. “We really want to support Plasco, but if we don’t see movement . . .  (it’s) so we’re not lagging behind a year and a half from now.”