The URL can be used to link to this page

Home My WebLink AboutResolutions - 1990.08.30 - 18181Misc. Res. 90206 . August 30, 1990 By General Government Committee IN RE: (Support) HE 5890 with Amendments - Tire Burning Resource Recovery Facility WHEREAS Federal Law requires that utility companies purchase electricity from certain resource recovery facilities (RRF's) at prices or rates that reflect the utilities own fixed and variable costs; and WHEREAS the purchase price for such electricity varies greatly depending upon the utility company's need for additional generat:.ng capacity; and WHEREAS some Michigan utility companies have excess generating capacity at this time and, as a consequence, would not be required to include fixed or "avoided capacity" costs in their purchase price computations; and WHEREAS PA2, 1989 of the public acts of the state of Michigan, in recognition of this fact, required utility companies, with more than 500,000 customers, to purchase up to 120 megawatts of capacity from RRF's which process qualified solid waste, at least 50.1% of which was generated in the utility's service area; and WHEREAS PA2 further states that the Public Service Commission may assume that a Michigan Utility Company needs capacity and include "avoided capacity" costs in the computed purchase price of electricity supplied by RRF's; and WHEREAS HE 5890 would mandate that Michigan utility companys purchase power from tire burning RRFs, regardless of the source of such tires; and WHEREAS such facilities would use a portion of the available 120 megawatts of capacity and would effectively result in Michigan consumers and taxpayers subsidizing disposal of tires from out of state, due to the premium electricity rates or "avoided capacity" cost payments required by PA2; and WHEREAS this situation can be remedied by capping the amount of Electric Generating Capacity from tire burning facilities, on which the "avoide...i capacity" cost portion of the electricity purchase price would apply, to 20 megawatts statewide and by assuring that fees charged to Michigan haulers do not exceed the fees charged to out-of-state haulers. NOW THEREFORE BE IT RESOLVED that the Oakland County Board of Commissioners support HB5890, providing the following amendments are adopted; Page 2, line 11 ...landfill gas OR &61.% 95% OF ITS TOTAL ANNUAL FUEL... Page 3, line 11 ...CHARGED A-4WW.--NGT—GR,B.444—T-gAg THE LESSER OF THE AMOUNT PAID BY AN OUT-OF-STATE SCRAP TIRE PROCESSOR OR SCRAP TIRE HAULER OR AN AMOUNT EQUAL TO... Page 3, line 19 ...commercial operation. FURTHER THE PROVISIONS OF THIS SECTION SHALL NOT APPLY TO MORE THAN THE FIRST 20 MEGAWATTS OF TIRE-FUELED RESOURCE RECOVERY FACILITY CAPACITY IN THE STATE THAT HAS BEEN CONTRACTED AND ENTERED IN COMMERCIAL OPERATION. Excluding rate provisions... BE IT FURTHER RESOLVED that copies of this resolution be sent to all legislators from Oakland County and to the County's Legislative Agent. Mr. Chairperson, on behalf of the General Government Committee, I move the adoption of the foregoing_resolution. GENERAL GOVERNMENT COMMITTEE Resolution # 90206 August 30, 1990 Moved by Skarritt supported by Crake the resolution be adopted. AYES: McConnell, McCulloch, Moffitt, Oaks, Pappageorge, Pernick, Price, Rewold, Skarritt, Aaron, Caddell, Chester, Crake, Ferrens, Gosling, Huntoon, Jensen, Johnson, R. Kuhn, S. Kuhn, Law, Luxon. (22) NAYS: McPherson. (1) ABSTAIN: Olsen. (1) A sufficient majority having voted therefor, the resolution was adopted. STATE OF MICHIGAN) COUNTY OF OAKLAND I, Lynn D. Allen, Clerk of the County of Oakland, do hereby certify that the foregoing resolution is a true and accurate copy of a resolution adopted by the Oakland County Board of Commissioners on August 30, 1990 with the original record thereof now remaining in my office. In Testimony Whereof, I have hereunto set hand and aryd A4j4sayrg(Founty of Oakland at Pontiac, Michigan this daiLIM AudAt 1 99LL Ly ETITTounty Clerk Discussion Document f113 5890 Fundamental concern is that the bill woujd lead to Michigan citizens subsidizing the clean-up of other state's scrap tire problems Issues to Consider... • Federal Law and Related Administrative Policies which Regulate Utility Purchases of Electricity... • Major benefit of 2 PA 89 • Cost of Tire Incineration and Who Pays the Bill • Alternative Allocation of Tire Incineration Costs • County specific considerations Federal Law and Related Administrative Policies which Regulate Utility Purchases of Electricity... • Require utilities to purchase electricity from certain Resource Recovery Facilities (RRF's) • Price of power depends on whether utility needs RRF's power to meet service territory demand for electricity • If utility . needs RRF power, purchase price set at utility's fixed cost plus variable cost • Fixed power generation cost depreciation and interest • Variable power generation cost - operation and maintenance expenses • If utility does not need RRF's power, purchase •price sel at utility's variable cost • Today's energy market: fixed cost - 70% total electricity price variable cost - 30% total electricity price Major benefit gf 2 PA • Michigan utilities have power plants to meet electricity demands • Was not possible to pay RRF's more than variable cost of power production • Michigan's Solid Waste Management Plan stalled without full-prices for RRF electricity (fixed and variable cost recovery) • State would be unable to divert 40% of waste stream to incineration • Major contribution of 2 PA 89... Allowed utilities to purchase RRF power as if utilities needed new power sources Permitted full-price, power purchases • Important... 