No nPo int So urc e Offse ts Optio ns & Po te ntia l - PowerPoint PPT Presentation

No nPo int So urc e Offse ts Optio ns & Po te ntia l __________________ Oc to b e r 14, 2016 E xe c utive Orde r 52 Sta ke ho lde r Co mmitte e Je ff Co rb in Re sto ra tio n Syste ms, L L C Se nio r VP fo r Wa te r Qua lity Ma rke ts a nd Mitig a tio n

My Unde rlying Assumptio n  Po int So urc e Cre dits a re NOT a Pe rma ne nt F ix to Offse t Ne w L o a ds  Allo c a tio ns Will Ne ve r b e Pe rma ne ntly T ra nsfe rre d  Using E xc e ss Pt. So urc e Allo c a tio ns Pro vide s No “Additio na lity”  i.e ., No Wa te r Qua lity Be ne fits  So We MUST F ind a Wa y to Ma ke No nPo int So urc e Offse ts Wo rk  Do ing So Will Also Addre ss Muc h Ne e de d Ag Re duc tio ns  Whic h a re Wo e fully Unde rfunde d

Offse t Optio ns  Bundling Ag Co nse rva tio n Pra c tic e s  L a nd Co nve rsio n  Wa ste -to -E ne rg y

Bundling Ag Co nse rva tio n Pra c tic e s  Pric e Ca n’ t Co mpe te with Che a p Po int So urc e Cre dits  I nc e ntivize ?  Prio ritize a b o ve Po int So urc e Cre dits?  Ne e d Ce rta inty tha t De ma nd will Ma te ria lize  Sta te Buys Cre dits? (Nutrie nt Offse t F und § 10.1-2128.2)  Sto c k up a Surplus fo r E c o no mic De ve lo pme nt E ntic e me nt?  Ne e ds to b e E no ug h o f a Buffe r “Ab o ve Ba se line ”  Re me mb e r…2:1 Offse ts Re q uire d  T he MOST yo u g e t in the Ja me s Ba sin (E a st o f I -95) 4.99 # s/ a c re (T N) 0.19 # s/ a c re (T P) E a rly Co ve r Cro p & 15% N Re duc tio n o n Co rn & Co nt. No -T ill  e .g ., 10,000 po und T N o ffse t wo uld ne e d 4008 Ac re s  Ne e d to De ve lo p Bro ke ra g e s  Priva te Ma rke t c a n do this (e a sily) if issue s a b o ve a re a ddre sse d

L a nd Co nve rsio n  Wo rking F a b ulo usly fo r VA Sto rmwa te r Pro g ra m  Cre dit Pric e s a re Ma rke t-Ba se d with Multiple Co mpe ting Pro vide rs  L a nd I nte nsive fo r L a rg e Offse ts  e .g ., T he MOST yo u g e t in the Ja me s Ba sin (E a st o f I -95) 13.35 # s/ a c re (T N) 2.16 # s/ a c re (T P) e .g ., 10,000 po und T N Pt. So urc e o ffse t wo uld ne e d to c o nve rt 1498 ac r e s!!  Are the Re duc tio ns E ffic ie nc ie s Ove rly-Co nse rva tive ?  Nume ro us (una c c o unte d fo r) Co -Be ne fits – Wildlife , Ca rb o n, L a nd Co nse rva tio n, e tc .  I s it T ime to Re visit/ Re vise / I nc e ntivize ?

Wa ste (Ma nure )-to -E ne rg y  I t’ s time …e no ug h ta lking a b o ut it…  Sta te L a w Alre a dy Allo ws I t (e nc o ura g e s? )…c a lls it o ut spe c ific a lly  Co nside re d a Pt. So urc e in L a w --- o nly a 1:1 Offse t Re q uire me nt  § 62.1-44.19:15 (D) - Ne w o r e xpa nde d fa c ilitie s  Prio ritize d fo r F unding (Nutrie nt Offse t F und § 10.1-2128.2)  Are a s o f Surplus Anima l Ma nure a re We ll-Do c ume nte d  Priva te Ma rke t Willing to I nve st (no sta te / fe d funds)  Co st Co mpe titive with Pt. So urc e Cre dits  I t’ s a T rue “F ix” to Offse t Ne w/ E xpa nde d L o a ds (de a ling with a kno wn pro b le m)  Co -Be ne fits --- Addre sse s Cle a n/ Alt E ne rg y Ne e ds

An On-the -Gro und E xa mple

The GES Animal Waste to Energy Solution Regulatory Friendly The GES System converts animal waste to energy through a • The Code of Virginia has already codified the use of animal- • closed loop zero-emissions process; waste-to-energy conversion as an approved Point Source Nutrient Offset practice, thereby conveying a River Basin This permanent nutrient reducing system is both modular and • wide Service Area at a 1:1 ratio of nutrient reduction scalable, and can be right-sized for virtually any WTE/Nutrient- pounds to nutrient credits. Reduction application; The larger service area and lower credit ratio allow for A 50 Ton per Day animal waste conversion plant is currently • • economies of scale that are difficult if not impossible to under construction in Duplin County, North Carolina and will achieve through Non-Point Source credit generation begin commercial operation in Q1 2017; practices, which in turn allows for credit pricing closer to The GES Build-Own-Operate model puts all of the technology • the General Permit defaults of $4.60/N lb. and $10.10/P lb. risk on the technology provider, so the respective end-users pay The GES credits are not regulatory-derived paper allocations • only for the power, REC, Char, or Nutrient Credits delivered. that can be reduced or eliminated with each 5 yr. permit Duke Energy, Smithfield Foods, and Dominion Resources • cycle, rather they are actual laboratory verified permanent (VEPCO) are participants in the NC project via PPA, REC, Waste nutrient reductions within the watershed that can be Supply, and Char-Offtake Agreements. contractually obligated for virtually any term. The GES credits can be electronically tracked, remotely • GES AWTE Conversion Unit monitored by regulators via smart phone, tablet, laptop, or PC, and easily transferred and assigned, making them ideal for both permit compliance and economic development.

Wa ste (ma nure )-to -E ne rg y E na b ling Co nditio ns  Stre a mline d Ce rtific a tio n/ Appro va l Pro c e ss  Gua ra nte e d So urc e o f Ma nure (lo ng -te rm c o ntra c t)  Gua ra nte e d Purc ha se r o f Cre dits (Sta te via Nutrie nt Offse t F und)  Po we r Purc ha se Ag re e me nt

Optio ns Are L imite d, b ut…  Ca n I nc e ntive s I nc re a se the Via b ility?  T he re is a Willing / E a g e r Priva te Ma rke t  Hig he r Re duc tio n E ffic ie nc ie s?  L o we re d Offse t Ra tio s?  Sta te -Purc ha se o f Cre dits?  Stre a mline the Pro c e ss?

Je ff Co rb in Se nio r VP fo r Wa te r Qua lity Ma rke ts & Mitig a tio n Re sto ra tio n Syste ms, L L C jc o rb in@ re sto ra tio nsyste ms.c o m (804) 389-4226