Webster WPCF Biogas to RNG Workshop Rick Kenealy – Webster DPW Paul Adams – Webster Finance Director Bob Wimmer and Roberto Dabbas -- Navitas June 4, 2026
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Digester Gas • Where does it come from
Digester Gas is an Asset
• Produced in Anaerobic Digesters • Conversion of solid material to gas • Primary sludge and waste activated sludge • High Strength Organic Waste – byproducts of food production, commercial kitchens
• What is in it • Energy – 60 to 70% methane (natural gas) • Water vapor • Carbon dioxide - 30 to 40% carbon dioxide
Digester Gas • Where does it go • Combusted in digester boilers (47% of average production)
Digester Gas Use
• Provides heat to digester building • Provides heat to the anaerobic digester tank • Reduces natural gas purchase
• Any excess is combusted in flare (53% of average production) • Required for safety and permit compliance • No financial benefit
•Natural Gas – Distributed by RG&E Renewable Natural Gas (RNG)
• 100% Methane • Fossil Fuel – Underground deposit
•Digester Gas can be upgraded to Renewable Natural Gas
RNG Conversion Remove CO2
Raw Biogas
Remove Water Remove Contaminants Test RNG Quality Add fuel (if needed) ready for use
RNG Equipment
Value of the gas
CI Score
•Carbon Intensity Score
Value of environmental attribute
• Webster – negative 22 • Typical Landfill – positive 30 • Dairy Digester – negative 150 to negative 250
• Voluntary Carbon Reduction Market • Environmental Attributes • Tied to the CI score • More negative the better
Value of the environmental attribute
• Annual Production of RNG – 29,000 MMBTU per year • Equivalent to the annual natural gas use of 300 homes in Webster (1.5% of the households) • Value of environmental attributes $10 to $17 per MMBTU • $290,000 to $493,000 in annual revenue
• Pathway from production to consumption
Injection of RNG
• Option 1 – Connect to RG&E Gas Main on plant access road • Lowest Operating Cost • Cap-ex estimate of $1.2M • Interconnection Facilities Constructed by RG&E • Interconnection Facilities Operated by RG&E • Gas must meet RG&E Quality Specifications • Requires TAP Agreement (Interconnect Agreement)
• Pathway from production to consumption • Option 2 – Construct Tube Truck Filling Station
Injection of RNG
• RNG would be compressed and loaded onto tube trucks • Higher operating costs due to gas compression and transportation • Would require capital investment, less than $1.2M estimated for RG&E interconnect • RNG must meet final user quality specifications • Options for buyer/user of gas (does not need to be RG&E) • Currently under evaluation
• Pathway from production to consumption
Injection of RNG
• Option 3 – Third Party Gas Management • Third Party would take possession of gas after treatment • All contracts, management, investment, liabilities and handling of the gas by third party • Would require an expansion of the gas production capability (minimum volume to be determined) • Would negate the tax credit/federal grant • Currently under evaluation
•Annual Operating Costs
Operating Costs
• Maintenance - $86,000 • Media Replacement - $26,000 • Power - $50,300 • Supplemental Propane $22,00 (Not anticipated) • Total - $184,300 • Net Revenue - $105,700 to $308,700
Capital Costs Budget
•Tax Consulting - $161,500 •Design - $348,000 •RG&E Interconnection $1,200,000 •Equipment and Installation $6,790,000 •Total - $8,499,500
• Inflation Reduction Act • Clean Energy Tax Credit (Section 48)
Federal Grant
• Investment in equipment that produces energy from alternative sources • Biogas projects specifically included in program
• Section 6417 • Allows applicable entities to receive direct payment from Treasury instead of claiming tax credit in form of tax benefit
• One Big Beautiful Bill • Preserves Tax Credits • Extends Production Tax Credit until 2029
• Withum and MSC Consulting • Completed Tax Credit Eligibility Evaluations
Federal Grant
• Project Qualifies for the Credit/Grant • Webster may file for credit upon injection of RNG
• Credit/Grant Eligibility • Includes portions of current project costs • Capital cost of the RNG project • Projected credit of $6.8 to $8.0M
TOWN OF WEBSTER RNG PROJECT PAYBACK ANALYSIS Tax Credit $6,800,000
Tax Credit $8,000,000
Scenario 1 $105,700 Net Revenue
Scenario 2 $308,700 Net Revenue
Scenario 3 $105,700 Net Revenue
Scenario 4 $308,700 Net Revenue
Project Cost
8,500,000
8,500,000
8,500,000
8,500,000
RNG Tax Credit Revenue
(6,800,000)
(6,800,000)
(8,000,000)
(8,000,000)
1,700,000
1,700,000
500,000
500,000
Annual Debt Service Cost
102,000
102,000
30,000
30,000
Revenue Sale Natural Gas
(105,700)
(308,700)
(105,700)
(308,700)
(3,700)
(206,700)
(75,700)
(278,700)
Total Debt Service Cost Over 30 Years Net - Revenue Sale Natural Gas
3,060,000 (105,700)
3,060,000 (308,700)
900,000 (105,700)
900,000 (308,700)
Years
28.9
9.9
8.5
2.9
Net Project Cost
Annual Cost (Revenue) After Debt Service
The preliminary eligible ITC basis is approximately $26,700,000 and the project is favorable under both the lowerbound and upper-bound approaches regarding the IRS 80/20 Rule.
Current Activities
• Developing the final project pricing for equipment and installation • Evaluating options instead of RG&E Interconnection • Requesting environmental attribute pricing proposals (revenue) • Developing Project Guarantee Agreement • Completing Project Scope and Amendments
Next Steps
• Finalize SEQR • Determine RNG Injection Approach • Determine Final Project Price • Conduct Bond Resolution Amendment • Negotiate Final Contract
Key Dates and Critical Decisions
• Finalize SEQR – Must be completed prior to Bond Resolution • Bond Resolution – Must be completed prior to contract approval • RNG Injection Approach – Needed for final site layout and project economics • Ordering equipment – RNG Upgrading Equipment has 56 week lead time from PO
Potential Path Forward
• 7/2/26 - Delivery of Project Price and Agreement • 7/16/26 - Town Board Resolution to Approve Amended Bond Resolution. This will increase the maximum cost of the project but not the amount expected to be borrowed. • 7/16/26 - Town Board Resolution to Authorize the Town Supervisor to Sign the Amended Navitas Contract. • 7/22/26 - Project Start Date • 11/30/27 - Project End Date • 11/15/27 - Flow of Pipeline Quality Natural Gas Begins • 12/15/27 - Town Files for RNG IRS Credit • 4/15/28 - Town Receives Funds from RNG IRS Credit
WPCF RNG
Questions?