HomeMy WebLinkAboutAgenda - 12-01-2008 - 3cORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: December 1, 2008
Action Agenda
Item No. _~G _
SUBJECT• Joint UNC/Orange County Landfill Gas Recovery Project Update
DEPARTMENT: Solid Waste Management PUBLIC HEARING: (Y/N) No
ATTACHMENT(S): INFORMATION CONTACT:
(Under Separate Cover)
Public Information Meeting Presentation
Pro forma Gwen Harvey - 245-2307
Draft Agreement Gayle Wilson - 968-2885
PURPOSE: To present a status report of the progress of negotiations and a draft agreement
between Orange County and UNC-Chapel Hill regarding development of joint landfill gas
recovery project.
BACKGROUND: In January of 2008 the Board of Commissioners (BOCC) authorized a
Memorandum of Understanding between the County and UNC authorizing discussion on the
feasibility of a landfill gas to energy project at the Orange County Landfill. In April 2008 the
Board authorized staff to proceed towards final contract negotiations. In the ensuing period
County and University Staff have been working diligently to conclude negotiations and present a
recommended agreement and project development plan to the County and University
administrations for consideration. Staff is of the opinion a final draft agreement is nearing
completion and believes it is time to brief the BOCC on the provisions and features of the
current draft agreement as well as the overall project approach. A public information forum was
held on October 13.
Under the terms of the proposed Agreement, the County will grant UNC the rights to the landfill
gas ("LFG") generated at the Eubanks Road Landfill. UNC will construct a system to collect,
transport, and combust such LFG, initially through flaring and then through electricity
generation. In exchange for the LFG rights, UNC will make monthly payments to the County for
a percentage of the heating energy value of LFG that UNC has flared and used to generate
electricity. UNC is responsible for all costs and operating responsibilities associated with the
LFG Project.
Key Terms
Rights Granted UNC: The County grants UNC the rights to the LFG generated by the
Landfill during the Agreement's Term along with a license to access the Landfill and
2
easements across County-owned properties to construct the pipeline used to transport
the LFG to UNC.
. Operating Responsibilities: UNC is solely responsible for constructing, operating,
maintaining, and repairing the LFG Project, including all associated costs and legal
compliance obligations. The County is solely responsible for operating and maintaining
the Landfill, exclusive of the LFG Project, including all associated costs and legal
compliance obligations. The Agreement also provides the Landfill's operations take
precedence over the LFG Project's operations.
Commercial Terms: UNC will make monthly payments to the County calculated on the
heating energy content of LFG delivered to UNC multiplied by an index price for natural
gas that is capped at $9.00 per MMBtu (inflation adjusted on a compound basis at 2%
per year). The commercial terms rest on an economic analysis resulting in an equal
sharing of project value between the County and UNC during the Term of the Agreement.
For LFG combusted through flaring, UNC pays the County 5.3% of the LFG's
heating energy content multiplied by the natural gas price.
For LFG combusted through energy conversion, UNC pays the County 16.6% of
the LFG's heating energy content multiplied by the natural gas price.
These percentages are subject to upward or downward adjustments should the
U.S. enact federal legislation restricting greenhouse gas emissions affecting
certain underlying economic assumptions agreed to by the parties. However, the
5.3% flare percentage cannot go lower than 2.09%or higher than 8.51 %. The
16.6% energy conversion percentage cannot go lower than 6.52% or higher than
26.68%
The Agreement grants the County the right to obtain up to 15% of the carbon
credits generated by the LFG Project through a carbon credit-exchange
mechanism.
The County's payments also may be adjusted to account for changes in methane's
global warming potential and UNC's generation of renewable energy credits.
Term: Twenty years with two five-year renewal terms exercisable at UNC's option. If
both options are exercised, the Agreement will run for thirty years.
Dispute Resolution: All disputes, except those requiring immediate injunctive relief, are
submitted to an escalating negotiation and non-binding mediation process. If such efforts
are unsuccessful, either party may resort to litigation.
From the University's perspective the primary goal of the project is to work towards carbon
neutrality at the Carolina North Campus, and significantly reduce the carbon footprint of the
entire UNC-Chapel Hill system. The use of landfill gas as an alternative fuel for both thermal
and electric energy production is an important component of achieving this goal. Orange
County is committed to addressing the problems and priorities of its residents, and taking a
leadership role among local governments with respect to climate change.
FINANCIAL IMPACT: There will be no financial impact related to receiving the project
negotiations update. However, if and/or when a final agreement is presented to the BOCC for
approval, there will be income generated to the Solid Waste Enterprise Fund for the period of
the agreement that could range from $115,000 to $140,000 annually with the potential for an
3
additional $3,500 to $40,000 annually from the sale of renewable energy credits. The actual
income will be variable and based on landfill methane output, natural gas price fluctuations,
federal greenhouse gas policy and other economic externalities.
RECOMMENDATION(S): The Manager recommends the Board review the draft agreement
and background information, receive the presentation, ask questions or request clarifications,
and provide any additional direction to staff or the consultant prior to the completion of
negotiations and the consideration of the final agreement at a subsequent meeting.
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November 20, 2008
between
® NGE C~ TY, N®IZ'I'I3 CAIN®LIN1~
and
T UN IZSITY ®F I~TOI~'I'~I C ®LIN.~, AT C PEL I~
Dated as ®f December _, 200
23
{00018638.DOC 16}
24
TABLE OI+' CONTENTS
ARTICLE I Definitions .................................................................................................................. 5
ARTICLE II Respective Rights and Obligations of the Parties ...................................................12
A. Rights Granted to University ................................................................................ 12
B. University's Operating Responsibility ..................................................................14
C. The County's Operating Responsibilities ............................................................. 18
D. Operating Protocols .......:..................:...... ::~.........----...................................... 20
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ARTICLE III Permitting and Construction of Facili, ~'e's ...........:: . ............................................ 21
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ARTICLE IV Representations of the Parties........ '~.~... ~~~`~.: v ........................................ 22
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A. The University's Representations .................. ~,................................................ 22
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................................ t~:~~.................................... 2
B. The County's Representations ~ -'~
C. Disclaimer of 'Warranties ..........................................:........................................... 24
~'''•~ 24
ARTICLE V Liability ... -_ =~`~T;;~~=~~R~ ...........................................................................................
1 ~L~~..
ARTICLE VI Term a"r1 ;« i~rm~nah ~ ........................................................................................... 25
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A. Termination -so~~~li;,e~~J'z~.ver~- ~ ................................................................... 27
B. Miscellaneous Te .. ~ tion Events ....................................................................... 27
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C. Termination Rights o e County ........................................................................ 28
D. Rights Upon Termination or Expiration ............................................................... 29
ARTICLE VII Purchase and Sale of LFG .................................................................................... 31
A. The University's Purchase Obligations ....................................................:........... 31
B. Payments to the County ........................................................................................ 32
C. Payment for Gas Flared ........................................................................................ 32
D. Payment for Gas Converted to Energy ................................................................. 33
E. Adjustments to County Payments ......................................................................... 34
{00018638.DOC 16} 1
25
F. Billiug ................................................................................................................... 41
ARTICLE VIII Respective Effective Dates of the University's Obligations Under this
Agreement ......................................................................................................................... 42
ARTICLE IX Landfill Gas Delivery ............................................................................................ 42
ARTICLE X Insurance and Taxes ................................................................................................ 44
ARTICLE XI Dispute Resolution ................................................
ARTICLE XII Force Majeure .....................................................
ARTICLE XIII Miscellaneous ..............................................
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{00018638.DOC 16}
26
LANDFILL GAS AGREEMENT
This Agreement is entered into as of December __, 2008 (the "Closin,gLDate"), between
Orange County, North Carolina (the "Coon ') and the University of North Carolina at Chapel
Hill (the "University"). The County and the University are sometimes hereinafter referred to
individually as "Party" and collectively as "Parties: '
RECTTALS
WHEREAS, the University is the flagship public research university of the State of
North Carolina located in Chapel Hill, North
~1=: ^C
WHEREAS, the University desires, in furth~r.,,.~ce of i '~'~~University Sustainability Policy
and the sustainabili ob"ectives associated with the ro ~~s~i~Carolina North Campus, to pursue
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and implement projects in cooperation with community partn`t'°s~~`;that .preserve natural resources,
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conserve energy, reduce hazardous emissions, and lessen overall envir~unental impacts;
WHEREAS, the Cau a good steward of the environment and a leader in the growth,
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development, and sus_tari~;bility of`tbehcommunity, desires to partner with the University in its efforts
,~-r ~,
to meet the goals of the Unlverslty,~ ~~ at`'tnar~hty Policy and its other sustainability efforts;
. ~~~
WHEREAS, the Unive~sxtThas determined that to help achieve these objectives it will work
cooperatively with the County to extra'andfill gas from the Orange County Landfill, an to convert
that gas into energy to supply power and heat for the University's Carolina North Campus while at
the same time removilag significant quantities of greenhouse gases from the atmosphere;
WHEREAS, the County desires, in furtherance of the health and well-being of its citizens
and the fiscal soundness of the. County, to enter into this Agreement with the University to make
beneficial use of Landfill resources and to generate revenue for the County from the sale of LFG;
WHEREAS, the County owns and operates the Orange County Landfill (NC Solid
Waste Parcel 68-01) located on the north and south side of Eubanks Road, approximately 1.3
3
{00018638.DOC 16}
27
miles to the west of the Highway 86 exit from Interstate 40, and approximately five (5) miles
north of Chapel Hill, at 1514 Eubanks Road, Chapel Hill, North Carolina, which consists of two
land disposal areas, a "North" closed unit comprising about fifty (50) acres (the `North
Landfill"), and a "South" operating unit comprising approximately twenty-five (25) acres and
operated in four phases (the "South Landfill"). The South Landfill is currently operating in
Phase 4 and is expected to reach capacity in the Spring of 201 l;
WSEEREAS, waste acceptance records indicate that the North Landfill received about
1.2 million tons of waste during its operating
the South Landfill is approximately 920,000 tons; ~"`~~'r~ A
W.~ItEAS, Landfill Gas (as defined below),
dioxide, nitrogen and traces of other constituent gases, is
decomposition of waste in the Landfill;
to June 1995. The capacity of
principally of. methane, carbon
as a by-product of the
~~: .
AREAS, sub'•-cf=a~ terms and conditions set forth in this Agreement, e ounty
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desires to grant to ~he~i ~nlverslty t~e exclusive right to design, develop, install and operate the
LFG Project (as defined b y~~ to pr ~~t~er-landfill gas (and in particular, methane) and to
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convert LFG into one or more ~'`, .- y of energy, thereby reducing associated greenhouse gas
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emissions from the Landfill, while at~he same time generating power from a renewable energy
source;
WHEREAS, subject to the terms and conditions set forth in this Agreement, the
University desires to have the exclusive right to design, develop, install, and operate the LFG
Project, and to collect, extract, and remove LFG from the Landfill, and either to destroy such gas
or to convert all or any portion of it into energy to supply part of the University's energy needs at
its Carolina North Campus, or for any other lawful purpose; and
4
{00018638.DOC 16}
28
W.~REAS, The County and the University desire to cooperate in the design,
installation, and operation of the LFG Project because of the project's environmental, public, and
economic benefits.
NOW, THEREFORE, in consideration of the mutual agreements, representations,
warranties, and covenants contained in this Agreement, and o ;., e r good and valuable
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consideration, the receipt of which is hereby acknowledged, the P,_, ~_,e~s hereby agree as follows:
ARTICLE I ~~~i( ` ~ ~ , .
~~
I~EFINiTIONS ~ "-'~
~ ~.
1. Adjusted BTU Equivalent Price means (a) in 2010, $9.00 per ~? ~~,,~ ' tu, and (b)
each calendar year during the Term of the Agreement thereafter, $9.00 per MMBtu as adjusted
upward on an annual, compounding bas " kn ~.~t~vvo ercent (2%). The Adjusted BTU Equivalent
Prices are set forth on ExhibitA to this Agr~ment: ~ ~ ~,k
2. Approvals shall mean the L~C'Pro~ect e"rmits, easements, rights-of--way,
consents, authorizations and other approvals that~ay be necessary for the University to install,
construct, operate maintain and repair the LFG Project.
.."~
Average ,~ilowance Market Price means the average monthly market price in
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U.S: dol~ ",~~14 ~ as determined ~~~ the methodology established by the Carbon Price Consultant in
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accordance wi ~ ~:~~.~'~ra~ra~h 12~3~ of this Agreement, attributed to one Emission Allowance created
~~ ~
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under federal legs ~~.et~,u~,~-ihe United States enacting aCap-and-Trade System to regulate GHG
emissions.
