during the cross-examination of the city of vancouver ( cov ... - … › documents › proceedings...

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WSLegal\074707\00001\12499666v2 David Bursey Partner Direct Line: 604.891.5128 e-mail: [email protected] Our File No.: 074707.00001 September 16, 2015 By Email British Columbia Utilities Commission Suite 600 900 Howe St Vancouver BC V6Z 2N3 Attention: Erica M. Hamilton, Commission Secretary & Director Dear Ms. Hamilton: Re: Creative Energy Vancouver Platforms Inc. Application for a Certificate of Public Convenience and Necessity for a Low Carbon Neighbourhood Energy System for Northeast False Creek ("NEFC") and Chinatown Neighbourhoods of Vancouver (Project No.3698836) During the cross-examination of the City of Vancouver ("COV") witness panel on 15 September 2015, the COV witnesses were asked questions about the following areas. COV's responses follow. 1. At Transcript volume 2, page 374, Ms. Sadrehashemi asked about affordable housing targets in the NEFC area. COV Response The 2009 Directions Report, approved by the City of Vancouver's Council, set the following targets for affordable housing in NEFC: 3.7.1 Designate 20% of the total number of dwelling units in NEFC for affordable housing. On some sites, where it will not be possible to achieve 20% affordable housing, payments-in-lieu will be received. These Payments-in-lieu will be used to achieve affordable housing on sites within NEFC, FCN, and/or other areas. 3.7.2 Designate a minimum of 10% of the total number of dwelling units in NEFC for market rental housing. C1-11

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Page 1: During the cross-examination of the City of Vancouver ( COV ... - … › Documents › Proceedings › 2015 › DOC_4460… · 2015, the COV witnesses were asked questions about

WSLegal\074707\00001\12499666v2

David Bursey Partner Direct Line: 604.891.5128 e-mail: [email protected] Our File No.: 074707.00001

September 16, 2015

By Email

British Columbia Utilities Commission Suite 600 900 Howe St Vancouver BC V6Z 2N3

Attention: Erica M. Hamilton, Commission Secretary & Director

Dear Ms. Hamilton:

Re: Creative Energy Vancouver Platforms Inc. Application for a Certificate of Public Convenience and Necessity for a Low Carbon Neighbourhood Energy System for Northeast False Creek ("NEFC") and Chinatown Neighbourhoods of Vancouver (Project No.3698836)

During the cross-examination of the City of Vancouver ("COV") witness panel on 15 September 2015, the COV witnesses were asked questions about the following areas. COV's responses follow.

1. At Transcript volume 2, page 374, Ms. Sadrehashemi asked about affordable housing targets in the NEFC area.

COV Response The 2009 Directions Report, approved by the City of Vancouver's Council, set the following targets for affordable housing in NEFC:

3.7.1 Designate 20% of the total number of dwelling units in NEFC for affordable housing. On some sites, where it will not be possible to achieve 20% affordable housing, payments-in-lieu will be received. These Payments-in-lieu will be used to achieve affordable housing on sites within NEFC, FCN, and/or other areas. 3.7.2 Designate a minimum of 10% of the total number of dwelling units in NEFC for market rental housing.

C1-11

markhuds
CREATIVE ENERGY NES NEFC CPCN
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September 16, 2015 Page Two

WSLegal\074707\00001\12499666v2

The remaining sites in NEFC include Plaza of Nations 6B, Concord 6C, and Pavco 10C. These sites are expected to deliver about 2.8 million square feet of residential, which create approximately 3,512 units total. As per the policy above, the affordable housing component would be 909 units, and the rental units would be 454 units. This does not include potential density increases achieved by removing the viaducts, which is the subject of a future Council decision and therefore densities remain unknown. 2. At Transcript volume 2, page 378, Mr. Weafer asked whether the purchase of

renewable natural gas ("RNG") from Fortis Energy Inc. is a benefit to the community in terms of credit for GHG reductions.

COV Response

Yes, if the RNG displaces existing natural gas supply. The latest Provincial Guidance for local governments treats RNG as biofuel, so carbon content is deemed 100 per cent biogenic and excluded (for now: the Guidance notes that there are ongoing discussions around this).

The Provincial Guidance may be found at this link: http://www2.gov.bc.ca/assets/gov/environment/climate-change/policy-legislation-and-responses/carbon-neutral-government/measure-page/2014_bc_best_practices_methodology_for_quantifying_greenhouse_gas_emissions.pdf.

Yours truly,

BENNETT JONES LLP

Original signed by

David Bursey Partner DB/jrs

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Compass Resource Management Ltd.200 - 1260 Hamilton St.Vancouver, B.C. V6B 2S8 Canada

Phone: 604-641-2875Fax: 604-641-2878www.compassrm.com

Supporting Policies and ActionsTrent Berry, Tim Wilson, Taylor Zeeg

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Current City Supporting Policies / Actions

Large site rezoning policy requires screening of DE for rezoning applications (EcoDensityAction 2).

