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Managing Risk in Power Facilities by Outsourcing Wastewater Management

By Clark Harrison, Director Business Development Purestream Services
Clark Harrison, director of business development with Purestream Services, discusses the advantages of a wastewater pay-for-services model for reducing future risks and uncertainties

Today’s power generators face more challenges and uncertainty than ever before. This is especially true with wastewater management and the need to comply with increasingly stringent state and federal regulations. An example is the U.S. EPA’s new Effluent Limitation Guidelines (ELGs) which introduced strict limits on the concentration of toxic metals and other pollutants in wastewater streams that can be discharged from power plants. To meet the ELG’s new target effluent concentrations, numerous steam electric power plants would potentially face capital-intensive upgrades such as new equipment installations, infrastructure modifications, and facility expansions — investments that can place an undue financial burden on many power plants and especially those in deregulated states where returns on capital investment are not assured.

Following the release of the ELGs, the EPA has since postponed certain compliance dates by two years under the new administration in order to evaluate and possibly revise best available technology (BAT) effluent limitations and pretreatment standards, but rules such as the ELGs demonstrate the types of regulations that power plants can expect to encounter in the future.

When large capital expenditures in wastewater treatment systems are required, they can be particularly challenging to justify with older plants, specifically when it requires balancing the plant’s anticipated life expectancy against the potential long-term benefits of deploying that capital. But even if a large wastewater investment in an old plant can be justified, there will most likely be alternative investments — such as those in new generation, power delivery infrastructure, renewables, or electricity demand side management — that offer higher and more predictable returns.

Adopting new wastewater treatment technology can also introduce long-term cost uncertainty regarding ongoing operational expenses and maintenance requirements, and may create further financial burdens if plants need to hire new dedicated personnel or reassign existing staff.

With these challenges in mind, steam electric power plants can consider outsourcing their wastewater management needs through a turnkey wastewater service agreement. Under this type of model, power plant owners circumvent the need to invest significant capital while reducing future regulatory risks and simplifying their long-term wastewater operations. By agreeing to a fixed payment structure, plants also ensure for a more predictable expense schedule, thus avoiding the potential cost variability associated with owning, operating and maintaining a system.

On a much smaller scale, power plant owners have found a way to avoid capital expenditures for installing permanent vacuum systems that are used to clean flue gas ducts, clear away coal and ash spills, or remove dust and other solids that accumulate in plants. Instead, contract agreements have been arranged with service companies that provide vacuum trucks on demand and the peoplepower to operate the equipment, based on plant needs. By outsourcing this requirement, power plant owners avoid spending capital, making long-term investment commitments, hiring people, or taking on additional maintenance burdens. Importantly, the performance risk is passed on to the service provides.

By utilizing a service-based approach for their wastewater management needs, power facilities can outsource the full responsibility to a single service provider. This strategy can be immensely beneficial for handling intermittent waste streams, such as air heater washes or evaporative pond wastewater, as well as continuous wastewater streams like cooling tower blowdown, FGD blowdown, or landfill leachate.

Moreover, by choosing a compliant solution without dedicating capital, power plants will be free to instead deploy that capital toward investments that offer more certainty — such as those on the retail, regulated side of the business that offer guaranteed positive outcomes.

Power plants that use a service provider offering evaporative technology can reduce their risks even further by eliminating wastewater discharges altogether — thus avoiding any possibility of being out of compliance. Purestream Services offers evaporators that follow the pay-for-services model and provides wastewater treatment services and solutions with its innovative technologies in Midland, TX, for the oil and gas industry, primarily treating produced and frac-flowback water for reuse. Purestream has treated over 30 million barrels of water for 16 major operators in the West Texas region as a service provider.

Amy Hansen's picture

Thank Amy for the Post!

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Richard Goodwin, Ph. D., P.E.'s picture
Richard Goodwin, Ph. D., P.E. on May 8, 2018

Cabot Oil & Gas first quarter 2018 Total Operating Expenses of $ 1.58/Mcfe [$1.52/MMBTU]  confirms that based on Shale Gas spot price = $3/MMBTU sufficient margin remains after deducting 10% for expected increase to Operating Expenses from a complete autonomous wastewater Reuse Recycle facility.

Dr. Richard W Goodwin PE Environmental & Energy consulting engineer 5/8/18

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