Test Drive Before You Buy: Making Data-driven Life Cycle Cost Decisions

INTRODUCTION The City of Chattanooga (the City) owns and operates the 870-megaliter per day (ML/d) Moccasin Bend Wastewater Treatment Plant (MBWWTP) that discharges treated effluent to the Tennessee River. Over the last 20 years, the City has been making strategic investments in planning level studies and innovative technologies to engage in the circular economy. Recently, site constraints and a limited capital improvements budget drove the City to investigate how thermal hydrolysis (TH) pre-treatment paired with intensified anaerobic digestion could optimize the capacity of existing assets thus avoiding costly anaerobic digestion (AD) expansion work in the future with potential economic paybacks through resource recovery. A previous investigation of TH+AD versus conventional AD indicated a narrow margin in capital and annual operating costs, however conservative planning criteria resulted in a recommendation to forego TH and expand the existing digester complex. Preliminary calculations suggested more aggressive planning criteria for a TH+AD alternative could result in a more favorable 20-year life cycle cost and opportunity for long-term return on investment through resource recovery. However, limited full-scale proof of such aggressive criteria presented unacceptable risk and required application of uncertainty factors that would again render TH+AD economically unfavorable. Therefore, the City elected to make a small ($500,000) investment in a pilot-scale demonstration study to generate site-specific data and a comprehensive life cycle cost evaluation. The objective of this paper is to discuss how the City used the pilot-scale study to de-risk a conceptual level life cycle cost evaluation and avoid approximately $50,000,000 in capital and operational expenditure over a 20-year planning period. METHODS The City completed a TH+AD pilot study to inform cost-estimating efforts associated with implementation of TH+AD at the MBWWTP. The results of this pilot study were used together with analysis of historical operating data, previous planning efforts, and industry experience to conduct a comprehensive, life cycle cost-based business case evaluation (BCE). The primary components of the BCE included flow and load projections, conceptual design of alternatives, pilot-scale testing to empirically verify the potential benefits to anaerobic digestion and sludge dewaterability, detailed capacity analysis of the existing facilities, and calculation of the 20-year life cycle cost of alternatives. The evaluation proposed and compared three alternatives: Alternative 1: Conventional Anaerobic Digestion Alternative 2: Partial-Plant TH and Intensified Anaerobic Digestion Alternative 3: Full-Plant TH and Intensified Anaerobic Digestion Site-specific operating data derived through the pilot evaluation are summarized in Table 1 and were supplemented with additional vendor testing, literature, and industry experience. These data were used to develop conceptual designs for the three alternatives including major equipment size, type, quantity, configuration, and performance. Table 1: Summary of Pilot-Derived Data Cost estimators developed a Class 5 Opinion of Probable Construction Cost (OPCC) based on the conceptual designs and price information provided by equipment vendors. The Class 5 OPCC included construction costs (direct costs and general costs), taxes, bonds, insurance, and 25 percent construction contingency and is summarized in Table 2. Escalation, estimate contingency (2.5 percent), engineering, and administrative costs are not included in the OPCC but are included in the Total Project Cost Estimate (TPCE) used in the value business case evaluation. Table 2: Capital Cost Estimates Annual O&M costs were estimated assuming 2034 annual average flow conditions (Table 3). Electricity costs were based on the number of duty units in operation at 2034 annual average solids loading conditions. Chemical costs included pre-THP dewatering polymer and biosolids dewatering polymer. Operational and maintenance labor costs were based on experience at other THP facilities and the City's hourly wage rates. Biosolids hauling costs were estimated based on the projected wet tons produced annually and vendor quoted costs for handling Class A and B biosolids. Table 3: Annual Operating Cost Estimates Finally, results were incorporated into a qualitative alternatives assessment to incorporate non-monetary considerations associated with the triple bottom line into the decision-making process. The team worked collaboratively with multiple City stakeholders to evaluate and rank each alternative under 11 criteria (Table 4). Table 4: Qualitative Evaluation Matrix RESULTS 20-year life cycle costs were prepared assuming design and construction of all alternatives occur over four years, beginning in 2020. The cumulative annual life cycle cost of each alternative was calculated (Figure 1). The estimated annual expenditure was similar for each alternative, with TH-based alternatives being slightly less due to significant savings in biosolids hauling costs. Alternative 2 was shown to have the lowest life cycle cost. However, concerns with partial-plant TH were identified early in the evaluation including inability to achieve Class A biosolids. As a result, Alternative 2 was eliminated. Alternative 3 had a lower life cycle-cost than Alternative 1 and a more favorable score in the categorical comparison. Therefore, Alternative 3 was selected as the recommended alternative. Figure 1: Cumulative Life Cycle Cost CONCLUSIONS The City's small investment in a pilot-scale demonstration study resulted in meaningful, site-specific data that increased confidence in planning criteria and life cycle cost estimates that were ultimately used to make important capital planning decisions. As a result, the City anticipates approximately $50M in capital and annual operating cost avoidance over the 20-year planning period. Several additional recommendations were proposed based on findings made throughout the evaluation. Recommendations are summarized in chronological order below. 1. Further de-risk planning and budgeting efforts by conducting a solids sampling campaign confirm or revise the blended sludge assumptions made under this evaluation. 2. Review and update flow and load projections and re-evaluate facility build-out capacity. 3. Progress Alternative 3: Full-Plant TH+AD to Preliminary Design (30 percent). Conduct value engineering, a Class 3 cost estimate, and an alternative delivery method evaluation. 4. Evaluate secondary treatment capacity considering current performance, future performance under projected flows and loads, current and future nutrient regulations, and opportunities to retrofit existing infrastructure for sidestream treatment. 5. Design and construct full-plant THP and intensified anaerobic digestion incorporating findings from recommendations 1 through 4. 6. Design and construct sidestream treatment (likely in conjunction with TH project). 7. Evaluate energy management alternatives in a small study after TH and digester system commissioning. 8. Implement selected energy recovery based on results of evaluation and available funding.