HomeMy WebLinkAboutAgenda - 04-15-2008-6aORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: April 15, 2008
Action Agenda
Item No. ~,~g_
SUBJECT: Potential UNC Landfill Gas Project -Update and Request to Proceed
DEPARTMENT: County Managers Office and PUBLIC HEARING: (Y/N) No
Solid Waste Management
ATTACHMENT(S):
1. Progress Report #1 - 2/19/08
2. Progress. Report #2 - 3/13/08
3. Progress Report #3 - 4/8/08 -with
Preliminary Commercial Terms and
Legal Terms, Proposed Project
Schedule, and Proposed Project Map
INFORMATION CONTACT:
Gwen Harvey, Assistant County
Manager, 245-2307
Gayle Wilson, Solid Waste, 968-2885
Bob Sallach, Olver, Inc.
Ray Dubose, UNC Energy Services
PURPOSE: To present an update from the County and UNC teams -the third and final report
as specified under the Memorandum of Understanding (MQU) dated January 17, 2008 - on the
development feasibility of a landfill gas to energy project on Eubanks Road to benefit Carolina
North, and to request BOCC authorization to proceed towards final contract negotiations.
BACI~CGROUND: On January 15, 2008, the BOCC authorized entering into an (MOU) with the
University of North Carolina at Chapel Hill to ensure due diligence and anticipate effective
implementation of a landfill gas recovery project. The MOU was designed to focus time and
attention on the following outcomes:
Energy Generation/Ultimate Use
Short term gas flaring and energy generation, preferably to benefit the Carolina North
development
Economic Feasibility
A business and financial scenario favorable to both the County and the University, ideally one
that would negate the need for the University to subcontract with a third party for the generation
and/or use of the landfill gas
Due Diligence
An obligation. by both parties to work aggressively within a 90 day window to bring forth a
credible, joint plan of action -including Preliminary Commercial and Legal Terms -for the
beneficial reuse of the gas by the University, pending final negotiations and review by the
County Manager and County Attorney. Ultimate approval of a final contract rests with the
BOCC.
The BOCC previously received two (30 day) written Progress Reports as specified by the MOU.
These reports were dated February 19, 2008 and March 13, 2008. An April 8, 2008 update is
attached to this abstract. The County and UNC teams comprised of staff, consulting engineers,
energy analysts and legal representatives held a total of five meetings which allowed them to
review and discuss preliminary .data on landfill gas quantities, generation and collection
estimates, equipment selections, pipe routing, constructions costs, revenue sharing concepts,
and overall project economics and legal constructs.
IVlajor Endings to date and recommendations for next steps from the County and UIdC
teams to the BOCC are summarized below. Representatives from UIVC will be available
along with County staff at the April 15 meeting to make a brief presentation and respond
to any questions. In the near future, UNC and staff will also be able to provide the BOCC
with a graphic presentation on the proposed physical layout and project construction
plans from a planning and engineering perspective.
The overall project schedule includes a period for public information and involvement for
the surrounding neighborhood and community at large before a final contract is
presented to the BOCC for consideration.
Engineering
1. The. University intends to use the landfill gas to generate electricity to achieve carbon
credits through demonstrable greenhouse gas reduction
2. Technical analysis of the landfill gas -quantity calculations, lab testing for contaminant
levels, etc. -revealed no obstacles to project implementation
3. Capital costs (collection system, flare, gas compression and clean-up, pipeline, and
engine-generator) are currently estimated at $5.5 million; annual operating and
maintenance costs in year one (2010, projected), at $250,000
4. Construction and commissioning of the intermediate Flare- Collection System could occur
- pending final BOCC contract approval and design/permit processing - by the first
quarter 2010; the Power Generation Facility could be commissioned by the fourth quarter
2010
5. Flaring is an intermediate step, projected to last less than one year. Flaring allows for the
earliest possible start to methane destruction and the attainment of carbon credits.
Flaring provides the necessary lead time for the development and testing of the energy
generation and pipeline components of the project. Flares will be enclosed (no visible
flare), creating maximum opportunity for methane destruction and carbon credit value.
6. UNC anticipates demands at Carolina North will require full utilization of the landfill gas-
to-energy around 2013
Attachment 1 contains copies of the three Progress Reports and provides further technical and
engineering detail. Special consideration must be given to the gas recovery system co-existing
with ongoing waste disposal operations.
Commercial
A minimum 20-year contract term is contemplated; with provisions for extension, under which
the University would compensate the County through -
1. Payments based on two components - (A) Monthly, a 15 percent share based on energy
generated/heating values delivered compared to an agreed upon monthly published
natural gas index, with a maximum cap; and (B) Intervals to be determined, a 15 percent
share based on methane destruction (carbon credits), either through flaring of the gas or
its use in power production. The 15 per cent value is subject to change to 10 per cent if
landfill gas quantities collected are significantly below projected levels, or the value of
carbon credits does not exceed a prescribed level by 2015.
2. The County will have the right to sell its carbon credits to the University, sell in the "open
market", or retain as off-sets for its own qualifying projects or conservation interests.
3. The County and UNC both recognize that the methodologies to equate the carbon
equivalents -methane destruction -and convert them to monetary value are continuing
to evolve. This significant aspect of final contract negotiations will. require careful
attention and considerable discussion. The County will obtain specialized legal
assistance in the final contract review
4. No payments would be made to the County for the heating value of the landfill gas flared,
nor for methane destroyed prior to flaring
5. The University proposes to assume the full cost of capital construction and annual
maintenance and operations
Attachment 2 provides further detail on the preliminary commercial terms.
legal
1. Transfer point of ownership of the landfill gas to be precisely defined
2. Issues of possible odor, gas, and noise migration to be examined and reconciled
3. Conditions precedent to "Go Decision" will address governmental and regulatory agency
permits and approvals
Attachment 3 provides further detail on the preliminary legal terms. As referenced above, the
County will seek specialized legal counsel with experience in waste to energy contracts to assist
in final negotiations. Special consideration must be given to maintaining compliance with
existing solid waste permits. Also provided with Attachment 3 are a proposed project schedule
and siting map.
A complete copy of the draft report, "Landfill Gas to Energy Feasibility Study", prepared for UNC
and Orange County by Richardson Smith Gardner & Associates and Affiliated Engineers
4
requisite to project implementation, may be reviewed by contacting UNC Energy Services or the
County Manager's Office.
FINANGIAL IMPACT: There is no financial impact associated with the discussion and potential
authorization for the County and UNC to continue working towards a formal contract proposal to
present for BOCC action. Revenues are currently forecast for the County should it enter into
contract with the University to implement a landfill gas recovery project. More specific revenue
projections will depend upon final project economics and the conclusion of contract
negotiations.
RECOMMENDATION(S): The Manager recommends that the Board
1. Provide any feedback and direction .as may be desired to the County and UNC teams
relative to preliminary Engineering, Commercial, or Legal terms; and
2. Formally authorize the County and UNC teams to move forward in the development of a
final contract to be brought back for BOCC consideration, targeting the meeting of
August 19, 2008.
g1~d,~J 2
THS UNIVERSITY
pf NORTH CAROLINA,
"~', aE CHAPI3L HILL
February 19, 2008
Ms. Gwendolyn Harvey
Assistant County Manager .
