FINANCE COMMITTEE MEETING Capital Budget Discussion

Transcription

1 REVISED FINANCE COMMITTEE MEETING Capital Budget Discussion DATE: Monday, May 10, 2010 TIME: 1:00 PM PLACE: CITY COUNCIL CHAMBERS Public is Welcome to Attend A G E N D A CALL TO ORDER 1. PRESENTATIONS: 1:00 PM 1.1. Garth Sherwin, City Manager, re Introduction by City Manager 1.2. Corey Wight, City Treasurer, re Overview of Capital Improvement Program (CIP), including funding Doug Hawkins, Director of, re Review of Transportation Projects 1.4. Doug Hawkins, Director of, re Review of Utility Funded Projects LUNCH: BREAK: 12:00 Noon to 1:00 PM 2:00 PM NOTE All Materials to be distributed at the Meeting Members of City Council, Administration and the Media may with to bring City of Lethbridge Capital Improvement Program Binder

2 City of Lethbridge Capital Improvement Program Finance Committee May 10, 2010 Objective Timeline Agenda Review of Draft CIP Book Project evaluation Pay As You Go Debt Funding by category Operating costs Grants

3 Objective Approve a three year capital program (2011to2013)withinatenyearplan 2013) ten (2011 to 2020) Target for approval July 5, 2010 Operating costs that flow from this capital planwillfeedthe2012to2014operating to 2014 Budget CIP needs to be balanced within the three year window What is the Capital Improvement Program (CIP) A plan which matches the capital wants, needs, andprioritiesofthecommunity of the with a financial strategy Wants/Needs Dollars Available

4 Pre CIP Planning Master Plans Transportation Parks Bikeways and Pathways Cemeteries Emergency Services Recreation and Cultural Facilities Heart of our City Police Needs Assessment and 25 yr facility Facility Condition dii Adi Audit Transit and Para transit Service Standards Lethbridge Performing Arts Centre Study Growth Management Plan Various Community Based Plans Planning Feb1 1, 2010 Timeline CIP process and financial overview Project updates and accomplishments Transportation Community 28 th Street North project March 1, 2010 Police Facility project Nature Centre Expansion project Transit Facility Expansion

5 Timeline March 15, 2010 Draft DftCIP Water, Wastewater, Stormwater Waste & Recycling Electric March29 29, 2010 Draft CIP Parks Community Services Master Planning Timeline (cont.) April 12, 2010 Draft CIP Transportation Bill Kergan Centre project Exhibition Park project Apr 26, 2010 Family Village Co location project Offsite Levy

6 Timeline (cont.) May 10 11, 2010 Overview of CIP book, Funding, Process Review of Projects Transportation, Utilities Community (including Parks & Storm) Specific Project Information Transit Smart Card Technology Police Facility May 12 13, 2010 Resolutions & Debate Timeline (cont.) May and June 7 11, 2010 Community information City Hall Foyer Hosted May 18 & 20 from 5:00 8:00p.m. June 14, 2010 Amended Draft CIP document presented to Finance Committee July 5, 2010 City Council approval of CIP

7 REVIEW OF DRAFT CIPBOOK Directional Resolutions Resolutions from CIP requiringsomefutureaction listed at front of book including the action taken on the resolution

8 Section A Some portions of A will not be included untilthefinaldraft the A 1 transmittal letter A 3, A 4 Pie charts will be included in story boards following decisions onprojectsoccurring occurring this week Section A A 2 Evaluation Process

9 Section A A 2 Evaluation Process Proposed projects are subjected to an evaluation process Planning documents (including master plans) are a key part of these evaluations Helps to ensure high priority projects are considered in the Capital Improvement Program Section A A5 Pay As You Go (PAYG) Plan Three Components of fpaygpl Plan Annual PAYG amounts for Community and Transportation Projects Annual tax supported debt payments (currently all internal) Balancing amount to (or from) the Major Capital Projects Reserve

