FEI GVS & DD B IOMETHANE P URCHASE A GREEMENT E XHIBIT B-5 - - PowerPoint PPT Presentation

B-5

FEI ‐ GVS & DD BIOMETHANE PURCHASE AGREEMENT EXHIBIT

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GVS&DD Biomethane Agreement Streamlined Review Process

September 25, 2013

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Contents

Regulatory Background

• Regulatory History
• Approvals Sought

Project Description

• Project Overview
• Interconnection Facilities and Capital Costs
• Agreement Compliant with Biomethane Program

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PART 1: Regulatory History and Approvals Sought

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Relevant Regulatory History

2012 2013 Q2 Q3 Q4 Q1 Q2 Q3 Q4

March 2013: Order G-45-13 Biomethane Pilot Cap Increased December 2012: AES Report December 2012 Filed PIR & 2012 Biomethane Application February 2013 Order G-18-13 CPCN required for GVS&DD August 2013: FEI Applies for Acceptance of GVS&DD Agreement May 2013 Decision G-70-13 3 Biomethane Projects Approved August 2013 BCUC Order G-126-13 Exempting Upgrading from CPCN

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Approvals 2010 Biomethane Decision Order G-194-10

• Approval of Biomethane Supply Agreement between FEI and

GVS&DD pursuant to Section 71 of the UCA

• Capital Expenditures related to Interconnection Equipment for the

Project pursuant to Section 44.2 of the UCA

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Project Description

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Purchase complies with RNG Program

GVS&DD responsible for upgrading raw biogas FEI purchases Biomethane

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GVS&DD Required Interconnect

Location: 13500 Gilbert Rd, Delta, BC Connecting Pipe: 300 m of 114mm PE Pipe FEI Station: Gas monitoring, Pressure, odorizing, flow measure, safety, control Total Cost: $0.739M

New FEI Station

WWTP Tie-in Location Interconnect Piping Existing DP main

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Key Elements of Station

• Inlet Valve
• Gas Monitoring

[Gas Chromatograph, H2S Monitor, O2 Monitor]

• Pressure Regulation
• Odorizing
• Flow Measurement
• Communication

Modular and moveable (skid-mounted) Designed to operate automatically

• Shut off if gas does not meet specification

Interconnecting Pipe

• Matches FEI standard

FEI will use standard Interconnection

Salmon Arm Fraser Valley Biogas

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Capital Costs of Interconnect

• Piping costs are estimates with contingencies included (site visit done)
• Station costs include contingencies
• FEI considers this a conservative estimate at +5% / -20%

Item

Description Distribution Pressure, PE Pipe, residential area, piping on GVS&DD Property Station Capital Cost Estimate $639,000 Pipe Capital Cost Estimate $100,000 Connecting Pipe $300/m

• Est. Cost per GJ-station and Pipe

(based on expected flow, 20 year) $0.92/GJ

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Contract Highlights

Item Amount Comment

Volume (Max) 40,000 GJ/Yr Maximum Biomethane Volume Excess Gas up to 60,000 GJ/Yr Maximum Volume purchased @ Sumas Monthly Index Rate Total Maximum Injected 100,000 GJ/Yr Estimated FEI system capacity Contract Term 10 Years Injection Date Q4 2015 Approval + 18 months Long lead item is upgrader FEI Capital $0.739M Capital Cost of Interconnect Price $13.40/GJ Starting Price $10.68/GJ Minimum Biomethane Price Price inflation 1.5% annual Price capped at current BCUC approved maximum of $15.28

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Purchase of Excess Gas

• All Biomethane produced up to 40,000 GJ per calendar year

purchased at Biomethane Rate

• Remaining Gas Purchased at Sumas Monthly Index
• Not part of biomethane supply pool
• GVS&DD retains any GHG benefits on excess gas
• New supply point on FEI system
• Will be tracked separately
• FEI purchases Max 60,000 GJ per year excess gas
• FEI purchase a total of ~0.275 TJ/day*
• No material impact to MCRA (~150 TJ/day)

* 100,000 GJ / 365 days – includes total amount of gas purchased (biomethane + excess gas)

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Approved Pilot Program Criteria

• All contracts are at least 10 years in Length
• FEI has retained control over injection location
• The selected upgrader is sufficiently proven
• FEI reserves the right to refuse gas
• The partner is a municipality, regional district, or other public

authority, or is a private party with a track record in dealings with FEI or that posts security to reduce the risk of stranding

• All the contracts are below the approved Maximum of $15.28*
• Within approved annual maximum purchase of biomethane

(Supply cap)

* Supercedes criteria that the projected supply meets the proposed economic test that the maximum

price for delivered biomethane recalculated from time to time based on the updates to the BC Hydro RIB Tier 2 rate

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Projects included in Revised Supply Cap

• Commission Orders G-29-13 and G-45-13 increased supply cap

to 530,000 GJ annually from 250,000 GJ annually

• GVS&DD project specifically referenced in Commission Orders

Project Name Contract Maximum (GJ/Year) Fraser Valley Biogas 91,250 Salmon Arm Landfill 40,000 Kelowna Landfill 118,000 Earth Renu 100,000 GVS&DD 40,000 Dicklands 70,000 Seabreeze 70,000 Total 529,250

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Project is Compliant with FEI Criteria

Criteria Contract Contains Clause that Meets Criteria Comments Contract Duration at least 10 Years YES Retained final control over injection location YES FEI owns interconnect Upgrader Proven YES GVS&DD will impose criteria in its procurement process to select an upgrader that is sufficiently proven Right to Refuse Gas YES Based on quality and volume The partner is a municipality, regional district or other public authority, or is a private party with a track record in dealings with FEI or that posts security to reduce the risk of stranding YES The GVS&DD forms part of Metro Vancouver and is a government

• wned and operated utility, funded

by taxpayers. No security required. Price below $15.28 YES Limits price to the approved Max Below Supply Cap YES

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Conclusion

• The GVS&DD project is part of the Biomethane Pilot Program
• FEI has negotiated the GVS&DD Agreement to comply with the

approved Biomethane Pilot Program criteria.

• The Interconnection costs are necessary for the GVS&DD

project.

• FEI believes that the agreement and interconnection facilities

are in the public interest.