United States      Region 4         November 1980
Environmental Protection   345 Courtland Street, NE
Agency        Atlanta GA 30365

Solid Waste  '                   	
A TECHNICAL
ASSISTANCE
PROGRAM REPORT

FEASIBILITY STUDY OF
RESOURCE RECOVERY
OPPORTUNITIES FOR HAWKINS
COUNTY, TENNESSEE

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               Public Law 94-580   Oct.  21,  1976

      Technical  assistance by personnel  teams.  42  USC  6913


          RESOURCE RECOVERY AND CONSERVATION PANELS

     SEC.  2003.   The Administrator shall provide  teams  of personnel,
including  Federal, State, and local employees or  contractors  (herein-
after referred to as "Resource Conservation  and Recovery Panels")  to
provide States and local governments upon request with  technical
assistance on solid waste management, resource recovery, and  resource
conservation.  Such teams shall include technical,  marketing, financial,
and institutional specialists, and the services of such teams shall  be
provided without charqe to States or local Governments.
           This report has been reviewed by the Project Officer,
           EPA, and approved for publication.  Approval does
           not signify that the contents necessarily reflect the
           views and policies of the Environmental Protection
           Agency, nor does mention of trade names or commercial
           products constitute endorsement or recommendation for
           use.
           Project Officer:  Elmer 0- Cleveland

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       U. S. ENVIRONMENTAL PROTECTION AGENCY

      TECHNICAL ASSISTANCE PROGRAM REPORT SERIES
         PRELIMINARY  FEASIBILITY STUDY
      OF RESOURCE  RECOVERY OPPORTUNITIES
         FOR HAWKINS  COUNTY,  TENNESSEE
                  PREPARED FOR
       OFFICE OF  SOLID  WASTE MANAGEMENT
U,S,  ENVIRONMENTAL  PROTECTION AGENCY, REGION  IV
                       BY
          CSI RESOURCE SYSTEMS, INC,

                  NOVEMBER 1980

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                             PREFACE


     This report was prepared for Hawkins County, Tennessee, under
the Technical Assistance and Panels Program, which is conducted by
the U.S. Environmental Protection Agency (EPA) to provide assistance
to state and local governments.  Technical  assistance was provided
in response to a request submitted to U.S.  EPA Region IV by Hawkins
County.
     This report presents the results of a  preliminary determination
of the feasibility of resource recovery for the county.   This deter-
mination involved an evaluation of the market potential  for energy
recovery from solid wastes; the development and evaluation of re-
source recovery alternatives; and the identification of the major
tasks to be performed prior to deciding to implement a resource re-
covery project.  These activities reflect the results of two site
visits to Hawkins County by CSI Resource Systems, Inc. (Resource
Systems); and discussions with county and municipal  personnel and
two industrial energy users in the area.
     Resource Systems is a technical assistance contractor to the
Office of Solid and Hazardous Waste, U.S. EPA Region IV.   Under the
terms of the Technical Assistance and Panels Program, all of Resource
Systems' technical assistance activities on behalf of Hawkins County
were paid for by EPA.
     Resource Systems wishes to thank especially the following indi-
viduals for their support and generous cooperation:   Ben Scott, Plant
Engineer, Holliston Mills; Frank Testerman, Solid Waste Committee
Member, Hawkins County Commission; and Frank Victory, State of
Tennessee Department of Public Health, Division of Solid Waste Manage-
ment.

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                                m
                         TABLE OF CONTENTS
CHAPTER 1.   OVERVIEW 	    1
     Findings/Conclusions 	    3
     Immedi ate Next Steps 	    6
CHAPTER 2.   SOLID WASTE COLLECTION,
            DISPOSAL, AND GENERATION 	    9
     Current Collection and Disposal Practices 	    9
     Current Waste Generation 	  10
     Projected New Landfi11 Costs 	  11
CHAPTER 3.   RESOURCE RECOVERY OPTIONS 	  13
     Resource Recovery Using Hawkins
     County Waste Only	  14
     Resource Recovery Augmented by 30 to
     40 TPDg from a Neighboring County 	  23
     Resource Recovery Outside of Hawkins County	  25
CHAPTER 4.   IMMEDIATE NEXT STEPS 	  27
     Implement Resource Recovery 	  27
     Continue Reliance on Landfill ing 	  31
APPENDIX A.  STATE OF TENNESSEE RESOURCE
             AND ENERGY FACILITY PROGRAM
APPENDIX B.  ECONOMIC AND FINANCING
             ASSUMPTIONS AND PROJECTIONS

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                       CHAPTER 1.   OVERVIEW
     Hawkins County, an area of some 41,000 people, is located in

northeastern Tennessee, just south of the Virginia border.  The county
encompasses five incorporated areas, the largest of which is the city
of Rogersville (population around 4,500); the remainder of the county

is primarily rural.  As the one existing county landfill  has reached

its capacity limits, the county must secure a new landfill site.  Re-
cognizing that a new landfill will mean an increase tn both the cost
of collection (because of longer haul distances) and the  cost of dis-
posal (because of land acquisition and preparation costs  and the costs
of complying with more stringent environmental  requirements), the county

wished to consider resource recovery options, in particular, energy re-
covery, as a means of minimizing future disposal costs and of extending
the life of the required new landfill.  Consequently,  the county re-
quested technical assistance from the U.S. Environmental  Protection
Agency (EPA) to evaluate resource recovery as a solid  waste disposal
option.

     The prefeasibility study had two overall objectives:  first, to

determine, on a preliminary basis, whether or not any potentially viable

market/waste supply matches exist that would warrant technical and eco-
nomic consideration; and second, if the findings are positive, to identify

those immediate steps that should be performed prior to a commitment of

significant additional resources for a comprehensive feasibility study.

     The feasibility of resource recovery depends on the presence of

five basic ingredients for a successful project.  These are:

     •  Potentially viable energy buyers whose requirements
        would use all or most of the usable, or processible,
        solid waste generated.*

     t  A sufficient tonnage of processible solid waste from
        which enough energy and/or marketable materials could
        be produced to meet the requirements of one or more
        potentially viable buyers.
   Processible solid waste is that tonnage of the total waste potentially
   available which could be processed in a resource recovery facility.
   Unprocessable materials include oversized, bulky waste  (e.g., large
   metal objects, bed springs, rugs) and white goods.

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                             -2-
     •  Potentially available sites that are well situated
        with respect to the shipment of solid waste and
        the delivery of energy to prospective buyers.
     •  Commercially available technologies that can be
        used to meet the energy requirements of the
        identified markets.
     t  A total disposal cost that is competitive with the
        alternative disposal methods available to parti-
        cipating communities.
     To assist Hawkins County in establishing the preliminary feasi-
bility of resource recovery, the study initially focused on a review
of the existing waste disposal system in order to develop a prelimi-
nary estimate of the amount of waste available for processing in a
resource recovery facility.  The results of this effort indicated
that the estimated tonnage available in Hawkins County alone for pro-
cessing in a resource recovery system may be insufficient to support
an economically competitive facility.
     While it appeared that the estimated available tonnage might be
too low to support an economically competitive resource recovery
.facility, because,the county is faced with a critical waste disposal
problem, the feasibility of processing this estimated tonnage was
analyzed.  In addition, the study included an assessment of resource
recovery possibilities where Hawkins County waste would be augmented
by waste from a neighboring county.

     In the remainder of this chapter, the study findings and con-
conclusions are summarized, and immediate next steps are identified.
Chapters 2 and 3 present the study findings in more detail.  In
Chapter 4, the immediate next steps that are critical to Hawkins
County finding a solution for its imminent waste disposal problem are
discussed.  Appendix A contains a discussion of the requirements of
the State of Tennessee Resource and Energy Facility Loan Program --
a possible source of financing for a resource recovery project serving
Hawkins County.  Appendix B gives the assumptions used in and the
findings of the preliminary economic analysis.

