November 3, 1998

To:Works and Utilities Committee

From:Executive Director, Technical Services

Subject:Main Treatment Plant Energy Supply

Interim Status Report

Purpose:

A consultants update report is required to identify the preferred alternative for meeting the thermal energy and electricity requirements of the Main Treatment Plant.

Funding Sources, Financial Implications and Impact Statement:

There are no direct funding implications of this report.

Recommendations:

It is recommended that this report be received for information.

Council Reference/Background/History:

City Council, at its meeting held on October 1, 1998, adopted Clause No. 4 of Report No. 8 of The Works and Utilities Committee headed, "Opportunities to Participate in Cogeneration Facility with Toronto Hydro and Private Sector". The report recommended that " the Commissioner of Works and Emergency Services be given authority to negotiate a draft agreement with Toronto Hydro and Boralex, the Paperboard Industries subsidiary, specializing in cogeneration".

In a report dated May 15, 1998 to Works and Utilities Committee from the Commissioner of Works and Emergency Services, it was recommended that the Commissioner report on associated business cases to replace the heat previously provided through the incineration of sewage sludge through: (i) stand alone boilers; (ii) cogeneration facilities, (iii) district heating and electrical generation or/and (iv) existing incinerators fuelled with digester gas and/or natural gas only to heat the existing waste heat recovery boilers.

Toronto Hydro, in a public media release dated October 13, 1998, announced a joint venture with Boralex Inc., the energy subsidiary of the Cascades Group, to develop a new cogeneration plant in the Portlands area of downtown Toronto. Paperboard will use the electric power and steam produced by the cogeneration plant. Excess electricity generated in the project is to be sold by Toronto Hydro to its various customers and the remaining thermal energy from the plant could be used at the Main Treatment Plant and/or a new greenhouse which could be build near the cogeneration plant.

An alternative to purchasing thermal energy from the Boralex cogeneration plant is to generate thermal energy from a cogeneration unit located on the Main Plant site. Such an on-site generating unit would be dedicated to the thermal and electricity needs of the Main Treatment Plant and would provide security of supply in the event of a major power outage such as the one resulting from the devastating 1997 ice storm that impacted eastern Ontario and neighbouring Quebec.

Gore and Storrie Limited at the request of the former Metro Works Department prepared a cogeneration feasibility study report in 1993 for the Main Treatment Plant addressing plant standby power and thermal requirements.

Comments and/or Discussion and/or Justification:

The Commissioner of Works and Emergency Services is considering authorizing an update by CH2M Gore and Storrie of the 1993 Gore and Storrie report at a cost of approximately $22,000 including GST.

Funds required for the consultant's update report are available in the approved 1998 Capital Works Program of the Water and Waste Water Division, Water Pollution Control, Main Treatment Plant.

The consultant's update report is required so that City staff can compare the cost of cogeneration on the site of the Main Treatment Plant with the cost of thermal energy and electricity from the proposed Toronto Hydro/Boralex Inc. cogeneration project to be located in the Port Lands area near the Main Treatment Plant. The comparison will help to determine best alternative to meet the needs of the Works and Emergency Services Department. The information provided in the consultant's update report will assist in the negotiations with Toronto Hydro.

The distribution charge could be avoided by the on-site cogeneration alternative. In 1996, the Main Treatment Plant consumed electricity from Toronto Hydro at a total cost of $7,676,738.00.

The average cost of electricity of approximately 7.2 cents per kilowatt hour now consists of a generation charge of approximately 3.8 cents per kilowatt hour plus a transmission and distribution charge of approximately 3.4 cents per kilowatt hour. The transmission and distribution charge of 3.4 cents per kilowatt hour is 47 % of the total charge. Avoiding the transmission and distribution charge by generating on site could result in very significant savings at the Main Treatment Plant.

The consultant's update report will also include an estimate of the reductions in carbon dioxide emissions and air quality improvement that would result from the project. In addition an estimate of the value of tradable emissions credits will be provided.

Conclusions:

Cogeneration on site at the Main Treatment Plant will be compared with cogeneration by Toronto Hydro/Boralex Inc. with respect to cost, operations, security of supply and environmental benefit including potential emissions credits in an update report.

Contact Name:

Kevin Loughborough, P. Eng. - Technical Services

Tel. No. (416) 392- 8845 Fax No. (416) 392-4540

E-mail: kevin_t._loughborough@metrodesk.metrotor.on.ca

Tom Denes, P. Eng.

Executive Director

Technical Services

Barry H. Gutteridge

Commissioner

Works and Emergency Services

KTL/main.cog