Orange County.
Post Office Box 8.181
Hillsborough, North Carolina 27278
ENERGY SERVICES
DEPARTMENT
gzS BRANCH STREET
CAMPUS BOX r85S
CHAPEL HILL, NC z7S99-r85S
RAYMOND 8. DUBOSE
Dirrltor
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F 9r9.843.73z8
Raq.DaSose®energy-nnc.edu
SUBTECT: 'The University of North Carolina at Chapel Hill. Memorandum of
Understanding with Orange County RE: Landfill Gas Recovery Feasibility Study
Dear Gwen:
Transmitted herewith for your use, information and distribution to the Orange County
Board of Commissioners is a status report for the subject study. Please do not hesitate
to contact me.with any questions.
Sincerely,
Raymond E. DuBose, P.E.
Director, Energy Services
cc: Carolyn Elfland
Philip Barner
John Masson
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Landfill Invesiatin
Monthly Report
February 11, 2008
Produced By:
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1414 Raleigh Road, Suite 305
Chapel Hill, North Carolina
(919) 419-9802 (Fax 419-9803)
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Table of Contents
Meeting Notes 1/17/2008 ...........................................................................................................3-4
Meeting Notes 2J4/2008 ................................................ .............................................................5-6
7
Landfill Gas Sample Ptan .............................................. ................................................................
8
Options Site Plan .............................................:............ ................................................................
Afifiliafi
Erogineet~
1414 Raleigh Road, Suite 305
Chape! Hill, North Carolina
(919) 419-98D2 (Fax 419-9803)
UNC -Altematnre Energy Analysis Landfill Gas Investigation
Pmjeci
University of North Carolina- Chapel Hill
nn~~t~n9 Notes
08029-00
Piojed Nn.
01!17/2008
p~y~f Meeting Date
Project Flick-off Meeting Page 1 of 2 las
Type of Meeting Page Typi~
PresentlRepresenting:
Gwen Harvey Orange County gharveyta~co.orange.nc.us
Gayle Wilson Orange County gwilson[cDco.oranae.nc.us
Paul Spire ~ Orange County psp'ire(a~co.oranae.nc.us
Michael Meagher Orange County mmeagherCa~co.orange.nc.us
Bab Sallach Olver, Inc. rsallachla~olver.com
John Masson UNC-CH Facilities Planning Jmasson(a~fac.unc.edu
Ray DuBose UNC-CH Energy Services ray.duboseCa7energy.unc.edu
Phil Bamer ~ UNC-CH Energy Services ohilio.bamerCa~energy.unc.edu
Matt Lamb Richardson Smith Gardner matt(cr~rsgengineers.com
Jeny Schuett Affiliated Engineers jschuett _aeiena.com
The meeting was held at UNC-CH to discuss the start of the landfill gas analysis effort and review the 90 day
schedule. The following items were discussed:
1. Introductions for all the team members and their roles were discussed. The following was
established:
a. John Masson will be the primary contact and project manager for UNC. ..
b. Mike Meagher will be the prime contact for .technical information and site visits required at
the landfill. The team can correspond directly with Mike, but should copy Gayle and Bob
Sallach on all requests for information.
2. The initial feasibility study includes taking samples at the landfi(I for gas quality and presence of
contaminants. These samples will be taken in the next few weeks and lab analysis will follow.
3. RSG will be using landfill records to develop the gas quantify estimates. Standard EPA modeling
will be used.
a. Olver, Inc. has prepared some very preliminary numbers for estimated gas available. These
preliminary estimates to be sent to RSG for review.
b. Orange County to provide landfill records for RSG use.
4. The leachate is currently pumped and hauled form the site. Orange County is in the process of
installing a system that has a direct connection to OWASA sewer. The equipment will be located
on the south side.
a. It would be desirable to bring all gas to a central location for clean-up.
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ML'@t111g ~Ot@S
1414 Raleigh Road, Suite 305
Chapel Hill, North Carolina
(919) 419-9802 (Fax 419-9803)
UNC - Altemattve Energy Analysis Landfill Gas Investigation
~~
University of North Carolina- Chapel Hill
Owner
Project IGck-off Meeting
Type of Heating
08029-00
Pmjeci No.
01/17/2008
Meeting Date
Page 2 of 2 ias
Page Typist
b. The new landfill °clean-up° system required for this project should be able to use this same
discharge connection. Based on that, it would make sense to have this equipment on the
south side.
5. Orange County would prefer that a shielded, enclosed flare be used and included in the analysis.
Although this is a more expensive option, it provides a shielded flame that is not visible from remote
locations.
6. The three options under consideration were reviewed. The three options are:
a. Power only•at Duke Energy Substation site on Homestead
b. CHP (Combined Heat and Power) at Carolina North site
c. Gas use (fBD) at existing Cogen site
7. The pipe routing form the landfill to Carolina North or the Cogen Plant was discussed. AEI noted
that the railroad corridor is the most direct route for any of the options, but dialog with the railroad
needs to take place to confirm the possibility and restrictions. UNC to investigate the potential of
these discussions.
8. Orange County to provide current electrical rates and available capacity for service at the landfill.
Orange County noted they had 3-phase service available at the planned leachate treatment pond.
9. The ownership and operation of the flare system was discussed. Although it is planned that the
flare would only be used in events where all the gas can not be consumed, it seemed to make most
sense for Orange County to have control of flare operation.
10. It was noted that cost for capping/closure of the South landfill would need to be incurred. This
closure is currently planned for 2012.
11. The next meeting is scheduled for February 4th at 1:30 pm.
These minutes represent our best understanding of the discussions held and decisions reached at the
meeting. Please advise the writer of any errors or omissions of substance.
Affiliated Engineers
Jerry A. Schuett, P.E.
PrincipaUProject Manger
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1414 Raleigh Road, Sure 305
Chapel Hill, North Carolina
(919) 419-9802 (Fax 419-9803)
UNC - Alternative Energy Analysis Landfill Gas Investigation
Project
University of North Carolina- Chapel Hill
Owner
Progress Review Meeting
Type of Meeting
Present/Representing:
Gwen Harvey
Gayle Wilson
Michael Meagher
Bob Sallach
John Masson
Ray DuBose
Phil Bamer
Matt Lamb (Partial via phone)
Jerry Schuett
Orange County
Orange County
Orange County
Olver, Inc.
UNC-CH Facilities Planning
UNGCH Energy Services
UNGCH Energy Services
Richardson Smith Gardner
Affiliated Engineers
Meet~n' Notes
08029-00
Project No.