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                              -3-
FINDINGS/CONCLUSIONS

     The findings of this preliminary feasibility study indicate that

resource recovery could be a viable option for Hawkins County under

the following conditions:  (1) the county is able to augment its esti-

mated tonnage of processible waste with additional tonnage from a

neighboring county; (2) Holliston Mills (the one potential energy buyer

located in Hawkins County) adds a third shift to achieve 24-hour oper-

ations; (3) funding from the Tennessee Valley Authority (TVA) is

available; and  (4) financing is obtained from the State of Tennessee

Resource and Energy Facility Loan Program.  This conclusion is based on

the following:

     •  Hawkins County faces an imminent disposal problem as
        the capacity of the existing county landfill  is ex-
        hausted, and the county is under mandate by the State
        Department of Public Health to develop a new sanitary
        landfill.  Disposal costs at a new landfill  are likely
        to be close to $12 per ton by 1983.*

     t  On the basis of two recent solid waste studies, Hawkins
        County appears to generate between 68 and 78 TPDs
        (tons per day on a 5-day-per-week basis) of waste.  Of
        this amount, some 54 to 62 TPD5 is assumed to be avail-
        able for processing in a resource recovery facility.

     •  Only one potential buyer of waste-derived energy exists
        in. the county -- Holliston Mills -- whose energy require-
        ments are sufficient to utilize substantial  portions of
        the energy contained in the estimated processible ton-
        nage potentially available; and whose current energy use
        (natural gas) is compatible with the objective of dis-
        placing high-cost fuels.  However, a major constraint
        to a resource recovery project servicing Holliston Mills
        is the fact that the company's energy demand is currently
        limited to 12 to 16 hours per day, which would result
        in a low system load factor.   If a sufficient incentive
        (i.e., third-shift energy priced at a substantial  dis-
        count) were offered to Holliston, the company has
        indicated that it would consider increasing its oper-
        ations to 24 hours per day.

     •  Holliston Mills-owned land contiguous to the manufactur-
        ing plant could be available to site a resource recovery
        facility.
1.   Landfill disposal cost projections derived from cost estimates con-
    tained in "Structural Organization of the Hawkins County Sanitation
    Department," County Technical Assistance Service, fall  1979.

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                               -4-
        A modular combustion  unit  (MCU) system with a design
        capacity of  72 TPD and an  annual average throughput
        of about 62  TPDs of solid  waste could be used to pro-
        duce either  steam or  high-temperature gas for sale
        to Hoi listen.*  However, even under the most opti-
        mistic assumptions (including 24-hour-per-day, 5-day-
        per-week operations at Holliston Mills), such a plant
        does not appear to be economically competitive with
        the cost of  continued primary reliance on landfill ing:

        -  Even assuming the  availability of TVA grant monies and
           lower interest State of Tennessee financing under
           the Resource and Energy Facility Loan Program, the
           net disposal cost  at the resource recovery facil-
           ity alone is projected  to be around $23 per ton
           in  mid-1983** and  $21 per ton in mid-1988.

        -  Because the county will still need to develop a new
           landfill  to dispose of  what could amount to as much
           as  35 percent (by  weight) of the waste stream (com-
           prising unprocessibles, process residues, and
           emergency bypass waste***), the costs of resource
           recovery,  to some  extent, will be incremental to the
           costs of  landfilling.   Consequently, for a resource
           recovery  facility  to be considered an economically
           viable solid waste management option for the county,
           it  should be competitive with the costs of a new
           sanitary  landfill  designed to process all of the
           waste generated in Hawkins County.

        A 90-TPD5 (design capacity of 100 TPD) MCU-based system
        using  Hawkins County  waste and augmented by 30 to 40 TPD5
        of waste from a neighboring county appears to be economi-
        cally  competitive with continued primary reliance on land-
        filling.  This facility would produce either steam or high-
        temperature  gas for sale to Hblliston Mills, which, again,
        would  operate on an expanded 24-hour-per day, 5-day-per-
        week basis.  The net  disposal cost at the resource recov-
        ery facility  (assuming that TVA funding and lower inter-
        est financing under the state program are obtained) is
*    Design capacity is the manufacturer's rated capacity of the waste
     processing equipment.  Annual average throughput is the amount of
     waste processed by the system on a 5-day-per-week basis averaged
     throughout the year.

**   The beginning of the assumed first year of commercial operations.
***  Bypassed waste is that portion of the processible tonnage that goes
     directly to the landfill  in the event that the resource recovery
     system is either on scheduled or forced outage.

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                                 -5-
         projected to be around $11 per ton of waste in mid-1983.
         By mid-1988, a cost of $5 per ton is projected.  It
         should be noted that these net disposal costs were esti-
         mated assuming that Holliston Mills would expand to 24-
         hour-per-day operations in response to third-shift
         energy priced at a 25-percent discount.  If such a dis-
         count were found to be an insufficient incentive and a
         larger discount (i.e., 50 percent) were required, net
         disposal costs at the resource recovery facility would
         likely increase by some $5 per ton.  On the other hand,
         economics are likely to be improved if a larger-size
         facility could be implemented (e.g., a facility with a
         throughput capacity of 108 TPDJ, with a 25-percent dis-
         count for third-shift energy.

      A resource recovery system to provide either steam or high-
temperature gas to Holliston Mills compares favorably with continued
primary reliance on landfill ing in several respects:

      •  The county would probably save on land disposal costs
         by handling less waste at the landfill.

      •  The life of the new sanitary landfill  could be ex-
         tended by as much as 4 times its initial  projected
         useful life (depending on the tonnage of waste that
         that was imported from the neighboring county).

      •  Holliston Mills would gain a cost-competitive and
         secure locally produced alternative energy source
         compared to its current reliance on natural gas.

      •  The county would be contributing to the achievement
         of national alternative energy goals.

      •  A modular-based system affords the county the option
         to increase the capacity (and, hence,  output) of the
         resource recovery facility in future years in re-
         sponse to increased waste generation and/or indus-
         trial development.   The availability of this alter-
         native energy source could be a means of attracting
         new industry.

      •  A resource recovery facility itself would create
         additional industrial-sector jobs.

      •  Resource recovery is an environmentally sound method
         of solid waste management.  By processing the major-
         ity of its waste in a resource recovery facility,
         the county would reduce the chance of groundwater
         pollution from a landfill.

      If Hawkins County and Holliston Mills cannot meet the several

conditions necessary for a viable in-county resource recovery project,

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                                 -6-


it may be feasible for the county to implement a joint, resource recov-

ery project to be located in a neighboring county and to service an

energy buyer(s) in that county.  Investigation of this option was, how-

ever, beyond the scope of this prefeasibility study.


IMMEDIATE NEXT STEPS

      The  findings and  conclusions summarized above  are conditional and

 preliminary  indications of  project  feasibility; further investigation
 is necessary to determine if resource recovery is the preferred waste
management option, and whether, in  fact, a project  can be implemented.
Several critical tasks must be performed to verify  the preliminary

findings, before committing substantial resources to project imple-
mentation.  As the eligibility requirements under the State of
Tennessee Resource and Energy Facility Loan Program would necessitate
submittal of a project prefeasibility study by January 15, 1981, in
order to be eligible to receive financing in that year, the country
would have to move quickly.  The critical next steps are:

      •  Hold discussions with Holliston Mills to ascertain
        its level of interest in a  resource recovery project,
        particularly as regards its willingness to  consider
        operating 24 hours  per day  in response to third-shift
        energy offered at a substantial discount.  Obtain more
        detailed information on the company's energy practices
        and requirements, including detailed energy load pro-
        files showing  hourly, daily, and seasonal variations;
        aggregate current and projected fuel costs; and elec-
        trical, water, and  other utility charges.

      t  Establish a waste characterization program  in Hawkins
        County to ascertain that a  sufficient amount of solid
        waste with a sufficient energy value is available to
        satisfy the requirements of the potential energy cus-
        tomer.  In addition, determine the seasonal fluctuations
        in waste quantity and composition.

      •  In parallel with obtaining  a more reliable  estimate
        of the processible  tonnage  generated in Hawkins County,
        establish the  feasibility of securing additional ton-
        nage from a neighboring county such that a  waste
        processing capacity of 90 TPDs or greater could be
        achieved.

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                               -7-
     t  Determine whether Hawkins County and the partici-
        pating neighboring county control the various
        portions of the waste stream generated within the
        respective counties; develop strategies to ensure
        that the waste can be directed to a resource re-
        covery facility.

