Abandoned Waste Water Package Treatment Plants
What happens when a package treatment or small trailer park subdivision sewage plant has reached its useful life in about 25 years? The owners don’t want to invest any more money in the aged infrastructure and the trailer park residents certainly cannot afford to take it over/fix it or split the cost to buy a new system at $400,000.
Package plants are pre-manufactured treatment facilities used to treat wastewater in small communities or on individual properties. According to manufacturers, package plants can be designed to treat flows as low as 0.002 MGD or as high as 0.5 MGD, although they more commonly treat flows between 0.01 and 0.25 MGD (Metcalf and Eddy, 1991). The most common types of package plants are extended aeration plants, sequencing batch reactors, oxidation ditches, contact stabilization plants, rotating biological contactors, and physical/chemical processes (Metcalf and Eddy, 1991). There are over 200 privately owned and operator small wastewater treatment plants in the Commonwealth of Kentucky. However, few of these package plants are regulated by the Public Service Commission. There are fewer than 33 of these plants are under PSC control, which represents a total of 3,545 customers statewide (PSC presentation to Local Government, 2016). These package plants exist in every county and are commonly older than their design life and are approaching critical service junctures or are in need of significant infrastructure investments to continue service. Owners of these plants divest themselves of the package treatment plants and leave the users in a situation that is not easily remedied. Wastewater package treatment plants are regulated by the Clean Water Act Section 402 permit process and often cannot meet compliance standards. When continued operation is not sustainable some owners just walk away. Privately owned companies are not eligible to apply for grants or government assistance under the Kentucky Intrastate Authority. Currently there are few methods that can be used by regulators for emergency intervention.
Examples of issues leading to abandonment are:
- Inability to get financing for capital improvements;
- Inadequate cash flow for operations at the current rates;
- Unsustainability of rates necessary for adequate financing or operations
- Inability to remedy regulatory enforcement actions
- Failure to pay wholesale suppliers;
- Loss of wholesale supply unrelated to financial issues.
Abandonment of a package treatment plants can take two forms: Voluntary and Functional (Involuntary.)
- Voluntary Abandonment: The owner operator of the utility seeks to relinquish control and asks the PSC to declare the utility abandoned.
- Functional Abandonment: The Public Service Commission determines the existence of an imminent threat to health or safety of the customers or to the continued viability of the utility service and initiates an abandonment case.
In both types of abandonment, the underlying reason tend to be the same: Financial Non-Viability. Regardless, the statute directs the Kentucky Public Service Commission to declare a utility abandoned if certain conditions occur with respect to the operations or financial viability of the utility.
The Kentucky Public Service Commission’s goal is to provide for the continued operation of the utility. This usually means finding a new owner or operator.
If continued operation of the utility is not possible, the PSC will seek to arrange an orderly closure that gives customers of the utility enough time to make alternative arrangements for the sewer system. This may be done under the supervision of a receiver.
Public Service Commission Process in Abandonment Proceedings:
- The PSC requires sewer utilities to give prior notice of abandonment to a number of entities, including local governments.
- The PSC conducts an investigation and a hearing;
- The utility is placed into possible receivership in Franklin Circuit Court where the ultimate disposition of the utility is determined - (i.e. Returned to owner, possible receiver is appointed, Liquidation or closure.
The Public Service Commission views abandonment as a last resort. Every abandonment case considers what options are available to provide continued service under the current operator.
Kentucky Revised Statutes 278.020 and 278.021 establish an orderly process for the abandonment of a jurisdictional utility. These statutes only apply to utilities that are regulated by the PSC. A small portion of these package treatment plants are under PSC regulation.
A Case Study of Package Plant Abandonment: Cedarbrook PSC Case #2014-00091
The Cedarbrook abandonment case illustrates the critical importance of local government involvement and planning in abandonment cases.
The plant began operations in 1976 with capacity to serve 60 homes. Cedarbrook’s owners made two attempts to sell the package plant in 1997 (application withdrawn) and 2008 (PSC denied the sale.) The abandonment requests were filed by Cedarbrook’s owners in March 2014. Prior to 2014 the Harrison County Fiscal Court formally established the Harrison County Sanitation District to prepare for future sanitation needs of the county. Even though the sanitation district was not fully prepared to begin operations, they made additional preparations and agreed to take over the ailing plant. The abandonment was granted in 2015.
Harrison County Sanitation District was appointed as the receiver on May 1, 2015. A permanent transfer of the facility was granted on June 29, 2016. Long-term community planning and local leadership helped to make this a successful outcome.
During the 2017 Legislative Session House Joint Resolution 56 was passed and signed by the Governor. The resolution directs the Kentucky Division of Water to conduct a study identifying privately owned and operated small wastewater treatment plants in the state. Plants must submit a practical emergency intervention method to respond to plant failures.
The task force is charged to develop potential legislative changes that are necessary to prevent failures or abandonment of these plants and to ensure continuity of service to the plants’ customers. KMUA is a member (Steve Baker, Superintendent, London Utility Commission) of this working group and will keep members updated of their progress.
- Metcalf & Eddy, Inc., 1991. Wastewater Engineering: Treatment, Disposal, and Reuse. 3rd ed. The McGraw-Hill Companies. New York, New York.
- KPSC presentation to Local Government Committee, June 2016.
- EPA Wastewater Technology Fact Sheet: Package Plants, EPA 832-F-00-016, September 2000.
- Goodwin, Peter Director, Kentucky Division of Water, September 2016, Testimony to Legislative Committee.