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04-13-15-R
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04-13-15-R
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TCAAP Energy Integration Resiliency Framework <br />Energy Source Implementation <br /> <br /> <br /> 57 <br />The City, County and JDA should resolve these items prior to commencing with the site development <br />RFP process. While all of the items listed above are important for development, the following items will <br />likely require the most attention. <br />Forming the Business <br />Unless Ramsey County or Arden Hills is the owner of the low-temperature district energy system, an <br />ownership entity should be developed, based upon the system mission. The ownership entity will <br />handle the system operations, maintenance, and billings. The business could be best served by one of <br />the following structures: Municipally Owned, Private Non-Profit, Private For-Profit, or a Hybrid <br />Publically-Owned Infrastructure/Private Non-Profit Company. Each structure has inherent benefits and <br />detriments, which will need to be evaluated as the business structure is determined. <br />The private, non-profit model operational structure is the business structure that was assumed in the <br />financial analysis. This business structure operates under the governance of local stakeholders and <br />customers. This type of business model has several advantages, the most prominent being that the <br />rates would be cost-based, meaning that the rates would cover the cost of operating the system and <br />debt service, without mark-ups for profit or return on investment. <br />Developer Outreach and Education <br />A critical aspect of this system is that each home in the system service area should be connected to the <br />system. This will require developers to install heat pump units in each home, instead of traditional <br />forced air furnaces and air conditioner units. The developers should be properly educated on this <br />opportunity and this direction should be clearly stated in the RFP language, so that the developers can <br />understand and implement the strategy from the onset. <br />Reach Agreement with U.S. Army for use of Existing Building and Treated Groundwater <br />The ownership entity will need to negotiate with the Army for the use of energy from the treated <br />groundwater and the existing building to which the groundwater treatment station is attached. This <br />agreement will, at a minimum, need to provide for access to and operation of the energy transfer <br />station equipment. Ideally, an agreement would include ownership transfer of the building and <br />groundwater pumping system at the termination of the groundwater treatment operations, so that the <br />heat pump loop can continue to meet the heating and cooling needs of the development. <br />System Financing <br />Depending upon the preferred ownership structure, the financing strategy for the system could be very <br />different. If the system is publicly owned, it could be financed through the public institution or in <br />private markets. If a private, non-profit, the system could be 100% debt-financed based upon long-
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