The operator of a troubled manure digester near Waunakee has tentatively agreed to sell the facility to a California firm.
Clear Horizons, the Milwaukee-based company that has operated the facility since 2010, announced Thursday that it had signed a letter of intent to sell the digester to Clean Fuel Partners of San Francisco.
Sale discussions began this summer after a tumultuous two years that included three spills, a fire and a multitude of alleged violations from state regulators. The two companies plan to finalize the deal as soon as possible.
Clean Fuel has already hired a controller for the Waunakee facility and it plans to hire all the employees currently working there. The company would like to eventually expand within Dane County, Clean Fuel CEO John Haeckel said.
“The first step for us is to get this project back to where everybody would like it to be,” Haeckel said. “But since part of our mission is to capture the methane as well as capture the nutrients, we look forward to working with farms to find other projects within the Yahara Watershed to continue that work.”
Clear Horizons chief operating officer Norm Doll said Clean Fuel — whose sole business is development and operation of anaerobic digesters to manage livestock waste — is better suited to operate the digester and that his company will completely divest from the industry.
“We’re not going to operate digesters anymore,” Doll said. “We believe that (Clean Fuel) and their engineering team, ES Engineering, are much better poised to handle this kind of an operation. Whether the company exists after this is a technical thing, but the company as it is will not be operating digesters.”
Built in 2010 for $12 million, including tax subsidies, the digester generates electricity by burning methane gas from manure piped in from three nearby dairy farms. The facility is designed to remove at least 60 percent of the phosphorus from the manure before it is returned to the farmers and spread on fields. Removal of phosphorus has become a top strategy in improving water quality and reducing algae blooms in the Yahara Watershed’s four lakes.
But the Waunakee digester has been plagued by pipe bursts and spills, leading state and county officials to question the facility’s oversight in recent years.
In November 2013, a pipe burst and 380,000 gallons of manure poured from the digester. The facility had two additional spills in January and March of last year that released a combined 77,000 gallons.
In November, the Wisconsin Department of Natural Resources listed almost 90 alleged air pollution violations at the facility. The company was notified of the violations just weeks after the Department of Justice agreed to hear DNR complaints alleging violations of monitoring requirements, and that the plant failed to remove enough phosphorus from dairy animal waste before it was spread on farm fields.
In February, Dane County officials followed suit by demanding that Clear Horizons present a compliance plan or be considered in violation of both its leases for county-owned components of the facility, which include the land and some equipment.
Clear Horizons responded by installing a spill containment system, automatic shutoff valves and other safety features, and in May, the DNR said it would increase the amount of air pollution allowed at the facility to help it deal with the alleged violations.
The limit set in the Clear Horizons’ original 2010 permit was too low because the company didn’t fully understand the way its generators worked, the DNR said.
The facility also had an explosion and fire in August 2014, but the state didn’t allege any violations related to the incident.
One of the facility’s three 1.25-million-gallon digesters is currently without a roof. Clean Fuel has a new roof on order and plans to install it and have the digester operating again by winter, Haeckel said.