10 Pay As You Go in Operating Budget Page 119 in Approved OperatingBudget PAYG Capacity 10,000,000 8,000,000 6,000,000 4,000,000 2,000, Transportation PAYG Leisure & Comm PAYG Debt Payments PAYG Total

11 Section B Debt B 2 Tax Supported External Debt

12 B 3 Utility/Self Supported Debt B 4 Offsite Supported Debt

13 Section B Debt Schedules B 5 Proposed Borrowing B 6 External Debt Payments B 7 Internal Loan Payments B 8 External Debt Balance B 9 Internal Loan Balance Transportation (C): Roadways Bridges Pathways/Sidewalks Community (D): Sport/Rec/Cultural Facilities Other Facilities (Public Ops, West Leth Ctr) Transit Community Partnership Environmental Utilities (E): Water Wastewater Solid Waste Electric Utility (F): Transmission Distribution Support Stormwater Basic Capital Grant Pay As You Go Pay As You Go MSI / AMIP Grant MSI / AMIP Grant MSI / AMIP Grant MSI / AMIP Grant OtherGrants OtherGrants Internal Loan External Loan External Loan Offsite Levy Offsite Levy MRSR

14 Section C Transportation Section D Community

15 Section E Environmental Utilities Environmental Utility Budgets Operating & Capital Mtce Funded from Utility Rates Debt Payments

16 eed

17 Section F Electric Utility

18 Section G Grants/Funding Municipal Sustainability Initiative (MSI) G 1 Alberta Municipal Infrastructure Program (AMIP) G 2 Federal Gas Tax Fund (formerly NDCC) G 3 Basic Capital Grant (BCG) G 4 Municipal Sustainability Initiative (MSI) Page G 1 Purpose: Provide long term sustainable fundingtoenhancemunicipal sustainability

19 MSI Page G 1 Eligible projects: Roadways and dbid Bridges, Public Transit Vehicles and Facilities, Water, Wastewater, and Storm Sewer Management, Emergency Service Facilities and Equipment, Solid Waste Management Facilities and Equipment, Maintenance Equipment, Infrastructure Management Systems, Community & Recreation Facilities, and other Municipal Buildings and Facilities Alberta Municipal Infrastructure Program (AMIP) Page G 2 For Core Infrastructure Rd Roadways &Bid Bridges Public Transit Water Supply and Treatment Systems Wastewater Treatment Systems Storm Sewer drainage Systems Emergency Service Facilities and Vehicles

20 Alberta Municipal Infrastructure Program (AMIP) Page G 2 Other infrastructure can only be funded afterthecityhascertifiedthatit score the has that its core infrastructure is in good condition 2009/2010 is the final year of Grant Funding Projects must be completed by December 31, 2015 Grants Federal Gas Tax Fund Page G 3 Purpose: Development of environmentally sustainable municipal infrastructure to maintain or enhance economic, social and cultural opportunity and well being, while protectingandimprovingthequalityof improving the of our environment upon which people and economies of Alberta depend

21 Grants Federal Gas Tax Fund Page G 3 Eligible projects: Public Transit Water and Wastewater Management Stormwater Solid Waste Management Community Energy Systems Roadways and Bridges Grants Basic Capital Grant (BCG) Page G 4 $60 per capita based on the previous year s official population. 75 percent Province/25 percent City cost sharing For transportation capital related projects. The City s Citys 25% matching share is funded from the Pay As You Go program

22 Grants Basic Capital Grant (BCG) Page G 4 Eligible projects: Roadways and Bridges, Utility Rehabilitation, and Public Transit System Note: City of Lethbridgeuses this grant for the maintenance and upgrades to our transportation system Questions?

