Approve Landfill Gas Rights & Site License Agreement for Renewable Natural Gas (RNG) with Yolo RNG, LLC for the Landfill Gas Beneficial Use Project ("the Project"); adopt Addendum #3 to the Yolo County Central Landfill Permit Revision Environmental Impact Report (EIR) prepared for the Project (Att. A.) and authorize staff to file a notice of determination pursuant to the California Environmental Quality Act (CEQA); approve the Project and authorize the Chair of the Board to sign the agreement with Yolo RNG, LLC for the construction and operation of the Project at the Yolo County Central Landfill; authorize the transfer of the existing landfill Gas-to-Electricity plant and its tangible assets to Yolo RNG, LLC for the Project; and authorize County Counsel and Director of the Department of Community Services (or their designees) to approve minor amendments to the agreement. No general fund impact) (Fieseler/Juhler) (Est. Staff Presentation: 5 min)

In 1985, the County entered into a commercial gas production agreement (lease) related to the collection of methane produced at the Yolo County Central Landfill (YCCL).  Under the lease, the County granted rights to install, operate, and maintain a landfill gas collection and conveyance system (GCCS), an electrical power conversion system, and a transmission line to connect with the nearest commercial utility lines.  In exchange for the right to collect the methane from the landfill, the company was required to pay royalties to the County on sales of electricity or landfill gas (LFG) to outside customers.

Over time, the County had several operational difficulties with the contracted operator, which led to the circulation of a request for proposals on November 23, 2015, seeking a qualified and experienced contractor to take over operations of the landfill gas-to-energy (LFGTE) facility.  In response to this request, the County received one proposal. After careful review of the proposal, including references and discussions with Ameresco, staff determined that Ameresco was qualified to perform the services required by the agreement. Ameresco assisted with the assessment of the LFGTE facility's condition.  On April 26, 2016, the Board authorized the purchase of the rights to the landfill gas and all associated LFGTE facility assets that were left from the original contracted operator for $900,000. The agreement approving the purchase (Agreement No. 16-56) was subsequently amended in May and November 2016.  The purchase of the gas rights, the LFGTE plant, GCCS, and associated assets included the LFGTE plant, the GCCS piping, LFG collection wells, condensate pumps, other assets related to the energy generation and delivery system, the utility easement agreements, permits, and all entitlements necessary to own and operate the systems. Ameresco took over operation of the LFGTE acility on January 29, 2017, and assisted the County in implementing the recommended safety and operational upgrades to meet current regulations. Ameresco has continued as the contract operator for the LFGTE facility since that time. 

In recent years, the LFGTE plant has continued to deteriorate after 35+ years of overall operation, resulting in over $1M in operational expenses and repairs annually.  The current operations agreement with Ameresco also expires on June 30, 2026, which coincides with the expiration of the County’s Power Purchase Agreement with SMUD.  The Division has spent the last several years evaluating different approaches and project options for the beneficial use of LFG once these contracts expire.

Due to deterioration of the internal combustion engine generator sets used to generate electricity and the high cost of maintaining them, the County determined that continued operation of the energy plant in its present form is not in the best interest of the County. The County has seen a similar pattern of high maintenance costs and plant downtime to perform the required maintenance since the County assumed ownership of the LFGTE plant.  In 2024, the County solicited proposals from qualified engineering consulting and legal consulting firms and entered into agreements with Civil and Environmental Consulting, Inc (CEC) and the law firm of Hawkins Delafield & Wood LLP (Hawkins) to assist the County with a procurement effort for a new LFG and Biogas Beneficial Use Project at YCCL. CEC assisted the County with drafting the RFP, and Hawkins prepared a draft Landfill Gas Rights and Site License Agreement (a.k.a., Gas Rights Agreement or GRA) that was included in the RFP and covered subjects including the long terms lease of the land, the design, permitting, and construction of the new LFG beneficial use project, utility interconnection, safety, environmental compliance, facility operations, and the sale of the LFG and environmental attributes generated by the project to the gas developer. 

An RFP was issued on May 1, 2025 (ATT. C.), and three responsive proposals were received on July 2, 2025. The CEC team conducted a detailed technical evaluation of each proposal based on the requirements listed in the RFP.  The County reviewed the proposals and CEC’s evaluation and selected two proposers for interview. On September 25, the County issued an Intent to Award the contract with Redtail Renewables LLC (Redtail) and began detailed negotiations. Division staff have worked closely with Hawkins, County Counsel, and Redtail on updating the GRA, including refinement of project details and the compensation framework.  

