Civil Engineering and Project Management

202 - 925 McMaster Way Kamloops, BC V2C 6K2

Tel (250) 372-2149 Fax (250) 374-2129

July 11, 2016 File: 1096-001-01

Corporate Administrative Officer Box 25 Hagensborg, BC V0T 1H0 Attention: Rosemary Smart Via email: admin@hwwdistrict.ca Dear Rosemary, Hagensborg Waterworks District (HWD): Mini-Hydro Development Phase 1 Conceptual Review: Report

1. Introduction

This report outlines the Phase 1 assignment conducted to explore the development of a mini-hydro system on the Snootli Creek at Hagensborg, BC (Figure 1). The District anticipates rebuilding its water intake on the Snootli Creek within the next few years. There is the possibility that this rebuild could be funded by the Department of Fisheries and Oceans (DFO) as part of their fish hatchery upgrades at the confluence of the Snootli Creek and Bella Coola River. The alternative is that the District funds these works themselves. While these options are being considered, the District would like to know if hydro generation is a feasible addition to future water intake system upgrades. 2. Phase 1 Approach The following scope of work was adopted in this conceptual study:

Collated as much existing information as we can on the hydrology and water system from HomePlus and NHC consulting studies.

Conducted a visit to Hagensborg to gain an understanding of the project background and site conditions.

Developed conceptual designs and to start on costing of these alternatives.

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A preliminary business case for this micro-hydro system has been developed to provide an answer to the feasibility of including a mini-hydro system in the proposed upgrade to the Snootli Creek water intake and supply system, with the DFO or without their project in future. The District can then decide whether or not to proceed with the design and implementation of the project in the follow-up phases.

It should be noted that the scope of work for this Phase 1 study was conducted at a conceptual level. The study expenditure included:

- Travel time at a reduced rate (18 hrs) $ 520

- Kilometres travelled (@$0.54/km) $ 799

- Site time and engineering option development $ 1,560

- Meals and two night’s accommodation $ 238

- Conceptual drawings and engineering estimates $ 501

- Business case preparation (incl. Skmana Creek Consulting report) $ 1,200

Total for Phase 1 excl. GST $ 4,818 An additional 18 hours of non-billable time was spent on comprehending the DFO’s mini-hydro work conducted to date, as well as additional research on old fashioned water wheels. Final reporting, and liaison with DFO and their consulting engineers. This extra input has not been charged to the District. 3. Project Description The DFO is currently upgrading its fish hatchery that is located at the mouth of the Snootli Creek. As part of this project, the DFO wishes to obtain virus free water form above the water falls where the HWD has its potable water intake on Snootli Creek. The DFO has proposed rebuilding the water intake. They would also install a dedicated pipeline down to the hatchery. At the end of this pipeline they have suggested installing a mini-hydro system to generate power for the private use of the hatchery, or could be connected to the BC Hydro system for net metering under 100 kW (see Site C on Figure 2). There was some concern expressed by DFO if the net metering route is taken. The DFO may not have the mandate to operate such a system and they would consider handing this mini-hydro over to the HWG to operate. Any excess power produced over and above that consumed would be “bought back” by BC Hydro at around $0.10 per kWh. An alternative suggested by the DFO and their consultants is to route most of the Snootli Creek flow from the intake structure down to Site D (Figure 2) where it will pass through a larger mini-hydro system that can be connected to the BC Hydro grid under the Standing Offer Program. It has subsequently been determined that this project would not qualify for this program as Hagensborg is not connected to the main BC power grid. This larger system has not been considered further in this report. The HWG has had mixed feelings about allowing another party’s pipeline to be installed on their property. They feel that they could supply the fish hatchery with water via the existing

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water pipeline, even if it is at a nominal cost. This would preclude the inclusion of a mini-hydro system, but could include the upgrade of the intake works and other options (e.g. hydro-generators in the pipeline or large water wheels) As such, the HWG has wanted to find out in this conceptual study if a mini-hydro system should be included in the various water system upgrades being proposed.

3.1 Water Source

Water would be sourced from the Snootli Creek above the waterfall, which is located just downstream of the existing HWD water intake. Northwest Hydraulic Consultants (NHC)1 and Worley Parsons have conducted a fairly thorough study of the Snootli Creek in the context of their work on the upgrades to Fish Hatchery. This has included a feasibility assessment of the two mini-hydro systems they have proposed. In their report, NHC estimated that the average discharge of the Snootli Creek at the HWD intake, ranges from 2.31 to 2.61 m3/s or 2,310 to 2,610 litres/second. Please refer to their report for more details. NHC has been conducting real time flow gauging and turbidity monitoring for the past two years. Both the HWD and the DFO would like to see a new creek intake constructed in place of the old one.