23 Capital Improvement Program Presentation to Finance Committee May 10, 2010 TRANSPORTATION CIP 1-23-

24 Transportation CIP Project Identification Growth with the Growth Management Plan Capacity through the Transportation Master Plan and Intersection counts Condition Assessments through condition assessments of our system we determine the annual rehab necessary System Upgrades through public requests, inspection programs, warrant analysis and planning studies system upgrades are identified (ie. Pathway missing links, sidewalk pararamps, traffic calming) Transportation CIP Project Prioritization Maintaining Safety Maintaining Levels of Services Preserving Existing Infrastructure Upgrades to Existing System Providing Access for Growth -24-2

25 Transportation CIP Funding Options Transportation projects are funded by the following sources Tax supported Pay as you Go Provincial / Federal Grants Offsite Levies restricted to growth projects Refer to C-1 Infrastructure Transportation Capital Improvement Program Projects Commencing in the First Three Years 3-25-

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28 Upgrade Existing System C-16, Scenic Drive North, 9 Ave / Stafford Dr Projects, next three years: Scenic Dr North, 9 Ave N / Stafford Dr $1,000,000 previously approved Budget, next three years: $9,500, $9,500,000 Prepare a detailed design and provide construction services Construct the initial two lanes of an ultimate four lane roadway with ultimate earthwork Upgrade Existing System C-17, 43 Street N Projects, next three years: Prelim design 43 St - Hwy 3 / 62 Ave N Construct a four lane roadway from Hwy 3 to 9 Ave N divided Budget, next three years: $300, $6,600,000 Prepare a detailed design and provide construction services

29 Upgrade Existing System C-18, 26 Avenue N, 23 Street to 28 Street Projects, next three years: 26 th Ave N, 23 Street / 28 Street N Budget, next three years: $2,100,000 Prepare a detailed design and construct a four lane roadway to connect with that recently constructed in 2007 at 28 Street. Upgrade Existing System C-19 Mayor Magrath Drive, 40 Ave S to City Limit, Projects, next three years: Mayor Magrath Dr, 40 Ave S to City Limit Budget, next three years: $4,200,000 Prepare a detailed design and construct embankment fill to accommodate the Ultimate six lane divided roadway

30 Provide Access for Growth - C-31, Metis Trail, Simon Fraser to Garry Drive Projects, next three years: Metis Trail, Temple Blvd / Whoop-up Drive Metis Trail, Simon Fraser / Temple Blvd Budget, next three years: $3,000, $2,200,000 Prepare a detailed design and construct the initial two lanes of Arterial Roadway to accommodate development Provide Access for Growth - C-32, Garry Drive, Existing to 600m west of Metis Trail Projects, next three years: Garry Drive, existing to 600m west of Metis Trail (to first development entrance) Budget, next three years: $3,000,000 Prepare a detailed design and construct the initial two lanes of Arterial Roadway to accommodate development -30-8

31 C-2 shows the Transportation program out to 2020 Questions? Maintain Safety - C- 5, Gravel Road Upgrading Projects, next three years: 43 Street from 26 Ave north Whoop-up Dr, to City Limits As required (unidentified) Budgets, next three years: $700, $525, $550,000 Involves reconstruction of existing gravel roads or upgrading to a paved standard rural roadway if traffic volumes warrant

32 Maintain Safety C-6, Intersection Improvements Growth Projects, next three years: 13 Street N / 26 Ave N Garry Drive / Squamish W 43 N / 2 Ave N 43 N / 5 Ave N University Dr. W / Highlands Blvd. W Budget, next three years: $1,000, $1,051, $1,104,000 Project involves new traffic signals and geometric improvements in new growth areas. As Warranted: - Traffic and Pedestrian Volumes, - Accidents History, -Congestion Maintain Safety C-7, Intersection Improvements Non-Growth Projects, next three years: MMDr / 5 Ave S 9 Ave / 36 St N 23 St / 9 th Ave N 13 St / 5 Ave N 13 St /6 Ave S 16 Ave / 13 St S Budget, next three years: $1,000, $1,051, $1,104,000 Project involves new traffic signals, signal upgrades and geometric improvements in older non-growth areas. As Warranted: - Traffic and Pedestrian Volumes, - Accidents History, -Congestion

