Oregon Town Strives for Sustainability

City of Gresham Uses Partnership for Asset Management, Energy Efficiency
James W. Rush — Apr 01, 2009

ustainability has become a buzzword in recent years, and for good reason. It has become apparent that the old approach to water and energy provision would not be sufficient to meet the needs of tomorrow. A growing population and dwindling supplies have forced the need for change, especially when you consider the fact that the U.S. population is expected to double over the next 50 years to more than 600 million people, according to the U.S. Census.

Cities across the country are looking for ways to increase energy and water efficiency, as well as adopt improved management techniques to get the best value from infrastructure assets. The City of Gresham, Ore., recently implemented a public-private partnership for management of its wastewater treatment, which included significant strides in achieving sustainability.

In 2005, Gresham and Veolia Water reached an agreement on a seven-year, $21 million contract under which Veolia manages the operation and maintenance of the City’s wastewater treatment plant, a beneficial use biosolids management program, industrial pretreatment program analyses, cogeneration operation, laboratory services and nine lift stations.

Two key areas of the contract were the inclusion of an asset management plan in the proposal, and a cogeneration facility to reduce energy costs association with wastewater treatment. The arrangement has begun to realize benefits in both areas. In fact, the City and Veolia recently received the 2008 Public-Private Partnership Award from the National Council for Public-Private Partnerships.

“The City of Gresham and Veolia Water have and continue to work closely together to implement a wastewater program that is improving the local environment while protecting the city’s valuable assets,” said Dave Rouse, Gresham’s Director of Environmental Services. “We built this partnership with the interests – both today and for the foreseeable future – of our community in mind. We are pleased with the remarkable accomplishments we have made in our first several years.”

Asset Management

Asset management involves getting the longest life-cycle at the least cost, while maintaining desired service levels. One of the attractions to Veolia’s partnership proposal was the implementation of an asset management plan that would help reduce costs associated with infrastructure repair.

“Like a lot of communities, Gresham was looking at asset management as a way to manage its wastewater system in the most cost-effective manner,” said Paul Proctor, project manager for Veolia Water North America. “You have to perform the right level of maintenance to get the most out of the dollars that you have.”

Proctor said the first step Veolia took was to develop an asset directory and hierarchy. “This is a key component; it’s like an address book,” Proctor said. “The process involves identifying what assets you have. In the case of Gresham, there were about 450 assets listed, but through the discovery process that went up to about 900. Once you have identified your assets, you need to evaluate the condition, and that’s an ongoing process.”

The other key factor of the asset management program is a criticality review. Identifying the assets that are most important helps create a roadmap for maintenance. “It’s important to understand the criticality of the assets,” Proctor said. “We need to understand what the effect of failure is. What is the impact and probability of failure? Those assets that have a higher probability of failure or will have a greater impact are the ones we need to be paying attention to. By maintaining the critical assets, we are able to reduce the risk of environmental impacts and safety issues.”

Proctor said that implementing a successful asset management plan requires establishing a comfort level among staff. “It’s a cultural change in how we perform maintenance. In the past, there might have been equipment that was serviced once a month, but we may find out that it is not a critical asset. That allows us to reduce our attention there and refocus it to something that is more essential. It’s a strategic approach to getting the most of the existing infrastructure.”

In one case, Proctor said, the project team identified a critical power transformer that was never evaluated or maintained. “If it failed we would have run the risk of environmental non-compliance,” he said. “So, we set up a preventative maintenance approach and developed a backup plan in the event of failure.”

“Veolia has developed an approach to determine the life ranges of the assets,” said Paul Warr-King, Gresham city council member. “By understanding the life-cycle, we are better able to plan for maintenance and long-term capital improvements.”

The asset management program is anticipated to reduce the capital maintenance and replacement costs of the city’s assets by 15 to 25 percent over the term of the agreement, saving the city several million dollars that can be used for other municipal priorities.


The wastewater treatment process lends itself to energy production because of the methane gases that are created as a result of the treatment process. At the Gresham Wastewater Treatment Plant, Veolia oversaw the installation of a new cogeneration system that now supplies more than half of the plant’s power. The new system replaced an older 250 kW system that had become inefficient.

The plant uses a new Caterpillar lean-burn engine and 395kW synchronous generator. Nicknamed the “Co-Gen” for its dual ability, the engine “generates” the methane gas produced by organic waste at the plant into both electrical power and heat used at the facility.

Online since November 2005, the Co-Gen is converting methane gas into 55 percent of the treatment plant’s power needs and reducing the City’s annual electricity costs by $208,000, an average of $17,000 savings a month. The project cost is $1.1 million – a figure City engineers estimate will take just five years to pay for itself with the cost savings.

Another significant factor in the project’s success is an $82,000 cash incentive from EnergyTrust of Oregon Inc. to offset a portion of the project’s startup cost. Additional savings of $288,000 come from the state’s Business Energy Tax Credit Pass-Through Option offered through the Oregon Department of Energy.

“Gresham will be reducing energy costs by burning a fuel they already have and that otherwise would have been wasted,” said Adam Serchuk, senior program manager for biopower at Energy Trust.

“With the cogeneration system online we are now producing much of our energy needs on site,” Warr-King said. “In fact, we are studying the possibility of adding solar or wind energy production facilities to close the remaining gap.”

Public-Private Partnerships

Partnerships have shown in some cases to lead to lower costs and increased performance. A key to entering into a successful partnership requires research on behalf of the municipality to make sure the it is getting what it needs in terms of a contract and a partner.

“You need to get as much information as you can before you request proposals,” Warr-King said. “You need to use consultants and engineers who are familiar with the process to serve as advisors.”

The city’s treatment plant serves 108,000 customers in the city and neighboring areas and treats an average of 13 million gallons of flow per day. Because Gresham has continued to grow, officials are looking to expand the plant to handle additional capacity.

Warr-King said that Gresham has benefited from the partnership. “Essentially what you’re doing when you enter into a partnership is you’re buying a group of management experts,” he said. “In our case, the partner was familiar with cogeneration and asset management, which were areas that we wanted to expand in.”

James W. Rush is editor of UIM.

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