It isn’t every day a major utility spins off a small, agile startup entity. But that’s what DC Water did about two years ago.

DC Water is the utility that distributes drinking water and collects and treats wastewater for more than 672,000 residents of Washington, D.C., and provides wastewater treatment for 1.6 million people in neighboring counties.

That small and agile startup is Blue Drop, a nonprofit entity that shares expertise and best practices from DC Water with other water and wastewater utilities, markets biosolids products, and aims to elevate the stature of water agencies and the water professions.

Alan Heymann is president of Blue Drop and chief marketing officer with DC Water. He sees Blue Drop as working for the benefit of both DC Water ratepayers and utilities around the country that can benefit from DC Water’s wisdom built on real-world experiences. He talked about Blue Drop, its mission and its activities in an interview with Treatment Plant Operator.

TPO: What is the history behind Blue Drop?

Heymann: Blue Drop was incorporated November 2016. The lead-up to that took about a year. We asked: Do we want it to be a department of DC Water? A separate organization? If separate, for profit or nonprofit? What should the governance look like? And what should be the relationship between DC Water and the new entity? It’s fairly unusual for a large and bureaucratic organization to launch a small and nimble startup, but that’s what we did. We got Blue Drop off the ground pretty quickly.

TPO: What is the overall mission of Blue Drop?

Heymann: We have a dual mission. The first part is to provide meaningful relief to DC Water ratepayers, both retail and wholesale. We do that in two basic ways: by generating revenue and by saving money, largely from the avoided cost of land application of biosolids. The second part of the mission is to elevate the status of the water sector by sharing what DC Water has built, or learned, or become adept at.

TPO: What areas of DC Water expertise is Blue Drop sharing with other utilities?

Heymann: Initially we have focused primarily on stakeholder engagement. We also do work in customer service and a little bit in change management. This summer we plan to branch out into executive coaching.

TPO: Why do you consider it important to emphasize stakeholder engagement?

Heymann: Our basic premise is that if a utility has a poor reputation among its customers or is not known by its customers, that utility is poorly equipped to ask things of its customers that will represent an increasing burden in years to come. People who run utilities today are very aware of the difference stakeholder engagement makes.

TPO: What specifically are the coming burdens you speak of?

Heymann: Every utility faces growing cost of operations, whether for aging infrastructure that needs to be repaired or replaced or for further environmental mandates coming down from the federal or state level. These things are becoming more expensive, and the federal share of investment in water and wastewater in the United States is at a historic low. As a utility, where do you turn? You turn to your ratepayers. And if your ratepayers don’t know you, that is a big problem.

TPO: How optimistic are you about utilities’ capacity to engage with their stakeholders?

Heymann: The good news is that making the argument I just made is not as difficult as it used to be, and I think utility leaders get this. They’re asking more of their customers not only in the rates they pay, but also in that construction is hard. It creates service disruptions. It creates noise, dust and traffic issues. I tend to look at this as a metaphor: a reservoir of goodwill that you need to build up with your stakeholders before you need it. Anytime you ask more of someone in a relationship, especially with the stakeholders of a utility, you tap into that reservoir of goodwill. You can’t go to customers with a rate increase before they know why that matters — before they understand why what you’re asking is important to them.

TPO: What approach does Blue Drop take toward sharing expertise with utilities?

Heymann: It’s peer-to-peer work, at lower cost than you would typically find in the private sector. That’s because we’re public sector employees and because we’re a small and pretty lean crew. We don’t have the staff capability to put somebody on site for six months at a time. We go in; we do workshops; we visit for a couple of days. We interview, we assess, and then all the reporting and recommendations we do on the consulting side are done from our offices here in D.C. That also keeps the cost down.

TPO: What do you offer in terms of deliverables to Blue Drop’s utility clients?

Heymann: We take the lessons we’ve learned on our own journey to other utilities, especially those that are smaller and don’t have large staffs and budgets. We say: We’ve got diagrams, communications plans, and playbooks you can use. Once we assess who your stakeholders are, how you need to reach them, and the staffing and resources you have at your disposal, we do a gap analysis. We recommend a set of best practices and leave you with a toolkit to use with your own team on your own time. We do this without creating the sort of consultant dependency where we have to be there at every step.

