UPDATE: March 11, 2019: Montgomery County Executive Marc Elrich is still committed to closing the county-owned incinerator in Dickerson, Maryland, but his timeline is now less certain. Previously, Elrich had promised to close the site by 2022 when Covanta's operating contract was up. The extension of that contract to 2026 by his predecessor is one complicating factor.
"I'm gonna phase it out when I can phase it out. But people have to remember that I didn't say I was gonna shut it down until we had a plan for dealing with the waste," he told Bethesda Magazine in a recent interview. "So I'm not shutting it down until we figure out how we're gonna figure out how we're gonna increase the amount of recycling."
- A decision to extend Covanta's contract to operate the Montgomery County Resource Recovery Facility in Dickerson, Maryland was made "days" before County Executive Isiah Leggett left office, as recently reported by Bethesda Magazine. New County Executive Marc Elrich had campaigned on shuttering the county-owned facility by 2022.
- The current contract now runs until April 1, 2026, with the county paying Covanta about $40 million each year, said county public information officer Neil H. Greenberger via email. When asked if terminating the contract early would cost extra money, Greenberger said the county was "reviewing the detailed terms of the agreement."
- A Covanta spokesperson said the company typically does "not disclose terms of client contracts like this on a facility by facility basis," declining to answer specific questions about the deal.
Prior to the election, Montgomery County had already formed a "zero waste" task force in 2018 which, in partnership with the county's Department of Environmental Protection and consulting firm HDR, will develop a new long-term waste management plan. It remains unclear how this contract extension could affect that process.
While this contract news was reported in Covanta's fourth quarter earnings statement on Feb. 14, the recent Bethesda Magazine article caught many by surprise. Published minutes from a Jan. 9 task force meeting don't indicate that anyone involved was aware of the contract extension; Elrich, who called into the meeting, said the latest he'd consider keeping the facility open was 2024. No mention of a contract extension was made during the task force's Feb. 13 meeting.
According to documents cited by Bethesda Magazine, which have also been published by the Sugarloaf Citizens Association, Leggett notified the Northeast Maryland Waste Disposal Authority of his plans to exercise an extension option in the contract on Nov. 16 – a little more than a week after Elrich was elected. The authority signed off on Nov. 20. Such discussions generally occur over a period of many months, indicating that this idea emerged prior to the election.
Covanta has been contracted to operate the facility since it opened in 1995. Due to the facility's age, recent analysis from HDR determined it would need anywhere from $3 million to $14.9 million in capital improvements. Details of how extensive those planned upgrades will be, or how that cost will be split, were expected to be finalized in negotiations scheduled to begin Dec. 3 at the earliest— the day on which Elrich was sworn in. It remains unknown when Elrich was first informed of these new contract details.
Leggett, the former county executive, has asserted that ceasing operations at the incinerator would increase costs for the county, as waste would likely need to be shipped out-of-state. The incinerator currently processes approximately 1,800 tons of waste each day.
However, that rationale from the former county executive doesn't pass muster with all critics. Groups such as Sugarloaf, the Energy Justice Network and the Institute for Local Self-Reliance maintain that recycling programs can be expanded and existing rail infrastructure can transport this material from a transfer station to multiple landfills in neighboring states. The fact that Montgomery County recently finished bond payments for the incinerator is cited as another sign that a pivot might be easier than suggested.
A termination of the contract would be notable for Covanta. In its 2018 annual report, the company listed the Montgomery renewal as one of the year's three key contract announcements. The site is one of the company's 18 service-fee model, client-owned facilities — all but two of which are listed as being in the U.S. In terms of daily tonnage, Montgomery County is Covanta's fifth-largest client-owned operation.
When asked about the incinerator's potential closure during Covanta's Q2 2018 earnings call last summer, CEO Steve Jones appeared unconcerned.
"[If] they go in different direction, they go in different direction," Jones said at the time. "So it won't have a material impact for us."