ubc ndes financial due diligence report -ndes.pdf · – incremental costs confirmed by independent...
TRANSCRIPT
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B-7
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UBC Neighbourhood District Energy System
Streamlined Review Process
October 30, 2014
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Agenda
• Team Introduction
• UBC– Project Purpose
– TRIUMF
– NDES Neighbourhoods
– UBC’s Commitment to Sustainability
– Project Development Timeline
• Corix– Project Plan Overview and Objectives
– GHG Emissions
– Overall Project Plan
– Phase 1
– Unique Features
– Rates
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Team
• Corix – Michelle McLarty – Director, Business Development
– Ian Wigington – Director, Regulatory and Government
– George Dolmat – Project Manager
– Ann Tuck – Senior Legal Counsel
– D’Arcy H. Radelet – Financial Advisor
– Charlene Rowan – Project Co-ordinator
– David Bursey – Partner, Bennett Jones LLP
– Mike Homenuke – KWL, Infrastructure Planning Engineer
UBC– John Metras – Managing Director, Infrastructure Development
– Orion Henderson – Director, Energy Planning and Innovation
– Michal Jaworski – Legal Counsel, UBC
Slide 4
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UBC Neighbourhood District Energy System
Presentation to BC Utilities Commission
October 30, 2014
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Project Overview• The UBC Neighbourhood District Energy System (NDES) is intended to
provide cost effective, low carbon energy for UBC residential development areas.
• Key infrastructure system to help achieve aggressive community GHG reduction targets, through use of waste heat from TRIUMF.
• Neighbourhoods served to include Wesbrook Place, Stadium, East Campus, Acadia and potentially Musqueam Block F.
• Option for UBC Academic District Energy System (ADES) to purchase low carbon energy from NDES.
• NDES to be designed, built, financed and operated by Corix Utilities under authorization of BC Utilities Commission.
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TRIUMF Canada’s National Laboratory for Particle and Nuclear Physics
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• Canada’s leader in probing the structure and origins of matter and in advancing isotopes for science and medicine.
• TRIUMF is owned & operated by a consortium of 17 Canadian universities and was founded in Vancouver 45 years ago.
• TRIUMF is committed to reducing the carbon footprint of research itself, not just the typical admin/residential activities associated with a large "industrial" organization.
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NDES Neighbourhoods
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UBC Sustainability
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Project Development Timeline
• NDES Pre-Feasibility Study completed in 2011
• Mandatory DE ready policy for all Neighbourhood buildings 2011
• NDES Full feasibility study completed in 2013
• Corix selected as UBCs District Energy partner in 2013
• Corix completed technical and financial Due Diligence in 2014
• UBC and Corix finalized a term sheet 2014
• UBC Board of Governors approved execution of Term Sheet, completion of definitive agreements and application by Corix to BCUC
Next Steps:
• Application to BCUC for Certificate of Public Convenience and Necessity
• 2015 first DE connected building
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Unique Features• Carbon Emission Rider during temporary Natural Gas period
– Equity between early and later customers
– Reflects communities commitment to low carbon energy
– Smoothing of rates over project lifetime
– Corix has appropriate incentive to implement low carbon energy source
• Connection Credit
– Hydronic systems in low-rise wood frame buildings have incremental capital cost
– Incremental costs confirmed by independent Quantity Surveyor
– Credit designed to keep developers whole while market transforms
– Credit has small rate impact but overall rates will be better than not having connection of these loads at all (economies of scale)
• Academic System Interconnection
– ADES can access renewable energy sources in order to achieve GHG targets
– ADES can connect Academic buildings on periphery of campus in order to supply them with low carbon energy
– ADES provides near-term load to bridge connection to Acadia and also ongoing summer load to lower the costs of TRIUMF heat recovery for all users
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The University of British Columbia
Neighbourhood District Energy System
Project Overview
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Project Plan
• NDES will be implemented in two phases
• Phase 1
– Subject of this application
– Approximately the first 10 years of operation
– Provide service for Wesbrook Place and initial loads in Acadia
East and Block F neighbourhoods
• Phase 2
– Contemplated to occur in 2024
– Implement alternate energy source (TRIUMF)
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GHG Emissions
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Project Plan – Phases 1 and 2
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Project Plan – Phases 1 and 2
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Phase 1
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Phase 1
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Unique Features
• Carbon Emissions Rider
– During Phase 1, Corix proposes to collect $25/tonne for GHG
emissions
– Initial customers contribute to the cost of the future alternate
energy source
• Connection Credit
– Designed to support the hydronic design necessary to ensure
connection of early low-rise buildings in Wesbrook Place
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Indicative Costs
30-year NPV Levelized NDES Cost vs. Competitive Carbon Neutral Benchmark
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Monthly In-suite Heating Bill
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CPCN Approval Request
• CPCN to construct and operate Phase 1 of the NDES
pursuant to section 45 and 46 of the UCA
• Approval under 45 (vii) of the UCA of the IA between
Corix and UBC including endorsement of the proposed
project plan
• Approval under sections 45(i), 56, 60 and 61 of the UCA
of the revenue, rate design and rates as described in the
application
• Approval of the accounting treatment of the following:
– Revenue deficiency deferral account
– Proposed Connection Credit
– Carbon Emission Rider
– Indicative rate design as provided in Section 2.10
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CPCN Approval Request
• Keep financial model confidential to protect Corix’s
business interests
• Approval to capitalize and amortize Corix and UBC’s
project development costs
• Approval to add AFUDC to capital costs and apply the
same combined interest and return on equity cost as
applied to the rate base amount at that particular time