TPO: On the biosolids side, what does the DC Water program look like today?

Heymann: We’ve made some changes in the last few years. We had been doing lime stabilization of Class B biosolids, and we paid a contractor to take that material out to farms for land application. We were generating about 1,200 wet tons per day. Farmers were on a two-year waiting list for the material, but a few things were going on. First, we needed upgrades to the lime stabilization equipment. Second, there were questions about the stability of the Class B biosolids regulations — whether they would become more restrictive. And third, we saw an opportunity for cost reduction through the production of energy from biogas. 

TPO: What did DC Water do in response to these developments?

Heymann: We toured the world looking for technologies for anaerobic digestion, and we settled on the CAMBI technology out of Norway. It combines thermal hydrolysis and anaerobic digestion in a fairly compact footprint.

TPO: What has been the result of adopting this technology?

Heymann: Three significant things have happened. One, we are generating enough energy from biogas to run about a third of our plant. That is a cost we no longer have to bear through buying that power off the grid. Two, we are generating a lot fewer biosolids — about 450 tons a day. That is a reduction in cost from fewer trucks going out the door. And three, we now have Class A Exceptional Quality biosolids coming right off the belt. It gets dewatered a little bit, but there’s nothing else we have to do to get it to Class A. Before, if we wanted Class A, we had to take our Class B material and compost or blend it.

TPO: Where exactly does Blue Drop come in?

Heymann: The product is called Bloom, and it’s trademarked. Blue Drop is the firm engaged in the marketing and sale of this product on behalf of DC Water. We’re focused on marketing a product that has economic value, as opposed to the traditional waste hauling and disposal model that the industry still by and large depends on. We can arrange short-haul truck shipments, and we can invoice customers for a few cubic yards of product, which is not something a big utility is usually equipped to do.

TPO: How is the marketing and sale of Bloom progressing?

Heymann: We’re starting out small. Our first year in business we did about 9,000 tons. We’re on track to do 20,000 tons this year and 40,000 tons next year — increasing proportions of what we’re producing. It’s for different markets. We’re going after the soil blenders, nurseries and landscapers of the world, in addition to sticking with the farmers who have been using our product for quite a while.

TPO: In this capacity, what is the bottom-line benefit Blue Drop delivers to DC Water?

Heymann: The main value we provide is in the cost-savings from not having to land-apply the material we sell. If we sell a ton of Bloom for $7 to $8, on the back end that saves DC Water $45 from not having to pay a contractor to land-apply it. It doesn’t take a lot of imagination to see that down the line we could be talking about millions of dollars in savings.

TPO: What can other clean-water agencies learn from what Blue Drop and DC Water are doing on the biosolids side?

Heymann: Not every utility will generate the tonnage that we do, but the CAMBI process certainly can be applied on a much smaller scale, and it is in Europe. I know a lot of utilities are turning to anaerobic digestion. It’s a large capital outlay, but it produces cost savings in the long haul, as we’ve already found. As a matter of fact, the economics of the CAMBI system were not built on the concept of selling the material. It was simply about reducing the tonnage and producing energy.

TPO: Why do you think clean-water agencies should be looking toward more advanced biosolids processes?

Heymann: The landscape for biosolids in the United States is very fragmented. The regulations are different state by state. There are places where you can’t do certain things. In Massachusetts for example, access to farmland is very limited, and utilities are incinerating their biosolids. There are a number of ways to manage biosolids, but I think the first message is that it is not always necessary to go with the straight-up waste disposal model, which by the way, is very expensive. There are other options available, even though permit compliance and moving the material off the property every day is the No. 1 goal. 

TPO: What are the benefits of going to Class A Exceptional Quality biosolids?

Heymann: There is a great story to tell around that material. When you have Class A Exceptional Quality, it is safe for many uses. It is beneficial. It returns nutrients to the earth. It sequesters carbon. It’s the very definition of locally produced material. We find as we search out new markets for Bloom that customers in the city are interested in having it in bags so they can use it at home. We’re not there yet — we’re doing only bulk sales — but that is something to be aware of. Demand will build up if you start to go down that road.