3.2 System Water Requirements

The following water withdrawals are allowed under current water licencing: Hagensborg Water District (domestic water supply) 7.5 l/s

DFO Fish Hatchery (from Snootli Creek) 136 l/s

3.3 Powerhouse location and optimization

Option 1 – DFO Site C In Chapters 5 and 6 their report, NHC presented a detailed recommendation of their mini-hydro proposal described above (Figure 3). A new creek intake would be built at the same location as the existing intake. The existing HWD water supply line would be connected to this new intake. A dedicated 12” diameter DFO pipeline would be installed from the new intake structure down to the hatchery.

1 NHC. 2013. Fisheries and Oceans Canada. Snootli Creek Hatchery Flood Hazard and Water Supply Assessment. Prepared for WorleyParsons.

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NHC estimated the cost of the above-mentioned intake and pipeline works to be around $400,000 excl. taxes. A mini-hydro system will be installed at Site C to generate electricity. A separate pressure reducing bypass line around the mini-hydro station would be installed for use when the mini-hydro is not operational (e.g. low flows or maintenance). NHC estimated the cost of the Site C mini-hydro station to be around $275,000. An example of a similar system is at the Quinsam Hatchery near Campbell River on Vancouver Island which has recently installed a system to take advantage of the 22 m of hydraulic head to generate approximately 40 kW.

Photo of Quinsam Hatchery Turbine and Generator

Courtesy of NHC and Dependable Turbines Ltd. NHC used the Nusatsum and Clayton Creek hydrological series to model energy production at the Site C mini-hydro installation. They concluded that the Hagensborg installation could yield around 50 kW (or 413 MWh annually). This would save the DFO Hatchery around $40,000 of its current $81,000 electricity bill where it pays BC Hydro around $0.14 per kWh. Since a large portion of this BC Hydro electricity is generated by diesel engines in the Bella Coola Valley, it is expected that these rates will continue to rise in future. Skmana Creek Consulting confirmed that these NHC numbers were in the right ballpark (see Skmana assessment in Attachment 1).

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It should be noted that the energy production of 413 MWh per annum for this mini-hydro is less than the hatchery’s energy consumption of 676 MWh per annum. In other words, there would be no positive “net metering” and hence no potential income of $0.10 per kWh for a third party operator. The benefit would go to the DFO who would make a saving on what they would pay to BC Hydro each year. To word it in terms of the HWD taking over this mini-hydro. The HWD could charge the DFO $0.11 per kWh to provide them with the 350 to 413 MWh that could be sold to the hatchery each year. This could generate an income of between $38,500 and $45,400 per annum. The HWD would however have to assume the cost of day to day operations and maintenance (O&M), and equipment replacement (every 10 years or less). This cost could amount $30,000 per annum2. The risk of assuming this liability may not be worth it for the HWD at 50 kW. Upping it to 100 KW would make it more viable. Unless there are compelling reasons that the DFO cannot netmeter or produce its own private power, it would make financial sense for the DFO to build and operate its own mini-hydro station installation at Site C. The private energy that can be fed to certain installations at the fish hatchery. Although isolated from the BC Hydro power, these independent hatchery installations can be wired to hook up to BC hydro as a backup in the event that the mini-hydro is not operating. The only benefit that the HWD would enjoy if it allows the DFO to install a pipeline across its property, is a new creek intake at no cost to the HWD. Other Options Mike Walsh from Skmana Creek Consulting reviewed the various locations (A, B and C on Figure 2 and in Attachment 1). His inputs have been used in evaluating the various options. Option 2 – Mini-hydro at Fire Hall The DFO could build a similar mini-hydro installation as Option 1 at Site B near the Fire Hall. It would generate less energy (around 275 MWh per annum). Net metering would occur at the Fire Hall with a net income of around $25,000 being credited back to the HWD from BC Hydro after the HWD’s annual electricity usage of $2,000 is subtracted. O&M and replacement costs could however be a little higher than this at around $30,000. There is no real financial incentive to take on the risk of operating this mini-hydro station at 50 kW. It may be worth upping the power generating capability to 100 kW. Option 3 – In-line generation at the Fire Hall At Site B it is possible to install two or more in-line flow driven generators in the existing domestic water supply pipeline to Hagensborg. The flow rate in this pipe is

2 Includes: operations and utility administration salaries; day-to-day O&M costs, which can be significant with mini-hydro’s; and savings each year for major components that wear out regularly.