33 Maintain Safety C-8, Sidewalk Mobility Ramps Projects, next three years: Downtown / Hospital Areas Older Communities (central neighborhoods in Lethbridge) Budgets, next three years: $250, $263, $275,000 Approximately 25 intersections and 25 handicap parking stalls per year will be reconstructed until 2016 Follows the request of the Canadian Paraplegic Association. Maintain Safety C-9, Bikeways/Pathways on Roadways Projects, next three years: Bicycle Lanes 13 St 16 Ave S / 26 Ave N 10 Ave S MMDr /13StS S Pathways Scenic Drive -1 Ave S/5 Ave N Budget, next three years: $500, $525, $551,000 Program will complete pathway connections and develop bikeways within roadways as per the Bikeways/Pathways Master Plan adopted by Council in

34 Preserve Existing Infrastructure C-10, Arterial Rehab Projects, next three years: Various locations Budget, next three years: $1,000, $1,051, $1,104,000 Ongoing program varies as indentified from annual condition inspection program. Municipal i Pavement Management Application (MPMA) Intent of the Overlay program is to maintain our Arterial roads to an acceptable standard and protect this valuable asset. Preserve Existing Infrastructure C-11, Bridge Rehab Projects, next three years: Whoop-up Barrier Replacement (2011) Budget, next three years: $1,315, $319, $293,000 Ongoing program varies as indentified from annual condition inspection program. Bridge Management System Intent of the Bridge Rehab program is to maintain our Parks and Transportation bridges to an acceptable standard and protect this valuable asset

35 Preserve Existing Infrastructure C-12, Community Lighting - Rehab Projects, next three years: Arterials / Downtown / Older neighborhoods Budget, next three years: $300, $316, $332,000 Condition Assessment completed in 2010 Program replaces 1% of street lights annually that are beyond their useful life. Secondary benefit is to replace street lights with LED bulbs (less electricity). Preserve Existing Infrastructure C-13, Traffic Signal Replacement Projects, next three years: Older traffic signals that require upgrades Budget, next three years: $300, $315, $330,000 Condition Assessment completed in Intent t of this program replaces Traffic Signals that are beyond their useful life

36 Preserve Existing Infrastructure C-14, Major Sidewalk Rehab Projects, next three years: Downtown/London Road Budget, next three years: $190, $200, $210,000 Ongoing program varies as indentified from annual condition inspection program. Infrastructure Management System Intent of this program replaces approx. 750 m (1 or 2 blocks) annually that are beyond their useful life. Preserve Existing Infrastructure C-15, Railway Rehab Program Projects, next three years: Signalization of approx 5 Rail-Road crossings Rehabilitation of Rail Spur lines as required Budget, next three years: $500, $526, $552,000 Initial crossing assessment indicates 11 signalized crossings required of 24 Intent of this program is to repair spur lines as required through ongoing inspections

37 Upgrade Existing System C-20, C-21, Planning Projects Projects, next three years: Mayor Magrath Drive, 3 Ave S to 3 Ave N 6 Ave South, Mayor Magrath Dr to Scenic Dr Budget, next three years: $315,000, each project Conduct a Functional Design of Roadways to determine upgrades to accommodate increased traffic and growth Upgrade Existing System - Planning Projects , Planning Studies C-22, 5 Avenue North, Stafford Dr to MMD, C -23, Interchange preliminary design Whoop-up/University Dr and Whoop-up/ Scenic Dr C-24, 13 Street N, Crowsnest Trail to 26 Ave N C-25, University Drive, North of Rail tracks to Hwy3, C-26, Transportation Master Plan, Planning Studies are needed to determine land requirements, initial costs estimates, determine constraints, obtain public and Council approval

38 Upgrade Existing System Construction Projects , Construction Projects C-27, Whoop-up Drive (McMaster to Aquatania Blvd.), 2016 C-28, University Drive (Sunridge Blvd to Community Stadium), 2018 C-29, 26th Ave N (31st N to 43rd Street N), 2020 C-30, 28th Street N (5th Ave to 18th Ave N), 2020 C-17, 43rd Street North (9th Ave to 26th Ave N), 2019 C-18 26th Ave N (Scenic Drive N to 23rd Street N), 2021 C-19Mayor Magrath Drive (40th Ave S to South City Limits), 2015 As Warranted: Traffic and Pedestrian Volumes, Accidents History, Congestion Provide Access for Growth C-33, C-34 Planning Projects Projects, next three years: C-33, North Scenic Drive, Upland Blvd / 62 Ave, in 2013 C34, 44 Avenue North, Scenic Dr N to 43 Street N, in 2013 Planning Studies are needed to determine land requirements, initial costs estimates, determine constraints, obtain public and Council approval