4. BTU shall mean British Thermal Unit.
5. BTU Equivalent Price shall be determined monthly in advance as the Transco,
zone 3 Pricing Point "midpoint" settlement price for natural gas published in the report named
"Monthly Gas Price Assessments -Inside FERC" published by McGraw Hill Company. The
5
{00018638.DOC 16}
29
underlying data set is "Monthly Gas Price Assessments -Inside FERC". The value for
September 2008 was $8.45 per million Btu.
b. Cap-and-Trade System means a system that (i) establishes a total cap on GHG
emissions from an identified group of GHG. emitters; (ii) establishes a market for Emission
Allowances; and (iii) allows trading of Emission Allowances among GHG emitters.
7. Carbon Credit means any contractual, equitable or statutory legal right, interest,
credit, offset, entitlement, benefit, allowance or certificate evidencing a reduction from the
,~%~
environment of one metric ton of carbon dioxide or C,~e his verified by (i) a federal, state, or
~~
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local Governmental Authority pursuant to laws r°~ egulations stablishing a regulatory mar et
,~ ~~
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for reductions of GHG emissions, or (ii) an indeperet third-parry utilizing nationally-
reco ed standards for establishing emissions reduction credits;., sociated with non-regulated,
voluntary projects or activities.
~. Carbon P,~ ii ~w ~~~;o'xasnltant means an independent, qualified nationally-recognize
consulting firm w1=~ig~.ficant ~,erience in the regulated carbon markets established in the
~-
United States under fedeia~rry~eii~~~a ~" ~ ~eectxn a Cap-and-Trade System and the price of
Emissian Allowances in such
~~ ~
9. CO2e means carbo .~~- dioxide equivalent, or the base reference for the
determination of Global Warming Potential of Greenhouse Gases of a similar amount of carbon
dioxide.
10. Conversion MNISTU g1HV has the meaning set forth in Paragraph 119 of this
Agreement.
11. Conversion Payment has the meaning set forth in Paragraph 118 of this
Agreement.
6
{00018638.DOC 16}
30
12. Conversion Percentage means sixteen and six-tenths percent (16.6%).
13. Delivery Point shall mean the location at which the ownership, possession and
control of the Landfill Gas is transferred from the County to the University. For purposes of this
of this Agreement, the Delivery Point shall be the blower discharge point on the Landfill
Property as shown on Exhibit B.
14. Closing Date has the meaning given in the preamble.
15. Effective Date shall mean the date the easements listed on Exhibit C are legally
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granted to the University by the County. In the ev~,~t'~theasements listed on Exhibit C are
granted on different dates, the date the last easemeni,~;~ ~ranted~hall be the Effective Date.
16. Emission Allowance shall mean an autho~3;atlon Issued by a Governmental
Authority to emit one metric ton of CO2e. ` ~'
• ~~a~
17. Engme Start-up Date shall be the date whe ~ the engine located at the
University's Carolina
conversion of Landfz~lCas.~into
reaches steady-state conditions and commences the
energy.
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18. En,,~,ironme ..m ~ ~~"e~i~.~s~'~l~> all credits and allowances generated by and
'the g~~er'tion, db~lction, treatment, sale or use of the Landfill Gas, including
tell
~~~
~.,_ r~wance ;offsets, "green tags," and renewable energy credits, or
Emission'' }` `
~~~
any other ass "T`~Y~rz~term that biay hereinafter be used to describe the environmental benefit of
.§Fd
either destroying an~~s-,~~~t in the Landfill Gas (including methane) or using the Landfill Gas
as a source of energy.
19. Environmental Laws shall mean all Federal, state and local Laws concerning
pollution or protection of~the environment or human health, as the foregoing are enacted or in
effect, on or prior to the date hereof (including ambient air, soil, surface water, ground water,
7
{00018638.DOC 16}
31
wetlands, land or subsurface strata), including without limitation: (i) the Comprehensive
Environmental Response Compensation and Liability Act, 42 U.S.C. §§ 9601 et seq.; (ii) the
Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act, 42
U.S.C. §§ 6901 et seq.; (iii) the Oil Pollution Act (33 U.S.C. §§ 2701 et seq.); (iv) the
Occupational Safety and Health Act (29 U.S.C. §§ 651 et seq.); (v) thefEmergency Planning and
Community Right-to-Know Act (42 U.S.C. §§ 11001 et seq.); vii Fhe Endangered Species Act
~...~G
;~: 4`2n
_~r
1531 et se vii the Clean Air Act (42 U.S. ~A~t~§ ~~=;seq.)~ (vii) the Federal
Gtll.. ~.
(16 U.S.C. §§ q•), ( ) ~:~.
~z~
Water Pollution Control Act (33 U.S.C. §§ 1251 et seq.); (viii) the Toxic S ~`'; ~nces Control Act
.~'
~~- ,~,
(15 U.S.C. §§ 2601 et seq.); (ix) the Hazardous Materials Transportation Act (49'U qS'C. §§ 5101
et seq.); and (x) all North Carolina Laws comparable to the foregoing.
-u~r ,
20. Extension Period has the`rne;,;,,,;:',.;,g set forth in Paragraph 98.
~,.w..,..sR,~
21. Fair Market Value has the r~~amng`~e~ ~xth m Para_g_rap 11 .
n~k
aa; ~ .
22. Flare Percentage means five aud~ttiree-ten ~,;~iercent (5.3%).
23. Flare MMBTU ffi~V has the meatng•,,set forth in Paragraph 116.
24. Aare Payment has the meaning set~forth in Para_g__raph 115.
Date shall be the date when the flare reaches steady-state
~risand commences ttletcontinuous burning of Landfill Gas.
~~r+s~~
,, ~ ~ ~t
,,_i~ ~
26. !_-+nrecasted Gabon Price means, for a year during the Term of this Agreement,
the corresponding Fb~eF:,a~.,''d Carbon Price for such calendar year set forth in ExhibitA.
27. Force ~Vlajeure shall mean any cause or causes for delay of performance by a
Party, which are not reasonably within the control of the Party claiming Force Majeure and
which, by the exercise of reasonable diligence, such Party is unable to prevent or overcome
including without limitation, acts of God, terrorism, acts of the public enemy, wars, blockades,
8
{00018638.DOC 16}
32
insurrections, riots, epidemics, landslides, lightning, earthquakes, fires, storms, hurricanes,
floods, high-water washouts, arrests and restraints of governments and people, strikes, lockouts,
protests, or other industrial disturbances, civil disturbances, explosions, catastrophic events such
as breakage or accident to machinery or lines of pipe caused by an event of Force Majeure,
enactment of statutes, laws or regulations, and other acts of Governmental Authorities (excluding
acts by a Party) frustrating the purposes of this Agreement. Force Majeure shall in no event
include (i) any change in the economy or in the markets, pricing or demand for natural gas or
n,~~.
~~?~
LFG that affects the University's ability to use LFG, o,~the puce at which LFG or natural gas can
~~
,~~~~ ~~.
be sold, or (ii) increases in the cost of constructing`or,~perating~the LFG Project.
28. Gas Conversion System shall mean an.3 .,e~apment used by the University to
convert the Landfill Gas into thermal or electric energy,
29. Gas flow Meter shall mean the device(s) used
Gas flow, methane conten »»°~~„.e'~~ther parameters.
M-sib- "Fr;.~ti:N'~i:'^~
generator or boiler.
the rate of Landfill
30. Gash,":~ eans ai~'~~.FG delivered to the Delivery Point.
r~ ~~
31. Global Wa " ,? g~~'°ot+~n~,~a.,,orp-a~WP means the, estimate of the atmospheric
warming resulting from the releas~`~f~a~ t mass of a particular Greenhouse Gas, in relation to
the warming resulting from the releas'~f the same amount of carbon dioxide.
32. Governmental Authority means any federal, state, local or foreign court,
arbitrator, alternative dispute resolution body, government or political subdivision or department
thereof, or any governmental, administrative or regulatory body, commission, board, bureau,
agency or instrumentality.
33. Greenhouse Gases or GHGs means carbon dioxide, methane, nitrous oxide,
hydrofluorocarbons, perfluorocarbons and sulphur hexafluoride
9
{00018638.DOC 16}
33
34. Higher Heating Value or HHV shall mean the amount of heat released when a
known volume of methane is burned and shall equal 1012 BTUs per cubic foot of methane at one
atmosphere pressure at 60 degrees Fahrenheit (60° F)
35. Kyoto Protocol means the protocol to the UNFCCC ,adopted at the Third
Conference of the Parties to the United Nations Framework Convention on Climate Change in
Kyoto, Japan on December 11, 1997, as may be amended.
36. Landfill means, collectively, the North Landfill and the South Landfill.
37. Landfill Gas or LPG shall mean the ~~~ an~'~ts constituent elements) generated
from the decomposition of materials deposited in~the'~L;sandfill. ~~,,
y~ J
.~,.:_
38. Landfill Permits means all licenses, crn~ts, certifications, authorizations,
ey.:_
T ~. •:.tii,,.7a
~~°
approvals, and entitlements issued by any Governmental Auth'~~~-.'iy,~a,~nd relating to the operation,
m}*A
,cx. ~•
ownership, development and/or maintenance of the Landfill, as aa.X of the foregoing may, from
time to time hereafter, be amended or supplemented, including, without limitation, Municipal
Solid Waste Landfill Permit Number 6$-O1 issued to .the County on or about May 5, 1982, as
amended and asar.,~,.~nay, from time to time hereafter, be further amended or supplemented.
3`. ' Laws any law (including common law), statute, .treaty, ordinance, rule,
~~3 ~
~ ~ ~~ ~ A~5
re ~~atio `~~Y~~,ode, order, ;'`~ injunction, judicial decision, decree, reporting or licensing
a^, Asa;.
~~k', , xy
requirement ur, tither legall ~~~~ybinding requirement of any Governmental Authority and shall
include, without ]imit~'~_~"tip ; r~l Environmental Laws.
r~
40. LFG l~olleetion System shall mean all equipment at the Landfill, including
piping, header lines, lateral lines, wells, pumps, blowers, condensate knock-out vessels, flare,
and related equipment used by the University to extract, collect, and treat Landfill Gas from the
Landfill.
10
{00018638.DOC 16}
34
41. LFG Project shall mean the LFG Collection System, the Gas Conversion
System, and the Pipeline.
42. LFG Project Permits means all licenses, permits, certifications, authorizations,
approvals, easements and entitlements issued by any Governmental Authority (including the
County) and relating to the ownership, development, construction~,installation, operation,
~.,,i
maintenance and/or repair of the LFG Project, including, withY limitation, any special use
' "'"' from time to time
permits or special use permit modifications, as all of the '~ aregoin ' ~ Yy,
=..:,~.
hereafter, be amended or supplemented. ~``~~, ''~,
~; .,
~f~~~.. ~~y('
~~--{4i:aI~Y"L Y
43. Meter Point A shall' be located on the header line that branc~i`~s~'`to the Gas
Conversion System as shown on Exhibit B. Meter Point A shall be the poilit where the heating
~4
~Y,;~,,
energy content of Landfill Gas delivered toth~pGas Conversion System is measured.
4:1:-'..1 .-.
44. Meter Point A Methane Content h~s~tt~''meaning set forth in Paragraph 119.
,. r,:.
45. Meter Point B shall be located~~R the he's r llne that branches to the flare as
shown on Exhibit B. Meter Point B shall be ~li~ point where the heating energy content of
t:,,.._.
Landfill Gas d~l~vered to the flare is measured. ~'
h --~5
°%- Meter~~±~airt.B Methane Content has the meaning set forth in Paragraph 116.
{ ~~ ~ MMB
=~~~.
48. '~ ',~ ~, thl3
,~ ~~~
49. No~~R~~ ~'
50. Pipeli~`ie
million (1,000,000) BTUs.
a~ Statement has the meaning set forth in Paragraph 128.
has the meaning given in the Recitals.
means all pipes and equipment necessary to transport LFG from the LFG
Collection System to the Gas Conversion System.
11
{00018638.DOC 16}
35
51. SCF means standard cubic feet, which means the amount of Landfill Gas which
occupies one cubic foot of space when the Landfill Gas is at a pressure of 14.73 psia and a
temperature of sixty degrees Fahrenheit (60° F).