02/04/2008
Mee6rg Date
Page 1 of 2 ias
page Typist
gharveyja~co.oranoe.nc.us
gwilson _co.orange.nc.us
mmeagher(caco.oranae.nc.us
rsallach ~olver.com
JmassonCa~fac.unc.edu
ray.dubose(a~energy. unc.edu
philio.bamerC~energy. unc.edu
ma~rsgengineers.corn
jschuett ~,aeieng.com
The meeting was held at UNGCH to discuss the progress to date on the landfill gas analysis effort. The
following items were discussed:
1. The progress to date includes:
a. Obtaining and reviewing the landfill records.
b. Obtaining gas samples and sending to lab for testing. Results are expected in about 2
weeks. The initial readings indicated methane quantities ranging from 58% to 62%, which is
good. See attached map for graphics and preliminary sampling data.
c. Gas generation estimates have been started. Using Lo = 100 and a collection efficiency of
85% for the North site and 75% for the South site, there is approximately 420 CFM of gas
available at the peak in 2011 to 2012. This quantity will remain above 310 CFM for at least
10 years and should be able to produce between 0.75 and 1.0 Megawatt of power.
d. Preliminary pipe sizing and equipment selection/pricing for Prime Movers has begun.
e. Current electrical and gas demands at Carolina North (existing Facilities Services buildings)
have been quantified and season usage curves have been developed.
2. Based on the preliminary data, it is estimated an 8" to 12" gas main will be required ftom the landfill
site to the point of use at UNC. Routing paths and costs are being investigated.
3. Based on the preliminary gas estimates and current loads at Carolina North, it appears that a power
generation capacity of 0.75 Megawatts should be considered. There is sufficient load to -utilize
approximately 80% of the potential power generation (750 Kw) available in Year 1 (likely 2010), with
this growing to 100% by Year 5 (2015) as new buildings develop at Garolina North.
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1414 Raleigh Road, Suite 305
Chapel Hill, North Carolina
(919) 419-9802 (Fax 419-9803)
UNC - Alternative Energy Analysis Landfill Gas Investigation
Project
University of North Carolina- Chapel Hill
Owner
Progress Review Meeting
Type or Meeting
IUleeting Notes
08029-00
Project No.
02/04/2008
Meeting Date
Page 2 of 2 ias
Page Typist
4. UNC will set up a meeting with the~Cogen personnel to discuss use of the landfill gas at the Cogen
site. Although this has the longest pipe 'run, it is a' location where the LFG can be fully utilized
immediately to offset coal consumption in the boilers.
5. RSG will investigate other sources of income for the project. The follawing were discussed:
a. Grants- KEPI program (Renewable Energy production Incentive). This is a federal program
that may possibly offer some grant money for the project.
b. Golden Leaf Fouridation -not likely as this is typically tied to job creation.
c. It was decided that a special appropriation from the State Legislature is not likely for this
project, based on UNC's experience with the OWASA reclaimed water system.
6. The final Agreement was discussed in general. It was decided that the Agreement would need to
define the following items:
a. Ownership and operation of equipment at landfill site (Flare, clean-up equipment,
compressors, etc.)
b. Access and easements at landfill site
c. Who is responsible for purchase and installation of the gas collection and flare system at the
landfill?
d. Permitting responsibilities
e. Timeline for implementation
f. Who retains carbon credits and how are they valued?
7. The next meeting is scheduled for February 21st at 10:30 am.
These minutes represent our best understanding of the discussions held and decisions reached at .the
meeting. Please advise the writer of any errors or omissions of substance.
Affiliated Engineers
Jerry A. Schuett, P.E.
Principal/Project Manger
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r°~ THE UNIVERSITY
~~ of NORTH CAROLINA
at CHAPEL HILL
March 13, 2008
Ms. Gwendolyn Harvey
Assistant County Manager
Orange County
Post Office Box 8181
Hillsborough, North Carolina 27278
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F 919.843.7328
Ray.DuBoseQa energy.unc.edu
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SUBJECT: The University of North Carolina at Chapel Hill Memorandum of
Understanding with Orange County RE: Landfill Gas Recovery Feasibility Study -
Monthly Report #2
Dear Gwen:
Transmitted herewith for your use, information and distribution to the Orange County
Board of Commissioners is a status report for the subject study. Please do not hesitate
to contact me with any questions.
Sincerely,
~~
Raymond E. DuBose, P.E.
Director, Energy Services
ENERGY SERVICES
DEPARTMENT
gas BRANCH STREET
CAMPUS BOX 1855
CHAPEL HILL, NC 27599-1855
RAYMOND fi. DUBOSE
Director
cc: Carolyn Elfland
Philip Barner
John Masson
15
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Landfill as Investigate®n
Monthly Report
March 13, 2008
Produced By:
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En~ln~~rs~.
1414 Raleigh Road, Suite 305
Chapel Hill, North Carolina
(919)419-9802 .(Fax 419-9803)
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Table of Contents
Meeting Notes 2/21/2008 ..............:............................................................................................3-4
Meeting Notes 2/26/2008 ...........................................................................................................5-6
Meeting Notes 3/11/2008 ..............................................................................................................7
,,~~ ~1 AfFiliated
f./?'1 ~ 0 Engineers
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1414 Raleigh Road, Suite 305
Chapel Hill, North Carolina
(919) 419-9802 (Fax 419-9803)
UNC -Alternative Energy Analysis Landfill Gas Investigation
Project
University of North Carolina- Chapel Hill
Owner
Progress Review Meeting
Type of Meeting
IVleeting (Votes
0$029-00
Project No.
02/21 /2008
Meeting Date
Page 1 of 2 Jas
Page Typist
Present/Representing:
Gayle Wilson
Michael Meagher
Bob Sallach
John Masson
Ray DuBose
Phil Barner
Matt Lamb
Jerry Schuett
Orange County
Orange County
Olver, Inc.
UNC-CH Facilities Planning
UNC-CH Energy Services
UNC-CH Energy Services
Richardson Smith Gardner
Affiliated Engineers
gwilson co.oranae.nc.us
mmeacther(a~co.orange.nc.us
rsallach(c~olver.com
Jmasson(c~fac.unc.edu
rav.dubose(a~energy.unc.edta
philip.barnert7energy.unc.edu
matt(cr~.rsgengineers.com
jschuett(a7aeieng.com
The meeting was held at UNC-CH to discuss the progress to date on the landfill gas analysis effort. The
following items were discussed:
1. The progress to date includes:
a. The gas quantities have been calculated based on landfill records.
b. Lab results ~ of gas samples have been received. No major issues identified- the
contaminant levels looked very low. No siloxane or sulfur treatment will be required. A copy
of the results is attached to these notes.
c. The cost models have been advanced.
d. Preliminary pipe sizing and equipment selection/pricing for Prime Movers has been
completed.
2. Based on the preliminary data, it is estimated an 8" to 12" gas main will be required from the landfill
site to the point of use at UNC. Routing paths and costs are still being investigated.
3. The preliminary analysis is based on a Cat engine with an output rating of 815 Kvv.
4. A preliminary economic analysis was distributed showing capital costs and yearly O&M costs. The
analysis showed that Options 1 and 3 are the most attractive since there is limited thermal load
available for Option 2 at this time.
