It may be the only time you’d want to see cash go up in flames.
The Federal Reserve Bank of Philadelphia is literally burning tons of paper money to power local homes and businesses.
“This program is important because rather than sitting in a landfill, our currency shred is now being recycled and turned into electricity, providing power to residents of the Delaware Valley,” said Jake Lofton, an officer in the Fed’s Cash Services Department.
Every month the Fed shreds an average of 16 tons of currency at its facility in Old City Philadelphia, Lofton said. Its money that’s been worn out and needs to be taken out of circulation.
The life span for different bills varies from about 3 and a half years for $50 bills to 7 and a half years for $20s and 15 years for $100 bills, according to the bank.
The shredded cash is then taken to an energy-from-waste plant in Chester, Pennsylvania, burned and the steam generated from the process produces electricity.
“The shredded currency generates 110,000 kWh of renewable electricity each year — enough to power 115 homes for a month,” Lofton said.
The cash-for-energy burn started in 2011 when the Fed started looking at ways to become more environmentally friendly, Lofton said.
For the 30 years before that change, the destroyed money was placed into landfills.
The Philadelphia Fed isn’t the only Federal Reserve Bank that is recycling old money. Facilities in Los Angeles and San Francisco also burn their shredded cash for electricity and in Phoenix the residue is converted into home insulation, according to the bank.