52. South Landfill has the meaning given in the Recitals.
53. Teran has the meaning set forth. in Para_g_raph 98 and shall include any Extension
Period.
54. Waste MCaterials means collectively, any chemical, waste, material or substance
~.
that is listed or regulated under applicable Environme.,. `" .Lam as a "waste" or as a "hazardous,"
~..
"special" or "toxic" substance or waste, or as a `tebn~nant" c~~"pollutant" or words of similar
~~ ....
~2", ~--
import, including, without limitation, petroleum, petrole ~"~"`products and byproducts.
ARTICLE II `,~' .
~_
RESPECTIVE RIGHTS AND OBLIGATIONS OF THE' PARTIES
A. Rights Granteii~tf- University
_~- ~,, ~~
55. The ~Ui;.t~;ty herebyrants to the University the sole and exclusive right to (a)
~, ~ 1,~ri
design, develop, and co ~` .,~~~ G~ro~ect~(b) collect, extract and remove Lan as
L 7 to ~ ~1i:4~. w ,~~. •.. e3 ,
from the Landfill; (c} produce e "' ~ ; gy from the Landfill Gas for the University s own use, or for
~~~
sale to one or more third parties or thel'ectrical grid; (d) derive Environmental Benefits from the
treatment, destruction and use of the Landfill Gas; and (e) do, at the Landfill, consistent with the
University's obligations in Articles II and III hereunder, all things necessary to carry out (i) the
permitting, development construction, and operation of the LFG Project; (ii) the collection,
extraction, and removal of the Landfill Gas; (iii) the production of electrical or thermal energy;
and (iv) the redirection, redelivery, transport or marketing of the Landfill Gas, or any portion
thereof, to any third party. Provided, however, that the County expressly retains all rights in the
12
{00018638.DOC 16}
36
Landfill Gas necessary to operate the Landfill in accordance with the Landfill Permits and all
applicable Laws.
56. The University agrees to flare any Landfill Gas delivered to the Delivery Point
that is not transported by the University to the Gas .Conversion System as follows: (i) during the
period occurring after the Flare Start-up Date and before the Engine Start-up Date; (ii) in the
event that LFG generated by the Landfill exceeds the capacity of the Gas Conversion System, as
determined by the University in accordance with good engineering practices and industry
~''~~
standards; (iii) during Gas Conversion System maint.~,,;~"~ ce,pair, or associated downtime; (iv)
y"u `-.
as reasonably necessary to protect human health,~s~; or the~±euvironment; and (v) during the
~- ~ .r~~u
pendency of a force majeure event affecting the Gas Con` r~on System.
'_'.I~~:~b.
S7. The University shall have` _..~ n~ , t to use and
u. _ • .
such other property depicted on Exhibit
operation of the LFG Project, including any
LFG Project, or the design and permitting of
commercially
parcel a~~~property not
efforts to assist the
ions of the Landfill and
construction, and
to evaluate the feasibility of the
Project. The County agrees to make
;whenever feasible, in accessing any
solely by the County that is necessary for the construction and
LFG Proj
the Greene Tract.
ct~~
S8. r"' e,,,~County s1-~1 grant the University, without additional University payment
s~:, ~ ~~
beyond the compelsai:inY '~t ,forth in this Agreement, such easements and rights of way through
~~.;,
the Landfill site and ,, er property owned solely by the County as may be necessary to drill gas
extraction wells, lay pipelines, lateral lines, header lines, and any other part of the LFG Project
infrastructure as contemplated by this Agreement, including, without limitation, the easements
and rights of away set forth on Exhibit C. The County also grants the University, without
13
{00018638.DOC 16}
37
additional University payment beyond the compensation set forth in this Agreement, licenses or
other approvals to install utility lines on the Landfill and other property owned solely by the
County for the LFG Project. The obligations of the University to perform its obligations under
this Agreement are subject to the County granting the easements and rights-of--way set forth on
Exhibit C. The condition precedent set forth in the preceding sentence::'.,. solely for the benefit of
~~-.
the University and maybe waived by the University at any time ' ~~~sole discretion.
Eu~~y
59. In furtherance of the LFG Project, the Coup 4 _-reby gr~~to the University,. and
~~,; '~.
its employees, contractors and agents, anon-exclusive license (the "Licensc~'~~,or the following
~a
~~
purposes, provided that any employees, contractors, and agents shall comply wi e health and
safety plan required to be developed under Paragraph 68 hereunder:
.~
a. the right to drill, excavata~~tre~ch or otherwise disturb the Landfill Property for
-~.
the purpose of installing, co ' tructin~7 apera,~ti~ng, maintaining and replacing gas
a ~".~ ~
wells, underground pipelines, ~r~an~'~lcs, Land%11 Gas flaring mechanisms, and
associated Landfill Gas equipment~~
~_~-.;
~-
b. the right to travel over any access roads located on the Landfill Property and any
T; ~; _t, r~, ~-
''~ adjacent ,~~ o,;~erty owned by the County, as such roads may be relocated by the
~~
County fro ~Fe to time during the term of this Agreement, for the purpose o
-~.
~~_ ~~
,. upon th ~~~~ . andfill Property. The University acknowledges that it does not
~s~,~ ~.
x~~~ ,iH.
claim"~i ,.~.~'vnership interest in the Landfill Property, except as otherwise stated
herein,~because of the University's use of the Landfill Property.
B. tJniversity 's Operating Responsibility
60. Subject to Article VIII of this Agreement and except as otherwise provided
herein, the University shall operate the LFG Collection System and the Gas Conversion System
at all times during the Term of this Agreement.
14
{00018638.DOC 16}
38
61. The operation, maintenance, and repair of the LFG Project shall be the sole
responsibility and undertaken at the sole cost and expense of the University (and its contractors
and agents) and shall be performed by the University, ,its employees, agents and subcontractors
(i) in compliance with all LFG Project Permits and applicable Laws and (ii) in accordance with
good engineering practices and industry standards. The University assumes the risk of the
delivery conditions (including the rate of flow, vacuum and pressure of delivery), quantity and
quality of LFG. ~
62. The University is solely responsible foE;`ereatin~ sufficient vacuum to extract LFG
~~~,
~;w-;~~,
y~:.,;a,
from Landfill and transfer it to the Delivery Po' t'"~.~.`'`Tly, syvu~ch acuum shall not adversely affect
the County's Landfill operations, and the University slidjust its operations of the LFG
~~=~~ ~.
Project or install necessary equipment at its sole cost and expe~s~,t~orrect any such adverse
effect. Should such adverse effects arise that the University,~is~ unable to correct through
operational adj
commercially reasQrfab~le'~Steps to
of the conditions causing
63. The University
County in the preparation,
shall, at the County Manager's written request, take
suspend the LFG operations pending the correction
commercially reasonable efforts to cooperate with the
filing of any applications or other documents as may
be necessary to perform the County's obligations under this Agreement.
64. The University shall submit for the County's prior approval (which shall not be
unreasonably withheld), all permit documentation prepared in accordance with Paragraph 82 and
all construction and design plans and specifications relating to the construction, operation, and
maintenance of the LFG Collection System prior to commencing construction. The County shall
have fifteen (15) calendar days to complete its review and approval of any such plans and
15
{00018638.DOC 16}
39
specifications. Any plans and specifications for which the County has not provided a response
within fifteen (15) calendar days shall be deemed approved. Should the County provide
comments on the initial submission of any submitted plans and specifications, it shall then have
fifteen (15) calendar days to complete the final review and approval of such revised plans and
specifications prepared by the University. Any revised plans and specifications for which the
County has not provided a response within fifteen (15) calendar days shall be deemed approved.
Should subsequent changes or modifications.be made to the-plans and specifications after they
have been approved, the County shall then have seven (7) days to review and approve such
changes or modifications. Any subsequently revised plans and specifications for which the
County has not provided a response within seven (7) days shall be deemed approved. Within a
reasonable time after completing constrution"~~f the LFG Collection System, but na longer than
:~ ~~ -~. '
s 60 da s the Universi shall rovide ~o the (:: gun mall "as-built" plans and specifications
for the LFG Collection System. Until the
Collection System are provided to the County,
to the state
installed c'om
~j'` ,.
disruption to
Project. During the
construction of the LFG
~•,...
system.
and specifications for the LFG
shall keep the County informed as
ion System and the location of all then-
its employees, agents and subcontractors shall minimise
during construction, operation, and maintenance of the LFG
subcontractors shall
of this Agreement, the University, its employees, agents and
unreasonably interfere with the County's operation of the Landfill,
including, but not limited to, the County's closure of portions of the Landfill and any other
requirements under the Landfill Permits or applicable Laws, and shall reasonably ensure that the
Landfill is not damaged by the University. Should such damage occur, the University shall
16
{00018638.DOC 16}
40
arrange for the repairs itself; provided, however, that the County has the right to take immediate
action to effectuate whatever repairs are necessary to the Landfill and the University shall timely
reimburse the County for the reasonable costs of any such repairs. The University shall use its
best efforts to design the LFG Collection System to minimise any incremental increase in the
County's costs of Landfill closure incurred to accommodate the LFG~Collection System. The
- 0 with the Coup the incretalf increase in the County's
Umversity shall share equally (50 5) tY 4
_~ ~r ~~
costs of Landfill closure incurred to accommodate the ~=, Coll c. on System; provided,
~~-~-
.~~;.
;*::t~
however, that the University shall not be obligated to pay, nor be responsib~le~for, any costs and
~F
~=;~r:.,
~r:,,_
~,,{,~
expenses in excess of $50,000. '~:"~`
66. The University shall, at its own expense, prepare, maintain, and submit to the
;Lr
Y~~'~"a'~ ~_
County monthly reports on Landfill Gas~praduction rates, which shall include an accounting of
t s~ }~~~'~~,
all LFG and the methane content of such LF ~:~dehv'ere~l~~r:~,,leter Points A and B.
~.y .,~ ,,,~,_ .
67. Notwithstanding anything con ~ " ed in ~~ Agreement to the contrary, the
University acknowledges that Landfill operationse recedence over the LFG Project, and, at
all times durin , ~~he term of the Agreement, and s k4 bject to its terms, the County shall have the
4,, r ~ ~-
right to ~ '~Lerate the L`aa"`d$11 and to take all actions at its own cost and expense that the County
r ,,,~~ ~y ra
~~ ~:3 ~- ~
deems i~c~sary or appro ~.te in connection with the operation and maintenance of the
}, 0.~
~~
Landfill, includin,,actions t comply with the Landfill Permits and any applicable Laws. 'The
~,
University further ac~iiau~ edges and agrees that the primary use of the Landfill is as a sanitary
}
~y_.
landfill, and that the L4FG shall be limited to production from the Landfill.
68. The University shall develop and implement a health and safety plan no less
stringent than that of the County with regard to the University's operations at the Landfill and
any work performed by its employees, contractors, or agents at the Landfill.
17
{00018638.IX)C 16}
41
69. The County shall allow the University to dispose at the Landfill, or at a
wastewater treatment plant used for the Landfill's leachate, any Waste Materials generated by
the LFG Project, provided such disposal is allowed under the Landfill anal LFG Project Permits
and applicable Laws. The University shall be responsible for any additional incremental costs
incurred by the County for disposing of any such Waste Materials, including, without limitation,
additional wastewater treatment charges or surcharges. If any Waste Materials cannot be
lawfully disposed of at the Landfill or through the County's permits, then the University shall be
xr
res onsible at its sole cost and expense for any neee s ry ~`~ff-site disposal of such materials
P ,
regardless of whether they are deemed a hazardo ~g:> trial or~`,.aste.
:`~ r{i^
\cr.~ a ~7- `4...
~i- ~} _~
\'u-~+1 3
C. The County's Operating,Res onsibilities~~~~4
nr`>~f..
N~~,i
'y~~~-i~-_~t
cif' ~.
70. The County agrees to maintain the landfill"~~>coy,er in accordance with any
,.s
'~~~,~~~
.?'A:~J
applicable requirements of the Landfill Permits. The County further agrees to make
commercially reasonable ;;, • ort~to repair cracks, fissures, erosion or other adverse conditions in
<a.P4
~~~~
~ ~~~ ~
the Landfill that (1),~,lu~l~ ~natenall.~y~affect the LFG Collection System s capture of Landfill Gas
~}'+ i r'~v4 nw.
or (ii) cause fugitive emiss '"r o TJauc~l C~~-r~~ss-fio~n the Landfill.
ti ~ ~,,
~5'a; :i
71. The County sha11`le~; esponsible for complying with the Landfill Permits and all
~,~~„
~ ~_~i ,:
Laws applicable to the operation and ~'~aintenance of the Landfill, including, but not limited to,
applicable provisions of the Operational Requirements for MSWLF Facilities, 15A NCAC
13B.1626.