5. It was agreed that some type of carbon reduction verification needs to be included for all options.
For this to be certified, an annual cost of about $20k is expected. This needs to be included in the
economic model
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Meeting Notes
1414 Raleigh Road, Suite 305
Chapel Hill, North Carolina
(919) 419-9802 (Fax 419-9803)
UNC -Alternative Energy Analysis Landfill Gas Investigation 08029-00
Project Project No.
University of North Carolina- Chapel Hill 02/21/2008
Owner Meeting Date
Progress Review Meeting Page 2 of 2 jas
Type of Meeting Page Typist
6. RSG will investigate other sources of income for the project. The following were discussed:
a. Grants- REPI program (Renewable Energy production Incentive). This is a federal program
that may possibly offer some grant money for the project.
b. Golden Leaf Foundation -not likely as this is typically tied to job creation.
7. RSG distributed a sample agreement form a landfill project they are currently working on. Bob
Sallach to investigate and provide similar samples from their work.
8. The next meeting is scheduled for February 26th at 3:30 pm to begin discussions on the economic
evaluation and final Agreement.
These minutes represent our best understanding of the discussions held and decisions reached at the
meeting. Please advise the writer of any errors or omissions of substance.
Affiliated Engineers
Jerry A. Schuett, P.E.
Principal/Project Manger
i~
na yte mts V-44 -26 P-1 -2 -1 AVERAGE
Total Reduced Sulfur Compounds -ASTM iJ5504
Hydrogen Sulfide ppmv ND ND ND ND ND
Carbonyl Sulfide ppmv ND ND ND ND ND
Ethyl Mercaptan ppmv ND ND ND ND ND
Methyl Mercaptan ppmv ND ND ND ND ND
Carbpm Disulfide ppmv ND ND 0.87 ND ND
Dimethyl Sulfide ppmv ND ND 2.8 0.87 3.4
Dimethyl Disulfide ppmv ND ND 80 ND 2.3
Total Reduced Sulfur ppmv ND ND 84 1 6
(Natural Gas Analysis -ASTM D1945
Methane %v/v 60 59 60 57 57
Carbon Dioxide %v/v 38 40 40 41 40
Total Compounds %v v 98 99 100 98 97
(Volatile Compounds -EPA Method TO-14IT0-15
Dichlorodifluoromethane ppbv 1600 14.00 150 580 ND
Chloromethane ppbv ND ND ND ND 280
1',2-Ci-1,1,2,2-F-Ethane ppbv ND ND ND ND 150
Vinyl Chloride ppbv 3500 1500 430 2000 1,500
Chloroethane ppbv 340 790 230 200 850
Trichlorofluoromethane ppbv ND ND ND ND 110
Acetone ppbv 9,300 2,000 4,000 ND 2,100
Methylene Chloride ppbv 850 140 990 .410 3,700
1,1-Dichloroethane ppbv 140 150 140 ND 1,400
c-1,2 Dichloroethane ppbv 5,100 1,900 ND 2,000 430
2-Butanone ppbv 5,800 2,700 4,800 780 5,100
t-Butyl Methyl Ether ppbv ND 180 ND ND 300
1,1,1-Trichloroethane ND ND ND ND 400
Benzene ppbv 450 440. ND' 780 750
1,2-Dichloroethane . ppbv ND ND ND 83 ND
Trichloroethene ppbv 410 130 670 410 390
4-Methyl-2-Pentanone ppbv ND ND 620 ND ND
Toluene ppbv 19,000 18,000 16,000 8,900 12,000
Tetrachloroethene ppbv 920 340 ND. 730 1,200
Ethylbenzene ppbv 2,800 2,700 4,400 670 2,200
p&m-Xylene ppbv 5,400 5,100 11,000 1,200 5,300
o-Xylene ppbv 1,600 1,400 2,000 410 1,500
Styrene ppbv 500 380 340 330 460
4-Ethyl Toluene ppbv 590 590 ND 250 .490
1,3,5-Trimethylbenzene ppbv 250 ND ND 190 ND
1,2,4-Trimethylbenzene ppbv 500 470 ND 210 270
Total Halogenated Vofatiles ppbv 12,860 6,350 2,610 6,413 10,260
Total Vofatiles ppbv 59,050 40,310 45,770 20,133 40,880
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280
150
1,786
482
110
4,350
1,,218
458
2,358
3,836
240
400
605
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402
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14,780
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1,382 '
402
480
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363
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41,229
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1414 Raleigh Road, Suite 305
Chapel Hill, North Carolina
(919) 419-9802 (Fax 419-9803)
Meeting Notes
UNC -Alternative Energy Analysis Landfill Gas Investigation
Project
University of North Carolina- Chapel Hill
Owner
Preliminary Economic Review
Type of Meeting
08029-00
Project No.
02/26/2008
Meeting Date
Page 1 of 2 ias
Page Typist
Present/Representing:
Gwen Harvey
Gayle Wilson
Michael Meagher
Paul Spire
Bob Sallach
John Masson
Ray DuBose
Phil Barner
William Tricomi
Nick Travis
Jerry Schuett
Orange County
Orange County
Orange County
Orange County
Olver, Inc.
UNC-CH Facilities Planning
UNC-CH Energy Services
UNC-CH Energy Services
UNC
Energy Strategies
Affiliated Engineers
gharve r~a,co.orange.nc.us
gwilson .co.oranae.nc.us
mmeaaher@co.oranae.nc.us
ospire(c~co.orange.nc.us
rsallach(a~olver.com
Jmasson(a~fac.unc.edu
rav.dubose(7a energy.unc.edu
philip.barner(p~eneray.unc.edu
will tricomi(c~unc.edu
ntravis energystrat.com
jschuett(a~aeienq.com
The meeting was held at UNC-CH to discuss some preliminary revenue sharing concepts for the Landfill Gas
project. The following items were discussed:
1. A number of "guiding principles" were suggested for an Agreement. These, principles are:
a. Simplicity and transparency in implementation
b. Afford upside to County while mitigating financial risk to UNC
c. Modest preferred distribution to County
d. Priority recovery of O&M expenses
e. Priority recovery of capital investment
f. Equitable sharing of available surplus
g. Maximize cost effective capture of carbon credits by UNC while
affording modest participation in carbon credits by County
2. A preliminary revenue stream calculation was distributed. This is based on preliminary. information
and needs refinement as the analysis is completed.
3. The revenue calculation can be done a number of ways. The following methods were discussed:
a. Use LFG to avoid NG purchases (This method does not really reflect any of the options
under consideration at this time)
b. Use LFG to avoid coal purchases (This method applies to Option 3)
c. Use LFG to avoid electrical purchases (This method applies to Option 1)
d. Use LFG to generate carbon credits only -flare only (Done for baseline comparison)
4. The results of the revenue analysis indicated that about 50% of the revenue stream is in the form of
carbon credits and 50% is in the form of the value of the fuel (coal or power purchase offsets).
a~
` ~ ~ i~.~~
1414 Raleigh Road, Suite 305
Chapel Hill, North Carolina
(919)419-9802 (Fax 419-9803)
~neet~ng rotes
UNC -Alternative Energy Analysis Landfill Gas Investigation 08029-00
Project Project No.
