City ponders district energy funding options

Port Alberni city council is mulling funding options for its $10 million District Energy Project.

  • Apr. 24, 2013 9:00 a.m.

To partner or not to partner – that will be the question when the City of Port Alberni receives word on several grant funding applications recently made to get the proposed District Energy Project flowing.

The project consists of a centrally located fiber based biomass system that would provide, in the first phase, heat and hot water to up to 12 buildings through approximately three kilometres of underground, insulated pipes.

The system has a 50-year shelf life and is fueled by fiber biomass, which includes wood waste in the form of construction demolition waste, and scotch broom.

In addition to reducing greenhouse gas emissions and diverting wood waste from the landfill (which is then chipped instead of burned), the project would provide about $265,000 per year in non-tax revenue for the city.

To offset the project’s near $10-million cost, the city has applied for $1.5 million from the Gas Tax Innovation Fund, and $800,000 from the Federation of Canadian Municipalities’ Green Municipal Fund (GMF).

During Monday night’s council meeting, consultant Stephen Salter provided an overview and update on the project. A decision on the funding applications is expected by July.

Other proposed funding sources for the energy project are loans; $4 million GMF loan and $1 million Municipal Finance Authority loan and just under $250,000 in city in-kind contributions.

Private investment makes up the remaining $2.4 million in proposed funding, although council could decide to borrow the money instead, pending on the outcome of the grants.

“The biggest drawback for having partners would be that the revenues would not come to the city in the same way, we couldn’t expect to have the same return,” Salter said. “We would also have less control over the use of the system.”

Other disadvantages include losing the ability to claim all of the carbon tax and greenhouse gas reductions.

Salter added that the advantages include private sector expertise and a lower debt load.

So far, the district energy project has received enthusiasm from potential clients, such as the Multiplex, Echo Village, Echo Pool, Pioneer Towers and West Coast General Hospital.

“We’ve had written expressions of interest and support,” Deakin said. “Enough that we felt confident in making the funding application.”

In response to a question from councilor Wendy Kerr on cost comparison, Salter said energy clients could expect to save in two ways.

“The first is that they would see a discount in the total cost of about 20 per cent, but the other thing is that typically district energy is sold over long term contract. Because the system is going to operate for a long time, and we have a pretty good idea of what it’s going to cost, they would be signing a contract to take energy with inflation at the rate of inflation… so they get price certainty.”

Pat Deakin, economic development manager said the department will continue to look into further grant sources as they come available, such as a public private partnership funding opportunity recently announced by the government.

“I’ve glanced at it, and it appears to me to be geared to be bigger projects like bridges, water and sewage treatment plants, but it is possible the district energy system would also qualify,” he said.

Niomi Pearson is a freelance journalist who formerly lived in Alberni.

Just Posted

Smoking ban arrives on BC Ferries

No crackdown, just education as BC Ferries enacts smoking ban

Alberni’s marine SAR unit relies on volunteers, local donors to stay afloat

Unit’s vessel will need retrofit, boat shed in next few years

Island Health issues boil water advisory for Cherry Creek, near Port Alberni

Island Health has issued a boil water advisory for the entire Cherry… Continue reading

Heavy snowfall closes Mount Washington for the day

Road to ski resort deemed unsafe, “high avalanche danger”

Alberni Valley Community Foundation seeks grant recipients

The Alberni Valley Community Foundation is accepting applications for grants to be… Continue reading

Floods, power lines down on Bamfield Road

Power outage affecting more than 400 customers

With a lighter touch, SAG Awards follows a familiar script

Morgan Freeman accepts the Life Achievement Award at the 24th annual Screen Actors Guild Awards on Sunday

S. Koreans burn Kim’s photo as N. Korean band leader passes

South Korean activists burned a large photo of Kim Jong Un as an extremely popular girl band passed them

Trudeau heads to Davos to pitch investment opportunities in Canada

Prime Minister Justin Trudeau is on his way to Davos, Switzerland for the annual World Economic Forum

Campbell River fire crews rescue two seniors trapped by mudslide, four homes evacuated

Residents were safely removed from the house and are now staying with family

A look at potential Canadian nominees for this year’s Oscars

The nominations are to be revealed Tuesday morning for the 90th Academy Awards

B.C. expert weighs in on why kids are eating Tide pods for fun

Why are kids taking part in something completely pointless yet so risky?

Philadelphia Eagles headed to Super Bowl

After routing the Minnesota Vikings 38-7, they will face Tom Brady and the New England Patriots

Most Read