72. The County shall make commercially reasonable efforts to develop and operate
the Landfill to enhance the production of Landfill Gas; provided, however, that nothing in this
Agreement shall obligate the County to incur any costs or expenses to enhance the production of
Landfill Gas or to take any action inconsistent with the terms and conditions of any Landfill
Permits or applicable Laws.
18
{00018638.DOC 16}
42
73. The County is not obligated to deliver the Landfill Gas at any minimum flow rate
or pressure and shall not be obligated to install or operate any of the facilities (including
compression or vacuum facilities) to deliver the Landfill Gas.
74. The County has no obligation to (i) deliver or to sell any minimum amount of
LFG to the Delivery Point; (ii) treat, process or condition the Landfill , ~ .as, maintain or increase
... ^~3:,~,~r
the pressure of Landfill Gas delivered to the University, or (m)~~:;~t 11 any facilities (including
blowers or com ression facilities) or, subject to Para a h~ 70 an~.`'~.,, alter any landfilling
r _
~..,
methods or practices relating to the production, collection or delivery of "e~r~~ _~ dfill Gas to the
~:
University.
75. The County shall not interfere with the University's Landfill Gas operations,
~~,
v;~~;,_.
except as such interference may be necesA~.,,_. ~ to comply with the Landfill Permits, by operation
sr~~h..
of Laws, or for the protection of the
commercially reasonable efforts to advise the
or safety. Each Parry shall use
Party fil~~y in advance of any changes in the
operation, maintenance, expansion, or other act~y~ tip that may adversely affect the business
~:
operations of the~ther at the Landfill. If any Party takes any action, refrains from taking any
r
. ,~
action, ,c r~dertakes-Senn','-,change in operations, maintenance, expansion programs or other
~~, .
activities t~~will ac
'fit ~~n
other, such P n. _gF(
a~'
~I?s
soon as practicable`;
notice in the case of
or threaten to adversely affect the business operations of the
use cb'~rrimercially reasonable efforts to give notice to the other Party as
the nature of the detriment and its cause, including emergency
emergency. However, in no event shall the County be required to delay
action that it deems necessary for the operation of the Landfill. If the alleged interference
continues beyond thirty (30) calendar days, then the affected Parry may invoke the Dispute
Resolution procedures set out in Article XI hereunder.
19
{00018638.DOC 16}
43
76. The County shall make commercially reasonable efforts to cooperate with the
University in its preparation, execution., and filing of any applications, permit submittals,
assignments of rights, and other documents as may be necessary to allow the University perform
its obligations under this Agreement.
77. The County shall make available to the University c°pe~s of all environmental
information, reports, studies, landfill gas feasibility reports, a~ss~~sments or other ocuments
affecting the generation of Landfill Gas or the LFG Project ~t the C~aity has prepared or that
~`'=~`~
~(i r"'~
have been prepared on the County's behalf. Such documents include'~~~:se the County is
~~
~~
required to submit to the North Carolina Department of Environment and Natural `sources.
78. The County shall reasonably ensure that the County, its employees and
~.~..
contractors do not damage the LFG Proje,~,t~'c r::;~ii rapt the operation of the system. Should such
damage occur, the University has the righ~~ to take~=,immediate action to effectuate whatever
repairs are necessary to bring the LFG Proj
shall timely reimburse the University for the
79. ~ County shall retain the sole
with reg~~ to Lan
~.,
ope atioli,:;~~clusive
,,~
80. The ry'n.
Collection System,
fully op, jerational condition and the County
costs of repair.
exclusive right, and shall have all obligations
if31l:~~perations and for meeting, all applicable Laws pertaining to such
,,
~~ ;~
of the~ts~yersity's operation of the LFG Project.
~~ee to develop and implement operating protocols for the LFG
without limitation, monitoring and reporting procedures,
communications and emergency response plans, and notification procedures.
20
{00018638.DOC 16}
44
ARTICLE III
PERNIITTING AND CONSTRUCTION OF FACILITIES
81. The installation and construction of the LFG Project shall be the sole
responsibility and be undertaken at the sole expense of the University, and shall be carried out in
compliance with the LFG Project Permits and all applicable Laws and in accordance with good
engineering practices and industry standards.
82. Except as set forth in Para ranks 58 and 59 of this Agreement, the University
shall be solely responsible for securing any and all:=.,'pprovals, including, without limitation,
~~~~~~ ,
preparing all permit documentation for any Land~llr=LFG Pr~j'ect Permits on which the County
~, n ~ :.~
~ ~~~
will be the permittee. Exhibit D contains a preliminar} E~u~ not exhaustive, list of Approvals
~~=~ ~~.
~~~ ~
that the University believes it must obtain to install, construc~.peratmaintain, and repair the
ti~ -~
LFG Project. The University shall, at its own expense, apply~~~or and seek to obtain all
Approvals, including thosetite~.4on Exhibit D unless they are not required for the LFG Project.
G~ ~~
+f~ 'u, ~'~~r
The University wil ,, ''~~l~~~for any~~~~~ch Approval as the owner and operator of the LFG Project,
and shall act as the "permi'tte~,",~ o~ "._~Perator" for such project as may be appropriate
under applicable Laws. ""
~~+3E;;a 7
83. The University recognes that it is in the Parties mutual best economic interest
for the LFG Project to be completed expeditiously. Without limiting the generality of the
University's obligations under Article II of.this Agreement, beginning on the Closing Date, the
University shall work expeditiously and in good faith to (a) complete the LFG Collection System
within eighteen (18) months from the Closing Date, and (b) complete the Gas Conversion
System within thirty-four (34) months from the Effective Date. If the University fails to
complete the LFG Collection System within five (5) years of the Closing Date, the County shall
have the right to terminate the Agreement pursuant to Article VI. If the Engine Start-up Date
21
{00018638.DOC 16}
45
does not occur within. thirty-five (35) months a$er the Effective Date, the Flare Percentage shall
be adjusted to equal ten and ninety-five one-hundredths percent (10.95%) for the purpose of
calculating any Flare Payment under this Agreement and shall remain at such percentage until
the occurrence of the Engine Start-up Date or five (5) years after the Effective Date. If the
Engine Start-up Date does not occur within five (5) yeazs after the r_,Y~ ective Date, the Flare
f+r ~w
clr-'+
Percentage shall be adjusted to equal sixteen and six-tenths per a.~r4 (16.6%) for the purpose of
~= ~~ N ~ ~;.;~;~
:~t~~'!~
calculating any Flare Payment under this Agreement and sh rema~a ~ such percentage until
-~~ {~...
the occurrence of the Engine Start-up Date. Commencing thirty (30) days a:~erthe Closing Date
of this Agreement, the University shall hold monthly progress meetings to s progress
towazd achieving these completion dates including the status of the construction of -the
~,~~; _,.
components of the LFG Project. The I~`;`;v~rsty shall invite representatives of the County to
,., ~.
~~ ~ ~~' 7i.u~
attend such progress meetings and the U ~ersrty~~~-provide the County with reasonable
~ n. t - 4p.
~Y~"
ance written notice of the location and tnne~df such meetings. The University shall distribute
adv ~ ~-
meeting minutes .to the County following such pi~~ogress meetings regazdless of the County's
*~ rs„'
attendance at such.~meetings.
~.~ ~ AR'T'ICLE IV~
~~~ -
~~ 1~EPRESENTATIONS OF THE PARTIES
~~ 43e""<. j. ~~
`e Universe ~ :~-s Re resentations
A.. ~ t1' U
84. The~`~ -~.Ii~ ersy represents and warrants that, in entering into this Agreement, it
;~~~-~
Ic "
has relied upon its o ~x;'~estimates of Landfill Gas volumes, based upon publicly available waste
disposal records and standard modeling assumptions and projections. The University further
represents that it has not relied upon Landfill Gas generation reports, drawings, and analysis
provided by the County or its consultant as an inducement for entering into this Agreement. The
County shall promptly inform the University, however, of any errors, miscalculations, or
22
{00018638.DOC 16}
46
omissions of which the County has knowledge, in any of the landfill reports it has prepared or
fiunished to the University.
85. The University represents and warrants that it has legal authority and right to
make and enter into the Agreement.
B. 'The County's Representations _~
1~.,;... ,....
86. The Coup re resents and warrants that it has 'p`imple title to the Landfill
~ p ~~°~
~_;,.~,
Property.
87. 'The County represents and warrants that it has not ma`8~ 'an assignment or
agreement to sell to any party other than the University the right to extract, colli c:~~'use, or sell
~~
the Landfill Gas.
88. The County represents
as Exhibit E, previously submitted to
Natural Resources and performed in
Landfill is not subject to the New Source
that, based upon calculations attached hereto
Molina Department of Environment and
.~,4 ~ y;~
40 F.R. Part 60, Subpart WWW, the
Standards for Municipal Solid Waste ,
~:~
Landfills, 40 C.F.R. Part 60, Subpart WWW (200'7) ("NSPS") or the Emission Guidelines and
Compliance Times for Municipal Solid Waste Landfills, 40 C.F.R. Part 60, Subpart Cc (2007)
("Emission Guidelines")
89. The County represents and warrants that it has all environmental permits,
authorizations, and approvals that are legally required to operate the Landfill, exclusive of any
permits, authorizations, and approvals that may be necessary for the LFG Project.
90. The County represents that, in entering into this Agreement, it has relied upon its
own estimates of the economic benefits of the LFG Project and has not relied upon any economic
or financial model prepared by the University or its consultant(s) as an inducement for entering
into this Agreement. The University shall promptly inform the County, however, of any errors,
23
{00018638.DOC 16}
47
miscalculations, or omissions of which the University has knowledge, in any of the reports it has
prepared or furnished to the County.
91. The County represents and warrants that it has legal authority and right to make
and enter into the Agreement.
C. (Disclaimer of ~'6Taa-ranties
92. Except as specifically set forth in Subyart B of this Article III, the University
accepts the condition of the Landfill, any real property subject to an easement or right-of--way
granted by the County, and the Landfill Gas "AS IS~IEI~ IS, WITH ALL FAULTS," and
,~x~~~
the University acknowledges that the County ~ ~ t made ~ d does not hereby make, and
F~ L=^:~3
s ecificall disclaims an re resentations ante s ~~~mises covenants a eements or
p Y ~ Y p ~ ~' p gr
"'~~r ~z
warranties of any kind or nature whatsoever whether past, pent or future, oral or written,
expressed or implied, concerning the condition or quality of tl`r'L dfill, any real property
subject to an easement
fitness for any
93. The University
=way granted by the County, or the Landfill Gas and their
business or activity contemplated, intended or ongoing.
~` ~~ LIABILITY
~~ u~
,~~~
shall ; ~:e solely responsible
for the installation, construction,
operation, maintenance, and repair of the LFG Project. It shall also be responsible, with respect
to the LFG Project, for (a) the installing, constructing, operating, maintaining, and repairing the
LFG Project in compliance with all LFG Project Permits and applicable Laws; (b) responding to
any notices of violation or compliance inquiries; (c) defending any enforcement actions; (d)
resolving any claims; and (e) paying any associated penalties. The University shall also be
responsible for damages and claims caused by the University's own negligence or that of its
• agents or employees.
24
{00018638.DOC 16}
48
94. The County shall be solely responsible for the operation, maintenance, closure,
and post-closure of .the Landfill, exclusive of the LFG Project. The County shall also be
responsible with respect to the Landfill, exclusive of the LFG Project, for (a) operating and
closing the Landfill in compliance with all Landfill Permits and applicable Laws; (b) responding
to any notices of violation or compliance inquiries; (c) defending an ~~~enforcement actions; (d)
:.
resolving any claims; and (e) paying any associated penalties.
~~:~ ~•
95. Except to the extent caused by the negligeii ~,~operatlu~~~of~the LFG Collection
System by the University (or its contractors and agents), the County sha11'!5~'~0~ ly responsible
~,~~
for defending any claims relating to the off-site migration of LFG or odors: ,pollution, or
~~,
nuisance conditions directly caused by such migration, including claims brought by a regulatory
agency, neighboring residents, businessesy;~or~tturd parties.
