Akron’s public steam plant is a success

By Doug Livingston

Akron Beacon Journal

AKRON

Akron’s never really had a reason to celebrate its public steam plant – until now.

The facility opened in 1979, offering a money-maker of a solution by burning trash to make steam, which would be sold and transported in underground pipes to heat businesses and hospitals.

By 1980, the public heating system, which cost $46 million then, or the equivalent of $208 million today — began to sputter. So the city borrowed more money and asked the state for help to redesign the facility.

Then there was the explosion five days before Christmas in 1984 that killed three people and injured seven. A 1994 trash fire closed the plant for several days. Authorities arrested a dozen employees that year for helping trash haulers sidestep plant fees.

With noxious fumes billowing above the Ohio and Erie Canal, the U.S. Environmental Protection Agency threatened the city with $30 million in upgrades. So trash burning ended in 1995 and the plant switched to coal, which it couldn’t quite kick for another decade.

Akron Thermal, a Youngstown company, ran the plant from 1995 until it filed for bankruptcy in 2007. It owed the city, county and other creditors $20 million.

By 2010, the steam plant, which was supposed to be revenue neutral, ran an $8.1 million taxpayer-subsidized annual deficit. Voters blocked Mayor Don Plusquellic from selling it that year.

The voters, tired of the subsidies, changed their minds in 2013 when 84 percent agreed to let Akron Children’s Hospital take the foundering operation off the city’s hands, possibly for free. But the hospital’s private consultants cautioned that it would be cheaper to install boilers or build its own steam plant.

The magnitude of the mismanagement, scandal, tragedy and disappointment that chronicled the plant’s past makes it hard to believe it’s successful today. But it is.

Meanwhile, Youngstown Thermal provides steam and chilled water service for heating purposes to 36 downtown customers, including city government.

Reg Martin, the company’s receiver, asked the city to take over the business Thursday. The request was soundly rejected by city officials, who said they know nothing about running an aging steam plant.

“I don’t want to add another burden to the city of Youngstown,” said Mayor Jamael Tito Brown. “We want to be part of the solution, but taking it over is not going to happen.”

Since 2010, Akron has borrowed $25 million to quietly transform the neglected public asset. The loans, which don’t impact the city’s bond rating or cramp future borrowing limits, are repaid through cost savings as the plant becomes cheaper to run. Energy efficiencies and customers – not taxpayers – service the debt.

Akron Children’s and Cleveland Clinic Akron General, which consume 70 percent of the steam plant’s output, collaborate with the city and Akron Energy Systems, the current operator, to steer the operation.

“That plant provides for us our entire ability to heat our campus,” said Steve Abdenour, senior vice president of operations for Akron General. “We have no redundancy for another [energy] source. It further provides for us the ability to sterilize all our instruments for our operating rooms.”

Each hospital, calling it an act of good corporate citizenship, has signed a 20-year contract to stay on as a customer, with an option to renew for another 20 years. The long-term commitment has made it possible to seek another $25 million, which city council approved Monday, to demolish most of the old steam plant and move water chillers from the old B.F. Goodrich facility across the canal to a new location inside a new building, which will require 20 percent of the space.

“The city is essentially replacing the old steam plant with a brand new plant,” Tim Ziga, associate general counsel for Children’s, said noting that the hospitals are confident of having reliable steam for the next 40 years.

The once perilous operation has registered only one injury since 2010: a worker broke his foot on a safety walk.

Customers, whose steam bills are tied to fuel costs, say rates have stabilized.

The last coal-fired boiler was retired in 2015. All the boilers, which the city bought outright instead of renting to save $720,000 a year, are now powered by cheaper natural gas. The coal boilers, which were converted to handle natural gas, ran at 60 percent efficiency. The units being installed in the new plant boast an 85 percent efficiency rating.

Akron Energy Systems is designing the turnaround, drawing on the experience of workers who’ve spent their lives at the facility. The company hired a plane four years ago to fly over the city at night with an infrared camera, spotting underground steam transmission lines that let heat escape. The leaks have been fixed and the pipes reinsulated. Manhole covers, which filled downtown streets with steam a few years ago, are inspected regularly now.

Most of the cost savings have come from shrinking the service area, which previously stretched from Fussy Cleaners on West Market Street to Summa Hospital and to Merriman Valley. Limiting service to downtown means lower costs to transport steam and chilled water over shorter distances.

The hospitals have been outfitted with a condensate return pipe that brings steam back to the plant to be recycled, saving the city from dumping 30 million gallons of water into the sewer and heating 30 million gallons of water from the spigot.

All these efficiencies, and more, have turned the steam plant into what it always promised to be: a money-maker. Instead of costing taxpayers millions of dollars a year, the system earned taxpayers a few thousand dollars last year. City officials expect that trend to continue.

The new building is up beside the old plant, which will be demolished. Some chillers and boilers have been installed. There’s room for more if former customers such as the University of Akron, which left the system in 2009, decide to hop back on the public utility.

It’s hard for even those who’ve worked at the plant their entire lives to fathom how far the operation has come in five short years. “I still get a lump in my throat,” said Kelly Dodson, an employee of 32 years who now works in sales and marketing.

Akron Public Service Director John Moore likened the new plant to mayors of the early 20th century buying land in Portage County to build a reservoir that feeds the city with drinking water today. “It’s truly a remarkable turnaround from five years ago,” he said.