Official Development Plan policies and rezoning conditions:• Hydronic heating / connection requirements for Northeast False Creek, Cambie

Corridor, parts of Chinatown, and River District

Service Area Bylaw in South East False Creek Neighbourhood:• All buildings must connect to system, • Voluntary connections to SEFC outside neighbourhood boundaries

5/10/2012 City of Vancouver DE Strategy – Stakeholder Workshop #2

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Supporting Policies / Actions Under Consideration

5/10/2012 City of Vancouver DE Strategy – Stakeholder Workshop #2

Land use / Building Policies , ActionsAdditional service area bylaws

- Establishes service area all buildings must connect to the low-carbon DE system- Many examples of mandatory connection policies (Richmond, North Vancouver, SEFC, NEFC)- Secures customer base, helps de-risk DE implementation

DE connectivity and connection requirements

- Requires new buildings in priority areas to build with hydronic heating and connect to low carbon DE service once available- Insures building mechanical equipment and operating temperatures are compatible with DE system

Green building standards

- Policy to reconcile LCDE connection requirements with LEED requirements- Currently, LEED does not consider the use of temporary gas boilers in a DE system that would transition to low carbon sources in the near term eligible for LEED points

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Supporting Policies / Actions Under Consideration

5/10/2012 City of Vancouver DE Strategy – Stakeholder Workshop #2

Cost competitive policiesProperty taxation of new LCDE utilities

-Tax incentives for DE systems (currently energy centre and DPS piping subject to property taxation)- Building scale energy plants not subject to property tax so tax on DE is incremental

Municipal infrastructure planning

- Utilidors for DE infrastructure (allowances for DE infrastructure)- Processes to co-ordinate DE infrastructure with other municipal infrastructure (shared capital plans, regular technical/planning meetings within City and / or utility partners)-“Future proof” for DE when undergoing other public works (e.g., installing conduit for distribution piping under roads), adding sections of transmission piping when undergoing other major public works- Zone strategic areas in the City for energy centres- Identify and secure potential energy sources (good land, water or rail access well suited to centralized facilities)

Lobbying -Senior levels of government for supporting policies and funding commitments. (E.g., Utilities Commission Act lighter regulatory requirements for smaller DE ventures, allow “strategic bundling” of physically separate systems under co-ordinated utility rate model)

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Supporting Policies / Actions Under Consideration

5/10/2012 City of Vancouver DE Strategy – Stakeholder Workshop #2

District Energy development standards and processes

Permitting Streamline the permit approval process for DE infrastructure

Regional coordination

Establish processes to co-ordinate / share costs of inter-municipal infrastructure (e.g. Transmission pipes that cross Vancouver-Burnaby border and/or Vancouver-Richmond border)

Technical standards

Primary side technical standards to ensure heat source flexibility, system scalability, and system compatibility with building design

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Supporting Policies / Actions Under Consideration

5/10/2012 City of Vancouver DE Strategy – Stakeholder Workshop #2

Engagement

Co-marketing district energy

Consumer education

Regional coordination

Gathering and disseminating market information (energy use, costbenchmarks, BAU benchmarks, etc.)

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Stakeholder Policy Questions

5/10/2012 City of Vancouver DE Strategy – Stakeholder Workshop #2

Facilitator to review supporting policies / actions with the breakout group.

• Do you have any questions about these policies? (e.g. their implications, application, etc)

• Do you support the policy / action?

• Do you have any concerns about the proposed policies / actions, or require further information?

• Are there additional policies to consider?

• Are there priority policies / actions that could be the immediate focus of strategy implementation?

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Stakeholder Advocacy Questions

5/10/2012 City of Vancouver DE Strategy – Stakeholder Workshop #2

• What are some of the key barriers pertaining to district energy implementation that the City and/or interested stakeholders communicate to higher levels of government (Federal, Provincial)?

• What do you consider priority advocacy issues?

Page 11: During the cross-examination of the City of Vancouver ( COV ... - … › Documents › Proceedings › 2015 › DOC_4460… · 2015, the COV witnesses were asked questions about

Compass Resource Management Ltd.200 - 1260 Hamilton St.Vancouver, B.C. V6B 2S8 Canada

Phone: 604-641-2875Fax: 604-641-2878www.compassrm.com

Ownership EvaluationTrent Berry, Tim Wilson, Taylor Zeeg

Page 12: During the cross-examination of the City of Vancouver ( COV ... - … › Documents › Proceedings › 2015 › DOC_4460… · 2015, the COV witnesses were asked questions about

Evaluation Criteria

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Page 13: During the cross-examination of the City of Vancouver ( COV ... - … › Documents › Proceedings › 2015 › DOC_4460… · 2015, the COV witnesses were asked questions about

1) Advance City’s Policy Objectives

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5/10/2012 City of Vancouver DE Strategy – Stakeholder Workshop #2

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2) Financial and Risk Exposure for City

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3) Competitive Customer Service*, Pricing and Fair/Transparent Regulation:

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5/10/2012 City of Vancouver DE Strategy – Stakeholder Workshop #2

*No significant difference in customer service expected between models. **Benchmark rate based on SEFC pro forma model under different ownership. Main difference is income taxes given City policy to charge return commensurate with private sector and City policy to charge itself full property taxes.

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4) Consistency, Predictability and Affordability for Land Developers/Owners:

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5) Enabling Environment for Utility Industry

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Ownership Evaluation Questions Ownership Evaluation (Handout summary table provided)Facilitator to review each model, criteria and the 5 attribute tables.

1) The City developed criteria to help assess ownership options. Five criteria were identified:• Advance City policy objectives regarding GHG reduction• Financial and risk exposure for City• Competitive customer service, pricing and transparency• Consistency, predictability, and affordability for developers• Enabling environment for utility industry

Provide feedback on the criteria – did we consider the right things? Are there additional criteriathe City might consider?

2) The City is leaning toward model 3 – Strategy Partnership. • Do you support this direction? Why or why not?• How might the Strategic Partnership model be further improved?• Is there a variation on this model, or should the City consider a different model?