~ nik
E ~
96. In no event shall either Pa~r~y be l ladle ' t~ ,the other Party for consequential,
r~. _ ~-
~~,
incidental, punitive, exemplary or indirect dam es, includu;~ but not limited to, loss of profits
or revenue, downtime costs, loss of use of any:- ~ro erty, or cost of substitute equipment or
~~' .
facilities, whetb.~~arising in tort, contract or otherwise. This provision shall survive the
expiratlor termina~i'r~if ~a~'fthis Agreement.
~~~ ~
ARTICLE VI
r a r: _
'~49~ '.-. Nothing in greement is intended by the Parties nor shall be construed as a
'49a.'.~e~'.~ ~5 ~M
~:4~,: v '~,r
,Sssys,{,. . ~.. {
waiver of an ~:i~ereign or `#' er immunity to which either Parry may be entitled to the fullest
~~.
~.
~,~
extent allowed by L` ~ "
TERM AND TERMINATION
98. The initial term of this Agreement shall commence on the Closing Date and shall
expire on December 31, 2029, or on such other date on which this Agreement is terminated in
accordance with its provisions. Upon the expiration of the initial Term, the University shall have
25
{0001863S.DOC 16}
49
the right, to the exclusion of any other entity, to renew this Agreement for up to two (2)
consecutive periods of five (5) years each. (each five-year period beyond the initial 20-year
period shall be termed an "Extension Period.") At the expiration of the initial 20-year term, or an
Extension Period other than the second Extension Period, this Agreement shall be deemed
extended for an additional five-year period unless the University gees written notice to the
County of the University's intent not to extend this Agreemen ~:; ~ later than ninety (90) days
r
prior to the expiration of the preceding period. All provisio c~ this A~ree~ment shall continue in
x `~ ~~
effect during any extension period except as those terms may be otherwa .modified by the
~r~~
Parties. Before the scheduled expiration date of the second Extension Period~~;~1~e' University
shall have the right of entering into exclusive negotiations with the County for a period of one-
hundred twenty (120) days for the purposes ~~fnegotiating a new or revised agreement relating to
the LFG Project. The University shall notifythe
to exercise this right
Extension Period. ~~~t'~,. ''
99. Terminati
~~
one (1) - ±ear prior
~..~
writing of the University's decision
expiration date of the second
terminate this Agreement under this Article
m.=,..
\ ~4~
VI, and except as provided in Park aph 102, a Party must first issue the other Party a Notice o
.~~,~:~
Default in accordance with the provis~;ons set forth below. The Party in receipt of such Notice of
Default shall then have the opportunity to cure the identified default within the specified cure
period. If the Party in receipt of such Notice of Default fails to cure the specified default within
the cure period, then the other Party may issue a Notice of Termination. Upon issuance, such a
Notice of Termination shall be deemed a Notice of Dispute for purposes of Article XI of this
Agreement and such Notice of Termination shall be submitted to dispute resolution in
accordance with that Article. Subject to Article XI, the termination rights provided in this
26
{00018638.DOC 16}
50
Article VI are not in lieu of, but are in addition to, any other rights and remedies either Party may
have under the circumstances.
A. Termination lti~hts of tl~e University
100. The University may issue the County a Notice of Default if the County breaches
any of its material duties or obligations under this Agreement and such breach is material to the
University's rights and benefits under this Agreement. If the County does not cure such breach
within forty-five (45) days after the date of the University's written Notice of Default, the
~~
University may issue the County a Notice of Te ' ~.~ ion. ~ 'Provided, however, that if by the
nature of the breach, the University agrees that ~ ~ulce~~can be achieved, but not within forty-five
a~ ~~
(45) days, and that after receipt of such notice the Co~`iu,~t ` has begun to effect a cure without
undue delay, then the County shall have such time as is reasonabl~A r~equ~lred to effect a cure with
~~
diligent effort, but in any event not to exceed ninety (90) days from~the date of the written Notice
of Default from the Univer~ ~°~~-~~
101. If, pr,li~2029~tbT.,FG generation rate falls below an average of 190 cfin over
~~.
~3.
a consecutive one hundre`di e ~+ts` (1$iJ);Nd~.y ..period due to no fault of the University, the
~ -~
University may issue the County`j` mice of Default. If the LFG generation rate does not exceed
an average of 190 cfm within the nin~"t~90) day period after the date of the Notice of Default,
~`'
then the University may issue the County a Notice of Termination.
B. Miscellaneous Termination Events
102. This Agreement may be terminated by mutual agreement of the Parties. In
addition, this Agreement shall terminate (without a cure period) if (a) the University's use of
LFG as a fuel source and for flaring should become unlawful due to no~fault of the Parties; or (b)
the LFG Project Permits or authorizations expire or are revoked due to no fault of the Parties and
cannot be renewed or reinstated due to no fault of the Parties despite their best efforts, such that
27
{00018638.DOC 16}
51
the University is unable to use the LFG as a fuel source and is unable to flare the LFG for the
remainder of the Term.
C. Termination Rights of the Coun
103. The County may issue the University a Notice of Default if the University fails to
make any of the payments due hereunder in accordance with this Agreement. If the University
Y~
fails to cure the a ent default within forty-five (45) days after tl~date of the written Notice of
P ym ~;~„; ~,,
Default, then the County may issue the University a Notice
104. The County may issue the University a Notice of Defaa ~ the University
breaches any of its material duties or obligations under this Agreement (other th~ala lh making of
payments in accordance with this Agreement, the termination of which is covered by Para~ranh
103 hereunder) and such breach is
Agreement. If the University does not
County's written Notice of Default, the
Termination. Provided, however, that if by the n,
can be achieved but not within forty=five (45)
the County's rights and benefits under this
within forty-five (45) days after the
J>
may issue the University a Notice of
the breach the County agrees that a cure
and that after receipt of such notice the
iiv~has beQUrii~`effect a cure without undue delay, then the University shall have such
times as i s reasonably requlr'~~t::; o effect a cure with diligent effort, but in any event not to exceed
ninety (90) d~a3~ ~~;;.:,.om the dot ~ that the University receives written Notice of Default from the
j~',~ .,,~~~
County
~,.~'.
105. The Cd-iinty may issue the University a Notice of Default upon the occurrence of
the following events: if the University abandons or vacates the entire LFG Project or removes
fixtures or equipment such that neither the flare nor the Gas Conversion System can operate,
except for such removal that may be undertaken during maintenance, upkeep, or in the normal
course of business. If the University fails to cure such default within forty-five (45) days after
28
{00018638.DOC 16}
52
the date of the written Notice of Default, then the County may issue the University a Notice of
Termination.
106. The County may issue the University a Notice of Default if the University
operates neither the Gas Conversion System nor the flare for a period of one hundred eighty
(180} consecutive days except (i) for a Force Majeure Event, and (i~,} at the beginning of the
~~:~`
Vin, ` ..
Term before the Gas Conversion System and flare have become<<~_ erational. If the University
a ~ Y
~x~ ~,
fails to re-commence continuous operation of either the `,,Conversion System or the flare
y~~t~
-~:.,,~
within forty-five (45) days after the date of the Notice of Default, then the ~~'°~aun~y may issue the
y :~:
'~~~,
University a Notice of Termination. ;;,
D. lti~hts Uuon 'Termination or Expiration
107. Survival of Selected Provisions. Notwithstanding the expiration or earlier
termination of this Agreement for any reason however described, the .following terms of this
Agreement shall survive~,,~ny,~~ ~h expiration or termination: Article V, Subparts C and D of
V~ A`xticle X ~'~A~~ticle XI and Article XIII.
Article VI, Article ,~
-~ £r ,
108. LFG Collecs~i'ci3~ ,S sten%Fo~~~~g the expiration or termination of this
-c2crr ~.~
}yY~ '
Agreement, the University shal~~le the right to dismantle and remove from the Landfill or
'~~~
~~--
other County-owned property all or ~yportion of the equipment comprising the LFG Collection
System. In the alternative, the University may elect to offer for sale to the County all or any
portion of the equipment comprising the LFG Collection System for its Fair Market Value. If
the University decides to dismantle and remove all or any portion of the equipment comprising
the LFG Collection System, it shall perform such removal consistent with applicable Laws and
any applicable provisions of the Landfill Permits and LFG Project Permits. The University shall
permanently seal and cap all openings for pipes or equipment left in the Landfill in accordance
with industry standards and any applicable provisions of the Landfill Permits and LFG Project
29
{00018638.DOC 16}
53
Permits. The University shall use its best efforts to prevent damage to County property during
such equipment removal process, and shall reimburse the County for the reasonable costs of
repairing any damage to the Landfill or other County properly.
109. Pipeline. Following the expiration or termination of this Agreement, the
University shall remove any Landfill Gas from the Pipeline, cap the Pipeline, and take any other
actions relating to the closure of the Pipeline as may be required by applicable Laws and by any
applicable provisions of the Landfill Permits and LFG Project Permits.
~,, .
110. The Universit~s Option to Offer the _° LFG " oleection Stem for Sale to the
Coup If the University elects to offer for -~~a~'e;_ the linty all or any portion of the
~,,.
~..,~.
equipment comprising the LFG Collection System, it sh ~ ~~so;~lotify the County in writing within
~;~,4~
~::Y .
,''y~~ ~~w't
~~
thirty (30) days following any expiration or termination of thls~°~~~gceement. If the County elects
.f~.~-;
;~. -,
,~~;-
to purchase any such equipment, such purchase shall be on an "`~ S IS," "WHERE IS" AND
"WITH ALL FAULTS" l~""- +~Nbut free of any and all liens, for the Fair Market Value (defined
s'i ~~
~,'
herein). If the Umv, rstdoes no ~~:inely notify the County of an election to offer for sale to the
~~~
~~ a~~Gi y~o~tectier~ , -stem and the University fails to remove such
County all or any portion o
~,., ~~
t f{
equipment within one hundred e~gli :: ,days (180) days after the expiration or termination of this
A Bement, then any such equipme=#~ emaining on the County's property shall be deemed
~' ~
abandoned. If such equipment is abandoned by the University after the County rejects the
University's offer of sale, then in the event the County subsequently makes productive use of
such equipment, or leases or sells such equipment, then the County shall pay the University the
Fair Market Value of such equipment.
111. Fair Market Value. In the event the University elects to offer for sale to the
County all or any portion of the equipment comprising the LFG Collection System upon the
30
{00018638.DOC 16}
54
expiration or termination of this Agreement, the Parties will enter into good faith negotiations to
determine the Fair Market Value of such equipment pursuant to this Paragraph 111.
a. The term "Fair Market Value" shall mean the value which would be
obtained for the equipment comprising the LFG Collection System that is
the subject of the University's offer for sale in an arm's length transaction
~:. - `~
between an informed and willin bu er urn e~ no com ulsion to bu ,and
g Y ,,. ~~. -,. p Y
~,~„-
an informed and willing seller under ni',;ompuls~t~h~to sell, based upon e
,_A
~=~~,.
use of the University's LFG Collection System as an ~ n ~. ing enterprise in
j=sM~~.~
_~.-~ - -~
its then current condition utilizing generally recogniz~+d~~'professional
criteria for the appraisal of industrial property used in the landfill gas
business. ~~
-~ ~ ~~~~
~~~.IE.~r+ i~Y-
b. If the County and the y~- niversi ~, .cannot agree on a Fair Market Value for
4 fe ~`' ~v Fr' r
the equipment compr~sm~g~~he LFG Collection System that is the subject of
the University's offer
then such Fair Market Value shall be
determined in an appraisal by an independent, qualified,
recognized appraiser of industrial property similar to the
's LFG Collection System.
ARTICLE VII
PURCHASE AND SALE OF LFG
A. The University's Purchase Obligations
112. Subject to the terms and conditions of this Agreement, the County shall sell, and
the University shall accept and purchase, all of the LFG that is delivered to the Delivery Point.
31
initiation. of good faith
within thirty (30) Days following the
{00018638.DOC 16}
55
B. Payments to the County
113. The University shall make payments to the County based on the heating energy
content of all Gas Sold. Such payments shall consist of the Flare Payment and the Conversion
Payment, as calculated in accordance with Subparts C and D of this Article VII. Such payments
and any other payments that the University may be required to make under this Article shall be
~.~~
fiall compensation to the County both for the heating energy c~o~t,nt of the LFG and for any
Environmental Benefits resulting from the destruction of
associated with reducing greenhouse gas emissions
114. The University will make
heating energy content of the LFG delivered to the U
A..
e LFGr~cluding those benefits
~ ~:*a~~-
~. ~ ....
a'.~
g renewable`'` e~gy.
~~.;
~~~:~~~au^3.
