THE REGIONAL MUNICIPALITY OF PEEL

WASTE MANAGEMENT STRATEGIC ADVISORY COMMITTEE AGENDA WMSAC - 2/2015 DATE: June 18, 2015 TIME: 1:00 PM – 3:00 PM LOCATION: Regional Council Chambers, 5th Floor 10 Peel Centre Drive, Suite A

Brampton, ON MEMBERS: B. Crombie; F. Dale; A. Groves; J. Innis; M. Palleschi; R. Starr; A. Thompson; J. Tovey Chaired by Councillor M. Palleschi or Vice Chair Councillor J. Innis 1.

DECLARATIONS OF CONFLICT OF INTEREST

2.

APPROVAL OF AGENDA

3.

DELEGATIONS

4.

REPORTS

4.1. Peel Energy Recovery Centre Update (Oral) (Deferred from the April 30, 2015 Waste Management Strategic Advisory Committee meeting)

Presentation by Norman Lee, Director, Waste Management

4.2. Infrastructure Development Plan – Use of Anaerobic Digestion for Green Bin Organics (Oral)

Presentation by Norman Lee, Director, Waste Management 5.

COMMUNICATIONS

6.

IN CAMERA MATTERS

7.

OTHER BUSINESS

WMSAC – 2/2015 -2- June 18, 2015

8.

NEXT MEETING Thursday, September 17, 2015, 11:00 a.m. - 1:00 p.m. Council Chambers, 5th Floor Regional Administrative Headquarters 10 Peel Centre Drive, Suite A Brampton, Ontario

9.

ADJOURNMENT

APPROVED AT WASTE MANAGEMENT STRATEGIC ADVISORY COMMITTEE April 30, 2015

5.2. Peel Energy Recovery Centre Update (Oral) Presentation by Norman Lee, Director, Waste Management

Deferred to the June 18, 2015 Waste Management Strategic Advisory Committee meeting

4.1-1

Peel Energy Recovery Centre Update

Norman Lee

Director, Waste Management

Region of Peel

1

Waste Management Strategic Advisory Committee

June 18, 2015

4.1-2

Introduction

Today’s Presentation:

1. PERC Background

2. PERC Project Team

3. PERC Process

4. PERC Procurement Process

5. Peel’s Recent Advisory Committee Experience

6. Key Differences Between Hanlan and PERC

7. Fairness & Transparency

8. WMSAC Mandate & Membership

9. Purchasing By-law

10. Potential Scope of PERC Advisory Body

11. Proposed Direction2

At the April 9, 2015 Regional Council Meeting, Council referred a request to

Waste Management Strategic Advisory Council (WMSAC) to discuss how

Councillors could become better informed about the Peel Energy Recovery

Centre (PERC) project while complying with procurement processes to

enable decision making and provide guidance on implementation.

4.1-3

PERC Background

3

Projected Time Project Milestones Presentation / Outcomes Completed

June 10 2010 Direction to conduct Long Term Disposal studyCouncil adopted staff recommendation to consider all available

technologies and recommended a preferred long term option2010-661

April 2011 Long list of technologies / List of Criteria 2011-403

Nov 24 2011

Approval of Long Term Disposal study findings and

direction to issue RFQ/RFP for Established Thermal

Conversion

Council approved staff recommendation to adopt Established

Thermal Conversion (EFW) as the Preferred Long Term Disposal

Option and to issue RFQ/RFP

2011-1156

Jun 14 2012Direction to apply for P3 Canada Funding and to issue

REOI prior to RFQ/RFP

Council adopted staff recommendation to submit an Application for

P3 Canada Funding and to follow the P3 Canada process, including

issuing an REOI and preparing a Business Case prior to RFQ/RFP

2012-708

Jun 15 2012 Region submitted P3 Canada Application July 2012 REOI issued on July 2 and closed on July 31, 2012

Sep 6 2012 Present status of Business Case Present hi-level status of Business Case 2012-1107