     If these tasks confirm the feasibility of a Hawkins County pro-
ject, a prefeasibility study should be submitted to the State of

Tennessee as part of an application under the Tennessee Resource and
Energy Facility Loan Program.  In addition, as the economic feasibility of
this project appears to be dependent upon the receipt of the previously
committed TVA financing, the county would have to obtain a firm commitment

for this financing prior to applying for a state grant.

     If the county is interested in pursuing the concept of joint par-

ticipation in a resource recovery facility to be located elsewhere,
concurrent to the above-mentioned steps, it should hold discussions

with neighboring counties to ascertain their interest in a possible
joint project to be located in their county and to service a local energy
buyer(s).  A feasibility investigation of such a project would involve
identifying an economically viable match among waste generation, energy

market(s), sites, and available technologies, similar to the investi-

gation reported here.

     In considering resource recovery  (whether it be an in-county pro-

ject or a joint project located in a neighboring county), Hawkins County

should be aware that:

     t  Even if resource recovery is implemented, a sub-
        stantial portion of the solid  waste stream will
        still require ultimate landfill  disposal.  This
        portion may be as high as 35 percent on a tonnage
        basis (but about 25 percent on a volume basis,
        which is the critical measure  for determining land-
        fill requirements).  This waste  includes oversized,
        bulky materials and noncombustibles that are di-
        verted from the project; residues of combustion;
        and emergency bypass waste.

     t  Whether resource recovery is implemented or not,
        the new county landfill must be  in compliance with
        stringent environmental requirements.

     •  Development of an MCU system normally requires  at
        least 24 months after procurement contracts are

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                               -8-
        executed.  This lead time suggests mid-1983 as the
        earliest date for a fully operational  system.

     Should the county decide not to pursue resource recovery,  it can
investigate the possibility of hauling its waste to a  neighboring county
for disposal in that county's landfill(s), in  lieu of  developing  a new
Hawkins County landfill.   Investigation of this option was not, however,
within the scope of this  study.

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                           -9-
                        CHAPTER 2.
      SOLID WASTE COLLECTION, DISPOSAL, AND GENERATION


     The attractiveness and feasibility of resource recovery for
Hawkins County depends in part on the magnitude of the county's
solid waste disposal problem, the amount of waste that is poten-
tially available for processing, and the economics of resource
recovery as compared with continued primary reliance on landfill ing.
The  capacity of the one existing county landfill is exhausted, and
Hawkins County is under mandate from the Tennessee State .Department
of Public Health to secure and develop a new landfill disposal
facility.  As the county has been unable to overcome citizen oppo-
sition to siting a new landfill, it now faces a critical disposal
problem.  Even if the county implements a resource recovery facil-
ity, it still must develop a new disposal site to receive all of
the  county's waste in the short term and bypassed waste, unpro-
cessibles, and process residues in the long term.
     Information on the county's waste collection and disposal prac-
tices and waste generation was obtained during two site visits and
from a review of several recent solid waste studies.   The primary
findings of the site visits and this review are that the county
only generates 54 to 62 TPDs of processible waste and that landfill
disposal costs for a new landfill are projected to be approximately
$9 per ton in 1980.  In 1983, these costs could reach $12 per ton.
     In the remainder of this chapter, current solid waste collection
and disposal practices in Hawkins County are described; waste gener-
ation is estimated, and an estimate of the disposal  cost at a new
landfill is given.

CURRENT COLLECTION AND DISPOSAL PRACTICES
     With the exception of Bulls Gap, each of the five incorporated
areas in Hawkins County has a municipally operated collection system.
In Bulls Gap,  the municipality contracts for services with private
collectors,  and residential  and commercial  waste pickups occur once

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                               -10-
a week.  The other four municipalities provide residential  collection
once a week, and commercial collection services twice a week.  The
remainder of the county is serviced by a county-operated greenbox
system with pickup typically twice a week.  Collection service costs
in the county are paid for from the taxes of the respective communities.
     All of the solid waste collected in the county is currently dis-
posed of at the Hawkins County landfill, which is located just south
of Rogersville.  This landfill has reached its capacity, and the
county is under mandate from the Tennessee State Department of Public
Health to secure a new landfill site.  Of the sites currently under
consideration, the most attractive is about 7 miles south of Rogersville
(representing an additional haul distance of about 5 miles  relative
to the location of the existing landfill).
     Current collection and disposal cost data are not available.  The
Hawkins County Highway Department is responsible for operating the
existing landfill, as well as for maintaining county roads.  The Highway
Department does not maintain separate records on the cost of operating
the landfill.  No disposal charge is currently levied for solid waste
disposal at the county landfill.

CURRENT WASTE GENERATION
     A review of two recent solid waste studies indicates that Hawkins
County generates an estimated 68 to 78 TPDs of waste.   A 1978. solid
waste study undertaken by the First Tennessee-Virginia Development Dis-
trict (FT-VDD) projected that an estimated 19,500 tons of solid waste
would be delivered to Hawkins County landfill in FY 1980, or approxi-
mately 78 TPDj-.   A recent TVA study indicated that some 17,000 tons per
                                9
year, or 68 TPDg, are generated.'1  On the basis of waste composition work
previously performed in other regions of the county, a conservative esti-
mate of 20 percent of this waste stream was assumed to be unprocessible,
1.  FT-VDD Solid Waste Survey, 1979.
2.  Five County Eastern Tennessee Solid Waste Manaoement Study, Tennessee
    Valley Authority, 1978.

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                                 -11-
leaving an estimated 54 to 62 TPDs of waste potentially available
for processing in a resource recovery facility.  For purposes of
this prefeasibility study, the higher estimate (62 TPDs) was assumed
in order to assess the potential for resource recovery under the
most favorable conditions.*  Because the basis for developing both
the FT-VDD and TVA estimates of annual tonnage is not known, the
62-TPD5 estimate should be considered as very preliminary.   While
an estimate of this nature is appropriate at the prefeasibility
level, were a decision made to proceed with a project to serve Hawkins
County, the estimate would have to be verified and account for the im-
pact of such factors as seasonal variations in waste generation and
composition, and increases in future waste generation as a  result of
increased per-capita generation rates, population growth, and indus-
trial development.
     The energy content (higher heating value) of the waste was as-
sumed to be 4,500 British thermal  units (Btu) per pound on  the basis
of waste quality data obtained from other primarily rural regions of
the country.

PROJECTED NEW LANDFILL COSTS
     Because acquisition of a new landfill has not yet begun in Hawkins
County and because accurate cost data for the existing landfill are
not available, it was not possible to develop a site-specific disposal
cost estimate for a new county landfill.  However, a recent engineer-
ing study performed for Hawkins County indicates that a per-ton
disposal charge of around $9 would be necessary in 1980 for a new
                                                   3
county landfill to be economically self-supporting.   Assuming a
10-percent annual escalation in the cost of operating a sanitary land-
fill, by 1983, the net disposal charge would be close to $12 per ton.
*  Because waste composition data were not available for Hawkins County,
   it may be an understatement to assume that 20 percent of the waste
   is unprocessible.
3. Op.  cit., County Technical  Assistance Service, fall  1979.

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                               -12-
     If Hawkins County implements resource recovery in the county, a
landfill is a necessary component of the resource recovery system.
Consequently, the costs of resource recovery cannot be considered as
a direct substitute for the costs of developing and operating a new
solid waste sanitary landfill.  While resource recovery could reduce
the volume of waste to be landfilled by as much as 75 percent, the
landfill still must be available to dispose of the remaining portion
of the waste stream, comprising unprocessibles, process residues, and
emergency bypass waste.  In other words, although a technically and
economically feasible resource recovery project serving Hawkins County
could result in reduced landfill  disposal  costs,  to some extent,  the
cost of a resource recovery facility will  be incremental  to the cost
of a new landfill.

