The 12 towns in the southeastern regional trash authority are preparing now for a new 10-year contract starting in January 2021 to take trash to the Lisbon incinerator, ending its nearly 28-year affiliation with the Preston trash incinerator.

Both the New London and Norwich City Councils on Monday unanimously approved changes to their ordinances governing trash disposal to reflect the contract change that will require all the cities’ municipal solid waste to be transported to the Lisbon plant, owned by Wheelabrator Technologies.

In Norwich, no one spoke at a public hearing on the change, and the City Council voted 5-0 in favor of the ordinance change. The New London City Council unanimously approved the change 7-0.

In the new contract with Wheelabrator, there will be no change to the so-called tipping fee of $58 per ton paid by the 12 individual towns in the Southeastern Connecticut Regional Resources Recovery Authority. But in the first year of the new deal, the authority itself will save $15 per ton in the subsidy the authority pays to reduce the costs to the member towns, SCRRRA Executive Director David Aldridge said Monday.

The actual per ton fee to the Covanta plant in Preston now is $84 per ton, with the SCRRRA member towns paying $58 per ton and the authority covering $26 per ton. The new contract with Wheelabrator will start at $69 per ton, with the towns still paying $58, and SCRRRA paying the remaining $11 per ton, Aldridge said Monday. The 10-year Wheelabrator contract calls for price increases per year set to the Consumer Price Index, but with a 3 percent cap, Aldridge said.

SCRRRA led the construction in the late 1980s and early ‘90s of the then-controversial trash-to-energy incinerator on Route 12 in Preston as the effort faced contentious environmental hearings and legal challenges.

The regional authority owned the plant from its opening in February 1992 through February 2017, when those construction bonds were paid off. Plant ownership then was transferred to operator, Covanta, which continued to receive trash from the SCRRRA towns through a short-term contract while the authority put out a request for proposals for long-term trash services.

Aldridge said only Covanta and Wheelabrator responded to the RFP, and the two proposals were “significantly apart.”

During the more than two decades when SCRRRA owned the plant, the authority received revenue sharing for the electricity sold by the operator, first American Ref-Fuel and then Covanta. Those revenues were accumulated into the authority’s reserve account that covers the authority’s operation costs and the subsidies paid to reduce annual trash disposal costs to its members.

Aldridge said there’s no electric revenue sharing in the new contract with Wheelabrator, but it reduces SCRRRA’s costs, allowing the authority to pay the subsidy longer. Aldridge said SCRRRA has “adequate funding” to honor subsidies to member towns through the 10 years of the new contract, which runs through 2030.

The SCRRRA member towns are: East Lyme, Griswold, Groton, Ledyard, Montville, New London, North Stonington, Norwich, Preston, Sprague, Stonington and Waterford.

James Regan, director of communications for Covanta at the New Jersey company's corporate office, said Covanta is "disappointed" it couldn't reach an agreement with SCRRRA, but said it should be able to replace the loss of the 127,054 tons SCRRRA towns sent to the plant in the 2018-19 fiscal year.

"Connecticut has a disposal deficit of about 400,000 tons of garbage going out of state," Regan said.

The Preston plant currently is full, with a capacity of just over 200,000 tons per year.

The trash contract change will not affect a separate five-year contract SCRRRA signed with Willimantic Waste Paper Co., Inc. two months ago. In that contract, SCRRRA pays the $70 per ton tipping fee for member towns. The fee will be adjusted after 30 months based on recycling market conditions at that time, Aldridge said.

“We are committed to recycling, because it is the most environmentally beneficial thing to do,” Aldridge said. “I am confident that the recycling commodity markets will rebound, and the cost will go down.”

c.bessette@theday.com