University of North Carolina- Chapel Hill 02/26/2008
Owner
Preliminary Economic Review
Type of Meeting
Meeting Date
Page 2 of 2 ias
Page Typist
5. The total revue is approximately $12,000,000 over a 30 year project life, but is highly dependent on
the value of carbon credits.
a. The carbon credits generated by the project are as follows:
1. Methane destruction (about 80% of the total)
2. Direct biogenic C02 emission reductions
b. The carbon credits were valued at $3.50/tonne until a cap and trade market was assumed to
begin in 2012. At that time, the price was assumed to be $15.00/tonne and was then
increased by the rate of inflation for subsequent years.
6. Avery preliminary proforma was presented and suggested as a starting point for negotiation. This
proforma used the guiding principals noted above to equally share the revenue over the course of
the project. The hierarchy of revenue distribution was as follows, based on the assumption that
UNC provided the funding for the capital costs:
a. Pay O&M costs
b. Provide a "preferential" distribution to the County of approximately 10% of the annual
revenue until all capital is recovered
c. Recover capital investment
d. Once all capital is recovered, distribute revenue to achieve a similar NPV for both the
County and UNC
7. The preliminary proforma resulted in a NPV of about $2,500,000 to each entity over the life of the
project. A copy of the information distributed at the meeting is attached to these notes.
8. The next meeting is scheduled for March 11th at 3:00 pm to continue dialog on the economic
evaluation and final Agreement. The following action items are to be completed in the interim:
a. Review proforma and guiding principles and generate comments/concerns
b. Review similar landfill gas agreements and start an agreement for this project
These minutes represent our best understanding of the discussions held and decisions reached at the
meeting. Please advise the writer of any errors or omissions of substance.
Affiliated Engineers
Jerry A. Schuett, P.E.
Principal/Project Manger
as
r ~~ ~ [~ ~f~C ~ ~~
1414 Raleigh Road, Suite 305
Chapel Hill, North Carolina
(919)419-9802 (Fax 419-9803)
IVleeting Notes
UNC -Alternative Energy Analysis Landfill Gas Investigation
Project
University of North Carolina- Chapel Hill
08029-00
Project No.
03/11 /2008
Owner Meeting Date
Review Meeting No. 4 Page 1 of 2 jas
Type of Meeting Page Typist
Present/Representing:
Gwen Harvey
Gayle Wilson
Michael Meagher
Brain Ferrell
Bob Sallach
John Masson
Ray DuBose
Phil Barner
William Tricomi
Matt Lamb
Nick Travis (via phone)
Jerry Schuett
Orange County
Orange County
Orange County
Orange County
Olver, Inc.
UNC-CH Facilities Planning
UNC-CH Energy Services
UNC-CH Energy Services
UNC
Richardson Smith Gardner
Energy Strategies
Affiliated Engineers
aharvey a(~.co.oranae.nc.us
gwilson~co.orange.nc.us
mmeagher a~co.orange.nc.us
~~~
rsallach~a olver.com
JmassonCa~fac.unc.edu
ray.duboset'a~eneray.unc.edu
philip.barner(a~energy.unc.edu
will tricomi(a~unc.edta
matt rsaengineers.com
ntravis(a~energystrat.com
jschuett(a~aeieng.com
The meeting was held at UNC-CH to discuss some progress to date and the preliminary economic "straw man"
for the Landfill Gas project. The following items were discussed:
1. A preliminary report has. been issued to UNC for review. A final review copy for Orange County's
viewing will be available in the next few weeks.
2. No comments were made on the notes from the last several meetings.
3. Option 1- Power generation at Homestead site is being considered the most viable option, since
confirmation of pipe routing to the cogen plant has not been confirmed as viable. Therefore, the
revenue stream on the project will be avoided electrical purchase and any value of carbon.
4. It was noted again that the project will not be viable based solely on the value of the fuel content of
the LFG. Some value on carbon credits must be established to make it viable.
5. The economic "straw man" presented by Energy Strategies on February 26th was based on an
equitable split of all revenues on the project after debt was retired and O&M costs were covered.
Orange County received an early preferential distribution to allow some cash flow to them before
the debt was retired.
6. AEI/UNC asked for response from Orange County on the preliminary economic "straw man"
distributed on February 26th. The following comments were made:
~3
~~
LEI ~Ci
~i.~~~°4
1414 Raleigh Road, Suite 305
Chapel Hill, North Carolina
(919) 419-9802 (Fax 419-9803)
UNC -Alternative Energy Analysis Landfill Gas Investigation
Project
University of North Carolina- Chapel Hill
Owner
Review Meeting No. 4
Type of Meeting
n~eet~ng totes
08029-00
Project No.
03/11 /2008
Meeting Date
Page 2 of 2 ias
Page Typist
a. Orange County has no immediate need for carbon .offsets/credits so in the short term they
would they would like to sell the credits.
b. A discussion on the verification of the credits took place. If credits are to be sold on any
type of future carbon market, additional verification and validation steps will be necessary.
Since UNC does not plan on selling their credits, this level of validation would not be
necessary for them.
c. Orange County would like to see a more simplified version of the commercial terms of the
Agreement that may provide some compensation for the fuel value of .the gas plus some
minimum level of payment for carbon credits.
7. It was noted that if the carbon credits are to be verified and validated for sale on the open market,
some reductions to the value in the economic analysis would need to be made. These would
include:
a. Any current flaring operations
b. Any degradation of methane inherent in the current landfill configuration
Since most of the credits would not be sold, it seems logical to use the quantities agreed upon by
RSG and Olver, Inc. The economic model will be updated to reflect these quantities for methane
destruction.
8. The project schedule was discussed briefly. It was noted that the LFG collection and flaring system
could be operational by July 2009 and the beneficial use of the LFG for power production could be
operational by July 2010. The economic model will be updated to reflect this.
9. Olver, Inc. had committed to sending some examples of -LFG agreements to UNC for review.
These have not been received, but the commitment was made again to send these.
10. The next meeting is scheduled for March 25th at 10:30 am to continue dialog on the economic
evaluation and final Agreement. The following action items are to be completed in the interim:
a. Final review copy of RSG study will be available for distribution to UNC
b. Some additional options for the commercial terms will be available
c. An outline of the legal issues for the Agreement will be pulled together
These minutes represent our best understanding of the discussions held and decisions reached at the
meeting. Please advise the writer of any errors or omissions of substance.
Affiliated Engineers
Jerry A. Schuett, P.E.
Principal/Project Manger
Y Q.'. ~4`.~iu..
`4 ~~ r,~R ~ }rt
i.Nk7.t/~~~*•v~ i
R~~,.~F 3
Landfill Gas Investigation
Monthly Report
April 8, 2008
Produced By:
;® Aff~lla~ted
;~ ~ing~neeirs~>
1414 Raleigh Road, Suite 305
Chapel Hill, North Carolina
(919) 419-9802 (Fax 419-9803)
~tt~¢c, tpb4
s
II 52~
io«
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Table of Contents
Meeting Notes 03/25/2008, 04/01/04 and 04/08/08 ...................................................................3-5
Commercial Terms Draft ............................................................................................................6-9
Preliminary Term Sheet .........................................................................................................10-13
Preliminary Project Schedule ......................................................................................................14
Project Location Map ..................................................................................................................15
Affiliated.
r~^' Engineers
Page 2 of 15
a~
~Ai#ilied
Engin±~rs~.
