County gives final OK to landfill gas agreement

GOSHEN — County officials have finalized an agreement to prepare and sell methane gas from the landfill.

The Elkhart County Board of Commissioners on Monday approved an agreement with Northern Biogas to prepare and sell methane extracted from the Elkhart County Landfill. The county will receive an 18 percent to 50 percent share of revenue depending on the total value of sales per year.

The agreement could net the county an estimated $42 million over its 20-year term, and as much as $120 million if two five-year extension options are exercised, county attorney Craig Buche told the Elkhart County Council in February. Council approved the agreement ahead of a public hearing and the board’s vote and acceptance of a guarantee from the company.

“This is the culmination of a process that we’ve been working through for some time,” Landfill Manager John Bowers told the board Monday. “We have council approval, I believe we’ve done your public hearing on this, and now all the legal minutia has been put together and we’re ready for signature.”

Morgantown, West Virgina-based Northern Biogas was one of six proposals the county evaluated from energy companies interested in building a conversion plant at the landfill. The plant will turn the byproduct of decomposing organic matter into usable energy in the form of natural gas.

Northern Biogas established an operating company called Elkhart Project LLC for purposes of the agreement. The company will be responsible for every part of the project, from designing the plant and obtaining financing to construction, which is expected to take two years.

The conversion plant is expected to be in operation by the end of 2025. The estimated $25 million construction cost is something Northern Biogas will solely be responsible for under the build-operate-transfer agreement.

As part of the contract extension option, the company would expand the conversion plant in order to capture the greater volume of methane the landfill will produce over time.

“This is a 20-year contract to sell the gas at the landfill. It has a provision in it for two five-year extensions based on capital input by the Northern Biogas company to expand the plant, so it could be as many as 30 years,” Bowers said. “We are paid a royalty monthly for the sale of our gas, and over time that royalty percentage goes up as it’s stipulated in the contract.”

The county will own the conversion system at the end of the agreement, and could either run it independently or find a new operator.