Volume for Payback (Isn’t So Simple After All)

WGTB logo PNG 112x89 Post 66 in a series. When Green Turns Brown is an examination of a small town’s digester-energy project, in which Whitewater, Wisconsin would import other cities’ waste, claiming that the result would be both profitable and green.

I posted yesterday about remarks from December on the supposed volume for payback of a waste-receiving station with today’s extra post in mind. That’s because like so much else about this digester-energy proposal, nothing that seems simple (easy money, etc.) really is simple, so to speak.

Consider this timeline:

December 2014: In a 12.14.14 meeting, Donohue presents two scenarios for energy production – a large project that former vendor Trane reportedly proposed, and a so called baby-steps proposal that Donohue was proposing. The baby-steps proposal claimed a six-year simple payback.

February 2015: Donohue & Associates produces Technical Memo 4, on the “Digestion Complex and Energy Production.” The 48-page document offers the same six-year payback scenario, on page 14.

December 2015: Wastewater Superintendent Reel makes his statement about a simple payback – an estimate that he says is a conservative one (that is, that payback could optimistically come sooner):

“The simple payback on that [a waste-receiving station at $431,000] conservatively is six years.”

So, Reel is repeating what Donohue claimed on 12.14.14, and repeated in a memo dated February 2015.

Now look ahead about two months from December 2015, on the eve of a March discussion on the project, and here is what one finds.

February 2016: Just a few months later, in a memo dated 2.25.16 (and part of the 3.1.16 Common Council packet), one finds a far longer timeline for payback, amounting to between 8.1 and 13.2 years.

Here’s that document —

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299. When did 6 years stretch to between 8.1 and 13.2 years?

300. If even this small part of the program – by its proponents’ own terms a baby-steps part – carries so great a range of possibilities, and differs so much from claims repeated over a 366 day period, what other claims will prove similarly wrong?

Update, in reply to a reader who wrote with a question: The longer timeline revealed in the 2.25.16 memo assumes no third-party investment recapture, and assumes no revenue sharing with a third-party. So a third-party agreement would push back the supposed revenue recovery dramatically, with only vastly greater amounts in tipping fees, from far greater volume or less desirable sources, changing that delayed recovery timeline.

WHEN GREEN TURNS BROWN: Appearing at and re-posted Mondays @ 10 AM here on FREE WHITEWATER.