1414 Raleigh Road, Suite 305
Chapel Hill, North Carolina
(919) 419-9802 (Fax 419-9803)
iVleeting Notes
UNC -Alternative Energy Analysis Landfill Gas Investigation 08029-00
Project Project No.
University of North Carolina- Chapel Hill 3/25, 4/1 and 04/08/2008
Owner
Review Meeting No. 5, 6 and 7
Type of Meeting
Meeting Date
Page 1 of 3 ias
Page Typist
Present/Representing:
Gwen Harvey
Gayle Wilson
Michael Meagher
Paul Spire
Brain Ferrell
Bob Sallach
John Masson
Ray DuBose
William Tricomi
Pat Crawford (Partial- via phone)
Matt Lamb
Nick Travis (via phone)
Jerry Schuett
Orange County
Orange County
Orange County
Orange County
Orange County
Olver, Inc.
UNC-CH Facilities Planning
UNC-CH Energy Services
UNC
UNC
Richardson Smith Gardner
Energy Strategies
AfFliated Engineers
harvevCa7co.oranae.nc.us
awilson co.orange.nc.us
mmeagher(c~co.orange.nc.us
pspireCa~co.orange.nc.us
bferrel I .ca hp-I aw. co m
rsallach[cr)olver.com
JmassonCa~fac.unc.edu
ray. d u boseCa~ e n e ray. u n c. ed u
will tricomiCa7unc.edu
pat crawfordCa~unc.edu
matt rsgenaineers.com
ntravisCc~energystrat.com
Lchuett(c~aeiena.com
The meeting was held at UNC-CH to discuss some progress to date and the path forward for the Landfill Gas
project. The following items were discussed:
1. A draft copy of the landfill gas feasibility study has been completed by RSG and was distributed to
the County for review. Note that the capital costs have been updated to reflect a greater level on
instrumentation on the equipment at the landfill and the pipeline cost have been updated to reflect a
more circuitous routing path along DOT highways.
2. The economic model was reviewed. It was noted that four major risks impact the project. These
are:
a. Over estimation of MFG quantity
b. Failure of a carbon compliance market to be established
c. Spikes in NG pricing
d. Overrun of estimated capital costs
3. The most recent model was run with the following assumptions:
a. LFG quantity matches estimates in feasibility study .
b. Carbon compliance market starts in 2012 and carbon credit price is per Nicholas Institute
projections
Page 3 of 15
a-~
Ong n+e
1414 Raleigh Road, Suite 305
Chapel Hill, North Carolina
(919) 419-9802 (Fax 419-9803)
IVleeting Notes
UNC -Alternative Energy Analysis Landfill Gas Investigation
Project
University of North Carolina- Chapel Hill
Ownar
Review Meeting No. 5, 6 and 7
Type of Meeting
08029-00
Project No.
3/25, 4/1 and 04/08/2008
Meeting Date
Page 2 of 3 jas
Page Typist
c. NG pricing is per NYMEX futures market, current pricing
d. 10% contingency added to capital costs
The results indicate positive cash flow for both parties over 20 years, with about 2.1 million NPV to
County and $1.15 million NPV to UNC. The results change significantly as each risk factor is
assumed to be at its worst case condition. In all those cases, the County NPV deceases slightly
(except for high price of NG, in which case it increases, and capital cost overruns are encountered,
in which case there is no change. In all cases, the UNC distribution decreases significantly.
4. To mitigate the risks; UNC suggested some language in the commercial terms to reduce the
distribution to the County to 10% in the event of no compliance market for carbon or less than
estimated LFG quantities are collected. Also, a cap on NG prices was included. No specific
measures for capital cost overruns were noted, but UNC would like to have some method of
mitigating risk in this area.
5. A written document of the proposed commercial terms was distributed to Orange County and is
included in the monthly progress report. Comments were requested prior to next week's meeting.
This document is attached and will continue to be discussed and modified as we move toward a
final agreement.
6. The legal terms are continuing to be advanced in the form of a preliminary term sheet. Will Tricomi
will forward the latest version for inclusion in the~final 30 day report going to the County next week.
7. A preliminary project schedule was distributed and discussed. The following comments were made:
a. The approval process for Orange County is too short. We should have the following items:
1. April 15~' -approval from County Commissioners to continue negotiations and
finalize and Agreement with UNC
2. Sometime thereafter, prepare a detailed presentation to County Commissioners on
the proposed project scope at either the joint planning meeting (JPA) with the
Town of Chapel Hill or at one of the regularly scheduled County meetings
3. Late August 2008 - Final Agreement is prepared and issued to County
Commissioners and UNC for approval
b. A copy of an updated schedule is included in the progress meeting.
8. It was agreed that the option of locating the power.generation equipment at the landfill site would be
left open as a possibility. This would help mitigate the initial capital cost and may simplify permitting
issues.
Page 4 of 15
~8
~fil;l . .
l r~ir~.
1414 Raleigh Road, Suite 305
Chapel Hill, North Carolina
(919) 419-9802 (Fax 419-9803)
Meeting Notes
UNC -Alternative Energy Analysis Landfill Gas Investigation
Project
University of North Carolina- Chapel Hill
Owner
Review Meeting No. 5, 6 and 7
Type of Meeting
08029-00
Project No.
3/25, 4/1 and 04/08/2008
Meeting Date
Page 3 of 3 jas
Page Typist
9. The final documentation to the Orange County Board of Commissioners was discussed and
comments from UNC were passed on to the County.
10. The next meeting will be scheduled for the week of April 21St after the Orange County
Commissioners Meeting on April 15th to continue dialog on the project.
These minutes represent our best understanding of the discussions held and decisions reached at the
meeting. Please advise the writer of any errors or omissions of substance.
Affiliated Engineers
Jerry A. Schuett, P.E.
Principal/Project Manger
Page 5 of 15
~~
Commercial Terms
1.1 Payments to the County
A. The University of North Carolina at Chapel Hill (the "University") shall make
payments to Orange County based on the heating content and use of landfill gas
(LFG) collected. The payments shall have two components, one related to the
energy content of the LFG, the other resulting from the destruction of methane
and associated reduction in greenhouse gas (GHG) emissions.