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                              -13-
                           CHAPTER 3.
                   RESOURCE RECOVERY OPTIONS
     Although it was questionable whether the estimated 62 TPDs of pro-
cessible waste available in the county could support an economically
competitive resource recovery facility, the technical  and economic feasi-
bility of a facility sized to process this amount of waste was assessed
because the county does face an imminent waste disposal problem.  The
results of this assessment indicated that a resource recovery facility
processing Hawking County waste only to provide steam or high-temper-
ature gas to Holliston Mills (the only potential energy buyer identified
in Hawkins County) does not appear to be economically competitive when
compared to the estimated cost of new landfill designed to dispose of
all of the county's solid waste.
     Because of the critical problem facing the county and because of
the problems encountered thus far in securing a new landfill  site,
another resource recovery option was investigated to determine, on a
preliminary basis, its feasibility for Hawkins County.  This  latter
option is to implement a resource recovery facility in Hawkins County
that would be augmented by at least 30 to 40 TPDs of processible waste
from a neighboring county, such that the total waste processing capacity
would be around 90 TPDs and the design capacity, 100 TPD.  This plant
would service Holliston Mills operating on a 24-hour-per-day basis,
5 days a week.
     The market, technical, and economic analyses indicated that an MCU-
based 90-TPD5 resource recovery facility supplemented by at least 30 TPDc
of waste from a neighboring county could be economically viable if
a number of conditions could be met.  The scenario under which this
option could be feasible is discussed in this chapter; the immediate
next steps that should be conducted if the county wishes to pursue this
option are discussed in Chapter 4.
     While it was not within the scope of this study to evaluate the possv
bility of a joint resource recovery project between Hawkins County and
a neighboring county where Hawkins would haul its waste to a recovery

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                             -14-
facility located in the other county and servicing a local energy
buyer(s), Hawkins County should consider this approach as another
possible option to continued primary reliance on landfill disposal.
A brief description of this option is included in this chapter; in
Chapter 4, the immediate next steps to be taken by the county, should
it decide to pursue this approach, are presented.
     Obviously, if the county should decide not to pursue resource
recovery, it can continue its reliance on landfill ing as the primary
means of solid waste disposal.  Because of the difficulty encountered
thus far in securing a new landfill site within the county, if land-
fill disposal is the preferred waste management approach, Hawkins
may want to consider investigating opportunities for using a landfill(s)
located in a neighboring county.  Again, it was beyond the scope of the
study to evaluate options for landfill disposal outside of Hawkins
County.  However, this approach to solid waste management is discussed
in terms of associated immediate next steps in Chapter 4.
     In the remainder of this chapter, the findings and conclusions re-
lative to the various resource recovery options assessed are presented.

RESOURCE RECOVERY USING HAWKINS COUNTY WASTE ONLY
     Once an estimate of waste generation in the county was obtained, it
was necessary to investigate whether or not there was a viable match
among the county's waste supply, market requirements, sites, and avail-
able technologies.  Consequently, a preliminary energy market/site
survey was conducted, followed by a technical and economic analysis of
project opportunities.  The results of these tasks are summarized below.

Energy Market/Site Survey
     Information obtained from the Hawkins County Commission indicated
that only two possible energy markets exist in the county -- Holliston
Mills, a textile concern; and the Holsten Army Ammunition Plant (HAAP).
Holliston Mills would purchase either steam or high-temperature gas;
HAAP would purchase low-pressure steam.

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                                 -15-
      For purposes of waste-derived steam, the most desirable steam
customers require low-pressure and low-temperature steam, have a
constant steam demand on a 24-hour-per-day basis and a minimum of
5 days per week throughout the year, and currently use high-priced
fuels in their boilers.  This latter characteristic is desired because
the price that can be obtained for the waste-derived energy is de-
pendent on the price of the fuel that it displaces.  A desirable
customer of waste-derived gas has similar characteristics, except
that the steam conditions are not applicable in this case.  For
both types of customers, a potentially available site should exist
nearby where a resource recovery facility could be located, and the
customers should be located close to the centroid of the wasteshed
to minimize haul costs.  For a high-temperature gas customer, the
resource recovery facility must be much closer to the plant it is
serving.
      On the basis of these desired characteristics, the preliminary
market survey indicated that Holliston Mills could be considered a viable
energy .customer for steam or high-temperature gas, only if the company
were to increase its operations to 24 hours per day.  HAAP was eliminated
as a potentially viable energy customer because the amount of steam that
could be generated by a plant processing all of the estimated tonnage
available (20,000 pounds of steam per hour*) would represent less than 20
percent of the facility's current steam requirements and less than 3
percent of the plant's rated capacity.  Given that the potential impact
that resource recovery could have on the energy requirements of the
Moisten Plant is so modest and that the plant already enjoys relatively
low-priced coal-derived energy, the base commander did not express any
interest in this concept.
      The two potential customers are described in greater detail in
the subsections below.
      Holliston Mills.  A leading manufacturer of hard covers for text-
books and other bound volumes, Holliston Mills is located in the north-
east portion of Hawkins County (its mailing address is in Kingsport,
Sullivan County).  Currently, the plant operates two shifts per day,
5 days per week.
*  Waste-derived steam estimates are based on an assumed 4,600 pounds
   of 125-psig steam per ton of solid waste.

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                               -16-
     Holliston uses gas-fired package boilers to produce low-pressure
process steam and high-temperature hot water for bleaching and dyeing
operations and for winter space-heating purposes.  Typical process
steam requirements are for 20,000 to 25,000 pounds per hour on an 8-
to 12-hour-per-day basis.
     The plant also uses substantial quantities of natural gas to
fire the approximately 15 dryers that are used to dry the final  products,
These dryers typically operate 16 hours per day at temperatures  ranging
from 200°F to 350°F.  The dryers are equipped with solvent recovery
equipment that is used to capture the volatile vapors for combustion
prior to their release to the atmosphere.
     Natural gas is purchased on an interruptible basis from the
Hawkins County Natural Gas Utility District at a current price of
$3.40/106 Btu (tied to the price of No. 6 residual oil).  Drying
applications account for 60 percent of the natural gas used; pro-
cess steam and hot water requirements account for the remainder.
     The Holliston Mills plant engineer is familiar with the con-
cept of energy recovery and has indicated that the company would be
interested in purchasing competitively priced energy (either low-
pressure steam or high-temperature gas).  Moreover, it appears as
though Holliston-owned land contiguous to the plant could be avail-
able for siting a resource recovery facility.  In addition, the
company would possibly consider partial equity investment in a
project.
     However, for Holliston Mills to be considered a viable poten-
tial energy customer, the company would have to modify its operations
such that its energy requirements would be on a continuous, 24-hour
basis.  A resource recovery facility serving the Holliston plant at
its current operating level (12 to 16 hours per day, depending on
whether steam or hot gas were purchased) would have a low system
load factor.  While the Holliston Mills plant engineer did indicate
that modifying plant operations to achieve a 24-hour-per-day status
could be possible, in order for this to be considered, third-shift
energy would have to be offered at a substantial discount to overcome
the additional labor and other costs that would be incurred.

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     Holsten Army Ammunition Plant.   HAAP is  a government-owned con-
tractor-operated munitions facility, comprising numerous buildings
and covering several hundred acres.   Most of  the plant is located in
Kingsport (Hawkins County); the remainder is  located in neighboring
Sullivan County.
     HAAP's steam requirements are large.  Two separate power plants,
consisting of eight boilers, in total, each with a design capacity
of 110,000 to 130,000 pounds of steam per hour, are used to produce
low-pressure steam to meet manufacturing requirements.  Six of these
boilers are coal-fired; the other two, which  are used as standby
boilers, are gas-fired.  Various manufacturing by-products are com-
busted in an environmental control boiler.
     For the reasons previously stated, HAAP  was eliminated as a
potential energy customer.
Technical  Analysis
     Because  the  county only  generates  an estimated 62 TPD5 of pro-
cessible  solid  waste,  a small-scale technology was determined to be
the  only  technical  option  for  producing  either low-pressure steam or
high-temperature  gas for  sale  to  Holliston Mills.  For purposes of
this assessment,  a  modular  combustion system  (MCU) was used as the
small-scale reference  technology.
     MCU-based  systems are  operating successfully in a number of
cities,  including North Little Rock, Arkansas; and Salem, Virginia.
These  units, which  are modular in design, can be grouped in numerous
configurations  to permit a waste  processing design capacity ranging
from less  than  100  TPD to  300 TPD (individual unit sizes of 10 to
75 TPD).  Within  the 100-TPD to 300-TPD  processing range, these
MCU-based  systems offer a cost advantage  (in terms of cost per
installed ton of capacity)  over mass-burning waterwall or refrac-
tory-lined combustion technologies.
     In the remainder of this section, a generic description is
given of an MCU waste processing operation, followed by a pre-
liminary system definition  for both steam and high-temperature
gas production.