39 Provide Access for Growth Construction Projects , construction projects C-31, Metis Trail (Whoop-up Drive to Caledonia), 2016 C-31, Metis Trail (Jerry Potts W to Garry Drive W), 2018 C-35, Jerry Potts, 2018 C-36, Whoop-up Drive (Coalbanks Gate to 30th Street W), 2014 C-37 43rd Street S (24thAve/Hwy4 to 40th Ave), 2018 As Required by development Capital Improvement Program Presentation to Finance Committee May 11,

40 Waste & Recycling Services Capital Improvement Program Waste & Recycling Services CIP Project Identification Regulations Planning Documents City Council Strategic initiatives Master Plans (eg. Waste Prevention & Diversion) Business plans Lifecycle management of assets

41 Waste & Recycling Services CIP Project Prioritization Health & Safety Regulatory compliance Condition assessment Maintaining a Level of Service Financial i viability Refer to E-1 Environmental Utilities Capital Improvement Program Projects Commencing in the First Three Years

42 Disposal Cell Construction (E-7) Description Design & construction of waste disposal cells $4.5M $5.7M Purpose & Justification Consume 200,000 cu m of air space per year Current staging plan Cell # Cell # Final 2 cells = 8 to 10 yr capacity

43 Environmental Management at the Closed Sites (E-8) Description Design & construction of a gas/leachate collection & treatment facility: Northside site $660K $660K Centre Site $550K $275K Purpose & Justification Protect public health & safety Environmental compliance Environmental Management at the Closed Sites Background 2 closed sites in Lethbridge Have been monitoring since 2000 Centre site: has an active vapor extraction system venting to atmosphere Northside site: No collection or treatment system Elevated methane gas level beyond the perimeter Elevated leachate heads Engineering study and preliminary design ($65K) May require a CIP amendment in 2011 based on design

44 Environmental Management at the Closed Sites Funding Unfunded liability 2010 engineering study will provide better understanding No dedicated funding source Create an additional cost pressure for the operating site E-2 shows the Waste Services program out to 2020 Questions?

45 Landfill Gas Management (E-9) Description Design & construction of a gas collection & treatment facility (flaring) $2.2M $2.0M Purpose & Justification Generation of 60,000 tonnes of CO2 equiv. To meet Specified Gas Emitters Regulation Landfill Gas Management Background Specified Gas Emitters Regulation 2003 reporting requirement > 100K tonnes of C02 equiv/yr % reduction 2009 reporting requirement > 50K -100K tonnes of C02 equiv/yr 20????% reduction Legislation Federal, provincial, US EPA Delayed construction to 2014/2015 Options (from Master Plan) reduce gas generation purchase offset credits Collect & treat gas Current cost estimate based on a flaring system

46 Landfill Rate Impacts Rate Changes to support capital program $2.00/tonne ($54.50/tonne -> $56.50/tonne) no rate increase to support capital costs 2010 preliminary design study may result in additional pressure on the capital budget

47 Landfill Master Plan Projects Description Master plan is underway Master plan may create additional projects Do not anticipate any projects within CIP time frame Recycling Depot Enhancement Description Needs survey has been completed Design options review Council presentation on options May, 2010 May result in capital expenditures in 2011 Amend CIP at that time if required

48 Water and Wastewater Capital Improvement Program Water / Wastewater / Stormwater CIP Project Identification Regulations Upgrades to meet regulatory requirements System Growth New facilities and network extensions (offsite funded) Performance Failure to meet levels of service Analysis predicting performance issues Asset Lifecycle Replacement Elevated maintenance costs End of useful life