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only around 7.5 litres per second, which is not constant throughout the day. It is expected that this option could yield, with net metering, close to the current energy usage of the Fire Hall each year (around $3,400).

Courtesy of Lucid Pipe Power Systems

The Board of Trustees are not in favour of this as an option, so no further work has been done on this option. Option 4 – Large Waterwheel At the site visit, the use of large waterwheels at the old mill site just downstream of the HWD water intake was envisaged by some of the Board of Trustees and AC Eagle. This technology has been used for two thousand years or more for grinding wheat and other grains. As part of this assignment, the author has conducted research into current knowledge regarding waterwheels and power generation. It seems that advancing gearing of waterwheels has not kept pace with advances in similar wind turbine gearing. We believe that bringing these current mechanical engineering advances into the waterwheel design arena may yield more efficient power production in waterwheels. For example, large wind turbines are geared up from 12 revolutions per minute (rpm) to 1,250 rpm by sophisticated gearing systems.

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Courtesy of The Waterwheel Factory & The Waterwheel Place

Courtesy of the Frank Gregory Collection Using current waterwheel technologies, it was calculated that one waterwheel that is 4 m in diameter with buckets 1.5 m wide and 0.3m deep, could yield a power output of around 40 kW if it uses an approach flume that can deliver 1.5 m3/s of water onto the wheel.

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The wheel would be located near the creek intake, which means that a powerline would have to be erected to transport electricity to the Fire Hall and the main BC Hydro grid. There is also a debate about building a wooden waterwheel that can warp and go out of balance, so lowering the power output. Modern designers prefer building the wheel from steel that is then powder coated to minimize corrosion. Preliminary estimates to design, build and install a steel waterwheel, its gearing system, its generating turbine and power indicate a cost of around $95,000 for one wheel, including the powerline to the hall. Again, income from net metering is in the region of $35,000 with expenses of $25,000. Two waterwheels to boost power output to 80 kW to 100 kW would make this option more attractive to the HWD.

4. Conclusion of Conceptual Study The bottomline conclusion is that even with initial capital funding, investing in and operating, maintaining and replacing major components of a mini-hydro system every 10 year is not a lucrative endeavour with the flow rates as per the existing licences. There is a case to be made for increasing the water licence volume to yield around 100 kW, which is the upper limit within BC Hydro’s net metering program. The capital cost would only be slightly incremental, as only certain components would have to be upsized to deliver 100 kW. This would effectively double the revenue that can be generated on the above-mentioned mini-hydro options, so increasing the viability of the mini-hydro options. Option 1: Having said this, this higher power output will basically only cover the hatcheries annual power requirement; so it still does not make complete sense for the HWD to take this on, as there will be very little positive net metering on a mini-hydro at Site C. It’s the DFO that would get the benefit of net metering in that it would not have to pay BC Hydro the $0.14 per kWh, but instead pay HWD say $0.10 per kWh for running the mini-hydro. This option would have to be discussed with the DFO in a series of meetings to find a solution that would be beneficial to both parties. Option 2: A mini-hydro at Site B (fire hall) would need to be built by the DFO. Net metering would go through the fire hall hydro meter. Again, this option would not benefit the HWD unless some share of the net metering is left behind for the HWD. In other words, the hatchery could obtain the benefit of the first 50 kW at a reduced rate, but then pays a higher rate to the HWD for the second 50kW generated. In both options 1 and 2, the DFO would receive virus free water piped to the hatchery from above the Snootli Falls at no cost, or at a very nominal O&M cost. Again this option would have to be explored with the DFO. Option 3: In-line generation in the existing HWD mainline would help reduce the annual oil heating and hydro bill that currently runs at $3,400 per annum. This is again not highly

