Project Green District Energy Feasibility Study - Partners in Project ...

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TRCA Pearson Eco-Business Zone District Energy Feasibility Study 10 April 2012 Appendices Strong support from the Town is a success factor in Markham, e.g. building developers are given points for sustainability by planning to connect to DE, which facilitates their development approvals. Another success factor is that the heart of the service territory is a green field development known as Markham Centre. This has the advantage of having only one land developer, namely the Remington Group. 20.1.6 Windsor The DES in Windsor is a little smaller than the ultimate build-out planned for the other systems reviewed in this subsection. But at 15 MWt of hot water, 6 MWt of steam, 5,660 tons of chilled water, ice storage and 6 MWe of emergency power, it is larger and more complex than the smaller utility DES developed in the last two decades as reviewed in the next subsection. It is of special interest as it is one of the few, if not the only, DES in Canada to have an ownership model that splits the distribution assets from the Energy Centre. District Energy Windsor (DEW, owned by the Windsor Utilities Commission) buys energy wholesale from BPC District Energy Inc., a subsidiary of OMERS. BPC acquired the Energy Centre from the original developers. The experience of Windsor suggests this unusual ownership structure is challenging. It tends to remove the incentive for growth from both sides because each has to deal with the other to effect growth. Hence, if the DES contemplated for the Pearson area was to become dependent on the GTAA for energy, the business relationships should be considered very carefully, including the pricing structure. Lessons could be learned from the Windsor experience. Also, ownership of the DES by the water utility (the Windsor Utilities Commission includes the water utility) is not recommended from an organizational perspective as these utilities operate on completely different business models. The provision of potable water and fire protection is a mandated municipal service with a monopoly and an obligation to serve. But a DES is a service that must compete for customers. A successful DES might enjoy a small monopoly for its own specific area but that is only a by-product of having successfully established reliable service. DE assets appear to be similar to water assets, i.e. buried pipe. But a complete DES includes the Energy Centre which involves very different technology. It may be partly because of special technologies used in Energy Centres, along with their high capital requirements, that there is a temptation to contract out, e.g. through Design Build, Finance Own and Maintain (DBFOM) type contracts. There are willing counter-parties to DBFOM contracts but risk is not really transferred. The wholesale energy purchase agreements have firm payment obligations that are the equivalent of debt obligations. Furthermore, the DE utility is still responsible for reliable service to the end users with less control than if it owned the Energy Centre. In summary, the experience of DEW raised concerns about split ownership of the distribution and energy source and against rolling DE into the water utility. 20.2 Smaller New DE Utility Systems Brief case histories of smaller DES over 1 MWt are included in this subsection in order to present an exhaustive review of all of the utility DES of any significant size that have been developed in Canada over the past two decades. Cornwall, Hamilton and Sudbury serve in the order of 10 MWt, whereas the others in Table 31 are in the range of 1 to 5 MWt. 154
TRCA Pearson Eco-Business Zone District Energy Feasibility Study 10 April 2012 Appendices Some smaller DES developed in remote communities are not included in this review as they were typically based on site specific circumstances, e.g. CHP using existing diesel generators, leading to a predominant role for the electric utility that owned the generators, and they typically supply heat only as and when the diesel generators are running, so the customers have to keep their own boilers in operation. DES Name COD Owners and Operators, where different Dockside Green Energy Strathcona Community Energy System Revelstoke Community Energy Lonsdale Energy Corporation Hamilton Community Energy Sudbury District Energy Corporation Cornwall District Heating (CDH) 2009 Partnership of land developers with energy companies (operated by one of the energy companies, Corix Utilities) 2006 Strathcona County (a specialized municipality in Alberta) 2005 City of Revelstoke Oujé Bougoumou 1993 Cree First Nation Table 30 Ownership of Smaller DES 2004 City of North Vancouver (operated by Terasen Utility Services) 2003 City of Hamilton, through Hamilton Utilities Corporation (a for-profit corporation) 1998 50% City of Sudbury, 50% Toromont Energy 1994 Fortis Ontario, originally developed by Cornwall Electric, wholly owned by City of Cornwall The following notes on the experience of each DES listed in Table 5 have less relevance to Project Green than those in Table 4, as most are significantly smaller than even Phase 1 as envisaged for Project Green. Nevertheless, it is useful for Partners in Project Green to be aware of this history. 20.2.1 Dockside Green Energy The most recent ownership structure of Dockside Green Energy (DGE) LLP as reported on its website is composed of Vancity Capital, Corix Utilities and Terasen Energy Services. It is operated under contract by Corix Utilities. It is a private utility with rates regulated by the province as described in its rate application 22 . 22 In their December 2007 application to the British Columbia Utilities Commission for a Certificate of Public Convenience and Necessity to construct the DES and approval of levelized rates based on their 155
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Bldg. No.1: Hilton Garden Inn Basic
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