Fortis BC’s Renewable Natural

Gas Program

AWMA, Quebec

May 2011Scott Gramm, Business Development Manager

Today’s agenda

Defining Biogas

• What is biogas and where does it come from?

• How it connects to our infrastructure

• FortisBC’s biogas projects

• Why biogas?

The Program

• Market research results

• What is our Renewable Natural Gas Program?

• Program benefits

• What YOU can do

Biogas vs. Biomethane

• Gas generated from organic material • Primarily consists of methane – 50% - 60% typically

• Potential Sources:• Anaerobic Digester (AD) Gas• Landfill Gas:

• Biomethane:• Biomethane:• Methane from a renewable source – “Upgraded Gas”

Raw Biogas Biomethane

40% - 60% CH4 >96% CH4

30% - 50% CO2 <2% CO2

0% - 2% O2 <0.4% O2

0-2000+ ppm H2S Sulphur free

UpgradeUpgrade

Biomethane is Carbon Neutral

FortisBC Biogas Supply ModelFortisBC may invest in “upgrading” plant,

interconnection assets and main extension increasing asset base

Asset recovery costs go into Biomethane rate

“Biomethane Rate Base”

Asset recovery costs from all customers –

“Rate Base”

Catalyst ProjectWaste Collection Digester Gas Collection FortisBC

Infrastructure

• FortisBC

• Interconnection equipment and main

• Infrastructure capital added to rate base for all customers

• FortisBC purchases Biomethane above current NG market price

85-90% of

Investment

10-15% of

Investment

Catalyst Project• Partner: Catalyst Power Inc

• Digester Project

• Average 110,000 GJ/year

• FortisBC owns interconnect equipment only

• Catalyst provides biomethane that matches NG qualitymatches NG quality

• Commissioned Sep 2010

• Long term contract

Salmon Arm Landfill Project

• FortisBC

• Upgrade plant, interconnection equipment and main

• Interconnection & main capital added to rate base for all customers

• FortisBC purchases raw Biogas at low price

• Upgrade capital covered in biomethane rate = capital recovery +gas price

Salmon Arm Landfill Project

• Partner

• Columbia Shuswap Regional District

• Landfill Gas project

• Average 30,000 GJ/year expected

• FortisBC owns upgrade equipment

• Commissioning Late 2011

• Long Term Contract• Long Term Contract

• Funding Partners

• BC Gov’t (ICE fund)

• BC Bioenergy Network

Why Biogas?

• Demand from customers

• Expectation that FortisBC provides “green” options

• Cooperate with BC Government Energy Policy

• Practical way to make energy policy a reality.

• Climate action goals GHG’s

• Firsts

• Fortis BC is the first in Canada develop and deliver carbon neutral biomethane in a distribution network.

• We are the first in North America to offer a biomethane program to retail customers to meet demand for alternative energy solutions.

Market Research Results

Should FortisBC offer a biogas program?

• Residential:

• 65% Yes

• 30% Maybe

What type of program should FortisBC have?

• Renewable Energy preferred over Carbon Offset • 30% Maybe

• 1% No

• Commercial

• 71% Yes

• 22% Maybe

• 2% No

• 2.8: 1 for Commercial

• 3.2: 1 for Residential

Customer Demand

Renewable Natural Gas Program

• FortisBC has created a vital link between suppliers of biogas (or biomethane) and customers

• Customers sign up to receive a blend of biomethane

• (10%) and natural gas (90%)

• Customers are signing up for “notional” gas • Customers are signing up for “notional” gas

• Cost is a premium compared to standard rate

• 10% more – approximately $4/month

• Biomethane effectively has NO carbon tax ($1.00/GJ on NG)

• Commodity Cost ONLY impacted

Customer Sign Up

• The program is available to residential customers first:

• Residential customers, excluding certain service areas

• Market to residential customers to increase visibility

• Limit enrollment to ensure supply is adequate

• Commercial customers coming soon

• Use existing rate structures

• May sign up for a % of total consumption

Program benefits - Customers

• Reduce customer and BC’s carbon footprint

• Replace 10% of regular natural gas with renewable natural gas

• All projects are located in BC

• FortisBC has tried to simplify offering for customers

• Sign up online for only $4/month extra

• Link extra customer costs to local projects

• Customers pay a small amount for an incremental benefit

• Contributing to FortisBC’s goal of leading British Columbia to a sustainable energy future

• Help FortisBC align with the government’s climate action goals

GHG Benefits of the Program

• Total greenhouse gas savings in first year

• About 13,000 tonnes

• About the same as removing 2,000 cars off the road yearly

• Should increase to about 34,000 tonnes yearly by 2012.

• Biogas can safely and efficiently reduce methane • Biogas can safely and efficiently reduce methane emissions from waste decomposition, which is 21 times more powerful in warming the atmosphere than CO2.

Key Program Contacts

• Call or email any of us for more information• firstname.lastname@fortisbc.com

• Scott Gramm -Supply Development• Arvind Ramakrishnan -Program Manager• Janet Devaney -Program Structure, Carbon Strategy• Derek Ramlu -Technical Support, Biogas• Derek Ramlu -Technical Support, Biogas• Courtney Hodson -Communications, Marketing