Oct 25 2012 Present Results of Business CasePresent high level results of P3 Business Case and obtain WMC

feedback2012-1206

Oct 23 2012 Review draft Business Case with P3 Canada staff Nov 22 2012 Review contract structure Risk and Financial

Implications

Present details regarding Risk and Financial Implications and obtain

Council direction

Direction to abandon P3 Funding

2012-1356

2012-1364

Jun 27 2013Approval of Business Case by Regional Council Present detailed results of the Business Case and obtain Council

direction2013-576

Aug. 16, 2013

Release RFQ (3-5 month submission period) Four teams prequalified for PERC using Mass Burn Combustion

Technology and will be invited to the RFP phase of the procurement

process

2014-481

2014 Public and Stakeholders consultation round # 1

4.1-4

PERC Project Team

4

4.1-5

Ongoing

Public

Consultation

Completed a Comparative Study

of all Available Technologies

Developed the Project Business

Case

Prequalified Four Proponent

Teams and Technologies

Obtain a Power Purchase

Agreement and an

Interconnection Agreement

Competitively Procure the Design,

Build, Operate and Maintain

Agreement

Complete all Approvals

(ESA, ECA and Land Use)

Complete Construction

Began the Environmental Screening

Process and Public/Stakeholder

Consultation

2010

2021

Held Commercially Confidential

Meetings with Prequalified

Respondent Teams

PERC Process

Ongoing

Procurement

Process

We Are Here 

4.1-6

PERC Procurement Process

A Request for Qualification was issued in August 16, 2013, beginning the

procurement process.

Four Respondent Teams have been prequalified.

Prequalified Teams have been engaged with the Project Team in

discussions regarding the project.

Staff and Peel’s external consultants are currently drafting the Request for

Proposal, which is expected to be issued in late 2015/early 2016.

A project agreement is expected to be finalized with the preferred vendor by

summer 2017, ending the procurement process.

6

4.1-7

Peel’s Recent Advisory Group Experience

The Region established a Project Advisory Group for the Hanlan

Feedermain project in October 2012.

Purpose of the group was to review:

procurement methodology;

amendments to the Region’s standard general conditions of contract; and,

support and assist the contract administration team during construction.

It was composed of 8 elected and 9 staff representatives.

It was not a Committee of Council.

The terms of reference for the group specifically directed that the Advisory

Group not convene during the procurement process.

7

4.1-8

Key Differences between Hanlan & PERC

8

Hanlan PERC

Council/ Advisory

Committee

Engagement

Prior to and following but not

during procurement

Procurement is underway (began Aug. 16, 2013)

Past Council and WM Committee were involved prior to the

beginning of the procurement process

Contract Structure: Design / Bid / Build (DBB)

Contract for construction only

Design / Build / Operate / Maintain (DBOM)

Procurement Type &

Evaluation

Request for Tenders

Award based on price only

Results of which are difficult to

challenge

Request for Proposal

Award based on price and evaluation of technical merit

Results of which are easier to challenge especially if a

potential proponent can prove the process was unfair

Terms & Conditions

of Contract

Used modified versions of

Regional standard contracts

Contract modifications

completed prior to the

procurement and with Advisory

Group’s participation

Regional standard contract terms and conditions are not

suitable for DBOM contract

Legal, financial and technical consultants are preparing

contracts specific to PERC based on Canadian standards for

DBOM contracts

Fairness Monitor Not used A Fairness Monitor has been engaged to oversee the

procurement process and ensure a fair, open and transparent

process

Fairness Monitor will report their assessment of whether or

not Peel conducted a fair, open and transparent process

A negative report would have a damaging impact on the

Region’s reputation and could open the Region to litigation

from unsuccessful bidders

4.1-9

Fairness & Transparency

In order to maintain confidence and comply with Peel’s Purchasing By-law, it is

important that the procurement process be objective, fair and transparent to prevent

legal and political challenges and reputational damage to the Region.