Under the GRA (ATT. B.), the County will transfer the gas rights and the existing LFGTE plant and its tangible assets to Yolo RNG, LLC, effective July 1, 2026, in exchange for the royalties outlined in the GRA. These royalties include a minimum ongoing payment of $500,000 annually to YCCL upon commencement of commercial operation, which will be paid as a monthly site license fee of $41,666.67 and subject to annual CPI adjustments of up to 3% per year. Yolo RNG, LLC will fully finance, permit, construct, and operate a LFG to renewable natural gas (RNG) upgrading facility, which requires specialized design to improve the quality of the raw gas stream by removing impurities, separating non-methane components, and conditioning the gas to produce a product that meets specifications for injection into PG&E’s pipeline. Yolo RNG, LLC will refurbish the existing LFGTE Caterpillar engine generator sets (CAT engines) to run on natural gas. The CAT engines will be used to supply power to the gas upgrading facility as well.  The contract period is set for 20 years, with two possible 5-year extensions upon mutual agreement by the parties.

For the purposes of ensuring environmental compliance and effective landfill operations, the County has elected to retain ownership of the GCCS, the wellfield blower, and the flare. The GRA includes provisions for Redtail to fully finance the capital investment in the GCCS. In addition, there are provisions for additional technology to be constructed to further enhance and establish mutually beneficial projects, such as a new waste heat recovery project that will transfer waste heat from Yolo RNG, LLC's new thermal oxidizer (TOX) unit and send it to the County’s In-Vessel-Digester (IVD) to enhance the digestion of the food waste, thereby increasing production of biogas.  These two additional projects are estimated to cost $6 million and $2 million, respectively. The County, upon mutual consent, will reimburse Yolo RNG, LLC for a portion of the construction costs over a period of 10 years to minimize the impact on rate payers.

The power poles located south of County Road 28H, between the landfill and the PG&E interconnect at the intersection of County Road 28H and County Road 102, will continue to be owned by the County and will support the new facility in a secondary capacity, in the case that Yolo RNG, LLC produces more electricity than needed, or if the facility requires additional electricity for operational needs.

On November 9, 2021, the Board of Supervisors certified the 2021 YCCL Permit Revisions Environmental Impact Report (EIR). Among other things, the EIR envisioned expanded LFG and biogas utilization opportunities. One of the opportunities described in the EIR identified a PG&E line located directly next to the existing LFGTE facility and a SMUD gas line that runs past YCCL along County Road 28H. The EIR notes that LFG and biogas could be cleaned and conditioned to meet the applicable standards for vehicle fuel and pipeline natural gas to be injected into one of the neighboring pipelines. The Yolo RNG project is for this type of LFG and biogas to RNG, which meets the standards for pipeline injection.  The California Environmental Quality Act (CEQA) Guidelines, Section 15164, provides that the Lead Agency “shall prepare an Addendum to a previously certified EIR if some changes or additions are necessary, but none of the conditions described in Section 15162 calling for preparation of a subsequent EIR have occurred.” Per these requirements, the third addendum to the EIR (ATT. A.) clarifies new equipment and operations regarding the use of LFG and biogas at YCCL to produce RNG, which includes switching the use of the CAT engines from running on LFG and biogas to running on natural gas with the intent of producing electricity for the new LFG to RNG facility. The third addendum clarifies and amplifies the information contained in the certified EIR and none of the conditions described in the State CEQA Guidelines Section 15162 calling for the preparation of a subsequent or supplemental EIR have occurred. The analysis performed for the third addendum determined that there are no new significant environmental effects and no substantial increase in the severity of previously identified significant environmental effects associated with the modifications to the project identified in the certified EIR.

Division staff worked with County Counsel, the Procurement Division, the Planning Division, YCPARMIA, Hawkins, CEC, Ameresco, PG&E, SMUD and Redtail Renewables (Yolo RNG, LLC).  Additionally, this item was presented at the March 23, 2026 Committee on Capital Investments (CCI) meeting. 

Bid Posted: May 1, 2025
Proposals Due: July 2, 2025

Evaluation Criteria Included in RFP

Vendor Performance

Excerpts from Redtail References:

Mr. Holsapple and his team were instrumental in supporting the timely construction and commissioning of the project. The team delivered this $30 million+ project on time and on budget.  To conclude, we had a great experience developing our RNG facility with Mr. Holsapple. - Rod Perkins, Area Manager, South Side Landfill Inc., Indianapolis, Indiana

Very satisfied with the work performed by Redtail. I consider Redtail Renewables to be a premier partner for the successful execution of RNG opportunities. Would absolutely recommend this developer to other owners. The Redtail team consists of high integrity individuals with a deep knowledge of the fuel and commercial offtake risks associated with landfill gas to RNG projects. - Jim Grant, MM Management