SMUD to purchase landfill gas from Texas

By Susanne Retka Schill
Landfill gas will be piped from Texas to California to help the Sacramento Municipal Utility District meet its renewable portfolio standard. SMUD announced April 20 it had signed a 15-year contract with Shell Energy North America for 6 billion British thermal units of gas per day. Most of that will be from a landfill near Dallas, supplemented by a variable amount of conventional natural gas. The gas will be used to fuel the SMUD Cosumnes Power Plant near Sacramento, Calif.

"Shell is the intermediary and providing balancing services," explained Barry Brunelle, SMUD supervisor for natural gas operations. "We were concerned about how this variable supply would work with our system." Shell worked out the contracts with both SMUD and the landfill gas developer, and will supplement the landfill gas volumes with a varying rate of conventional natural gas to supply SMUD with a consistent supply. "At the end of the month, Shell will bill us and let us know how much was conventional and how much was renewable," Brunelle said.

SMUD expects the landfill gas to provide about 8 percent of its renewable target in 2010, or 200 to 300 gigawatt-hours of renewable power per year. SMUD will pay Shell approximately $21 million a year for the landfill gas, which works out to approximately $90 per megawatt-hour of electricity. "The cost of this supply is higher than our expected energy prices for nonrenewable energy but lower than the expected cost of renewables," Brunelle said.

One month earlier, on March 19, SMUD announced it had signed a 15-year contract with Gas Recovery Systems LLC, a subsidiary of Fortistar Methane Group, for the purchase of approximately 1.5 megawatts of renewable energy from a plant near Santa Cruz, Calif., generating electricity from landfill gas. The expected output is 12 gigawatt hours per year.

SMUD's goal is to have renewable energy account for 33 percent of its power supply by 2020. Last year, renewable energy accounted for approximately 19 percent of SMUD's power supply.