Significant steps have been taken in the procurement process to date to ensure: the confidentiality of project information;

the elimination of lobbying by prequalified teams; and,

that the all members of the project team and external consulting team are not in a position of

conflict of interest.

Any perception that the process is not being conducted fairly and transparently would

discourage prequalified respondent teams from making the significant investment of

time and money necessary to submit a proposal.

To maintain the integrity of the process and to be compliant with the Region’s

Purchasing By-law any advisory group for PERC must be transparent. Transparency

can best be achieved through the Waste Management Strategic Advisory Committee

which conducts open and public meetings.

9

4.1-10

WMSAC Mandate & Membership

To provide strategic guidance on the implementation of the Waste Reduction

and Resource Recovery Strategy and the Infrastructure Development Plan

The PERC is a key component of the Strategy and the Infrastructure Plan.

Therefore PERC will fit within the WMSAC mandate.

WMSAC is a Committee of Council and therefore meetings are public.

Conducting the advisory body in this format will reinforce confidence that the

process is fair and transparent.

PERC’s Fairness Monitor and Legal and Procurement Advisors must be present

when items related to PERC are presented to WMSAC, during the Procurement

Process.

10

4.1-11

Purchasing By-law

Since the PERC project is currently in procurement, the scope of any Council

involvement must comply with the provisions of the Purchasing By-law (113-2013).

Part VII of the By-law, Prohibitions and Compliance, prohibits members of Regional

Council and Regional Staff from:

permitting anything to be done or communicated to anyone which could cause any potential

Vendor or contractor to have an unfair advantage or disadvantage in obtaining a contract from

the Region;

causing or permitting anything to be done which would jeopardize the legal validity or fairness

of any purchase or which would likely subject the Region to any claim, demand, action or

proceeding as a result of such act or omission; or,

engaging in any form of political or other lobbying to seek to influence the outcome of the

process or the award during bid solicitation process.

On October 27, 2011, Regional Council recognized this principle by passing a

resolution (2011-1069) directing that Council members not be involved in negotiations

or lobbying with respect to waste contracts (ie. that a cone of silence by

implemented).

Best procurement practice is that members of Regional Council not be involved in

any aspect of procurement.

11

4.1-12

Potential Scope of PERC Advisory Body

Project Aspect Be Informed Provide Direction

Environmental Approvals Yes Yes

Communications & Stakeholder

Engagement

Yes Yes

Power Purchase Agreement Yes Yes

Budget Yes Yes

Procurement Process Non-confidential items subject to

approval by the Region’s internal

Legal and Procurement Advisors

and Fairness Monitor

Not consistent with

procurement best practices

Project Agreements Subject to approval by the Region’s

Legal and Procurement Advisors

and Fairness Monitor

Not consistent with

procurement best practices

Decisions to be Approved by

Council

Yes Yes

12

4.1-13

Proposed Direction

Support for Proposed Direction:

PERC is currently engaged in the procurement process.

The use of Committee of Council will help ensure that the process is perceived to be

open, fair and transparent.

Use of a Committee of Council, public forum, will allow the participation of key

members of the PERC team who are best positioned to help inform the advisory

process.

Recommendation is compliant with the terms of the Region’s Purchasing Bylaw and

consistent with best procurement practices.

13

Staff recommend that WMSAC be used as the PERC Advisory Body

to inform Councillors about the PERC Project and that the role of

WMSAC with respect to PERC exclude procurement issues except

as noted in this presentation.

4.1-14

141414

Questions

4.1-15

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1 1

Infrastructure Development Plan – Use of Anaerobic Digestion for Green Bin Organics

Norman Lee Director, Waste Management

Region of Peel

Waste Management Strategic Advisory Committee June 18, 2015

4.2-1

Overview of Today’s Presentation

Recap of Infrastructure Development Plan

Green Bin Organics System Study

Next steps

4.2-2

Recap of Infrastructure Development Plan

In response to the need for more waste processing capacity and given the age of existing infrastructure, staff conducted a review of the Region’s future waste management infrastructure requirements.