7,~:_n~_
~A
eats to the Coul%i.~y ~a~sed on the
,. ~:~.
~~.,
in the preceding calendar month,
as determined in accordance with Subparts C and D of this Arti°~~~~~~II.~
C. Payment for Gas Flared ~ '
115. Each mon . ~ "~i°ng the Term of this Agreement, the University shall make
4 ~~--~~
payments to the Co ~:. " ~ based on `;t~e heating energy content of the LFG that is delivered to the
LFG flare (the "Flare Pa~~'. ';},,~~a}~rnmenc,,~~,~upon the Flare Payment Date (as that term is
~.
~- ~'''..
defined in Article VIII hereunder.} d continuing to the Conversion Payment Date (as that term
~uF .
fitYY~
is defined in Article VIII hereunder);""~Td (b) for any period after the Conversion Payment Date
during which the University operates the flare.
116. The University shall continuously monitor the LFG at Meter Points A and B, and
such LFG will be measured, recorded, and totalized on an hourly, daily and monthly basis. The
heating energy content of the LFG delivered to the flare shall be based on its measured monthly
methane content at Meter Point B. The methane cantent shall be measured in scflmonth and shall
be equal to the product of (a) the percent methane by volume, and (b) the LFG measured in
scf/month at Meter Point B (the "Meter Point B Methane Content"}. For purposes of
32
{00018638.DOC 16}
56
determining the Flare Payment, the total monthly heating energy content of the LFG measured at
Meter Point B (the "Flare l~~IMBTU HHV") shall be obtained by dividing the product of (a) the
Meter Point B Methane Content, and (b) 1,012, by 1,000,000. Expressed in a formula, the Flare
MMBTU I~IV =Meter Point B Methane Content x 1012 _ 1,000,000.
117. For a given month during the Term of this Agreement, the Flare Payment shall be
equal to the Flare Percentage, as such percentage may be adjusted in accordance with Subpart E
of this Article VII, multiplied by the product obtained by multiplying (i) the Flare MMBTU
HEIV for such month by (ii) the lesser of the
Price or the Adjusted BTU
z~;~,.
Equivalent Price. Expressed in a formula, e'~~nXhly Fl~~'°e Payment = (0.053) x (Flare
'~ ~~~
.~^'~,'"
MI~~IBTU HHV) x BTU Equivalent Price or Adjusted B"1' ~`!,` ~.guivalent Price, whichever is less.
A sample calculation of the Flare Payment is shown in Exhibit ~~ ~,
D. Payment for Gas Converted to Ener~y
118. Each mont.:.'~;a:d "°u~[zag the Term of this Agreement, the University shall make
~;,a -
payments to the Co ~ ` ~ rased on, t ~ heating energy content of the LFG that is delivered to the
~~
Gas Conversion System `(fie ~~un~ ur~i~n~-,l'a . ent") (a) commencing upon the Conversion
t~~ .~
Payment Date (as that term is d~fin~e~i in Article VIII hereunder); and (b) for any period during
which the University operates the Gas.~~'onversion System.
119. The University shall continuously monitor the LFG at Meter Points A and B, and
such LFG will be measured, recorded, and totalized on an hourly, daily and monthly basis. The
heating energy content of the LFG delivered to the Gas Conversion System shall be based on its
measured monthly methane content at Meter Point A. The methane content shall be measured in
scfJmonth and shall be equal to the product of (a} the percent methane by volume, and (b) the
LFG measured in scf/month at Meter Point A (the "Meter Point A Methane Content"). For
purposes of determining the Conversion Payment, the total monthly heating energy content of
33
{00018638.DOC 16}
57
the LFG measured at Meter Point A (the "Conversion MMBTU I~IV") shall be obtained by
dividing the product of (a) the Meter Point A Methane Content, .and (b) 1,012, by 1,000,000.
Expressed in a formula, the .Conversion MMBTU HHV =Meter Point A Methane Content x
1012 _ 1,000,000.
120. For a given month during the Term of this Agreement, theConversion Payment
.. r~~
shall be equal to the product of (a) the Conversion Percents -;~'~ such percentage may be
~~
'th Sub art E of this Article ~'~~;and (b~~' ~ ~~ product obtained by
adjusted m accordance vv~ ~ ~r ~~,
multiplying (i) the Conversion MMBTU I~IV for such month by ~~(ii) k~ lesser of the BTU
.~,
~.
Equivalent Price or the Adjusted BTU Equivalent Price. Expressed in a formuYl:~e County's
,._
monthly Conversion Payment = (.166) x (Conversion MMBTU HHV) x BTU Equivalent Price
or Adjusted BTU Equivalent Price,
Payment is shown in Exhibit F.
121. The Parties recognize that
reductions in GHG emissions and associated
Carbon
Allowances, are
to
Benefits` es~lting from tl
~~ --
~~:~
~,
the University ~ s~~~nternal
"~r~=~=
-=,x~ti t.
...Ef„
economic benefits.
E.
> less. A sample calculation of the Conversion
:~
.~
r ;~y
~gulations,~policies and procedures governing
narkets for Environmental Benefits, including
Accordingly, the University will strive
with respect to the LFG Project to ma~rimi~e the Environmental
and to measure and document them in a way that meets both
reduction objectives and the County's objective to generate
122. General. During the Term of this Agreement, the Parties acknowledge that
changes in the renewable energy marketplace and in the regulation of GHG emissions may occur
that may affect the compensation paid to the County under this Agreement. Accordingly,
pursuant to the terms and conditions hereunder, the Parties agree to make certain adjustments to
34
{00018638.DOC 16}
58
the County's payments under the following circumstances as set forth in Paragraphs 123-126
hereunder: (a) beginning in 2015 and in each year thereafter during the Term the Agreement, to
reflect certain differences that may arise between the Average Allowance Market Prices for such
years and the Forecasted Carbon Prices set forth on Exhibit A for such years (the "Emission
Allowance Price Adjustment"); (b) to reflect changes in Global Warming Potential that may
arise during the Term of the Agreement (the "GWP Adjustment"); and (c) to reflect additional
compensation that may result from the University monetizing additional or different
;;:,~ _
~;:;,.
Environmental Benefits under this Agreement (the: A iu'stment for Other Environmental
~' ~
Benefits"). The Parties shall jointly retain the ~ar~bU,n~Price ozlsultant, beginning on or about
the date that the flare becomes operational, and the P~ `~, shall share equally all fees and
expenses payable to the Carbon Price Consultant. ~ ;~~ _ . ~.
123. Emission Allowance Price Adjustment. The Parti~~acknowledge that the Flare
and Conversion Percen ~ e been established, in part, based on the Forecasted Carbon
Prices set forth on Liz"`h~t~A. An~'~'djustment in the Flare and Conversion Percentages pursuant
J -.r~ ~ ~ ~
to this Paragraph shall be l~~ ~` ed~`n a~~~ia~s~'of the Average Allowance Market Prices and
+~ ;~~,~.
~~~:;..:
the Forecasted Carbon Prices per~o~med pursuant to a methodology (the "Emission Allowance
,° ~~
Price MethodoloQV") developed in ~ecbrdance with the provisions of this Paragraph by the
Carbon Price Consultant. No adjustments to the Flare Percentage or the Conversion Percentage
shall be made (i) prior to 2015, or (ii) in any month during the Term of this Agreement in which
a Cap-and-Trade System has not been enacted under federal legislation in the United States.
a. Emission Allowance Price Methodolo>~y. Not later than one hundred eighty days
(180) before the first month in which an adjustment is made under this Paragraph
123, the Parties shall direct the Carbon Price Consultant to develop a
35
{00018638.DOC 16}
59
b.
methodology meeting criteria mutually acceptable to the Parties that shall permit
the Parties to perform a comparison of the Average Allowance Market Prices and
the Forecasted Carbon Prices by reference to (i) data showing the prices at which
Emission Allowances were purchased and sold in the regulated carbon market
established in the United States under federal legislation enacting aCap-and-
Trade System, and (ii) such other information that the Carbon Price Consultant
determines is customary and reasonable in the carbon consulting industry. The
Carbon Price Consultant shall
Allowance Price Methodology.
ies' agreement on the Emission
the Emission Allowance
~ ~,~
Price Methodology shall be submitted to ~ispute Resolution in accordance wi
Article XI of this Agreement. =~, ~ .
,;,.
~~`~~' gin 2015 and continuin
Flare and_Conversion Payment Adjustments. Beg~r g
through th ~;~ m~~alnxng Term of the Agreement, in any month in which aCap-and-
~ .f "
~,~;
has ~`e~n enacted under federal le station in the United States, the
c.
~^.~r ~ ~ ~
University s ~ p`ig` ~ s~.~or~~'Allowance Price Methodology to compare the
~`A`~~~~
Average Allowane~~~,; arket Prices and the Forecasted Carbon Prices for the
applicable month of
Lf there is a positive or negative difference between the Average Allowance
Market Price of an Emissions Allowance for the given month and the Forecasted
Carbon Price for such month,~the following adjustment to the Flare Percentage for
such month shall be made: The Flare Percentage shall be increased or decreased
by 0.357% for each whole dollar (rounded down to the nearest whole dollar) that
the Average Allowance Market Price for such month is either above (for
36
{00018638.DOC 16}
60
increases} or below (for decreases) the Forecasted Carbon Price for such month;
provided, however that the Flare Percentage for any month shall not be adjusted
in a manner that results in the adjusted Flare Percentage equaling a percentage
greater than 8.51% or less than 2.09%. For purposes of calculating adjustments
under this Paragraph 123, the Flare Percentage shall reset each month to five and
three-tenths percent (5.3%). For the avoidancet" }ambiguity and by way of
~~ ~`
exam le only, if the Flare Percentage is adj "~~;d..,t.~; 2015 from five and
p ~~``.
three-tenths percent (5.3%) to six percent (6.0%), the Flare~Y~~ce tage shall reset
,,Y~.,.
to five and three-tenths percent (5.3%) for purposes of ca1~i11ating any
adjustments to the Flare Percentage for the month of February ZO15.
6'p
'~t°c'~h,..
=~
.'1.ha.
d. If there is a positive or n~~gati~ed~ffe~rence between the Average Allowance
Market Price of an Emissions
Carbon Price for such month,
Percentage for such month shall
ven month and the Forecasted
adjustment to the Conversion
The Conversion Percentage shall be
or decreased by 1.12% for each whole dollar (rounded down to the
nearest whal~,;;clollar) that the Average Allowance Market Price for such month is
~~x F~_ ,
ther above (~ mcreases) or below (for decreases) the Forecasted Carbon Price
provided, however that the Conversion Percentage for any month
~~r =~'
shall ne adjusted in a manner that results in the adjusted Conversion
Percentage equaling a percentage greater than 26.68% or less than, 6.52%. For
purposes of calculating adjustments under this Paragraph 123, the Conversion
Percentage shall reset each month to sixteen and six-tenths percent (16.6%). For
the avoidance of ambiguity and by way of example only, if the Conversion
37
{00018638.DOC 16}
61
Percentage is adjusted in January 2015 from sixteen and six-tenths percent
(16.6%) to fourteen percent (14.0%), the Conversion Percentage shall reset to
sixteen and six-tenths percent (16.6%) for purposes of calculating any
adjushnents to the Conversion Percentage for the month of February 2015.
e. The University shall reflect any adjustments to the Flare and Conversion
Percentages made under this Paragraph 123, including the underlying
calculations, in the monthly Billing Statement for such month issued to the
~:.~
County under Paragraph 128 here `uz~c~er. A .sample calculation is provi e m
Exhibit G. ~`
~ '~~,
124. GWP Ad,~ustment. The commercial terms set t'urt~~ ~ s Agreement assume a
^4
,~. nary'''.,
Global Warming Potential (GWP) for methane of twenty-one (21) ~~ calculate the Environmental
Benefits that will result
will be adjusted as~s`~~,~i~~l
;~
Term of this Agreement as `
a. For any month iri
Project's destruction of methane. Payments to the County
the extent that the GWP for methane changes during the
the GWP of methane is twenty-three (23) or greater, as
accepted under any L~ivs regulating the GHG emissions of the University, or, in
the absence of such Laws, as provided in the then-current General Reporting
Protocol for the Voluntary Reporting Program published by The Climate
Registry, then the University shall make a payment to the County in the Monthly
Billing Statement for such month equal to twenty-five percent (25%) of the
product that results from multiplying the (i) lesser of the Average Market Price of
Emissions Allowances or the Forecasted Carbon Price for such month by (ii) the
38
{00018638.DOC 16}
62
difference between the number of metric tons of CO2e destroyed by the LFG
Project calculated by reference to a GWP of twenty-three (23) or greater and the
number of metric tons of CO2e destroyed by the LFG Project calculated by
reference to a GWP of twenty-one (21). A sample calculation is provided in
Exhibit G.
b. For any month in which the GWP of methane is nineteen (19) or less, as accepted
under any Laws regulating the GHG emissions of the University, or, in the
absence of such Laws, as provided~~ they' then-current General Reporting.