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financially lucrative, but would be a political decision to show the District’s commitment to sustainability. Option 4: Waterwheels. This is an option that the HWD would have to implement on its own as it would not benefit the DFO hatchery directly. Due to its location near the creek intake, some of the power can be used at the proposed new intake works to drive automatic turbidity isolation valves and other moving components. The rest of the energy would be conveyed down to the fire hall hydro meter for net metering. Although the capital cost of this option is not as high as the conventional mini-hydro systems in the first two options, there is a risk that the current waterwheel/electric turbine technology is not far enough advanced to operate efficiently. This system would have to be carefully engineered to make it viable from an efficiency and longevity point of view. To double up and generate close to 100 kW, the wheels will probably demand close to all the average flow that goes over the intake weir (i.e. 2 to 3 m3/s). All this water would be put back into the creek just below the mill site. Obtaining Government agency approval for the use of waterwheels could take up to 2 years to achieve and may require environmental and other studies. In summary, The District’s Board of Trustees have noted that they would only like to consider Options 1, 3 and 4 at this stage. For options 1 and 2 (i.e. DFO builds entire system and hands the running of the system over to the HWD as a utility; net metering and “trading” power to BC Hydro):

The first step is to hold planning meetings with local Hagensborg DFO personnel.

Once the two (or other) options are explored, debated, and a common understanding has been reached with the DFO hatchery staff members, then discussions with senior DFO staff in Vancouver can follow.

If the HWD wishes to allow the DFO to rebuild the creek intake and the pipeline and mini-hydro system; then the next step would be to draft and sign a memorandum of understanding to agree to working towards putting such a system in place.

The DFO can then commission the design and construction of the project. There would be very little financial capital contribution required of the HWD to construct this project (Options 1 and 2).

Option 4, or large waterwheel project, would require:

A design phase conducted by the District’s own consultants.

Funding in the order of $25,000 would have to be sought to conduct the Phase 2 planning and design work (suggest applying for a grant from a clean energy funding agency).

A Phase 3 will require that a water power licence application and design/environmental be submitted to the Ministry of Forests, Lands and Natural Resource Operations (MFLNRO). This phase will also include a detailed business plan that can be used for sourcing construction funding.

Phase 3 could take up to two years to complete depending on what studies will be called for from the various Government agencies.

N

Courtesy of HagensborgCourtesy of Hagensborg Waterworks District

Hagensborg Waterworks District

Phase 1: Conceptual Review of theInclusion of a Mini‐hydro in Future

Water System Upgrades

Figure 1Courtesy of NHC

Creek intake

D – DFO large hydro site

Hagensborg Waterworks District

Phase 1: Conceptual Review of theInclusion of a Mini‐hydro in Future

Water System Upgrades

Figure 2Courtesy of Skmana Creek Consulting

Fish Hatchery

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40

100

Proposed UpdatedIntake El. 89 m

Proposed Penstock Routes

Proposed Powerhouse

Proposed Energy Recovery Turbine

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CENTRAL COAST REGIONAL DISTRICT

Snootli CreekHydropower Alternatives

Northwest Hydraulic Consultants project no. 300171 Jul-2013

DRAFT

coord. syst.: UTM Zone 9 horz. datum: NAD 83 horz. units: metres

®Scale - 1:3,000

LegendPipelines

0 0.150.075KilometersData Sources:

Base Map - Image provided by clientContours - British Columbia Base WMS

Attachment 1

Skmana Creek Consulting 134 Boppart Court Kelowna, BC V1V 1G4

April 22, 2016 Attention: Jeremy Cooke, P.Eng. President, AC Eagle Re: Hagensborg Water Utility – Snootli Creek Microhydro Conceptual Review Further to our discussions on April 19th, 2016, it is understood that the Hagensborg Water Utility (HWU) is investigating options for the development of a microhydro project possibly in conjunction with the development of a water supply to the Snootli Creek fish hatchery. T he following is a conceptual assessment of the differing project configuration options and our general commentary on issues that may affect feasibility of the project. Figure 1 pr esents our understanding of the proposed intake and the differing locations available for powerhouse locations. Table 1 outlines the differing project attributes for each location.

Elevation Gross Head Penstock Intake 89m - -

PH Site A 67m 22m 320m PH Site B 59m 30m 625m PH Site C 50m 39m 825m

Table 1 – Conceptual Configuration It is understood that the flow available to the project would be either the 7.5 L/s as the flow currently utilized by HWU or, the 134 L/s the fish hatchery is proposing to divert from Snootli Creek. To help assess the feasibility of the differing powerhouse locations, several configuration and operational assumptions were made:

• 7% maximum pressure loss in a new penstock (required for the 134 L/s flow) • The full design flow is available for power generation and sufficient residual flow would be

available at the intake to satisfy downstream environmental flow needs • Discharge from generation will have no residual pressure

Based on the preceding information, Table 2 presents the conceptual project size and potential energy generation for the differing powerhouse locations and generation flow.

