The city of Auburn will likely still hire a Poughkeepsie-based firm to construct a power generator run by methane gas from the landfill.

But if both parties agree on an amended proposal for the project, the city's plan for a digester will be delayed for a while.

The Auburn Public Power Authority discussed on Thursday a tentative agreement between the city and Central Hudson Energy Group subsidiary C-H Auburn under which the firm would still build and initially operate the landfill power project.

But if accepted, the proposal will not include construction of an anaerobic digester at the wastewater management facility, as originally planned.

Elevated costs of the project had a lot to do with the change, said Public Power Authority Chair John Montone. With economic issues facing the state, materials and equipment are becoming more expensive, he said.

“We're going to get this part of the operation up and running first,” Montone said, referring to the landfill gas generator.

Auburn City Council approved the original contract with C-H Auburn last year. The contract included both projects, though city officials have voiced concerns about delays in recent months.

Under the new agreement, C-H Auburn would run the 2-megawatt generator powered by landfill gas for the first 15 years. The city would purchase the power for approximately 6 cents a kilowatt/hour, and the new agreement includes a rate cap of approximately 8 cents.

About half the energy produced will supply the city wastewater treatment plant with energy. The power authority will be able to use the rest of the energy for whatever it wishes.

Montone said the rest of the energy produced by the plant could be used to give some local customers discounted rates, encourage economic development or purchase green and carbon credits.

Montone also said that, while the digester project is not in the new agreement, it will still be a priority for the city.

“That is definitely part of the plan,” he said. “We just put it back a bit.”

One of the other issues connected to the energy proposals is a cap the city currently has on public utility projects. City councilors voted to remove the $2.5 million cap, but such a measure needs a public referendum.

Montone said the power authority will seek a referendum in an upcoming election, as future green energy projects could be affected if the bond cap remains.

However, the landfill project will be able to continue as planned, he said.

If all goes as expected, the plant should be completed by the end of June, Montone said.

“We are confident, at this point,” Montone said.

Staff writer Christopher Caskey can be reached at 253-5311 ext. 282 or christopher.caskey@lee.net