Date April 7, 1998

 To:Works and Utilities Committee

 From:Michael G. Thorne

Interim Functional Lead, Water & Wastewater Operations

 Subject:Deep Lake Water Cooling Project

 Purpose:

 To provide an update on the status of the Deep Lake Water Cooling Project.

 Recommendation:

 That this report be received for information.

 Funding Sources, Financial Implications and Impact Statement

 The former Metro Council, by adoption of Clause No. 10 of Report No. 12 of the Environment and Public Space Committee at its meeting on September 24 and 25, 1997, authorized an expenditure of up to $200,000.00 after Municipal Goods and Services Tax Rebate to proceed with a pre-design study of the Deep Lake Water Cooling (DLWC) Project, to be jointly funded and managed by Metro (now City of Toronto) and Toronto District Heating Corporation (TDHC). These funds were included in the approved 1997-2001 Capital Works Program for Water Supply.

 Council Reference/Background/History:

 Metro Council, at its meeting on September 24 and 25, 1997, by adoption of Clause No. 10 of Report No. 12 of the Environment and Public Space Committee titled DLWC Project also authorized Metropolitan staff to execute an energy transfer agreement between Metro and the TDHC on terms and conditions satisfactory to the Metropolitan Solicitor and the Commissioner of Works, subject to approval under the City of Toronto Act 1997.

 At its meeting of December 10, 1997, Metro Council amended this report, specifically with regards to the term of the proposed agreement and by granting the authority for Metro to enter into a long term lease with TDHC for infrastructure works for which ownership will ultimately be transferred to Toronto. These amendments were made as a result of further negotiations with TDHC to ensure long-term municipal interest in district cooling, ensure system stability and help TDHC secure advantageous financing arrangements for the capital works. Application of the deep lake cooling concept to Toronto was first considered about a decade ago. Essentially the concept involves using cold water from a deep Lake Ontario source. This renewable resource would be used in a district cooling sytem that serves the downtown core. The initial concept, estimated to cost approximately $600 million, was proposed to serve a market bounded by Bloor Street, Jarvis Street, Spadina Avenue and Toronto Bay, through a cooling capacity of 300,000 tons.

 The current project is much smaller in scope with an estimated cost of $100 million and a peak capacity of 40,000 tons. The project would involve drawing cold water at 4 degrees celsius from deep in Lake Ontario through a new intake at the Island Filtration Plant. Following transmission to the John Street Pumping Station, the potable water would be diverted through an energy transfer loop to TDHC=s central cooling facilities at the Metro Toronto Convention Centre where it would pass through heat exchangers. The water would then be returned to John Street Pumping Station at not more than 13 degrees Celsius for distribution to the City consumers.

 This project has several benefits. If the project proceeds, Toronto Works will obtain a new intake which will be located further offshore for the Island Filtration Plant. This location will likely provide an improved raw water source that may result in reduction in use of treatment chemicals and reduced taste and odour occurrence in water supplied from this plant. Further, there are several environmental benefits. Using deep lake water as a cooling source would reduce the demand for electricity and enable removal of ozone depleting refrigerants from existing building cooling systems. Based on the preliminary estimated peak cooling capacity of 40,000 tons, carbon dioxide emissions would be reduced by approximately 30,000 tonnes per year, along with reduction in nitrous oxides, sulphur dioxide and fine particle emissions. There would also be economic benefits as district cooling using deep lake water is less costly than conventional cooling using electric chillers.

 Commencement of the project is conditional upon successful completion of a Schedule B Class Enrironmental Assessment (EA) and mutual agreement by TDHC and Toronto Works and Emergency Services, to proceed following completion of the pre-design study which will confirm project viability.

 Comments and/or Discussion and/or Justification:

 In March 1998, the consulting firm of R.V. Anderson Associates Limited (RVA) was jointly engaged by the City and TDHC to conduct the pre-design study and Class EA for this project at a total estimated cost of $341,000.00. The City and TDHC have signed a memorandum of understanding with RVA to carry on with this study until a formal, legal agreement is in place. The pre-design study will allow Toronto and TDHC to confirm overall project viability. The study will examine the potential impact of the DLWC project on the water supply system to confirm that the quality and security of the water supply will not be compromised. The study will investigate the impact of the project on operations of the City Water Supply system, issues related to the intake design, design of

the energy transfer loop, treatability of low temperature raw water, etc., and refine Capital and Operating cost estimates. The pre-design study report for the project is expected to be completed by October, 1998.

 It has been determined that construction of a new intake at the Island Filtration Plant and modifications at the John Street Pumping Station, including the energy transfer loop, will be subject to the Schedule B Class EA as defined by the Class EA for Municipal Water and Wastewater Projects, June 1993. An additional allowance of $30,000.00 over and above the cost of the pre-design study has been made for the public consultation component of the Class EA to be carried out by City staff.

 It is expected that the Class EA will be completed by April 24, 1998, allowing a subsequent 30-day period for public comment. This timing for the EA will provide an opportunity to secure a $4 million grant through the Canada Ontario Infrastructure Works Program for works carried out by TDHC related to this project.

 As part of the public consultation and the EA process, a Public Open House and a Public Workshop were organized on March 16, 1998, and April 2, 1998, respectively. Both the Open House and the Workshop were very well attended indicating a high level of community interest in the project. A Public Advisory Committee has also been formed to provide the DLWC study team with advice on issues, alternatives to be examined, impacts and possible mitigation strategies, and other matters within the scope of the Class EA. The Public Advisory Committee will exist until the EA process is completed. Public and Agency concerns about potential impacts due to the project have been identified and these will be addressed through the EA process. An additional workshop has been organized for April 16, 1998, so that the public will have an opportunity to learn more about the project findings.

 The terms and conditions described in the report to the former Metro Council, approved at its meeting of September 24 and 25, 1997, will form the basis of a legal agreement to be executed by the City of Toronto and TDHC.

 Conclusion:

 The innovative DLWC project is expected to have environmental and economic benefits to the City. A pre-design study and Class EA is underway to allow public input and confirm project viability while maintaining the security and integrity of the Water Supply system.

 Contact Name and Telephone Number:

 Mr. H.A. Taniguchi, P. Eng.

Director of Water Supply Division

Phone: (416) 392-8220

Fax: (416) 392-3639

E-mail: htaniguchi@metrodesk.metrotor.on.ca

 M.G. Thorne, P. Eng.

Interim Functional Lead, Water & Wastewater

 Barry H. Gutteridge

Commissioner of Works and Emergency Services