Terre Haute to cash in on sludge

TERRE HAUTE, Ind (WTHI) – A pair of contracts you probably don’t know about could mean a better outlook for taxpayers in Terre Haute.  The Terre Haute Board of Works and Safety signed the contracts in July, and recently local leaders approached News 10 with concerns about what these contracts could mean for the city.

These contracts concerned some local leaders for a few reasons.  One, they say the contracts were not a part of the original agenda for the Board of Works July 28th meeting, when these contracts were approved and signed  two, a lot of money is involved in these contracts.  Finally, they involve developments that very few people have answers about, except Mayor Duke Bennett.

We sat down with the Mayor to get answers.  “10 On Your Side” asks Mayor Bennett if these are good deals for you, the taxpayer.

Since the implementation of property tax caps, we’ve heard plenty about how these caps have greatly reduced the City of Terre Haute’s budget.  Mayor Bennett says it’s a $9 million reduction overall, and he’s been trying to find ways to help make up all that lost revenue.

“One of the things we looked at was all of our waste streams to see is there some way we can make some money off of this,” said Mayor Bennett.

One of those waste streams is sludge.  This is what’s left at the end of the sewage treatment process. And as you can see, Terre Haute produces a lot of it.  Currently, the city pays $4.5 million to have sludge hauled by truck to Kokomo, Indiana, where it’s either put on farm fields, or dumped.

So now you may be asking, how could anyone find value in sludge?

The first of the two contracts signed by the Board of Works on July 28th is with a company called Powerdyne.  This Orange County, California company is in the business of producing “green energy.”

“As these guys approached us, they were looking for sludge because of a product they wanted to make,” said Mayor Bennett.

Specifically, the mayor says Powerdyne was looking for a place to make renewable fuels, such as renewable diesel fuel.  Mayor Bennett says the deal with Powerdyne took two years to reach.  Powerdyne has agreed to build a renewable energy producing plant in Terre Haute.

Mayor Bennett confirms Powerdyne is considering a handful of properties in Terre Haute for the plant, including the former International Paper property on Prairieton Road.  I confirmed through Pfister Realty that there is a sale pending for this property, however they would not tell us who the buyer is.  And they would only tell us the closing date on this property is “soon.”

Mayor Bennett said the city had to make a significant commitment to land the plant.  The contract between the city and Powerdyne is a 20 year deal.  It obligates the city to give Powerdyne 12 million gallons of sludge per month.  The city will also pay Powerdyne $2.46 million per month, or just under $30 million annually.  Plus, the city will purchase renewable diesel fuel from Powerdye at a fixed price of $2.46 per gallon.

So how is the city making money in this deal?  That’s where the second contract comes into play.

This deal is between the board of works and Sodrel Fuels of Indianapolis.  It’s also a 20 year deal.  Sodrel agrees to purchase fuels from Powerdyne’s Terre Haute facility.  And they go through the city to do so.  Sodrel will pay the city $2.5 million monthly or $30 million annually, securing a price of $2.50 per gallon on renewable fuels purchased.

This means the city makes about $40,000 per month on the deal, or just under a $500,000 per year.

“What a great opportunity to have this operation in Terre Haute, but us to be able to benefit from it by taking something that is waste and turning it into a product,” said Mayor Bennett.

Mayor Bennett says the city will still have to pay to have the sludge hauled to the new Powerdyne facility.  But he also says transportation costs will be cut in half, saving the city at least $2 million.

Also, a new plant means jobs.  How many?  Mayor Bennett is not sure.  But Mayor Bennett sees the plant as some much-needed economic development for the city.

We’ve reached out to Powerdyne, but they’ve not responded.  Mayor Bennett is hopeful the company will be making an official announcement on their development in Terre Haute “soon.”

As “soon” as we know, you’ll know.

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