When California's South Coast Air Quality Management District enacted part of Rule 1110.2 in 2008 covering operation of engines fueled by natural gas or biogas, Inland Empire Utilities Agency faced a challenge.

The agency had been using biogas from its wastewater treatment plant in Ontario, Calif., to run two 1.4 MW engine-generators, providing 30 percent of the plant's electrical needs. The new regulation forced the shutdown of one engine to meet emissions requirements.

IEUA had an energy independence plan to go gridless by 2020, relying heavily on renewable energy. To meet the new air-quality standards while taking full advantage of the plant's biogas, the agency had two choices: retrofit the existing engines or install a fuel cell.

The engines were nearing the end of their useful life, and future air-quality laws could further tighten emissions requirements. After a thorough evaluation, fuel cells became the clear winner.

"Southern California air regulations are continually becoming stricter, so that was a significant driving force in looking at an alternative technology," says Tom Love, general manager. "We felt fuel cells made the most sense because we don't anticipate any future problems long term on meeting stricter air-quality standards."

Regional steward

IEUA serves seven cities in western San Bernardino County and a population of 800,000. The Ontario plant is the largest of four the agency operates. The tertiary plant has a 44 mgd capacity but processes 28 mgd on average. The majority is recycled to irrigate parks, schools and golf courses, and the rest discharges to Prado Park Lake and Cucamonga Creek, and ultimately the Santa Ana River.

When California deregulated its energy market in 2001, IEUA began a renewable energy program with a goal to be fully off grid power by 2020. The agency has added 3.5 MW of solar power and 1 MW of wind power and plans to install more.

"We've set a goal that during the peak energy period of the day (usually noon to 6 p.m.), we will have enough onsite renewable energy generation so we aren't purchasing electricity from the grid," Love says. "We've made significant progress in the last 12 months. In 2011, we were generating 30 percent of our electrical demands from renewable sources at our facilities. Today with the fuel cell online, we generate 60 percent." Biosolids are composted and sold in the community.

The fuel cell, solar panels, wind turbines and diversion of biosolids from landfill, along with recycled water delivery and groundwater recharge, have prevented emissions of more than 5,800 tons of volatile organic compounds and 186,000 metric tons of greenhouse gases. In October 2012, IEUA received the South Coast Air Quality Management District's 2012 Good Environmental Stewardship Award.

IEUA is also evaluating ways to improve process efficiencies such as repairing air leaks in ducting, replacing less efficient aeration panels, using more efficient lighting, and replacing pumps and motors with high-efficiency models.

Purchase agreement

IEUA could not afford to install a fuel cell on its own because it was not eligible for tax credits. After a year of evaluating partners and negotiating rates, IEUA signed a 20-year purchase power agreement (PPA) with renewable energy company Anaergia. Under the agreement, Anaergia owns, operates and maintains the 2.8 MW FuelCell Energy unit, and IEUA purchases the electricity.

The PPA eliminates IEUA's risk of operating the fuel cell. "We were certainly concerned about the risk," Love says. "Fuel cells haven't had a long track record running on digester gas, so the power purchase agreement puts the performance risk on the provider." If the fuel cell should fail, IEUA can terminate the agreement and switch back to grid power. Concerns about the reliability of fuel cells revolved around impurities in biogas. At Ontario, the gas is treated before entering the fuel cell.

The operations team, freed from maintaining the engine-generators, can now focus on the treatment process. "It has freed them up to work on other maintenance in the facility," says Love.

Long-term savings

Fuel cell power now costs half a cent more per kilowatt-hour than grid power, but Love and his team looked at long-term savings. The PPA has a built-in escalator, so IEUA now pays 12.5 cents per kWh, escalating annually at 2.5 percent. Projections show the cost of utility power in California rising about 6 percent annually. IEUA anticipates saving $25 million over the 20-year life of the project because the cost of grid power will increase faster than the cost of fuel cell power.

"We've been telling ratepayers that although it costs us more now, in the long term, we are getting independence from the variability of the cost of energy from the grid," Love says. "In the long run, we anticipate this will save ratepayers money."