1. Energy Component
a. The University will make monthly cash payments to the County for the
useful energy content of the LFG delivered to the University in the
preceding calendar month. The payments shall be based on the total
measured heating value of the gas transmitted to the University to
produce power and/or thermal energy. No payment will be made for
the heating value of LFG that is flared.
b. The LFG shall be deemed delivered to the University at the point it
enters the pipeline for transport to the University facilities where it will
be used to produce power and/or thermal energy.
c. The heating value of the delivered LFG will be based on its measured
methane content. The methane content of the gas will be continuously
monitored and the resulting heating value will be measured in British
Thermal Units per Standard Cubic Foot (Btu/scf). The total gas flow
delivered to campus will be measured, recorded, and totalized on an
hourly, daily and monthly basis. The total monthly heating value of the
gas will be calculated from the totalized flow and heating value
measured and will be expressed in millions of Btu's higher heating
value (wlMBtu HH~,
d. For any month, the purchase price for the delivered gas will be
calculated as fifteen percent (15%) of the MMBtu HIIV (Allocated
Energy Content) delivered multiplied by a dollar amount per NIMBtu
HHV ("Btu Equivalent Gas Price").
e. The Btu Equivalent Gas Price shall be determined monthly in advance
as the IFERC Transco Zone 3 settlement price. IFERC Transco Zone 3
is a monthly published index price for the Transco Zone 3 pricing point.
The index is published in "Platts Inside FERC Gas Market Report"
published by the McGraw Hill Companies. The dollar amount per
NIlVIBtu this determined shall be referred to as the Delivered LFG Price.
f. Sample calculations of the monthly payment for the energy component
of delivered LFG are provided below. (To be provided.)
Confidential Preliminary Draft for Discussion Only
Attorney Client Privileged
March 31, 2008
Page 6 of 15
3~
2. Methane Destruction Component
a. The methane destruction component of the payment to the County will
be based on the total quantity of methane destroyed and the method of
destruction, either through the flaring of the gas or its use in the
production of power and/or thermal energy.
b. There shall be no payment for methane destruction prior to the time that
gas will be flared and the methane destroyed.
c. The methane content of the gas delivered to the flare and to the
University will be separately and continuously monitored. The total
methane flows delivered to the flare and campus will be measured,
recorded, and totalized on an hourly, daily and monthly basis.
d. The total amount metric tonnes of carbon equivalents (MTCO2e) for
methane destruction will be calculated for each month as the sum of the
MTCOze for gas delivered to the flare and to the University as follows:
1). For gas delivered to the University:
MTCOZe =Collected LFG Delivered to the Pipeline (in cubic feet)
multiplied by % by Volume Methane Concentration divided by 35.31
cubic feet per cubic meter multiplied by the Density of Methane
(0.000667 metric tonnes per cubic meter) multiplied by the Global
Warming Potential of Methane (GWP) as determined by the
Intergovernmental Panel on Climate Change (IPCC).
2). For g_as delivered to the Flare:
MTCOZe =Collected LFG Delivered to the Flare (in cubic feet)
multiplied by % by Volume Methane Concentration divided by 35.31
cubic feet per cubic meter multiplied by the Density of Methane
(0.000667 metric tonnes per cubic meter) multiplied by an Adjusted
Global Warming Potential for Methane (Adjusted GWP) where
Adjusted GWP is equal to Global Warming Potential of Methane
(GWP) as determined by the Intergovernmental Panel on Climate
Change (IPCC) less a factor to account for the CO2 that is released
when the methane is flared.
The GWP shall initially be 21 and the Adjusted GWP shall be 18.25.
The University and County understand that the methodologies used to
calculate carbon equivalents are evolving. Accordingly, the University
may adjust the methodologies provided in paragraphs A.2.d.1 and
A.2.d.2 above to reflect changes in methodologies commonly applied or
required under federal or state regulation.
(Example to be provided.)
Confidential Preliminary Draft for Discussion Only
Attorney Client Privileged
March 31, 2008
Page 7 of 15
~i
e. The University will allocate fifteen percent (15%) of total MTCOZe
thus calculated to the County (Allocated Carbon Credits).
3. Management of the County's Allocated Carbon Credits
a. Initially, the County has determined to sell its Allocated Carbon
Credits. The University may wish to acquire the County's Allocated
' Carbon Credits, but cannot assure the County that a sale to the
University will always be possible, or that it will result in the highest
value to the County.
b. To assist the County to sell its Allocated Carbon Credits, the
University will employ a third party to implement a program that will
enable the Allocated Carbon Credits to be sold. The University will
identify at least two candidates to serve as the third party (Carbon
Credit Advisor). The University shall review the candidates with the
County and shall then select the Carbon Credit Advisor. The
University may replace the Carbon Credit Advisor at any time by
repeating the selection process.
c. The Carbon Credit Advisor shall implement a program to enable the
sale of the Allocated Carbon Cl•edits. The Carbon Credit Advisor shall
review with the County and University alternative approaches to selling
the Allocated Carbon Credits. The University shall select the approach
to be implemented with input from the County.
d. The Carbon Credit Advisor shall estimate the market value of the
Allocated Carbon Credits under the selected approach at time intervals
consistent with the approach adopted. The market value shall be
defined as the estimated proceeds from the sale of the Allocated Carbon
Credits in the then current carbon marketplace net of all associated
transaction costs.
e. The University shall have first right of first refusal to retain title to the
Allocated Carbon Credits by paying the County the estimated market
value.
f. If the University elects not to retain title to the Allocated Carbon
Credits, it shall advise the County. The County may elect to receive
title to the Allocated Carbon Credits, or authorize that the Allocated
Carbon Credits be sold by the Carbon Credit Advisor. If the County
does not provide guidance in writing as to the disposition, the Allocated
Carbon Credits shall be sold.
g. If the Allocated Carbon Credits are sold, an amount equal to the net
proceeds received by the University from their sale shall be disbursed to
the County within 30 days of receipt of sale proceeds.
h. The University will work with the Carbon Credit Advisor to implement
a program that results in a fair market value for the Allocated Carbon
Credits. However, the County and University recognize that the value
of the Allocated Carbon Credits to the County may not be optimized
under this program. Accordingly, the County may at any. time, with
Confidential Preliminary Draft for Discussion Only
Attorney Client Privileged
March 31, 2008
Page 8 of 15
3a
reasonable notice, elect to request that the University discontinue the
Carbon Credit Advisor program.
Upon termination of the Carbon Credit Advisor program, the County
shall thereafter receive title to the Allocated Carbon Credits for
disposition at their sole discretion.
The regulations, policies and procedures governing reductions in
greenhouse gas (GHG) emissions and associated markets for carbon
credits are evolving. As the regulations, policies, procedures, and
markets for carbon credits evolve, the University will strive to adopt
cost effective practices with respect to the LFG project to maximize the
credits resulting from the project and to measure and document those in
away that meets both the University's internal carbon reduction
objectives and the County's objective to generate cash flow with access
to appropriate markets through which the Allocated Carbon Credits can
be sold.
B. Adjustments to the Payments to the County
a. The Btu Equivalent Gas Price shall be subject to a cap which shall be
calculated as $9.00 per MMBtu in 2010 escalating at 2% per annum.
b. The economic viability of the project to the University is highly
dependent on:
1). The quantity of LFG and associated methane content collected
from the landfill. If the cumulative quantity of methane collected
by the project for the years 2011 through 2014 is less than 90% of
the cumulative amount shown in Exhibit XXX, then the percentage
on which the Allocated Energy Content and Allocated Carbon
Credits are based shall be reduced to ten percent (10%) starting in
2015.