49 Water / Wastewater / Stormwater CIP Project Prioritization Regulations Must do Risk Assessment Consequence and likelihood of failure Cost-Benefit Analysis Value comparison of alternatives Budget & funding alternatives Can we afford to do this? Refer to E-1 Environmental Utilities Capital Improvement Program Projects Commencing in the First Three Years

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51 Protective Plumbing Program (E-10) The purpose of the PPP is to install sump pumps and backwater valves into homes that were damaged as a result of the July 1, 2008 rain storm. 154 of 379 basements completed as of April 2010 Estimated cost: $3.6M Schedule : Funding: -Stormwater Capital -Wastewater Capital (from Operations)

52 Wastewater Treatment Plant Headworks and Clarifier Upgrade (E-14) This project will implement improvements recommended in a 2003 WWTP Asset Condition Assessment. Estimated cost: $8.1M Schedule : Funding: -NDCC Grant -AMIP Grant -Debenture (Utility Rates) Water Treatment Plant Residuals Management (E-22) This project will provide for treatment of water treatment waste streams before they are discharged to the river. Regulatory requirements pending. Estimated cost: $10.7M Schedule : Funding: Debenture (Utility Rates)

53 Northwest Lethbridge Utility Servicing (E-25) New water, wastewater and storm lines are required to maintain existing levels of service and to allow continued growth in west Lethbridge. Estimated cost: $31.5M Schedule : Funding: Debenture (Offsite Levies) Garry Drive Reservoir (E-29) This project will provide 15 ML of additional storage capacity and have a pumping capacity of approximately 40 MLD. Estimated cost: $9.5M Schedule : Funding: Debenture (Offsite Levies)

54 Southeast Regional Sanitary Lift Station (E-28) This project will provide the wastewater collection capacity required for continued growth of southeast Lethbridge. Estimated cost: $18.0M Schedule : the subject of a negotiation to advance timing Funding: Debenture (Offsite Levies) E-2 shows the Water and Wastewater programs out to 2020 Questions?

55 Wastewater Treatment Plant Additional Bioreactors (E-11) This project will provide additional bioreactors to double the plant's treatment capacity. Estimated cost: $8.2M Schedule : Funding: Debenture (Utility Rates) Wastewater Treatment Plant Additional Digester (E-12) This project will construct a third digester and provide the redundancy needed for maintenance and increased digestion capacity to accommodate future growth. Estimated cost: $6.2M Schedule : Funding: Debenture (Utility Rates)

56 Wastewater Treatment Plant Cogeneration Upgrade (E-13) This project will consist of removal of equipment from the digester gas floor and installation of replacement or upgraded equipment; upgrade boilers and standby power transformer. Estimated cost: $3.2M Schedule : Funding: Debenture (Utility Rates) Treatment Plants SCADA Upgrade (E-15 & E-20) This upgrade project will replace aging hardware, improve historical data handling, and provide enhancements in the system configuration and security. Estimated cost: $1.7M Schedule : Funding: Debenture (Utility Rates) 50% / 50%

57 Wastewater Treatment Plant Security (E-16) This project will consist of installing additional fencing, controlled gates and interior and exterior video surveillance; upgrade of plant fire alarm system. Estimated cost: $1.3M Schedule : Funding: Debenture (Utility Rates) Water Reservoir Upgrades (E-17) This project will consist of the replacement of existing mechanical and electrical equipment, controls and instruments to extend the service life and reliability of the stations. Estimated cost: $6.1M Schedule : Funding: Debenture (Utility Rates)

58 Water Treatment Plant and Reservoir Security (E-18) This project will consist of installing additional fencing, controlled gates and interior and exterior video surveillance. Estimated cost: $1.3M Schedule : Funding: Debenture (Utility Rates) Water Treatment Plant No. 2 HLP Switchgear Upgrade (E-19) This project will consist of the replacement of existing electrical switchgear and pump motors to extend the service life of the plant. Estimated cost: $1.1M Schedule : 2012 Funding: Water Capital (from Operations)