The goal of Infrastructure Development Plan (IDP) was to

develop infrastructure that will meet the Region’s long-term needs in a reliable and cost-effective manner.

The IDP identified anaerobic digestion as the preferred method treating Green Bin organics.

Bi-weekly garbage collection is expected to increase the recovery of

Green Bin Organics by up to 50%

4.2-3

IDP Key Findings: Organic Processing

The existing infrastructure for processing Green Bin Organics is over capacity and cannot satisfy the Region’s future needs.

Anaerobic Digestion is preferred over an aerobic composting because: AD facilities can be located in built up areas, which allows for direct

delivery AD facilities produce biogas which is a source of renewable energy AD facilities are better able to deal with higher amounts of

contamination AD facilities have the ability to process an expanded list of Green Bin

materials including diapers and pet waste

Public ownership of Green Bin processing facilities is preferred.

Private development and operation is preferred (under a design, build, operate and maintain contract).

4.2-4

Endorsed Solution: Organics Processing

On June 26, 2014, Council endorsed the IDP and staff’s recommendation to develop a new Anaerobic Digestion (AD) facility within Mississauga or Brampton – potentially co-located with the Peel Energy Recovery Centre at the Peel Integrated Waste Management Facility.

Staff were directed to continue to refine the Infrastructure Development Plan. staff were to investigate technologies and

approaches for implementing AD.

Interim transfer and processing of Green Bin organics will be required while new long-term infrastructure is being developed.

4.2-5

Obtain all Approvals (Environmental and Land Use)

GB Organics Project: Key Steps

Developed Tonnage Projections to Determine Processing Needs

Council endorsed the use of AD for Green Bin Organics in the Infrastructure Development Plan

Issue RFQ to Pre-qualify Project Teams and Technologies

Issue RFP for DBOM Contract

Construction

Retain Consultant and Complete a Comprehensive Green Bin Organics System Study

2014

Retain Consultant for RFQ/RFP

We Are Here

Acquire Property (if required)

Confirm Siting Requirements

Operation

4.2-6

GB Organics System Study

Purpose: To assess technologies and approaches for implementing AD to process the Region’s Green Bin Organics. Multi-phased Approach: 1. Confirm current context: waste trends, renewable energy options, and potential

changes to regulations or policies 2. Assess options for key components of an AD system 3. Evaluate systems made up of key components identified in Phase 2 4. Assess siting options: PIWMF or other site 5. Prepare final business case for recommended system option Staff will engage qualified consultant to assist with the study.

4.2-7

GB Organics System Study: Phase 1 – Confirm Current Context

This phase of the study will identify:

Opportunities and challenges in Peel context, e.g. opportunities to use biogas / renewable energy in Peel’s operations or within the community

Opportunities for co-operation with municipal or private partners Current policy and regulatory trends and their potential impact over the

planning horizon, including: bi-weekly collection, carbon pricing, energy pricing, potential landfill organics ban, etc.

Lessons learned from recent AD projects: Toronto, ON (operational) Surrey, BC (under construction) Saint Hyacinthe, QC (permitting) Elmira, ON (operational)

Interest and ability of vendors to deliver technologies and services

4.2-8

GB Organics System Study: Phase 1 – Confirm Current Context (cont.)

Recent Municipal AD Projects: Toronto, ON

Owner City of Toronto

Facility Status Operational – Commissioned Dec. 2013

Design/Build/Operate AECOM Canada, ES Fox Construction, Veolia Water Canada

Process Single-stage, Wet AD (Mesophilic)

Capacity 75,000 tonnes per year

Feedstock Residential and commercial SSO

Liquid Effluent Treated and discharged to sewer

Solid Digestate Processed into compost

Biogas Utilization Co-generation to produce heat and electricity for facility and overall site needs

4.2-9

GB Organics System Study: Phase 1 – Confirm Current Context (cont.)

