Saving district energy in Nashville
Harvey W. Gershman, President, Gershman, Brickner & Bratton Inc.
IIn 1974, when Nashville Thermal Transfer Corp. (Thermal) began service in Nashville, Tenn., it represented an
elegant solution for the energy crisis of the mid-1970s. Powered by recovering the energy in municipal solid waste, Thermal
avoided dependence on fossil fuel for generating steam and chilled water. For almost 30 years, downtown Nashville relied
on waste-to-energy (WTE) to heat and cool as many as 40 downtown commercial and governmental buildings, including
those of the Metropolitan Government of Nashville and Davidson County (Metro) and the State of Tennessee.
Struggling to Stay Afloat
When Mayor Bill Purcell took office in 2000, his administration found that the Thermal plant had uncontrolled, escalating
costs; poor reliability; and air permit violations. Instead of being self-sufficient with respect to energy product sales and
municipal solid waste tipping fees, Thermal was demanding an ever-growing amount of taxpayer subsidy to keep financially
afloat. Compounding the reliability and operating cost problems, the pricing of steam and chilled water had been kept below
the market value and cost of production, so that a Metro subsidy of more than $80 million had accumulated since 1976.
An engineering assessment concluded that Thermal’s equipment was aging badly and needed an immediate infusion of
$15 million to keep it operational. Moreover, Thermal’s inability to attract and convert sufficient waste required the purchase of
natural gas to raise steam, defeating the entire rationale for the plant. Morale was low among both management and workers,
and there was little budgetary control or accountability.
Although Thermal’s customer energy prices were among the lowest for district energy systems across the United States,
recent increases had led customers to think that their rates were reasonably close to what their self-heating and -cooling costs
would be if they were not served by district energy. Growing customer resistance to further energy price increases meant that
Metro could not just raise rates for a Thermal- based solution without a concomitant assurance of better service – some-
thing customers were skeptical about ever receiving from Thermal.