Franklin Township Municipal Sanitary Authority inks deal with driller
One sewage company's waste water is a drilling company's treasure.
A contract between the Franklin Township Municipal Sanitary Authority and a Texas-based drilling company could net the authority as much as $3,500 a day.
The authority has agreed to sell up to 1 million gallons of treated wastewater per day to Select Energy. The company will pay $3.50 per 1,000 gallons.
“It looks like a lot of upside with no downside,” authority board chairman Mark Adamchik said. “It might be a long time until that cash comes in, but we could even discuss fee reductions (for FTMSA customers).”
It's fairly common for an agency to sell treated waste water, said Travis Windle, spokesman for the Marcellus Shale Coalition, a Pittsburgh-based industry group.
“Shale producers purchasing excess water from municipalities has been a financial shot in the arm for a number of local governments who are all working hard to do more with less,” Windle said.
According to a September study conducted by Penn State and West Virginia University, publicly owned water suppliers in Southwestern Pennsylvania have earned between $52,000 and $1.4 million annually by selling water to drillers for fracking.
Obtaining the water – a single Marcellus shale well requires between 2.5 million and 8 million gallons of water – makes up 10 to 20 percent of development costs, the study said.
Select Energy did not return messages seeking comment.
Authority assistant manager Kevin Kaplan said he doesn't expect the company to take the full 1 million gallons each day. He said he conservatively expects the authority to net at least $30,000 each month.
Authority manager Jim Brucker said the water would be transported to “one or two one-million-gallon holding tanks” in Monroeville or Penn Township. A water line will be bored underneath the turnpike, and a pump station will be built to help transport the water.
Kaplan said the profit might not be substantial, but any amount will help.
“Pennies turn into nickels; nickels turn into dimes,” Kaplan said.
Board members said they will deliberate during the next several months on what to do with the money from Select Energy.
“A debt reduction, fee reduction, money for our capital assets, or our asset management plant – there are a lot of options,” board member Jim Hamilton said. “They might grow into that million. This really deserves its own meeting.”
Extra money will be useful for authority officials, who are behind schedule on a sewer line replacement plan that could cost as much as $2.9 million.
Money has been tight at the authority because of bond payments. To make a nearly $1 million payment in June, Brucker nearly drained the fund in which the authority keeps the monthly $3 asset-management fee all customers pay. That money is supposed to be used to replace various equipment and sewer lines on a predetermined schedule.
Brucker said the money will be returned to the fund by December, when the next, smaller, loan payment is due.
Daveen Rae Kurutz is a staff writer for Trib Total Media. She can be reached at 412-871-2365, or email@example.com.