TAMPA — Every day, the city burns more than 1,000 tons of garbage, converting it to 22 megawatts of electricity per hour at its McKay Bay waste-to-energy plant east of Ybor City.
That's enough energy to power multiple city buildings.
But under state and federal laws that regulate utilities, the city can use only a tiny fraction of the power — enough to run the plant itself.
The rest is sold to Tampa Electric Co. at wholesale prices, or about 3 cents per kilowatt.
The city then pays the retail rate, which is about 10 cents per kilowatt for residential customers, to power its buildings.
"The utility is in business to buy low and sell high. They don't really care about other issues. They're serving their stockholders," said Rich Zambo, an attorney negotiating the city's so-called small purchase power agreement with Tampa Electric.
For at least the past two years, Tampa Electric and city officials have been negotiating a new agreement.
But in September, the state Public Service Commission sent the two sides back to the bargaining table, saying Tampa Electric had offered to pay too much for the city's electricity, and that could result in a rate increase for customers.
Hillsborough County is facing a similar struggle in negotiating a sales price with Tampa Electric.
The county's waste-to-energy plant on Falkenburg Road produces 46 megawatts of electricity per hour. About five megawatts powers the facility, while the rest goes to Tampa Electric.
In 2009, the county received $18 million from the utility for power generated at the plant. The money covers about 20 percent of the county's solid waste department budget.
But Tampa Electric wants to cut the rate it pays nearly in half, according to Covanta, which runs the plant.
If the price drops, that means solid waste fees for residents and businesses will increase, said James Ransom, a spokesman for the county solid waste department.
Tampa Electric spokesman Rick Morera declined to comment.
"We're still in the process of trying to put those agreements together," he said.
To save money, the county last year began selling power generated at the waste-to-energy facility to its sewer plant.
That's allowed under state and federal regulations that permit governments to use power on properties adjacent to the plants that produce the electricity.
The sewer plant pays about 6 cents per kilowatt for the power, less than the retail rates the facility previously paid to Tampa Electric.
Now, the county is using $1.2 million in federal stimulus money to build a transmission line to its water treatment plant so it can self-supply electricity there.
That will save about $250,000 a year, said Randy Klindworth, Hillsborough County's energy manager. "It's a real good payback," he said. "I would love to be buying power from that plant for all our buildings if we could, but we can't."
The transmission line the county is building with stimulus money will be large enough to also reach the adjacent county jail, the Hillsborough animal services building and a county warehouse complex. But to get power to those facilities, the county would have to invest in a transformer and other infrastructure.
The city's options are more limited. The only property it owns adjacent to its McKay Bay facility is a sewer plant. And its contract with Tampa Electric prohibits the city from self-supplying electricity for anything other than the waste-to-energy plant.
"There's cost involved in self-supply," Zambo said. "There's risk and liability costs and there's maintenance costs.
"I'm not saying that it's not a good thing to do. It's fairly complicated. You've got to look at a lot of issues."
Florida has 11 government-owned waste-to-energy plants.
Under state law, electric companies can pay only what's known as "avoided cost" — what it would have cost the utility to create the electricity itself — for power generated at the plants.
It's possible to send power through lines owned by local utilities for a fee, but electric companies typically don't rent their power lines.
"We raised that during negotiations, and Tampa Electric said, 'No,' " said Tampa City Attorney Chip Fletcher.
The city now is considering negotiating with another electric company. "We're looking at all our options," Fletcher said. "Our preference would be to be able to work with Tampa Electric."
Janet Zink can be reached at email@example.com or (813) 226-3401.