The city of Salem plans to replace its old methane-burning power generator and now has a $2.5-million incentive to ensure the new one performs.

City officials announced Thursday it netted potentially $3 million to replace its Willow Lake Cogeneration Facility. The grant, from Portland-based Energy Trust of Oregon, pays $500,000 when the new facility is built and up to $2.5 million if it hits certain benchmarks.

“I will say the energy production goals are very achievable,” said Ben Haney, a city engineer and project manager at Willow Lake Cogeneration Facility. “We’re feeling very confident that we’ll get the total $3 million.”

The Willow Lake Cogeneration Facility is, in essence, an engine that runs on methane gas from wastewater treatment and spins out electricity. It also produces heat that is reused.

But the engine is now 30 years old and, while it worked well in the 1980s, Haney said it doesn’t quite do the job in 2018.

“It’s at the end of its life and undersized for the amount of methane produced,” Haney said.

Buying a new engine and building a better facility will cost roughly $11 million. The city has already earned a separate $3.2 million from two earlier grants, as well.

Utility rates will cover the remaining costs and will also pay the up-front costs until the city hits those benchmarks.

Haney said, as proposed, the generator will produce about 150 percent the electricity that the benchmarks call for. It’s enough electricity to power about 900 homes, but the electricity will be used solely to help power the wastewater facility and offices.

Haney added the city could apply for about $400,000 more grant dollars in the coming weeks.

The city is currently looking for a builder on the project. Haney said the methane conversation system will cost about $9.2 million, but design, permitting and other soft costs could bring the total to an estimated $10.9 million.

Construction is expected to start in January and wrap up early 2020, Haney said.

In the announcement, Mayor Chuck Bennett called it a “very exciting project.”

“It is the kind of effort and ingenuity that demonstrates Salem’s commitment to environmental action,” he said.

Have a tip? Contact reporter Troy Brynelson at 503-575-9930, [email protected] or @TroyWB.

The current engine used at the Willow Lake Cogeneration Facility (courtesy of the city of Salem)