Recent Municipal AD Projects: Surrey, BC

Owner City of Surrey (P3 Development)

Facility Status Under construction March 2015 – mid 2016

Design/Build/Operate Iris Solutions: Orgaworld Canada Ltd, Shanks Group, Stantec Consulting Ltd., Smit Bros, Wilson (BC) Ltd.

Process Dry AD

Capacity 115,000 tonnes per year

Feedstock Residential and commercial SSO & yard waste

Solid Digestate Processed into compost

Biogas Utilization Refined to Recycled Natural Gas to fuel the City’s waste collection vehicles

4.2-10

GB Organics System Study: Phase 1 – Confirm Current Context (cont.)

Recent Municipal AD Projects:

Saint-Hyacinthe, QC Owner City of Saint-Hyacinthe

Facility Planned expansion of digestion capacity at the City’s wastewater treatment plant (WWTP) and construction of an injection station to connect to the local natural gas distribution network

Process Two-stage, Wet AD

Capacity 17,000 tonnes per year (SSO), 13,500 tonnes per year of sewage sludge

Feedstock Municipal and commercial SSO and sewage sludge

Liquid Effluent Discharged to WWTP

Solid Digestate Processed to a fertilizer for agricultural, municipal and domestic use

Biogas Utilization Refined to biomethane and injected into the natural gas distribution network operated by Gaz Metro with a portion to be used to heat City buildings and fuel City vehicles and the remaining made available to Gaz Metro clients

4.2-11

GB Organics System Study: Phase 1 – Confirm Current Context (cont.)

Recent Private AD Projects: Woolwich Bio-En Biogas Plant, Elmira, ON.

Owner Bio-En Power Inc.

Facility Status Operational – Commissioned April 2014

Process Two-stage, Wet AD

Capacity 70,000 tonnes per year

Feedstock Municipal and commercial liquid and/or solid organic waste

Liquid Digestate Hauled to on-farm storage for later land application as fertilizer

Biogas Utilization Production of 2.85 megawatts of electricity under a Feed-In-Tariff contract with the Ontario Power Authority

4.2-12

GB Organics System Study: Phase 2 – Assess Options for Key System Components

This phase of the study will:

Create a list of options for each key system component Pre-treatment Anaerobic digestion Biogas utilization Management of other outputs (liquids/solids)

Apply criteria that reflect Peel’s needs and the learning of the context review in Phase 1

Narrow the scope of options for further consideration (short list) by focusing on options best suited to Peel For some components the list may be narrowed to one

option

4.2-13

GB Organics System Study: Phase 2 - Assess Options for Key System Components

4.2-14

GB Organics System Study: Phase 3 – System Evaluation

This phase of the study will: Combine high scoring options for each

component into practical systems Consider integration with other waste

management facilities or operations Compare systems based on cost

performance, risk etc. Recommend a preferred system

4.2-15

GB Organics System Study: Phase 4 – Facility Siting

This phase of the study will investigate siting options once outcome of the PERC siting is known.

At PIWMF co-located with PERC or other new infrastructure

Elsewhere within the build up area of Peel

If new site is needed, site area, site access, planning and other requirements will be determined to inform the site search and selection process.

4.2-16

GB Organics System Study: Phase 5 – Final Business Case

This step of the study will outline: Contract structure, e.g. one overall contract or separate

contracts for different system components Anaerobic Digestion Gas Utilization Digestate Management

Ownership approaches Project delivery options: DBOM, etc. Availability of funding or financial incentives Management of key risks Procurement approach

4.2-17

GB Organics System Study: Next Step

Staff will engage a qualified consultant and complete the organics system study (funds are available in 2015 Capital Budget).

We Are Here

Retain Consultant and Complete a Comprehensive Green Bin Organics System Study

4.2-18

19 19

Questions

4.2-19