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                                -18-
     Generic System Description.  Whether the MCU-based resource
recovery system were producing steam or high-temperature gas, the
operation of the waste-processing subsystem would be similar.
Figure 1 provides a simplified diagram of an MCU.   As shown in this
figure, waste is delivered to the resource recovery facility, onto
a concrete loading floor.  Unprocessible materials (e.g.,  large
metal objects,  water heaters, rugs)  are removed and placed in
residue containers for sale as scrap or for disposal  in a  landfill.
A front-end loader is used to push the remaining solid waste into
a hopper, and a hydraulic ram-feeder moves the waste into  the in-
cinerator's lower chamber where it is partially burned. The heat
released provides the energy needed  to dry and gasify the  remaining
waste.   The carbon-monoxide-rich smoke leaves the  top of the lower
chamber and enters into the secondary chamber; there, more air is
added,  and the gases are burned to completion.  As the hot gases
exit the secondary chamber, they pass through a heat exchanger,
where the heat in the exit gases is  used to raise  steam.*   The stack
gases are then discharged to the atmosphere.**
     Ash consisting of glass, stone, metals, inert solid waste,  and
residual carbon char is moved from the bottom of the  lower chamber
into an ash disposal  system.   A magnet that recovers  magnetic metals
for sale to the secondary metal  market can be installed.   The remain-
ing ash is  loaded into  a truck for disposal  at a landfill.
     Preliminary System  Definitions.   In  the following paragraphs,  ini-
tial system definitions  are  given for  a resource  recovery facility  using
Hawkins County waste only, to provide  either  low-pressure steam  or  high-
temperature gas  to Hoi listen Mills.  Because of the  preliminary  nature
of  the  waste and market  data, these  systems  should be  considered  as
illustrative only.
     A  62-TPD5  (72-TPD design capacity) MCU-based system would  be  used
*  When the energy form delivered  is hot gas, rather than steam, an  air-
   to-air heat exchanger  (rather than a boiler)  is used as the  heat  ex-
   changer, or the heat exchanger  is eliminated  altogether and  the buyer
   uses the hot gases directly.
** Particulate emission control is usually provided for in the  design
   of the unit.  However, increasingly stringent air pollution  regula-
   tions will likely require the installation of electrostatic  precipi-
   tators on MCUs.

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                               FIGURE 1
                        MODULAR COMBUSTION UNIT
                                                             STEAM
REFUSE TRUCK
                      FRONT-END LOADER
                            RAM-FEEDER
                                                      0
h
Xr

D. .
*
;
/
<•
/
/
n/
d
	
r— in-
                                           MODULAR COMBUSTION  UNITS
                                                                   RESIDUE
UD
I

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                               -20-
to produce 125-psig steam for sale to Holliston Mills.   In sizing this
system, the following assumptions were used:
     t  The higher heating value (energy content)  of the
        county's waste is 4,500 Btu per pound.
     •  System efficiency is 60 percent.
     •  Two 36-TPD units are used; each unit  has a 90-percent
        availability, excluding scheduled maintenance.
     •  125-psig steam is produced.
     •  Steam output is 4,600 pounds per ton  of waste at
        50 F inlet feedwater temperature with no condensate
        return.
     •  The system operates 24 hours per day, 5 days per
        week, 250 days per year.
     •  Annual average system throughput is 62 TPDs,  or
        15,500 tons per year.
     •  Holliston Mills expands its operations to 24  hours
        per day (i.e., a third shift is added).
     To provide steam to Holliston Mills, a steam transmission line
would have to be constructed running from the resource recovery facility
to the manufacturing plant.
     When processing 62 TPD5 of solid waste, the MCU-based  plant would
have an average hourly throughput of 11,900 pounds of steam,  24 hours
per day.  Holliston Mills'  steam requirements range from 20,000 to
25,000 pounds per hour.  The company would use in-house boilers to
meet steam requirements in  excess of the output of the resource re-
covery facility.
     If high-temperature gas were produced for sale to Holliston Mills,
a 62-TPD5 (72 TPD design capacity) MCU-based system would be  used.  In
sizing this system, the following assumptions were used:
     •  The higher heating  value of the county's waste is
        4,500 Btu per pound.
     •  An air-to-air heat  exchanger is used such that system
        efficiency is 60 percent.
     t  Two 36-TPD units are used; each unit has a 90-percent
        availability, excluding scheduled maintenance.

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                               -21-
     •  The system operates 24 hours a day, 5 days a
        week, 250 days a year.
     •  Annual average system throughput is 62 TPDg,
        or 15,000 tons per year.
     •  Hoi listen Mills expands its operations to
        24 hours per day (i.e., a third shift is added).
     The system includes an air-to-air heat exchanger to avoid direct
contact by the waste-derived hot gases with the book covers in the
dryers.  If, in field trials at the Holliston Mills plant, it was
found that direct contact did not contaminate the product, the air-to-
air heat exchanger could be eliminated and the products of combustion,
suitably diluted to the required temperature, introduced directly
into the dryers through injection ports.  Direct venting would re-
duce system costs and could increase system efficiency from 60 percent
to ±90 percent, depending on the distance that the hot gases had to
be transported.
     The MCU-based system would be located on Holliston-owned land con-
tiguous to the manufacturing plant (preferably within a few hundred
feet of the drying operations) to maximize energy efficiency.
     The production of waste-derived hot gases in an MCU-based system
with an air-to-air heat exchanger has been successfully demonstrated in
an industrial application using industrial wastes (i.e., at the John
Deere plant in Wisconsin).   While use of an MCU-based system burning
municipal waste to produce hot gases for sale has not been demonstrated,
because the waste gases from municipal and industrial waste combustion
are similar, no unusual problems are anticipated with this resource re-
covery option.

Economic Analysis
     Preliminary economic estimates for a facility using Hawkins County
waste only were developed for the MCU-based system producing low-pressure
steam for sale to Holliston Mills.  Because the economics for a plant
selling high-temperature gas are expected to be similar, it was not
necessary,  at the prefeasibility level, to develop a separate set of
estimates.

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                                -22-
     In developing the bond requirements estimate, it was assumed that
the previously committed TVA grant financing of up to $1.2 million
would be available to Hawkins County.*  The bond requirements could
conceivably be met either through the State of Tennessee Resource and
Energy Facility Loan Program or through general obligation bonds (GOBs),
industrial revenue bonds (IRBs), equity financing, or a combination of
IRB and equity financing.  Because of the lower interest rates avail-
able through the state loan program (similar to those associated with
the GOB financing), this financing source was assumed in the prelimi-
nary economic analysis.  (See Appendix A for a discussion of the state
loan program.)
     Even with the assumed availability of partial TVA funding and state
loan program financing, the preliminary economic analysis indicates that
a 62-TPD5 (72-TPD design capacity) facility does not appear to be an eco-
nomically competitive option.  The projected net disposal cost in mid-
1983 would be around $23 per ton, and in mid-1988, around $21 per ton for
the resource recovery facility.  Because this cost must be considered, to
a certain extent, as incremental to the- projected cost of a new landfill
in 1983 (almost $12 per ton), the overall estimated solid waste disposal
costs would likely be prohibitively high.  Contributing to the high cost
of this system is the fact that certain economies of scale are lost with
a system of this size.  For example, a 72-TPD (design capacity) system has
the same staffing requirements as a 100-TPD system, and is nearly as costly
to construct.  In addition, because third-shift energy would have to be
offered at a substantial discount as an incentive to Holliston Mills to
extend its operations to 24 hours per day, energy revenues are lower than
those that could be obtained from a company already operating 24 hours per
day.  In Appendix B, the economic and financing assumptions used and the
economic estimates developed are presented in greater detail.
     In developing these estimates, the following key assumptions were
used:
     t  System capital costs escalate at a rate of 10 percent
        per year from current costs to the mid-point of con-
        struction, assumed to be mid-1982.
* TVA has indicated that it would make grants available for resource recov-
  ery projects producing an energy product other than electricity.  For
  this reason, cogeneration and straight electricity production from a re-
  source recovery facility were not considered.

