The city is poised on the threshold of yet another pioneering effort to reduce greenhouse gas emissions in the community.

Utilizing biomass from locally collected wood waste, the city’s electrical utility is investigating a low carbon alternative to heating with natural gas, and fleshing out a plausible business case for constructing a plant to produce it for distribution in the downtown core.

Called the District Energy System (DES), the conversation surrounding the project evolved from whether to move forward to how to best move forward at the city council table last Monday night.

Council approved city staff developing the next step in the DES utility, including beginning public engagement, securing financing authorization through the Municipal Finance Authority (up to $4 million), securing grant funding and undertaking a preliminary design.

As well, Nelson Hydro will also secure one or more central plant site locations and agreements with one or more regional wood waste suppliers.

Nelson Hydro general manager Alex Love said they would not make firm financial commitments in excess of $100,000 before returning to council with the finalized project plan.

“Upon securement of loan financing, grant funding, and customer memorandums of understanding, staff will bring the district energy project back to council for approval to construct,” he told council.

“But we are now at the stage of being able to have meaningful discussions with both fuel suppliers and customers as we can talk about rates and timing. The next stage we are proposing involves us having those discussions.”

The rate model would be an incentive rate with energy priced at 10 per cent below the equivalent natural gas rate.

The benefits for customers of a district energy system include improved energy efficiency, reduced maintenance costs, reliability, reduced space requirements for mechanical equipment and ease of operation.

The system would be located in the lakefront area, said Love, and supply heat to buildings — including core downtown buildings and Kootenay Lake Hospital as potential customers — produced from biomass boilers using local wood waste for fuel.

A district energy system produces steam, hot water or chilled water at a central plant that is then delivered to various buildings connected through an underground piping system. The energy delivered by the system through steam or water can then be used for space heating, domestic hot water and air conditioning.

There is no reserve or budget specifically for this purpose, but a Nelson Hydro capital reserve has enough capacity to absorb the amount with the intention “that it would be transferred onto the books of the DES once the utility is established.”

The full project has a capital cost of about $5 million, with a payback of 15 years or less based on a combination of financing rates, grant funding and customer connections.

Even though initially the utility revenues will be directed toward paying back its own capital costs the utility will become a net revenue generator for the city. The other benefits such as reduced greenhouse gas emissions and local supply of energy will begin in the first year of operation.

“We are not generating power with the project, but generating heat,” said Fiona Galbraith, the city’s corporate climate action coordinator. “But we really need a solution to heating our homes and reduce greenhouse gas emissions.”

The DES business plan document is slated to become available on the city’s website.

New bylaws in the works

City staff is working on preparing the documentation on several new bylaws, including one surrounding medical marijuana use, aggressive panhandling and keeping chickens in Nelson.

Although most of the new bylaws are deemed medium priority, they are in the queue for development.

The panhandling bylaw is expected to prohibit aggressive panhandling behaviours in public and introduce enforcement penalties.

As well, a separate bylaw for the regulating of beekeeping in the city has been requested for several years, and it is now on the bylaw priority list for creation, as is a separate bylaw for the regulating of hen-keeping in Nelson.

A medical marijuana bylaw and a good neighbour bylaw are also slated for research and preparation for consideration at the 2016 city council bylaw priority setting session, although both topics are deemed low priority.

A standards of maintenance bylaw — medium priority — is also being investigated. The province has developed a model standards of maintenance bylaw to ensure that rental housing meets minimum standards of comfort and safety.

This bylaw prescribes standards for maintenance and occupancy of building sites in the city to ensure buildings and sites are free from hazards and are maintained continuously in conformity with health, fire and building requirements.