City likes its beer and milk: plans upgrade to wastewater plant

With a $1.3 billion food and beverage industry that continues to grow, the City of Petaluma is racing to address a major roadblock that is preventing some beer and dairy businesses from expanding: the inability to process wastewater from food producers.

Earlier this month, the city applied for a $3 million grant from the California Energy Commission to help pay for the $13 million worth of upgrades planned for the Ellis Creek Water Recycling Facility. By 2017, city officials want to retrofit the wastewater treatment plant because it was not initially designed to accept high density waste from industrial producers.

"Food processing is a large part of our future, and this is an extension of that," said Mayor David Glass.

The goal of the city's "Biomass-to-Biofuel Project" is to use anaerobic digestion and state-of-the-art technology to transform the waste from food and beverage production into compressed natural gas, which would fuel city vehicles.

Processing food waste

Lagunitas Brewing Company is one of 11 companies in town that produce what is known as high strength waste, which is thick with nutrients from food production. Currently, most businesses truck their wastewater to the East Bay Municipal Utility District plant in Oakland, because the Petaluma plant cannot handle the volume and strength of the waste.

"That water is very difficult to treat," said Economic Development Manager Ingrid Alverde.

Lagunitas' Chief Financial Officer Leon Sharyon said the brewery ships 40,000 gallons of wastewater per day, filling eight to 10 truckloads. At approximately $5,000 a day, the company is spending roughly $1.7 million annually just to ship wastewater.

With such high costs to the business, Lagunitas decided to build their own water treatment plant. Construction begins in June.

"At $1.7 million a year burned, I couldn't wait for a solution to come from the city," Sharyon said.

While larger breweries such as Lagunitas have the option to process their own waste, smaller operations, like Petaluma Hills Brewing Company, are tasked with separating solids from their wastewater before it enters the city's sewers.

"It's all very regulated," owner JJ Jay said.

Local dairies have also been heavily impacted. Straus Creamery only has its corporate headquarters in Petaluma due to the high cost to join the city's wastewater system.

"They don't process their milk here, but they could," Alverde said.

Last year, Cowgirl Creamery submitted a letter to the city council stating that it was exploring relocation due to the high cost for wastewater processing. Spokesman Eric Patterson said when the creamery's lease is up in three years, they'll be looking for a new location if this issue isn't remedied.

"Wastewater issues and costs will always play a big factor in where we locate," Patterson said on Tuesday.

Cowgirl Creamery splits the cost to truck wastewater to Oakland with local ice cream company Three Twins.

"Together, we are looking at spending about $190,000 this year to haul our wastewater to EBMUD," Patterson said.

Regional jobs and revenue

Retaining these local businesses and attracting new companies are of vital importance to Petaluma's economy.

Among the city's 11 companies, 1,150 people are directly employed throughout Sonoma County, with wages ranging from $11 to $51 per hour. The industry supports another 3,670 jobs in the county through business to business purchasing, local spending and demands for public services.

Together, the city's food and beverage industry generates $99.4 million in state and local taxes annually, which could expand to include an additional $20 million in local revenue if the companies were able to expand.

Alverde said if the wastewater plant upgrades were in place to support expansion, those 11 businesses could add 307 more jobs.

"If they're able to expand by another 307 jobs, they could have an additional $309 million impact," Alverde said.

Energizing the city

Petaluma Public Works Director Dan St. John explained that the biofuel project would create a "closed-loop" system in the city — from the collection of waste, to the production of compressed natural gas, to the fueling of city buses and waste hauler trucks.

The project addresses climate change and the city's sustainability goals by replacing 170,000 gallons of diesel per year, the current amount used by the city's eight buses and 15 waste hauling trucks, with compressed natural gas.

The upgrades are scheduled in two stages. The first phase will include paying for biofuel production and a compressed natural gas fueling station. The second phase will incorporate an additional anaerobic digester and further facility modifications to allow the processing of high strength wastewater.

The total project budget is $13 million, of which the city will provide $10 million in matching funds with the CEC grant of $3 million. Phase 1 construction is slated to take place during the last half of 2015, and Phase 2 construction is scheduled to run into early 2017.

(Contact Allison Jarrell at allison.jarrell@arguscourier.com)