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                               -23-
     •  A TVA grant of $1,200,000  is  available  to  the
        project.

     t  State of  Tennessee  Resource and  Energy  Facility
        Loan Program financing  is  obtained  (a 15-year
        bond issue at 9-percent interest per year).
                          V
     •  The 1983  value of natural  gas is equivalent on
        an energy content basis to $0.93 per gallon of
        1-percent-sulfur  No.  6  oil.

     •  Energy costs escalate at 10 percent per year
        after 1983, and plant operations and maintenance
        costs escalate at 8  percent per  year.

     •  During the first  and  second shifts, 95  percent
        of the steam produced is sold at a  10-percent
        discount.

     •  During the third  shift, 90 percent  of the  steam
        produced  is sold  at  a 25-percent discount.
RESOURCE RECOVERY AUGMENTED BY 30 TO
40 TPD5 FROM A NEIGHBORING COUNTY

     A plant sized to process Hawkins County waste alone,  while appar-
ently technically viable, did not appear to be economically competitive.
Consequently, the economic feasibility of a 90-TPD5 MCU-based system
(supplemented by at least 30 TPDg from a neighboring county) was
assessed.  While it was beyond the scope of this  study to  identify
possible sources of this additional  waste, it was felt that preliminary
economic analysis of this option was warranted to ascertain whether
or not the county should consider pursuing an in-county project.
Again, the availability of the previously committed TVA funding and
financing under the state loan program were assumed.in the economic
analysis.  In addition, it was assumed that the plant would service
Holliston Mills (the only potential  energy customer in the county),
and that the company would extend its operations  to 24 hours per day.

      In this option, a 100-TPD (design capacity) MCU-based plant
with an annual  average throughput capacity of 90 TPD5 would produce
steam or hot gas for sale to Holliston Mills.  In sizing this illus-
trative facility, the same assumptions used for the 62-TPD5 MCU-based
plant were applied, except that design capacity and waste throughput
are obviously larger (two 50-TPD units would be used, rather than two
36-TPD units).   In addition, if producing steam, this system would

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                                -24-
 have an average hourly steam output of 17,200 pounds  (Hoilisten Mills

 currently uses 20,000 to 25,000 pounds of steam per hour).

      The economic assessment indicated that a resource  recovery plant

 at this size could be economically competitive with continued  primary

 reliance oh landfill ing, assuming certain conditions  can  be met.*  The

 net disposal cost is  projected to be around $11 per ton in  mid-1983,

 and $5 per ton in mid-1988.   Appendix B contains a  more detailed dis-

 .cussion of the economic projections.  The key assumptions used in

 developing these estimates are the same as those described  for a re-

 source recovery project using Hawkins County waste  only.

      The preliminary  economic feasibility depends,  however, on the

 following:

      t  Obtaining at  least an additional  30 to 40 TPD5
         (depending on the results of a more reliable
         estimate of the amount of processible waste
         available in  Hawkins County) from a neighboring
         county.

      0  Obtaining previously committed grant financing
         from TVA of up to $1.2 million.

      •  Obtaining a commitment from Hoi listen Mills to
         extend its operation to 24 hours  per day, at
         least 5 days  per week, in response to third-
         shift energy  priced at a substantial  discount.

      t  Obtaining financing under the State of Tennessee
         Resource and  Energy Facility Loan Program.

      As discussed in  greater detail  in Appendix A,  in order for a pro-

ject to be eligible for funding under the  state loan program, the energy

revenues and the net disposal cost must be sufficient  to support the

project.  Thus, while  the bond issue is sold on the  basis  of public
   For purposes of this study,  it was  assumed  that the  economics  would
   be similar for a resource recovery  plant producing either steam or
   high-temperature gas.   Consequently,  economic estimates  were developed
   for a steam plant only.   It  is possible that the economics could prove
   to be better for a plant producing  high-temperature  gas.  A detailed
   technical  and economic analysis would be required to quantify the eco-
   nomic advantages of one system over the other.

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                               -25-
ownership (as is a GOB) with the resultant low interest rates,  the
project must still meet the strict elegibility requirements  typical
of IRB financing (private-sector ownership).
     The net disposal costs projected as part of this  prefeasibility
study for a 90-TPD5 resource recovery facility are highly sensitive
to several assumptions.  First, if it was found that a discount for
third-shift energy greater than the 25 percent assumed was required
to motivate Hoi listen Mills to expand to 24-hours-per-day operations,
the projected net disposal costs reported here would likely  increase
significantly.  For example, if the third-shift discount were in-
creased to 50 percent, the projected net disposal  costs would increase
by some $5 per ton of waste processed at the  resource  recovery  facil-
ity.  Second, the economics of the resource recovery facility are
likely to improve for a larger facility.  Thus, if Hawkins could
obtain a sufficient tonnage of waste from a neighboring county  to
allow, for example, a 108-TPDs facility, the  projected net disposal
costs would likely be significantly lower than for a 90-TPD5 facility,
assuming a 25-percent discount for third-shift energy.

RESOURCE RECOVERY OUTSIDE OF HAWKINS COUNTY
     Another option that the county might consider is  participating  in
the implementation of a resource recovery facility in  a neighboring
county.*  If such an option were to be pursued, the county would still
have to proceed with the development of a new sanitary landfill, to  be
used for disposal of the estimated 78 TPD5 of waste generated in the
county until the resource recovery facility became operational.  Once
the county began hauling the processible portion of its waste (an
estimated 62 TPDs) to the resource recovery facility,  the landfill
could be converted to a rubbish dump to accommodate unprocessibles and
emergency bypass waste.  (Process residues would be disposed of in a
landfill located in the other participating county.)  A rubbish dump
   A resource recovery project for Sullivan County, Tennessee/Washington
   County, Virginia, has reached the conceptual design phase.  However,
   the hauling costs associated with transporting Hawkins County waste
   some 40 miles appear to prohibit the county's participation in this
   recovery project.

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                               -26-
could presumably be operated at a lower cost than a  full-scale land-
fill, such that Hawkins County could receive some landfill  cost savings,
In addition, the life of the new landfill  would  be extended greatly.
     Again, were the county to investigate this  option  and  decide  to
pursue it and if partial  financing from the State of Tennessee loan
program were desired, the same eligibility requirements  as  discussed
in the previous section and in Appendix A  would  apply.   The immediate
next steps associated with this option are discussed in  Chapter 4.

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                               -27-
                             CHAPTER 4.

                        IMMEDIATE NEXT STEPS
     The county has several solid waste management options it can pur-

sue.  These options are:

     •  Implement resource recovery.  In this option, the
        county could implement a 90-TPD5 Hawkins County
        resource recovery project that would also process
        from 30 to 40 TPD5 of waste from a neighboring
        county to meet a portion of Holliston Mills'  energy
        requirements.  However, the feasibility of this
        option is contingent on several  conditions being
        met.  Alternatively, the county could investigate
        the possibility of participating in a joint re-
        source recovery project to be located in a
        neighboring county and to service an energy cus-
        tomer^) located in that county.

     •  Continue reliance on landfilling.  In this option,
        the county can either (1) acquire a new sanitary
        landfill, or (2) arrange to haul Hawkins County
        waste to a landfill(s) located in a neighboring
        county.

     In order for the county to select a preferred option, and,  to

determine whether, in fact, the preferred option can  be implemented,

certain next steps must be performed.  These next steps, and the key

issues associated with the various options, are discussed in the re-

mainder of this chapter.


IMPLEMENT RESOURCE RECOVERY

     The county could either elect to investigate further the feasibility

of a 90 TPDj; or large Hawkins County resource recovery project or to
assess the possibility of a joint project to be located in a neighbor-

ing county.  If the county chose to pursue either option, it would

still have to acquire and develop a new landfill disposal site immedi-

ately.