,~
Protocol for the Voluntary Repo _._,g Progr~ published by The Climate
,~~~ ~
~~-
Registry, then the University shall reduce; t lie payment due the County in the
Monthly Billing Statement for such month by~~~;~.mo~ t equal to twenty-five
percent (25%) of the product that results from mu[`l~iplying (i) the lesser of the
~:rF~,.~ ~,.
Average ~]1~auc~Market Price or the Forecasted Carbon Price for such mon
by (ia;~E
J.F~G Proj
s°° ,~~
{{" F,:.
~, of metric=
'~, GWP of 1
`~
125. ~`' llstme
~_
Agreement is based '~"`~.~. ~,
::
a
the Term of this A e
nog between the number of metric tons of CO2e destroyed by the
to a GWP of twenty-one (21) and the number
of~~~~~~~e,~destroyed by the LFG Project calculated by reference to a
(19)~ less. A sample calculation is provided in Exhibit G.
The economic benefit of this
the value of Carbon Credits. The Parties recognize that during
other Environmental Benefits may be generated through the
University's operation of the LFG Project, particularly as relate to the market for renewable
energy. The Parties further recognize that the current state of the market for such Environmental
Benefits is unsettled with respect to whether, and to what extent, other Environmental Benefits
39
{00018638.DOC 16}
63
may become available that are associated with the operation of the LFG Project. The Parties
recognize that during the Term of this Agreement, new Laws, guidance, voluntary standards or
comparable directives may be issued that clarify the respective valuation protocols for various
Environmental Benefits associated with the LFG Project.
126. In consultation with the County, the University sh.~,~on an ongoing basis,
,,,~
determine if the categorization of Environmental Benefits asso_;,,ya_ed with the LFG Project in
~.
_,,~.
ways other than as Carbon Credits would result in additic~`"~° revenu~~'to the County without
~~ ~
compromising either the University's ability to derive environmental~n fit through the
x
generation of Carbon Credits or its achievement of other objectives for the~'G Project,
~~,
including in particular as it relates to the University's commitment under the American College
and University Presidents Climate C~ ~~~'gm~tm~~ent, ~ If such alternative categorization of
r~ ,.,
~~ ~XF~'
~ YfS ?:!
Environmental Benefits would result in' a gi'eater`~ ~,er~a~~.~ value to the University and a greater
a ent to the Coup than. the Coun ~o~ d recel e~ff the Environmental Benefits were
overall p ym ty ty ~ ~,
~,~~
solely categorized as Carbon Credits, and the U "'';~e~~rsity decides in a given month, in its sole
°~,.
discretion, to monetize a portion or all of the Environmental Benefits in a manner other than as
----
Carbon,redits, the``pirsity shall pay to the County fifty percent (50%) of the proceeds
_ ,~ '~ ~~
resu~tm mom such monetion net of any costs the University incurs both in monetizing the
~~ ay~~R
F.nvimnmental B~ ~rlefits and i~placin~ Carbon Credits that would otherwise have been generated
by the operation
if any, but for the University's decision to monetize another
type of Environmenta~Benefit. Provided, however, that nothing in this Agreement shall obligate
the County to incur all or any portion of any costs that exceed any surplus proceeds resulting
from the monetization of any Environmental Benefits. In the event the University generates a
surplus in any month, it shall provide an accounting of the surplus revenue thus generated in the
40
{00018638.DOC 16}
64
Monthly Billing Statement and the monthly payment to the County shall be increased
accordingly. A sample calculation is provided in Exhibit G.
127. Notwithstanding anything contained herein to the contrary, the County shall have
the option, exercisable at any time and from time to time upon thirty (30) days' written notice to
the University, to purchase Carbon Credits from a third party and to exchange such Carbon
Credits, without any additional compensation, for an amount equal to up to fifteen percent (15%)
of the Carbon Credits generated by the LFG Project in a given month. The Carbon Credits
purchased from a third party for exchange must be el~i
System enacted under federal legislation in the
must be eligible carbon offsets under the California Cli
Carbon Standard, or the rules of any regional compli
Greenhouse Gas Initiative or the Western Climate Initiative.
F. Biillin~ , ~.
128. The f ~ eras
month during the Term of t
the County on or before the
the Conversion Payment along with
offsets under aCap-and-Trade
the absence of such a system,
Action Registry, the Voluntary
such as the Regional
the metering devices to be read on the last day of each
iversity shall thereafter prepare and deliver to
.~
'l~5th) day of each subsequent month the Flare Payment and
to the County (a "Monthly Billing Statement")
providing all relevant metering information and data that will clearly indicate (and will permit
the County to verify) the (i) quantity of Landfill Gas on an SCF basis delivered to the Meter
Points A and B during the preceding calendar month; (ii) the Meter Point A Methane Content
and the Meter Point B Methane Content; (iii) the Flare MMBTU HHV and the Conversion
MMBTU HI-iV; (iv) the Flare Payment and the Conversion Payment; (v) any adjustments made
under Subpart E of this Article VII; and (vi) reasonably detailed calculations performed by the
University to derive all of the foregoing information.
41
{00018638.DOC 16}
65
ARTICLE V.~
RESPECTIVE EFFECTIVE DATES OF T'HE UNNERSITY'S OBLIGATIONS ~TNDER TffiS
AGREEMENT
129. Construction Date - (Construction of LFG Collection System): The
University shall have no obligation to commence construction of the LFG Collection System (or
to continue construction of the LFG Collection System if construction has akeady commenced)
prior to the University's receipt of all LFG Project Permits.
130. Flare Payment Date: The University
County thirty (30) days after the acceptance of
North Carolina State Construction Office.
131. LFG Project Date: The University shall
and the Gas Conversion System after the occurrence of the
commence Flare Payments to the
LFG Collection System by the
construction of the Pipeline
a. The receipt of all necessary Approvals to construct the Pipeline.
b. The receipt of all necessary LFG Project Permits.
132. Conversion Payment Date: The University shall commence Conversion
Payments tp;~f~~ ~ut~ttkirty (30) days after the acceptance of the completed Gas Conversion
~" ~~~;
Systexi~h~the North Cat'c~,~in~i State Construction Office.
~ '~"°
~ ~~
~ b
~' ~'L~ ~~~ ARTICLE IX
.;~4 ~,~
~, ~~y
'~~ `~ ~"' LANDFILL GAS DELIVERY
~J ~w.
~``~°v_,
133. Owners~~iji~and title of the Landfill Gas shall pass to the University at the Delivery
Point.
134. For purposes of measuring the quantity of Landfill Gas delivered to the Delivery
Point, the University shall install, at its own cost and expense, Gas Flow Meters for Meter Point
42
{00018638.DOC 16}
66
A and Meter Point B with a design accuracy of not less than two .percent (2%) for all parameters
measured and taking into account verification methodologies for Environmental Benefits.
135. Such Gas Flow Meters shall be owned, operated, maintained and calibrated by the
University at its sole cost and expense. The Gas Flow Meters shall be designed and operated to
provide time-synchronized data for M1V1Btu anal to provide all other~~rmation required to be
:mot:.
measured pursuant to this Agreement. The University's Gas F1Q1Vleters shall be sealed, with
~~ ~.
,~~~~
the seals broken only for the purpose of inspecting, testg, rep" ~'T, _~ or recalibrating the
k~;.
metering devices. The University shall keep its Gas Flow Meters accurate''- ~.;,,~n good working
:,~_ ~,
order and the University shall periodically test such metering equipment as the IrY ~~rsity deems
necessary; provided that the University shall test its metering equipment at least once every six
(6) months, but in no case less than any
manufacturers' recommendations. In the
repaired or recalibrated, or otherwise read or
provide the County with five (5) days prior
County may be,~presen
L
data and~im~lar reco
,, ~.w as i}'~,...
this "~A~grirei_m nt. The
Meters. °~~
136. The
times during the Terns
set forth in any applicable Laws or
Meters is to be tested, cleaned,
byhe University, the University shall
of any such procedure, so that the
during any such procedure~''~ The University shall preserve all charts, test
with the record retention provisions of Paragraph 149 of
shall have the right to install and maintain its own Gas Flow
its agents shall have the right from time to time, at reasonable
to monitor, access, and inspect the condition and use bf the LFG Project
and to monitor, access, and inspect work in progress and the day-to-day operation of the LFG
Project. Any such monitoring, examinations, inspections or visits shall be conducted in a
manner so as to cause minimum interference with the University's LFG Project.
43
{00018638.DOC 16}
67
ARTICLE X
IlvsUxartcE axe Tames
137. At all times during the term of this Agreement, the Parties shall maintain worker's
compensation insurance, covering liability under applicable worker's compensation law, at the
statutory coverage levels.
138. Any subcontractor retained by the University in connection with the construction
of the LFG Project shall comply with the minimum insurance requirements specified by the
North Carolina State Construction Office under the g`"~fructions to Bidders and General
,~{.}~~
,~-~~,'
Conditions of the Contract" (Form OC-15). The;~'f1iu~~xsity s require each such construction
~~~ ~~
_~~ .
:~
subcontractor to maintain such coverages for the
required therein. Any
,~,_.n.
subcontractor retained by the University in connection with to ~~nper~ation of the LFG Project
shall comply with the minimum. insurance requirements specified v~the "North Carolina General
Contract Terms and Condi~i ~?~,or the "University of North Carolina at Chapel Hill General
Terms and Condit
and Services," as applicable. The University shall
require each such operat ,T~ 5~.be~t2~ar~tn to maintain such coverages for the time periods
~'
m~ ,,
~,~,
required therein. ~ ~~
:~
139. No subcontracting sha~~elieve any Party of its obligations under this Agreement.
Each Party shall remain primarily liable and obligated to the other Parry for the timely and
proper performance of all of its obligations hereunder even if such obligations are delegated to
third-parry subcontractors.
140. Each Party shall be responsible for any taxes or assessments levied on any real,
personal or tangible property owned by it, inclusive of any LFG on that party's respective side of
the Delivery Point after the Closing Date of this Agreement. All transfer, documentary, sales,
use, stamp, registration, recording, conveyance and other similar taxes, fees or charges
44
{00018638.DOC 16}
68
(including any penalties and interest) arising from the transactions contemplated by this
Agreement shall be paid by the University when due or collected from the University by the
County in accordance with applicable Law. Half (50%) of the amount of taxes, fees or other
charges paid by the University, pursuant to the immediately preceding sentence shall be
subsequently reimbursed to the University by the County by set-off against the Flare Payments.
In accordance with applicable Law, the County will accept a certificate or other documentation
as required with respect to any claim by the University that it is exempt from the payment of any
~•~,
,.
such taxes. To the extent applicable, 'the University the"County will, at their own expense,
file .all necessary tax. returns and other
to such taxes, and the Parties
will cooperate to the extent necessary with respect to
:,a,
~....
141. General. Any dispute,
or claim that arises out of or relates to this
_~~" erformance
Agreement (including any dispute over the exilice, validity, interpretation, p ,
breach or ter~uatr'A~ereof) (a "Dis ute") shall be resolved in accordance with the procedures
in this
as set
connection with
prior to any party initiating litigation regarding such Dispute, except
~~
process set forth in t s
the Agreement. Each Party shall bear its own costs incurred in
ion process under this Article. The entire dispute resolution
is a compromise negotiation. Subject to the North Carolina
Public Records Act and other applicable Laws, all offers, promises, conduct and statements,
whether oral or written, made in the course of dispute resolution by any of the Parties, their
agents, employees, experts and attorneys are confidential. Subject to the North Carolina Public
Records Act and other applicable Laws, such offers, promises, conduct and statements are
45
{00018638.DOC 16}
69
privileged under any applicable arbitration privilege, are subject to Rule 408 of the Federal Rules
of Evidence and any state counterpart rules or doctrine and are inadmissible and not discoverable
for any purpose, including impeachment, in litigation between the Parties to the litigation;
provided, however, that evidence that is otherwise admissible or discoverable shall not be
rendered inadmissible or non-discoverable as a result of its presentation~r-use during the dispute
resolution process hereunder.
