Failed Dynamis project just cost Ada County another $2.6 million

For a decade, a private energy company, Fortistar, has been converting methane gas created by decomposing trash at the Ada County landfill into energy.

When the county announced in 2011 that a new trash-to-energy project would divert up to one-third of the landfill’s trash and convert it into electricity, Fortistar sued. The White Plains, N.Y., company said Ada County had promised it a certain amount of methane gas for 20 years, and less trash would mean less gas.

The trash-to-energy project, proposed by a small Eagle company called Dynamis Energy, cost the county $2 million before it collapsed amid permitting and other problems, and public backlash.

This week, Ada County said it will pay $2.2 million to settle Fortistar’s lawsuit and to buy the county’s future rights to landfill gas created at the county-owned and operated landfill. The county paid $451,000 in legal fees.

“The Ada County Board of Commissioners chose to end this lawsuit because it’s what’s best for our citizens,” Chairman Jim Tibbs said Tuesday in a news release.

THE BACKSTORY

To reduce methane gas created by decomposing trash, Ada County has created an extensive system of wells and pipes for collection. The landfill produces between 2,800 and 4,000 cubic feet per minute, or cfm.

The county burns off some of the captured gas in a flare, and since 2006 has diverted about 1,250 cfm to Fortistar, which uses two turbine engines to convert the gas to electricity that is sold to Idaho Power.

In February 2011, the county entered a new contract with Fortistar to add two turbines, creating an additional 3.2 megawatts of power and the need for an additional 1,250 cfm of landfill gas. Under the deal, the county was obligated to deliver gas produced and collected at the landfill to Fortistar’s four-engine system through September 2031.

But several months later, in November 2011, the county entered a five-year contract with Dynamis. The county agreed to deliver at least 408 tons of trash daily — about one-third of the landfill’s daily intake — to be converted to energy at a $60 million trash-to-energy plant. The county in 2010 fronted Dynamis $2 million to design it.

In February 2013, the county gave up on the project and any attempt to recover the money it gave Dynamis.

Fortistar sued Ada County for $30 million that October, claiming the contract with Dynamis conflicted with the contract with Fortistar.

“Fortistar felt the diversion of solid waste to Dynamis would eventually cause a decline in gas produced at the landfill, and then there wouldn’t be enough gas to run their engines or any future engines,” Ada County spokeswoman Kate McGwire said Wednesday. “Fortistar had a first right of refusal to the gas, and ... felt the county breached that contract.”

The lawsuit was scheduled to go to trial April 5. The two parties reached a settlement this month under court-ordered mediation.

Fortistar agreed not to add the two turbines and sold its rights to do any future gas-to-energy projects at the landfill. It maintained ownership of up to 1,250 cfm of gas so it could keep operating the two existing engines for 15 more years.

“Fortistar will continue to pay royalties to the county for the remainder of their contract,” McGwire said.

Ada County bought the rights to any future gas coming out of the Ada County landfill above 1,250 cfm, she said. The county will continue to burn off the excess gas it now owns. It is still exploring options for other gas-to-energy projects.

“No decision has been made at this time,” McGwire said.

An after-hours call seeking comment from Fortistar was not immediately returned.

This story was originally published March 30, 2016 at 9:16 PM with the headline "Failed Dynamis project just cost Ada County another $2.6 million."