The contractor that burns about 800 tons of Long Beach’s trash each day has notified the city that it intends to exit its contract at the end of January, throwing into question how the city will dispose of its garbage in the near future.
Long Beach has long burned its trash at the nearby Southeast Resource Recovery Facility, which was jointly owned by the city and Los Angeles County Sanitation Districts, but operated by a private company, Covanta.
Last year, Covanta, took over Long Beach’s liabilities at the facility under an agreement that it would keep any revenue it generated but had to pay for repairs and maintenance. In recent years, though, SERRF operated at a $4 million annual loss.
For years, cities were able to get credit for recycling by bringing their trash to SERFF where it would be burned to generate electricity, but a state law passed in 2022 did away with those recycling credits and presented a scenario where the facility could start operating at a $2 million loss every month.
Covanta informed the city at the beginning of the month that it’s seeking to terminate its contract early, citing equipment failures, unanticipated outages and mounting costs to keep the site running.
“Covanta now finds itself in a similar situation as the City nearly a year ago with projected expenses exceeding revenues, resulting in the decision to exercise its right to terminate the Agreement for convenience,” Bob Dowell, the city’s director of Energy Resources said in a memo.
There are several options the city will be looking at over the next 90 days as it tries to find a solution for what to do with the city’s trash once Covanta stops operating the site.
In an interview, Dowell said that the city could look to lock in a new deal with Covanta, possibly paying it a percentage on top of the cost to run the facility to get it through the originally planned June 2024 end of the contract.
It could also look to secure a new operator to take over for Covanta and potentially make some investments in the facility to keep it running longer. However, Dowell said that’s not likely considering the city is currently evaluating proposals to turn at least part of the facility’s footprint into an organic waste recycling center.
To keep the site running through 2024, an investment of between $8 million and $13 million could be needed, according to the memo.
“You’re not going to want to put a ton of capital money into it if you’re going to have to demolish it,” Dowell said.
Long Beach officials must also prepare for the real possibility that its trash-burning facility may go away sooner than planned, which would force the city to send its trash to landfills, something that could come with increased costs for residents and businesses.
Dowell said that while other cities were paying about $105 per ton to bring trash to SERRF when the recycling credit existed, the city’s locked-in rate was closer to $60 per ton.
“I can tell you it’s more than what it would be than bringing it to SERRF,” Dowell said of what the city would have to pay to send refuse to landfills.
In an email, Josh Hickman, deputy director of the Public Works Department said it would evaluate the impacts of SERRF’s closure and possible switch to landfills. The city currently pays intermediaries between $74 and $77 per ton to transfer refuse to landfills, something that was necessary when SERRF was periodically out of commission.
However, those rates are expected to increase, Hickman said. If the city needs to raise rates again it would have to come before the City Council at a public hearing.
“In short, refuse will continue to be disposed of at SERRF when available, and at the local transfer stations when SERRF is not available,” Hickman said.
Refuse rates already increased twice this year as the city tries to ready the launch of the state-mandated organic recycling law, which will require the city to buy new trucks, issue new cans and deploy enforcement teams to ensure businesses and residents are complying with the law.
The law requires cities to divert organic waste from landfills, where it creates the climate-warming gas, methane, and process the waste at new facilities that can convert it into things like compressed natural gas.
Southern California currently has a dearth of these types of facilities and the current SERRF site could be home to a new organic processing site in the future, but first the city will have to figure out what to do with hundreds of tons of trash.
Dowell said it’s a shame that the SERRF site could be nearing its end because he believes it was one of the least impactful ways to get rid of trash; burning it and turning it into electricity instead of putting it into a landfill.
But the city can’t run something that isn’t profitable, Dowell said. He’s hopeful that it can find someone to do it in the interim.
“We still have 90 days to sit down with them and try to work something out,” Dowell said of Covanta.