59 Water Treatment Plant Transmission Pipeline Rehabilitation (E-21) This project will consist of the relining i of the existing steel water pipelines to extend their service life. Estimated cost: $2.0M Schedule : Funding: Water Capital (from Operations) Water Treatment Plant Process Redundancy (E-23) This project will retrofit Plant No. 2 (constructed in 1956) with new technology and provide the required level of treatment process redundancy. Estimated cost: $5.5M Schedule : Funding: Debenture (Utility Rates)

60 Water Treatment Plant Additional Filters This project will provide the additional filters to increase the plant's treatment capacity. Estimated cost: $6.0M Schedule : Funding: Debenture (Utility Rates) Métis Trail Drive Deep Utilities Phase II (E-24) This project will provide the additional water distribution and wastewater collection capacity required for growth in the southwestern areas of west Lethbridge. Estimated cost: $7.0M Schedule : Funding: Debenture (Offsite Levies)

61 North Sanitary Siphon Twinning (E-26) This project will provide the additional wastewater collection capacity required for growth in the northern areas of north Lethbridge. Estimated cost: $6.0M Schedule : Funding: Debenture (Offsite Levies) West Siphon Screen Relocation (E-27) This project will increase the capacity of the existing siphon and allow continued growth in the southeastern areas of west Lethbridge. Estimated cost: $2.0M Schedule : 2015 Funding: Offsite Levies

62 Distribution System Looping (E-30) This project consists of water distribution system improvements such as additional interconnections, parallel mains and upsized mains. Estimated cost: $3.0M Schedule : Funding: Offsite Levies Wastewater Debt Servicing Chart To be inserted here

63 Steel Pipeline Relining Project Water Wastewater Debt Servicing i Chart To be inserted here Electric Capital Improvement Program Presentation Finance Committee

64 Electric Utility CIP Project Identification Transmission Large projects external (AESO/AUC). Smaller projects same as Distribution Distribution Regulatory Compliance Condition assessment Planning and Design (includes Load Growth and Safety). Financial (cost/benefit, risk/liability analyses) Support process improvement/change. Electric Utility CIP Project Prioritization In order of importance Safety Regulatory Compliance Maintenance of Service Level Financial Improvement of Service Level

65 Electric Utility Classification of Electric Plant Transmission, Distribution, Support Capital Plan primarily Program Based. Refer to F-1 Infrastructure Electric Utility Capital Improvement Program Projects Commencing in the First Three Years

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67 Capital Plan Organization Transmission Distribution Pi Primary Service Extensions and Programs Secondary Service Programs Transformation Programs Special Cable Replacement Program Special Advanced Metering Infrastructure. Support

68 Distribution Projects - Details Groupings (F-16, F-18, F-21) Primary, Secondary, Transformation Typically based on % of plant value New construction or life extensions/inflation (9.5%), and depreciation (3.0%) of base primary values. Example Projects for 2011/2012 Remove existing river crossing (111S-2) Replace concrete poles 43 rd St./Hwy. #3 to 146S (9 th Ave. N) Underground lines 241S - #3 and #4 (Industrial area). Build new tie line between substations 241S (Sherring Park) to 146S (9 th Ave. N. industrial park). Build new circuit between switching cubicles (SC91- SC204) Distribution - Special F-17 : Infrastructure Replacement Underground cable installed in 1960 s and 70 s. Older cable quality unacceptable. Global replacement required. Late 2010/2011 establish program and evaluate results. $ 5 million to $7 million annually. Community Impact. Minimize service interruptions. Extensive customer communication

69 F-17 Red (1970) Orange (1975) Yellow (1980) 93 Impact on Rates Transmission Projects have no impact Distribution Projects Increases based on primarily on new investments 2012 and on cable replacement/ami has significant impact. Approximately 2.2% impact in 2011 Average residential ($ 0.95/month) AMI initiative not included in above amount