Based on our review, the use of the existing 12 inch supply line would not be practical to convey the proposed 134 L/s hatchery flow. P ressure loses associated with this level of flow over the distance envisioned would be relatively high (>30%), limiting the power generation potential of the project. Although there is an incremental cost for the inclusion of a new pipe, the additional power generation afforded by the increased pressure would be recouped within the first few years of operation.

Hagensborg Water Utility – Snootli Creek Microhydro Project Conceptual Review

2

HWU Flow – 7.5 L/s Hatchery Flow – 200 L/s

PH Site A 1 kW 10 MWh 23 kW 200 MWh

PH Site B 1.5 kW 14 MWh 31 KW 275 MWh

PH Site C 2 kW1 17 MWh1 41 kW 350 MWh 1 – Likely not feasible, no residual pressure to service water system

Table 2 – Conceptual Production

Project Revenue

The basis for the project is to develop a new revenue opportunity for the HWU and based on ou r understanding of the energy market, there would be three differing mechanism to monetize the energy production of the project.

1. BC Hydro Standing Offer Program – is an open program that allows contracted energy purchases from new small and clean or renewable energy Projects throughout British Columbia. However, as Hagensborg is not connected to the main BC power grid, projects in this area are not eligible for inclusion under this program.

2. BC Hydro Net Metering Program - is designed for residential and commercial customers who want to connect a sm all electricity generating unit to the BC Hydro distribution system. Generating units up to 100 kW in capacity that use a clean or renewable resource are eligible to participate in the program. Inclusion in this program is relatively straightforward under an existing customer connection.

3. Private Sale – energy sale through an arm’s length agreement is possible but may trigger rules under the Utility Act designating the power producer as a “utility”; requiring an ongoing and costly administrative process.

Consequently, the BC Hydro Net metering program would likely present the most viable energy revenue mechanism. Energy sale under this program is based on a n annual accounting of the “net” customer energy consumption/production. Excess energy is currently purchased annually at 9.99 cents per kWh; implying a conceptual gross revenue of up to approximately $35,000 for the project.

Permitting

To develop the power project, provincial permitting for water usage will be required. Dependant on the base justification for the project, the requirements for fulfilling the permitting is varied. If the project is developed as a standalone power project, the requirements for permitting are extensive; requiring a minimum of 1 to 2 years and tens of thousands of dollars to complete. If the project is completed as a water conveyance system (i.e. water utility or fish hatchery supply) and the power generation is only performed as a by-product (i.e. pressure reduction) the requirements for permitting is less onerous and time consuming.

Hagensborg Water Utility – Snootli Creek Microhydro Project Conceptual Review

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Conceptual Cost

Costing for a system of this size is difficult to determine at a conceptual stage and is heavily influenced by generation capacity, penstock type/length, terrain and construction mechanism. However, a high level conceptual capital cost for the 41 kW project is estimated to be $325,000. Conclusions & Recommendations The larger 41 kW project is recommended as the most feasible option for the following reasons:

• the project affords the highest revenue potential relative to capital cost • the larger project is more cost efficient as it benefits from scale • water license permitting for a fish hatchery flow associated with this project location would be

less complicated, costly and time consuming To further assess the feasibility of the project, the following next steps should be performed:

• discussions for provincial permitting requirements should be initiated • review Net metering feasibility with BC Hydro and determine how a “customer” would be

established at the hatchery • review property impact/trespass’ that may influence project layout

Limitations The information, interpretations and recommendations presented in this report are solely with respect to a conceptual microhydro power project on Snootli Creek in Hagensborg, BC. The observations and conclusion presented in this report are based solely on information from the HWU and publicly available sources. If there are any significant variations from the conditions described in this report, an additional review should be performed to provide amendments to the original commentary. This report and the recommendations contained within were developed in accordance with generally accepted engineering practice. No additional warranty is either expressed or implied. We trust that this report meets your needs and if you should require additional information or review, please feel free to contact myself. Regards, Original sent by email Mike Walsh, P.Eng. Skmana Creek Consulting ltd. Kelowna, BC 250-801-5325

Hagensborg Water Utility – Snootli Creek Microhydro Project Conceptual Review

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Figure 1 – Conceptual Layouts

INTAKE

C – Snootli Hatchery

B – Fire Station Area

A – Old Mill Site