Hawkins County Project

     To confirm the feasibility of a 90-TPD5 resource recovery project

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                               -28-
servicing Holliston Mills, the following next steps should be performed:

     •  Hold discussions with Holliston Mills to ascertain
        its level of interest in a resource recovery project,
        particularly as regards its willingness to consider
        operating 24 hours a day in response to third-shift
        energy offered at a substantial discount.  Obtain
        more detailed information on the company's energy
        practices and requirements, including detailed
        energy load profiles showing hourly, daily, and
        seasonal variations; aggregate current and projected
        fuel costs; and electrical, water, and other utility
        charges.

     •  Establish a waste characterization program in Hawkins
        County to ascertain that a sufficient amount of solid
        waste with a sufficient energy value is available to
        satisfy the requirements of the potential energy cus-
        tomer.  In addition, determine the seasonal fluctuations
        in waste quantity and composition.

     t  After developing a more refined estimate of the pro-
        cessible tonnage generated in Hawkins County, establish
        the feasibility of securing additional tonnage from a
        neighboring county, such that a waste processing capacity
        of at least 90 TPD5 could be achieved.  A system sized
        to process more than 90 TPD5 could be viable, assuming
        the necessary additional tonnage could be obtained.*
        The economics are likely to be more favorable for a
        larger size facility.

     *  Determine whether Hawkins County and the participating
        neighboring county control the various portions of the
        waste stream generated within the respective counties;
        develop strategies to ensure that the waste can be
        directed to a resource recovery facility.

     If these tasks confirm the feasibility of the Hawkins County project,

a prefeasibility study should be submitted to the State of Tennessee as

part of an application under the Resource and Energy Facility Loan Program.

To be considered for financing in 1981, the feasibility study would have

to be submitted by January 15, 1981.  In addition, as the economic

feasibility of this project is dependent upon the receipt of the pre-

viously committed TVA financing, the county would have to obtain a firm

commitment for this financing prior to applying for a state grant.
   The maximum size of the resource recovery facility would be defined
   by the product requirements of Holliston Mills.and the amount of
   additional  waste available from a neighboring community.

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                               -29-
     When considering this option, the county should keep in mind
the following.  If this project were implemented in mid-1983 (the
assumed first year of resource recovery facility commercial  opera-
tions), at that time, the county could convert the new landfill for
use as a rubbish, process residue, and emergency bypass waste dis-
posal facility.  The reduced volume to be handled at the landfill
should result in some cost savings.  Nonetheless, the cost of re-
source recovery should be considered, to some extent, as incremental
to the cost of the landfill.  Other benefits that will accrue to the
county, should it pursue the implementation of an in-county resource
recovery facility, are:
     t  The life of the new landfill will be extended
        significantly.
     0  The county will be contributing to national
        alternative energy goals.
     •  Resource recovery is an environmentally sound
        alternative to continued reliance on landfill
        disposal as a primary means of solid waste
        management.
     Furthermore, should the county decide to use low-priced alter-
native energy for a resource recovery facility as an incentive to
attract industrial development, the capacity of the MCU-based system
can be increased by adding additional 50-TPD units.  In this case,
the county would likely have to obtain additional waste from neighbor-
ing counties to support a larger facility.
Joint Project Located in Neighboring County
     Because of the uncertainties associated with the 90-TPD5 project
in Hawkins County (e.g., whether Hoi listen Mills will extend its opera-
tion to 24 hours), the county should concurrently investigate the
feasibility of implementing a joint project in a neighboring county.
Again, this option requires that the county immediately acquire and
develop a new county landfill.
     If Hawkins County is interested in this approach to resource
recovery, it should hold discussions with neighboring counties to
ascertain their level  of interest in participating in a resource

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                               -30-
recovery facility.  If these discussions indicate interest on the
part of a neighboring county(ies), a prefeasibility study should be
performed (presumably as a joint endeavor by the counties) to ascer-
tain that the necessary ingredients to resource recovery exist;
namely, an economically viable match is possible among waste supply,
energy markets, sites, and available technologies.
     If the results of the prefeasibility study are positive, the
counties should proceed to:
     •  Hold discussions with the energy customer(s)
        to obtain information on level of interest
        and energy requirements as described in the
        previous section.
     t  Establish a weighing and sorting program
        in both counties to refine waste generation
        and quality estimates.
     •  Determine that sufficient control  over the
        waste stream exists to ensure delivery of
        waste to the resource recovery facility.
     Again, if the counties were to pursue State of Tennessee funding,
the program's eligibility criteria would have to be met.
     In considering this option, the county should be aware that, once
the resource recovery facility was operating, the new Hawkins County
landfill could be converted to a rubbish dump to handle unprocessibles
and emergency bypass waste.  This could result in some cost savings
and would extend the usable life of the new landfill significantly.
However, the county would also have to take into consideration the
costs associated with developing a transfer station (presumably
located at the site of the new landfill) where removal of a large por-
tion of the unprocessible waste would occur prior to hauling the waste
to the resource recovery facility.  Recent work performed in other
areas of the county indicates that Hawkins County can expect to pay
between $5 and $12 per ton in haul and transfer costs, depending on
the distance to be traveled.
     Again, the same benefits that would accrue to the county were it
to implement an in-county resource recovery project would be applicable
in this case.

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                               -31-
CONTINUE RELIANCE ON LANDFILLING
     If the county decides to continue its reliance on landfill ing as
a means of solid waste disposal, the county should immediately:
     t  Acquire and develop a new site for a sanitary solid
        waste landfill, or
     t  Investigate the possibility of disposing of its
        solid waste in a landfill(s) in a neighboring
        community.
     Obviously, should the county elect to pursue landfill  disposal  out-
side of the county, the associated haul cost would be a major constraint
to any otherwise viable landfill disposal  possibilities.
     It should be noted that, were the county to develop a  new sanitary
landfill and make a subsequent decision to pursue resource  recovery,
the volume of waste to be landfilled could be reduced by 75 percent,
depending on whether the resource recovery facility were located in  a
neighboring county or in Hawkins County.   This volume reduction  would
likely have associated cost savings, and would extend the life of the
new landfill significantly.

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                            APPENDIX A.
                 STATE OF TENNESSEE RESOURCE AND
                   ENERGY FACILITY LOAN PROGRAM

     In this appendix, the main features and requirements of the
State of Tennessee Resource and Energy Facility Loan Program are
summarized.
     The state loan program is used to finance facilities that re-
cover energy or materials from municipal solid waste.  As such, it
may be appropriate for financing a Hawkins County project.
     The loan program incorporates aspects of both GOB and IRB
financing.  The state issues bonds and then loans the bond pro-
ceeds to the sponsor of an eligible project.  The bonds, which are
issued and sold by the state (i.e., the state acts as bond under-
writer), enjoy tax-exempt status, as well  as, the full faith and
credit backing of the state.  In order for a project to be con-
sidered for financing under the program, it must have demonstrated
economic and technical merit.  Thus, while the bond issue is sold
on the basis of a GOB, with the resultant low interest rates, in
essence the project must meet the strict credibility guidelines
typical of IRB-type financing.


ELIGIBILITY
     Several project eligibility criteria have to be met.  First,
at least 60 percent of the materials or energy content of the munici-
pal solid waste stream has to be recovered and sold.  Second, 50
percent or more of this quantity of materials or energy has to be
spoken for by at least a letter of intent from prospective customers.
Third, facilities that will  convert the municipal solid waste must
be owned by public-sector entities (i.e.,  a municipality, a regional
entity, or a solid waste authority).  Fourth, prior to receiving
initial commitment as to loan availability, a prefeasibility study
must be submitted that demonstrates the technical and economic merit

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of the project.  Once initial commitment is made by the Tennessee
state program and prior to bond proceeds being received, a more de-
tailed feasibility analysis is required (similar to that required
by an investment banking firm for similar type projects).   The pre-
feasibility study indicating initial technical and economic merit
must be submitted to the Tennessee State Department of Public Health
by January 15 of the year in which the proceeds are being  requested.