70 Distribution - Special F-19 : Advanced Metering Initiative (AMI) AB government regulation (2010) currently in draft form. Current draft would require replacement of all meters in the City of Lethbridge. Implementation Automatic meter reading all customers. In Home Display (IHD) for all customers. Influence customer behaviour. $ 25 - $30 million cost over CIP timeframe. Impact on Rates Transmission Projects have no impact Distribution Projects Increases based on primarily on new investments 2012 and on cable replacement/ami has significant impact. AMI initiative may add approximately $7.00 to $10.00/month to each electric customer

71 F-2 shows the Electric programs out to 2020 Questions? Electric Capital Plan Organization Transmission As defined by Electric Utility Act (EUA) 138,000 volts from generator to City substation. Distribution As defined by EUA 25,000 volts and below from City substation to home. Support Programs Contribute to both Transmission and Distribution. Allocated to Transmission or Distribution

72 Electric Utility System Transmission 5 major subs (138/13.8 kv) 35 km 138,000 volt Distribution 780 km underground 200 km overhead 4,000 transformers Support SCADA, Fiber, Work and Facilities Management. 99 Typical Substation

73 Distribution Underground 101 Distribution Overhead

74 Support - SCADA 103 Transmission vs Distribution Transmission Distribution Dfiiti Definition Electric Utility Act Electric Utility Act Cost Recovery Transmission Rate to Province Distribution Rate to Customers. Standards Set by Province Set by industry/city Projects Assigned by AESO. Approved AUC Approved by Council

75 Transmission Projects - Details Projects based on condition assessment. Major projects either completed or underway. West side substation additional transformer (2009). Transmission line (26 th Ave. N.) rebuild (2010). New projects Like-for-like replacement. Require AESO (Alberta Electric System Operator) and AUC (Alberta Utilities Commission) approval. Transmission Projects ( ) Like-for-like (no specific approvals required). North and South East substations protection and control. $ 600,000 (2012) (Ref : F-4) West side substation T1 (first transformer). $1.5 million (2015) (Ref : F-6). Industrial Park substation Switchgear replacement. $ 1.5 million (2014) (Ref : F-9). Enhancements or New (AESO and AUC approvals) Line rebuild (26 th Ave. N. to substation) $ million (2011) (Ref : F-14). River valley substation transformer replacement. $ 1.4 million (2013) (Ref : F-6). Requires distribution system analysis and approvals

76 Transmission - 146S and 593S protection and control. 138 kv Line 241S Switchgear - 111S (River Sub) T3-674S (West Sub) T1-241S (Industrial Sub) Switchgear replace L/813L Line rebuild. 674S T1 111S T3 146S P&C 593S P&C 107 Other Transmission Projects. Potential Generator Industrial Park $ 1.7 million (2011) (Ref : F-12). External influence direct assigned project. Potential new west side substation and 138 kv line. $ 6.8 million (2017) (Ref : F-11) substation. $ 3.4 million (2017) (Ref : F-13) 138 kv line. Requires extensive distribution analysis and approvals. Misc. Upgrading (Ref : F-7, F-10)

77 Capital Plan Organization Transmission Distribution Support Allocated to Transmission/Distribution i ib ti Support Information Technologies AM/FM and Work Management (F-27, F-28) Roll out to field crews new regulatory requirements (AUC). Add transmission and fiber. $ 900,000 (2011 to 2013). Fiber Network (F-29) Several major extensions and replacements. $ 1.1 million (2011 to 2013)

78 Support cont. SCADA (F26) Supervisory Control and Data Acquisition Maintenance and cycle replacement of existing. $ 800, (2011 to 2020) Critical Infrastructure (F-31) Regulatory compliance (AESO/NERC) Protection of critical transmission components. $ 1.3 million (2011 to 2020). Fleet (F-24) Replacement and enhancement of Electric vehicles. $ 1.9 million (2011 to 2020). Other Environmental, Advanced Metering Infrastructure From Executive Summary of Draft. The role of Advanced Metering Infrastructure (AMI) in Alberta is envisioned to be enabling empowering Albertans in wise energy use, setting the stage for further development of retail markets and as one of the key features necessary to move to smart grid technologies