2). The future market value of carbon credits. If, as of December 31,
2014, substantive federal regulations to reduce GHG emissions have
not been enacted and market values for US carbon allowances as
estimated by the Carbon Credit Advisor or other independent expert
are not projected to average at least $15.00 per MTCOze for the
period 2015 through 2019, then the percentage on which the
Allocated Energy Content and Allocated Carbon Credits are based
shall be reduced to ten percent (10%) starting in 2015.
3). (Sharing of risk of capital cost overruns to be discussed.)
Note: The above allocation assumes University will be responsible for
maintenance of the collection and flare systems, pipeline, and engine
generator.
Confidential Preliminary Draft for Discussion Only
Attorney Client Privileged
March 31, 2008
Page 9 of 15
33
PRELIMINARY TERM SHEET
LANDFILL GAS RIGHTS AGREEMENT
The following is a preliminary summary for discussion purposes only of certain terms and
conditions contemplated for the Agreement.
1. Parties
Orange County, North Carolina ("County")
University of North Carolina at Chapel Hill ("University")
2. Rights Granted to University
a) Right to use and access the Orange County Landfill, 1514 Eubanks Road, Chapel Hill
("Landfill") on a 24-hour 7-day per week basis to perform the operations contemplated by the
Agreement.
b) Exclusive right and license to explore for, mine, extract and collect the landfill gas
("LFG")
c) Easements and right-of--way through Landfill site and license to drill gas wells, lay
pipelines, construct tanks and other related LFG collection infrastructure ("LFG Collection
System")
d) Ownership of and title to all LFG and to the LFG Collection System
e) License to install utility lines to Landfill necessary for the LFG Collection System and
related operations
3. Representations Warranties and Obligations of County
a) County represents and warrants that its has fee simple title to the Landfill and has full
right to make and enter into the Agreement
b) County represents and warrants that no verbal or written assignment or agreement
currently exists for the extraction and sale of the LFG
c) County agrees to lnalce reasonable efforts to repair cracks, fissures, erosion, or other
physical changes in the Landfill which have an adverse effect on the production of LFG
d) County agrees to cooperate in the development and operation of Landfill so as to
maximize the production of LFG, and County shall not interfere with University's LFG
operations
e) County shall maintain adequate "cover" over Landfill at all times to meet current federal
and state guidelines
f) County shall cooperate with University in preparing, executing and filing such
applications, assignments of rights, and other documents as maybe necessary to allow
University to conduct the activities contemplated under the Agreement
g) County agrees to make available to University copies of all necessary environmental
information, reports, environmental impact reports, air impact assessment studies in the County's
possession
h) County shall take reasonable measures to ensure that the LFG Collection System is not
damaged by the County, its employees or contractors. In such event that the LFG Collection
System is damaged by the County, ,its employees or contractors, the County shall reimburse
University for the reasonable costs of repairs
i) County shall retain sole and exclusive right and all obligations with regard to its
municipal solid waste landfill operations at the Landfill. County shall continue to be responsible
{00016169.DOC}
Page 10 of 15
3~-
for meeting all applicable laws and regulations pertaining to the operation of the Landfill,
exclusive of University's operation of the LFG Collection System.
4. Representations Warranties and Obligations of University
a) University shall install at its own expense the LFG Collection System
b) University shall be responsible for maintaining the LFG Collection System
c) University shall prepare applications to obtain all environmental and other permits which
may be required under applicable local, state, and federal enviromnental and other laws and
regulations in connection with its activities under this Agreement.
d) University shall use reasonable efforts to operate, maintain, repair and replace the LFG
Collection System in accordance with good engineering practices and industry standards
e) University shall use reasonable efforts to monitor the LFG Collection System in
accordance with all federal, state and local laws and regulations, for methane and oxygen
percentage by volume
f) University shall be responsible for the disposal of condensate regardless of whether it is
deemed a hazardous material. University shall have the right, if allowed by the laws of North
Carolina and Federal laws, to return any condensate to the Landfill
5. Compensation to County.
a) [terms to be inserted)
6. Liabili
a) University shall be responsible for: (i) damages and claims caused by University's own
negligence or that of their agents, servants, employees, or contractors, and (ii) damages,
penalties, fines, or other claims of any kind or nature resulting from the violation by University
of any laws or regulations that the University is responsible for complying with pursuant to the
terms of the Agreement, provided that such damages are shown to be directly attributable to the
University.
b) County shall be responsible for: (i) damages caused by County's own negligence or that
of their agents, servants, employees, or contractors, (ii) damages, penalties, fines, or other claims
of any kind or nature resulting from the violation by either party of any laws or regulations
relating to the Landfill and its operations (excluding the damages and claims described in 6(a)(ii)
above), and (iii) all other claims and damages of any kind or nature arising from the Landfill and
its operations (excluding the damages and claims described in 6(a) above), including without
limitation, the Landfill Collection System, flaring operations, and other operations contemplated
by the Agreement.
c) Neither party shall be liable to the other for any indirect, special, incidental or
consequential damages.
7. Term of Agreement. A minimum of 20 years, with provisions for extension, subject to
earlier termination if (a) the conditions precedent to "Go Decision" are not satisfied under
Section 8, or (b) the Agreement is terminated earlier pursuant to Section 9.
{00016169.DOC}
Page 11 of 15
3~
8. Conditions Precedent to "Go Decision"
a) Receipt of all required governmental and regulatory permits and approvals
b) No material adverse change shall have occurred with respect to the prospects for success
of the LFG project
9. Termination/Expiration
a) Each party shall have the right to terminate this Agreement in the event the other party
commits an act or an omission which is a material default under this Agreement, provided that
the party asserting a default must have first notified the other party in writing and allowed a
reasonable period of time, but not less than ninety (90) days (forty-five (45) days in the event of
non- payment of the compensation to the County) to cure such default.
b) In the event County terminates the Agreement, for any reason, prior to the scheduled
expiration date for the Agreement, County shall pay the University a prorated buyout amount to
compensate University for its costs and lost profits, which shall include the unamortized value of
all the LFG Collection System equipment, University construction costs and expenses, and
compensation for University's inability to access methane credits.
c) In the event that University reasonably determines that Lal-ldfill Gas can no longer be
recovered from the Landfill in sufficient quantities, then University shall have the right to
surrender and terminate this Agreement and thereby be relieved of all obligations under this
Agreement
10. Removal of Equipment
a) Following the expiration or termination of this Agreement, University shall remove the
University equipment comprising the LFG Collection System and shall permanently seal and cap
all openings for pipes or equipment left in the Landfill in accordance with the latest industry
standards.
b) If University fails to remove some or all of its equipment within [X] months after the
expiration or termination of the Agreement, such equipment shall be deemed abandoned by
University and shall become the property of the County.
11. Force Majeure
12. Amendments
13. Assignment
14. Books and Records
15. Waiver
16. Status of Parties/No A~encY
17. Notices
18. Equal Opportunity/Non-discrimination
{00016169.DOC}
Page 12 of 15
19. Governing Law/Venue
20. Entire A~xeement
21. Severability
{00016169.DOC}
Page 13 of 15
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