The City of Revelstoke has signed a memorandum of understanding with Corix Utilities to develop a plan for the ownership, operation and maintenance of the Revelstoke Community Energy Corporation.
“The city looks forward to working with Corix to arrive at an arrangement that best meets the needs of Corix and the city in expanding district energy with an attendant reduction in Revelstoke’s carbon footprint," said Mayor David Raven in a news release sent out Friday morning.
In February 2012, the Times Review reported that RCEC was exploring future ownership models with the aim of expanding the district energy system. $40,000 was allocated to hire a consultant to develop a package soliciting expressions of interest. The request for expressions of interest went out in July 2012 and the city chose to work with Corix in the fall.
In a March 2012 interview with the Times Review, David Johnson, the former president of RCEC who passed away not long after the interview, said the energy system had reached its capacity and required an influx of capital to expand. It was looking at three options:
– The city retaining 100 per cent ownership and RCEC remaining as is or expanding through loans and grants.
– A co-operative ownership model with a private partner.
– The outright sale of RCEC to an outside party.
The news release sent out by Corix Friday morning says the two parties will work to "develop a comprehensive plan for the ownership, operation and maintenance of the city's biomass-based district thermal energy system."
Geoff Battersby, the current president of RCFC, said the options laid out by Johnson remained on the table.
"Both the options of either a co-operative model with a private party or it being sold to an outside party are being explored with Corix," he said. "If we don't come up with something that we thinks suits our interest than we will stick with 100 per cent ownership by the city."
Jack Touhey, Corix's vice president of public and government affairs, said the company would be open to either outright ownership or partnering with the city. He said Corix will look at the value of RCEC over the coming months and see if it makes financial sense to buy into the business. This would involve looking at the capital cost of expanding the system, what rates would need to be charged to make the investment worthwhile, and whether customers would be willing to pay those rates.
"It's got an engineering and technical phase and its got an economic financial side," he said.
The decision to explore the ownership of RCEC has been conducted with little public discussion, though Battersby says it was brought up during public meetings in 2011 on the District Energy and Expansion Plan. It was revealed after minutes from a meeting were mistakenly placed in a council agenda package in February 2012.
It was revealed after minutes from a meeting were mistakenly placed in a council agenda package in February 2012.
The decision to explore the privatization of RCEC has been conducted with little public discussion, though Battersby says it was brought up during open meetings on the District Energy and Expansion Plan. It was revealed after minutes from a meeting were mistakenly placed in a council agenda package in February 2012.
RCEC chose to work with Corix in the fall and it took until recently to develop a memorandum of understanding on moving forward.
"The process of trying to arrive at an MoU has been rather laborious, I must say," said Battersby.
The Revelstoke Community Energy Corporation was founded in 2005 to run Revelstoke's thermal district energy system. Using wood waste from Downie Timber, it provides heating to 10 downtown buildings, including Downie, Revelstoke Secondary School, Begbie View Elementary, Minto Manor city hall and the community centre.
The city's District Energy Expansion Plan calls for expanding RCEC to include areas like the Trans-Canada Highway corridor, however Battersby said the current facility is maxed out and it would be difficult for the city to raise the capital needed to expand by itself.
"For RCEC to further expand the system would require a lot of capitalization," he said. "At this point, all our energy is on the market and if the opportunity to serve other customers comes up, we would not be in a position to provide them because we don't have more energy available."
Corix is a Vancouver-based developer of sustainable water, wastewater and energy utility infrastructure. It runs a biomass energy utility at the Dockside Green in Victoria, and the Neighbourhood Energy Utility at Simon Fraser University.
“We are pleased to formalize our partnership with the City of Revelstoke,” said Eric van Roon, the vice president and chief operating officer at Corix Utlities. "As an experienced district energy utility owner and operator, we look forward to working closely with the City to develop a plan to meet each of its objectives for district energy delivery.”