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UBC Neighbourhood District Energy System

Streamlined Review Process

October 30, 2014

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

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

UBC Neighbourhood District Energy System

Presentation to BC Utilities Commission

October 30, 2014

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.

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

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)

GHG Emissions

Project Plan – Phases 1 and 2

Project Plan – Phases 1 and 2

Phase 1

Phase 1

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

Indicative Costs

30-year NPV Levelized NDES Cost vs. Competitive Carbon Neutral Benchmark

Monthly In-suite Heating Bill

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

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