2 PA 89 is a subsidy bill Michigan citizens purchase power generating capacity which is not needed Provider of subsidy also the beneficiary The Qost of Tire Incineration and Who Pays the • Cost Michigan citizen incurs to incinerate tires includes charge to dump tires (tipping fee) plus premium price for electricity generated by RRF • HB 5890 has Michigan citizens purchasing all electricity (at _ premium prices) generated by tire-burning RRF even generation fueled by out-of-state tires • Michigan citizens subsidizing the incineration of imported scrap tires by paying premium price for electricity to support RRF -70% dedicated to incinerating out-of-state tires • Subsidy estimated at $40 million outlay for Michigan citizens Alternative Allocation of Tire Incineration Costs.u, • The only form of Michigan tire incineration subsidy which can be defended is one that benefits Michigan • If cost of tire incineration to be spread over both tipping fees and premium pricing for electricity, then so be it... but Michigan citizens should not pay premium electricity prices to support incineration of out-of-state tires • Premium electricity pricing should be reserved for only electricity generated via incineration of Michigan's scrap tires • Tipping fees for out-of-state tires should be at rates which properly reflect all costs of their incineration, including fixed cost recovery of that part of RRF dedicated to imported tires HB 5890: County specific considerations... 1. Bad public policy to allow the communities subsidy dollars to flow out- of-state... 2. Added stability to County's waste-to-energy facility to reserve access to tire -fuel... 3. Eliminate the risk of an out-of-state tire-burner displacing County waste-to-energy capacity FUNDED BY: THE CLEAN MICHIGAN FUND Michigan Department of Natural Resources Community Assistance Division Resource Recovery Section 411101 DNRIV • . 08/08/1990 09:57 DECO MARKETING 383 313 237 6498 P.02 . . STATEWIDE MARKET STUDY FOR USED TIRES ' 1. ' • 08/08/1990 0957 DECO MARKETING 383 313 237 6498 P.03 OldWM I We ABU KEY: 10,000 - 30,000 =ID 30,000 - 100,000 =AIL 100,000+ = A Wm/ fo•n••:,. .4.+4110. FIGURE 2 LOCATION AND SIZE OF SCRAP TIRE STOCKPILES IN MICHIGAN P.04 313 237 6498 100,000 50,000 100,000 300,000 80,000 40,000 10,000 68/08/1990 09:58 DECO MARKETING 383 TABLE 1 MAJOR STOCKPILES OF SCRAP TIRES IN MICHIGAN(1) Approximate County Location No. of Tires Alcona Alcona Co. Landfill 20,000-40,000 Allegan Gobles-Ashbaugh's M-40 . Tire Service 1,000,000 Marshall Tire Co. 150,000 McKibbon-Keller Road 100,000 Coldwater 250,000 Crawford/Otsego Landfill 40,000-50,000 Glen's Landfill 500,000 Abandon Road 100,000 Cole Tire Co. 750,000 Michigan Environs Landfill 35,000 M.C.C. Auto Parts City of Pontiac L & R Tire Warehouse Tire Co. Barry Branch Crawford Leelenau Livingston Mecosta Menominee Missaukse Oakland 1,000,000 100,000 200,000 1,000,000 Otsego A & L Auto Parts and Service St. Joseph Mottville Township Tuscola City of Caro Washtenaw E. Michigan Auto Salvage Wayne S & R Trucking Tire Outlet Co. Wexford Co. Department of Public Works Wexford (1) Stockpiles of 10,000 tires or more. The survey located smaller stockpiles In Barry, Bay, Dickinson, Eaton, Gratiot, Isabella, Kent, Livingston, Midland an Van Buren counties. SCRAP TIRE GENERATION A waste tire is generated whenever a new replacement tire is sold. The following types of firms are the majcr gen- erators of scrap tires: • tire dealers • new car dealers • auto equipment and auto parts shops • service stations • automotive repair centers 411 tire' wholesalers • tire retread and repair shops 2-3 JANET F. STICKLEY Director of Elections 858-0563 SUE PAYNE Chief Deputy Register 858-0610 RICHARD A. ELLIOTT DEPUTY CLERK - REGISTER 858-0561 LYNN D. ALLEN OAKLAND COUNTY CLERK — REGISTER OF DEEDS PONTIAC, MICHIGAN 48053 858-0560 STEPHANIE SCHROEDER Chief Deputy County Clerk 858-0581 TO ALL MEMBERS OF STATE LEGISLATURE FROM: Oakland County Board of Commissioners Enclosed find copies of two resolutions adopted by the Oakland County Board of Commissioners: 1. #90208 - SOLID WASTE ALTERNATIVES PROGRAM - $150 MILLION GRANT FUNDS FOR SOLID WASTE ALTERNATIVES 2. #90206 - SUPPORT HB 5890 WITH AMENDMENTS - TIRE BURNING RESOURCE RECOVERY FACILITY ynn D. Allen County Clerk Oakland County LDA:bjw Enc: 2 resolutions