KEY FEATURES
     Interest rates are likely to be similar to those associated
with GOB financing.  However, because of the uncertainties in the
marketplace at the present time, it is not possible to estimate what
the interest rate may be.
     Bond issue is predicated under a sinking-fund-type of arrangement
with the term of the bond issue not to exceed the expected useful  life
of a facility.  For an MCU-based system, the assumed useful  life is
around 15 years.
     Given the uncertainty associated with the capital cost projections
for any resource recovery project, inclusion of a contingency fund is
strongly recommended.
     Interest payments during construction and startup are similar to
GOB or IRB financing, and are to be capitalized and incorporated into
the bond issue.  It appears that a debt service reserve fund is not
necessary.
     While the project must be owned by a public-sector entity, there
appears to be flexibility regarding operation; if appropriate, it
appears that a facility could be operated by a private-sector firm
under contract to the public-sector owner.

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                            APPENDIX  B.
                      ECONOMIC  AND  FINANCING
                    ASSUMPTIONS AND PROJECTIONS
     In this appendix, the assumptions used and the projections made
in the preliminary economic analysis are used.   The economic and
financing assumptions are given in Table B-l.   Tables B-2 and B-3
give the capital and operating and maintenance cost and revenue
estimates for the 100-TPD MCU system.   Similar information is pro-
vided in Tables B-4 and B-5 for the smaller 72-TPD MCU system.
Finally, estimated labor requirements  for a 100-TPD MCU system are
given in Table B-6.

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                        TABLE B-l

             ECONOMIC AND FINANCING ASSUMPTIONS
•  1983 system capital costs based on turnkey or full-
   service procurement and escalated from current prices
   at 10 percent per year to the mid-point of construct-
   ion.

•  Energy revenues predicated on:

   -  1983 value of natural gas equivalent to $0.93/gallon
      1-percent-sulfur No. 6 oil; cost of energy escalates
      at 10 percent per year after 1983.

   -  95 percent of steam produced during first and second
      shifts sold at 10-percent discount.

   -  90 percent of steam produced during third shift sold
      at 25-percent discount.

t  Operation and maintenance costs escalate at 8 percent
   per year from current costs.

•  TVA grant of $1.2 million is available.

f  Interest earned on construction funds  prior to dis-
   bursement and on contingency reserve funds exceeds
   interest payments to bondholders during construction
   and startup phases.

t  Bond requirements predicated on State  of Tennessee
   Resource and Energy Facility Loan Program financing;
   15-year bond issue at 9-percent interest per year.

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                  TABLE B-2

        PROJECTED MID-1983 CAPITAL COSTS FOR

              100-TPD MCU SYSTEM

          (90-TPD5 AVERAGE THROUGHPUT)
 SYSTEM  CAPITAL COSTS1                    $ 3,550,000

 CONTINGENCY  (15%)                            535,000

 ENGINEERING/LEGAL                            100,000

    SUBTOTAL:                             $ 4,185,000
 LESS TVA  GRANT2                           ($1,200,000)

 CAPITALIZED  INTEREST3
 DURING  CONSTRUCTION
 AND STARTUP                                   -0-

 BOND REQUIREMENTS4                        $ 2,985,000

   TOTAL FINANCING REQUIREMENTS:           $ 4,185,000
1.  1983 system capital costs based on turnkey or full-
    service procurement and 10-percent annual  escalation
    to mid-point of construction.

2.  TVA grant of $1.2 million assumed to be available.

3.  Interest earned on construction funds prior to dis-
    bursement and on contingency reserve funds exceeds
    interest payments to bondholders during construction
    and startup phases.  This situation, which is atypical
    of most resource recovery projects being financed today,
    occurs because of the availability of the TVA grant
    monies.

4.  Bond requirements predicated upon State of Tennessee
    Resource and Energy Facility Loan Program financing;
    15-year bond issue at 9-percent interest per year.

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                            TABLE B.-3
               PROJECTED 1983 AND 1988 ECONOMICS FOR
                         100-TPD MCU SYSTEM
                    (90-TPD5 AVERAGE THROUGHPUT)
ANNUAL SOLID WASTE THROUGHPUT (tons)                       22,500
ANNUAL ENERGY PRODUCTION (Ibs of steam)               103,410,000
                                          1ST YEAR       6TH YEAR
OPERATION COST ELEMENTS                 (mid-1983)      (mid-1988)
     Labor                              $244,000        $358,500
     Maintenance and Replacements        232,500         342,000
     Utilities                            50,000          73,000
     Residual Disposal*                     NA              NA
     Taxes                                  NA              NA
     Insurance                            75,000         110,000
     Operator Profit                      50.000          73.000
TOTAL OPERATING COSTS                   $651,500        $956,500

ANNUAL DEBT SERVICE EXPENSES            $370,000        $370,000

ENERGY REVENUES                        ($734,000)    ($1,182,000)
INTEREST INCOME                         ($40,000)       ($40,000)

NET DISPOSAL COSTS                      $247,500        $104,500

NET DISPOSAL COSTS (per ton)             $11.00           $4.64
*  The cost of residual  disposal  has been reflected in the projected
   cost of landfill  disposal.

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                   TABLE B-4

        PROJECTED-MID  1983 CAPITAL COSTS  FOR

                72-TPD MCU SYSTEM

           (62-TPD5 AVERAGE  THROUGHPUT)
 SYSTEM  CAPITAL  COSTS1                        $  3,060,000

 CONTINGENCY  (15%)                                460,000

 ENGINEERING/LEGAL                                100,000

    SUBTOTAL:                                 $  3,620,000


 LESS TVA  GRANT2                            ($  1,200,000)

 CAPITALIZED  INTEREST3
 DURING  CONSTRUCTION
 AND STARTUP                                       -0-

 BOND REQUIREMENTS4                           $  2,420,000

    TOTAL  FINANCING REQUIREMENTS:             $  3,620,000
1.  1983 system capital  costs based on turnkey or full-
    service procurement and 10-percent annual  escalation
    to mi'd-point of construction.
2.  TVA grant of $1.2 million assumed to be available.

3.  Interest earned on construction funds prior to dis-
    bursement and on contingency reserve funds exceeds
    interest payments to bondholders during construction
    and startup phases.   This situation, which is atypical
    of most resource recovery projects being financed today,
    occurs because of the availability of the TVA grant
    monies.

4.  Bond requirements predicated upon State of Tennessee
    Resource and Energy Facility Loan Program financing;
    15-year bond issue at 9-percent interest per year.

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                           TABLE B-5
              PROJECTED 1983 AND 1988 ECONOMICS FOR
                         72-TPD MCU SYSTEM
                  (62-TPD5 AVERAGE THROUGHPUT)
ANNUAL SOLID WASTE THROUGHPUT (tons)                      15,600
ANNUAL ENERGY PRODUCTION (Ibs of steam)               71,698,000
                                          1ST YEAR      6TH YEAR
OPERATION COST ELEMENTS                  (mid-1983)    (mid-1988)
     Labor                               $244,000      $358,500
     Maintenance and Replacements         176,000       259,000
     Utilities                             39,000        57,000
     Residual Disposal*                      NA            NA
     Taxes                                   NA            NA
     Insurance                             65,000        96,000
     Operator Profit                       39,000        57.000
TOTAL OPERATING COSTS                    $563,000      $827,500

ANNUAL DEBT SERVICE EXPENSES             $300,000      $300,000

ENERGY REVENUES                         ($474,000)    ($764,000)
INTEREST INCOME                          ($32,000)     ($32,000)
NET DISPOSAL COSTS                       $357,000      $331,000

NET DISPOSAL COSTS (per ton)              $22.88        $21.22
   The cost of residual  disposal  has  been reflected in  the projected
   cost of landfill  disposal.

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                             TABLE B-6
                  ESTIMATED LABOR REQUIREMENTS FOR
                         100-TPD MCU SYSTEM
  Position
Plant Manager
Scale Operator/Clerk
Operators
Shift Managers
Ash Truck Driver
Maintenance Mechanic
Electrician**

TOTAL EMPLOYEES

DIRECT LABOR EXPENSES

FRINGE BENEFITS (@ 30%)

TOTAL LABOR EXPENSES:
Number of
Employees
    1
    1
    3
    4
    1
    1
      1/2
   11  1/2
Employee
Salary*
$25,000
 13,500
 16,000
 13,500
 13,500
 19,000
 15,000
Subtotal
$ 25,000
  13,500
  48,000
  54,000
  13,500
  19,000
  15,000
                                      $188,000

                                      .  56,000

                                      $244,000
*   1983 dollars.
**  Contract employee.

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