142. Notice. If a Dispute arises under this
claimant Party (the
"Claimant") shall provide a written notice of the Dispute ("Notice of Dispu~~'" Ito the other Party
~.
. ~.:: ,,
("Respondent"), which shall contain a reasonably detailed statement of the natur~u,the Dispute
and the relief requested. A Notice of Termination issued in accordance with Article VI shall be
deemed a Notice of Dispute for purposes't?tx..Article XI.
143. Executive Review. Upon `receipt ~ '~~~N~otice of Dispute, the University's
~,
Director of Energy Services and the Assistant _ianty Maner shall meet in person and, unless
r
the Parties mutually agree in writing to a different t„~im~, e period, shall have thirty (30) calendar
4
da s to discuss _GO ider and attempt in good faitho resolve the Dispute. If, upon the expiration
Y ~~ ~,L
of such.~:fiine penod, " --~eniversity s Director of Energy Services and the Assistant County
~s~lP~ ~ P3r~~,
Mana~er~'la:~ue been unable o~r~solve the Dispute, then they shall immediately submit the dispute
for Senior Ex "' uttye Review a ` r accordance with Para_g_raph 144 of this Agreement.
~~a~~ ~,:
°~:~~:
144. Senb~~ x utive Review. For disputes that are submitted for Senior Executive
.,,{~~ ,
Review pursuant to F aragraph 143 of this Agreement, the University's Associate Vice
Chancellor for Campus Services (or higher-level authority) and the County Manager (or higher-
level authority) shall meet in person and, unless the Parties mutually agree in writing to a
different time period, shall have thirty (30) calendar days to discuss, consider and attempt in
46
{00018638.DOC 16}
~o
good faith to resolve the Dispute. If, upon the expiration of such time period, the University's
Associate Vice Chancellor for Campus Services (or higher-level authority) and the County
Manager (or higher-level authority) have been unable to resolve the Dispute, then the Dispute
shall be submitted to non-binding mediation in accordance with Paza~raph 145 of this
Agreement.
145. I+lon-Binding Mediation. if the Executive Review and Senior Executive Review
dispute resolution processes are unsuccessful, the Parties shall be obligated to submit the Dispute
:.
to non-binding mediation through the use of a ne ~tral, independent, disinterested mediator
S;V~ff
` ~'TS
selected by the Parties from a professional m "a ; iana firma such Dispute is not resolved
~~T
through the non-binding mediation process within one huc7red twenty (120) days after the date
~.
of the Notice of Dispute or Notice of Termination (or such other. time period as mutually agreed
to by the Parties in writing), either Party may initiate litigation-'in any court of competent
jurisdiction. The' Partin
retained hereunder.~~ .:
146.
prevented from doing so by
obligations under this Agreement
equally all fees and expenses payable to any mediator
Except when cleazly
in dispute, the Parties shall continue performing their
any Dispute is being resolved as provided in this Article
unless and until such obligations are terminated by the termination or expiration of this
Agreement. The time frame for a Party to cure any breach of the terms of this Agreement shall
not be tolled by the pendency of any dispute resolution procedures.
147. Equitable Relief. Notwithstanding anything contained in this Agreement to the
contrary, the Parties shall be entitled to seek injunctive or other equitable relief in any court of
47
{00018638.DOC 16}
71
competent jurisdiction whenever the facts or circumstances would permit a Party to seek such
equitable relief without obligation to post bond.
ARTICLE XII
FORCE 11/IAJEURE
148. Suspension of ®bli~ations. If, because of a Force Majeure event, either Party is
unable, in whole or in part, to carry out its obligations under this Agreement, then such Party
shall give written notice and reasonably full details of the Force Majeure event to the other Parry
as soon as possible after the event's occurrence. Upon such notice, the obligations of the
noticing Party (other than the obligation to make any payments under this Agreement) shall be
suspended during the period in which the Party is unable to perform because of the Force
~'.
-~~-.-"j-y...
Majeure event, but for no longer period, p'r`c~ded that:
~~ -~.:
a. the burden of proof on~whetbcr a~Fnrce Majeure event has occurred shall
be upon the Parry cla m~n~a__._ 'Force Maje`~me;.
4~
b. the nonperforming Party shall make all reasonable efforts to continue to
,~,~.~.
>~
perform its obligations despite the occurrence of a Force Majeure event;
r~
k
,~
< ~
~, r~: ~ c. the none rforming Party shall provide the other Party with prompt written
~~
.. ~~, notice the cessation of the Force Majeure event.
~_~ ~;.
~`~ ~'~ ~;, ,~ ARTICLE XIII
~_;~ ~"
ti-~-.
MISCELLANEOUS
149. Records. During the term of this Agreement, and for a period of three (3) years
thereafter (unless a longer period of time is required under applicable Laws), each Parry shall
keep and maintain complete and accurate records and all other data required by each of them for
the purposes of the proper administration of this Agreement. Each Party shall have the right, at
48
{00018638.DOC 16}
72
its sole expense during normal business hours, to examine the other Party's records to the extent
necessary to verify the accuracy of any statement, change, notice or computation made
hereunder.
150. .Amendment to Agreement. This Agreement may be amended or modified only
by a written instrument signed by each of the Parties.
s-? ~.
151. Disclaimer of Joint Venture, Partnership and,Ai=ency. This Agreement shall
~`-~F
~~.
not be interpreted or construed to create an association, joint"~nture,~ ~ r~J;artnership between the
_n
,...... ~ Ii't
County and the University, or to impose any partnership obligation or liabil`i ;-'::;upon such Parties.
Neither the County nor the University shall have any right, power or authority t'~:e~~er into any
agreement or undertaking for, or act on behalf of, or to act as or be an agent of representative of,
~-
=~-
or to otherwise bind, the other Party.
~~~~ ~~ ~
152. Severability. If any term ~,. pro~i~sron;~of this Agreement or the application
~~ -n {x
~~~r,
thereof to any person or circumstance be invaliz~~~r unenforc ~'~le to any extent, the remainder of
~.;
this Agreement or the application of such terms an~~r~ovisions to persons or circumstances other
than those tow 'ch it is held invalid or unenforceable shall not be affected thereby, except each
~~, ~
µ ~~ v4.i its i~
Party sh Y be obhg~.~ed ~ to reform the remaining terms appropriately, and each term and
a ~~ t~
nrovi~,~~b~fEthis A~reementr:shall be valid and be enforceable to the fullest extent permitted by
law.
153. Assa``~~' end: Neither Party may assign or transfer its respective rights and
,_,r
obligations under thi Agreement, except with the consent of the other Party, which shall be in
that Party's sole discretion. Any assignment purportedly made by a Party without the requisite
consent of the other Parry shall be null and void.
49
{00018638.DOC 16}
73
154. 1Vatices. All notices and other communications under this Agreement (other than
regularly scheduled payments) shall be addressed as follows:
Orange County:
Orange County Solid Waste Director
P. O. Box 17177
Chapel Hill, NC 27516
(Current Director: Gayle Wilson}
FAX:
Orange County Manager
P. O. Box 8181 ~,,,
Hillsborough, NC 27278
(Current Manager: Laura Blackmon,}
FAX: ~.~, ,
With a copy to:
Orange County Attorney
P. O. Box 8181
Hillsborough, NC 27278
FAX:
Contact:
Orange Co~uu
(Currently: Pi
PHONE: (91
The University of.
,'?J
s~ -~
Waste Operations Manager
~... >
.. ~ ~.
~1
at Chapel Hill:
Director of Energy Services
925 Branch Street, Campus Box 1855
Chapel Hill, NC 27599-1855
(Current Director: Ray DuBose)
PHONE:
FAX:
With a copy to:
The University of North Carolina at Chapel Hill
General Counsel
Campus Box 9105
Chapel Hill, NC 27599-9105
50
{00018638.DOC 16}
74
(Current General Counsel: Leslie Strohm)
FAX: 919-843-1617
University Emergency Contact:
Such notices and communications shall be deemed to have been given and received when
personally delivered or upon receipt as evidenced by a United States Postal Service Receipt for
~~
Certified Mail or evidence of delivery by a private express mail service (e "g~., UPS, FedEx, DHL)
~r
{ ~.
or upon receipt by facsimile provided that the sender prompti~; .the ~ delivers a copy of the
notice together with the receipt issued by the sender's facsimile~machme; to.~the recipient. Either
Party may change the address to which•communications or payments are to be°"";"o"de by notice to
the other Party as set forth above.
155. Intesc-ation. This Agreeme
their agreement with respect to such subj~
previous agreements.
is intended by the Parties as the final expression of
written and oral, and supersedes all
156. Waiver. No delay or omission
any non-compliance or default by the other
~,.
~r °Fr~
~~X`~ •
a Party to exercise any right occurring upon
respect to any of the terms of the
,reement~~~~.ai1:.~mparr any such right or power or be construed to be a waiver thereof. A
~ iy~
b~~ ~~~
iv„~bq~either the Coun'klr the University of any failure of the other Party to perform any of
its obli~atiau~~,under this ~eement shall not be construed as a waiver of any future or
continuing failure~~-+~'~failures~whether similar or dissimilar thereto.
_-~
157. Choice"`` Law. This Agreement and any provisions contained herein shall be
interpreted under the laws of North Carolina without regard to principles of conflicts of law.
158. Communications. Neither Party shall make any public announcement
concerning this Agreement nor the transaction contemplated herein without first obtaining the
approval of the other Party which approval shall not be unreasonably withheld or delayed.
51
{00018638.DOC 16}
75
159. Equal Opportunit y/Non-discrimination. The Parties shall comply with all
federal and state requirements concerning fair employment and employment practices
discriminating by reason of race, color, religion, gender, national origin, disability, age, creed,
veteran's status, or sexual orientation.
160. No 'T'hird Party Beneficiaries. The Agreement is no _t~ntended to and does not
confer any right or benefit on any third party.
~.....
IN WITNESS WHEREOF, the Parties hereto have caused the execution of~,t . ~s Agreement by
,..: . ~,
t ~s
the representatives whose names appear below as of the date first written above. ' ,
• ~..
®RANGE C®UN'FY, NORTH CAROLINA
LTIVIVERSITY ®F N®R'TH ,CAROLINA AT
CHAPEL HILL
BY:
ITS:
DATE:
52
{00018638.DOC 16}
~s
Ezhibit A
~~
q ' ~
E - -
$ $.
2010 9.00 6.50
$ $
2011 9.18 7.25
$ $
2012 9.36 7.75
$ $
2013 9.55 8.00
$ $
2014 9.74 11.55
$ $
2015 9.94 18.00
$ $
2016 10.14 19.02
$ $
2017 10.34 20.04
$ $
2018 10.54 21.06
$ $
2019 10.76 22.08
$ $
2020 10.97 23.10
$ $
2021 11.19 24.40
$ $
2022 11.41 25.70
$ $
2023 11.64 27.00
$ $
2024 11.88 28.30
$ $
2025 12.11 29.60
$ $
2026 12.36 31.24
$ $
2027 12.60 32.88
$ $
2028 12.85 34.52
$ $
2029 13.11 36.16
203.0 $ $
{00018638.DOC 16}
77
13.37 37.80
$ $
2031 13.64 38.56
$ $
2032 13.91 40.11
$ $
2033 14.19 42.57
$ $
2034 14.48 46.08
$ $
2035 14.77 48.40
$ $
2036 15.06 49.37
$ $
2037 15.36 51.36
$ $
2038 15.67 54.51
$ $
2039 15.98 59.00
Note 1:2010 - 2014 estimated by Energy Strategies, LLC with input from Oliver Inc..
2015 - 2039 based on S. 2191, Nicholas Institute ADAGE Forecast.
{00018638.DOC 16}
78
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Ezhibit D
Approvals
Landfill Site
Solid waste permit
Air permit for flare
Duke Energy -New Service
Pipeline
Utilities Commission (NCUC)
Town of Chapel Hill
Dept. of Transportation
Orange County -Easements
Duke Energy -Easements
Dept. of Insurance
State Construction Office
Dept. of Natural Resources
Norfolk Southern Railroad
Gas Conversion 13uilding
Town of Chapel Hill - ZCP
Dept. of Insurance
State Construction Office
Air Permit for engine
Dept. of Natural Resources
OWASA
{00018638.DOC 16}
82
Exhibit E
Calculations demonstrating that Landfill is not subiect to NSPS
(see attached)
{00018638.DOC 16}
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