Key Risk Management Accountabilities for UBC Energy and Water Services
Taking new approaches to address energy and water management at UBC highlights not only the potential energy savings and positive impacts on campus, but also the associated risks. UBC has put risk management accountability measures in place to ensure its new Energy and Water Services (EWS) unit model addresses the following risk factors.
- Evaluate and understand the benefits and risks for UBC to be responsible for its utility infrastructure
- Consider other governance models, which could maintain those benefits and reduce the risks for UBC
Increasing Costs of Commodities
- Forecast energy and water consumption growth on campus and anticipated energy rate increases will drive up the University’s existing commodity budget from $36 million to $50 million over the next five years.
- Energy performance of new research-based buildings is a primary focus of the EWS Energy Planning and Innovation (EPI) Group. There’s a significant gap between the energy models used in the design of energy efficient buildings, and how buildings actually perform after they’re built. This gap is expanded even further by the complexity of the mechanical systems installed in these buildings. UBC’s standard building energy funding of $2.55 per square foot no longer meets the actual energy funding needs of new research buildings.
- Significant investments are still needed for UBC to replace aging infrastructure in all utilities.
- The Academic District Energy System (ADES) project addresses a major portion of deferred maintenance associated with the existing steam energy system.
- Further investments will be required to replace electrical sub-stations, electrical Paper Insulated Lead Cables (PILC), natural gas lines, cast iron water pipes, and aging storm and sanitary lines.
Peak Electrical Demand
- Despite current energy conservation and efficiency efforts, forecast electrical growth indicates UBC will exceed its BC Hydro electrical demand contract of 55 megavolt amperes (MVA) by 2016. UBC is working with BC Hydro on what’s referred to as “Stage 2” upgrades, which will increase UBC’s electrical demand contract to 65MVA.
- UBC is required to provide BC Hydro with a “letter of credit” for the Stage 2 capital costs (up to $24 million) in June of 2015. The capital costs will be recovered by BC Hydro through increased electrical revenue from UBC, between 2015 and 2022. If the revenue doesn’t grow as anticipated, UBC will be responsible for paying the balance remaining on the letter of credit in 2026. Current financial modelling indicates the letter of credit will be paid off by 2020.
- UBC is expected to surpass the Stage 2 electrical demand contract (65MVA) by 2024. On-campus electrical co-generation and/or substantive demand-side management initiatives are being evaluated to avoid the need for a Stage 3 upgrade from BC Hydro. UBC also wants to avoid or defer growth-related capital costs connected to our own electrical infrastructure. UBC’s current long-term plan is to manage its electrical demand without exceeding 65MVA.
- The number one seismic risk on the UBC campus is the existing powerhouse, which has been in place since 1925 and not only provides the campus with steam, but also houses the water pumps that pressurize the domestic water distribution system.
- The ADES project will eliminate this seismic risk, since the powerhouse is being replaced by a new Campus Energy Centre (CEC) in the fall of 2015. The water pumps will remain in their current location once the rest of the building is demolished.
Integrated Stormwater Management (ISMP)
- Significant investments are required within the Infrastructure Impact Charge (IIC) plan to enable stormwater detention facilities to limit storm flows to the Metro Vancouver (MV) Outfalls.
Catastrophic Events (emergency/continuity planning)
- Providing electricity, heat, water, and sanitary sewer services are essential to UBC’s recovery plans should a catastrophic event occur. UBC’s systems have some N-1 redundant (i.e. backup) features, which offer some resilience.
- Of concern is a potential gap in campus expectations regarding when electricity, natural gas/heat, and water would be available following a catastrophic event. UBC is nearly 100 per cent dependent upon BC Hydro for electricity, FortisBC for natural gas, and Metro Vancouver for water. UBC is considering options that may provide some diversification, while providing other benefits.
Infrastructure Master Planning
- Ensure that all of the existing infrastructure models reflect the new building construction growth that’s occurring on campus.
- Ensure greater integration of the various infrastructure master plans, to minimize disruptions and maximize synergies.