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Voluntary Action Plan 1999

Produced for Canada's Climate Change Voluntary Challenge & Registry Inc. October 31, 1999

TO THE READER
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TABLE OF CONTENTS
1. 2. 3. 4. 5. 6. 7. Executive Summary.......................................................................................................................1 Organization Profile ......................................................................................................................2 Senior Management Support........................................................................................................2
3.1 3.2 4.1 4.2 5.1 5.2 6.1 6.2 7.1 Signed Statement of Endorsement ....................................................................................................2 Internal Practices and Management Systems Dealing With Climate Change ...................................3 Methodology .....................................................................................................................................3 Quantification....................................................................................................................................4 Methodology .....................................................................................................................................5 Quantification....................................................................................................................................5 Targets...............................................................................................................................................5 Process for Target Review and Update .............................................................................................5 List of Key Activities / Projects ........................................................................................................6 Description of Reduction Projects: ............................................................................................6 ONGOING PROJECTS:.............................................................................................................6 NEW PROJECTS: ....................................................................................................................10 Estimated Impact of Activities and Projects....................................................................................11 Current Reporting Year ...................................................................................................................11 Verification .....................................................................................................................................14 Offsets .............................................................................................................................................14 Projects.....................................................................................................................................14 Our Corporate Response to Climate Change Issue .........................................................................16 Climate Change and Our Employees ..............................................................................................16 Climate Change and our External Contacts.....................................................................................17 GEMCo.....................................................................................................................................17 Electric Vehicle Program .........................................................................................................17 North Sun 99 ...........................................................................................................................17 Other.........................................................................................................................................18 Other Public Education on Climate Change....................................................................................18

Base Year Quantification ..............................................................................................................3 Projection .......................................................................................................................................5 Target Setting.................................................................................................................................5 Measures to Achieve Targets........................................................................................................6

7.2

8.

Results Achieved ..........................................................................................................................11


8.1 8.3 8.4

9.

Education, Training, and Awareness.........................................................................................16


9.1 9.2 9.3

9.4

TABLE OF FIGURES
Figure 1: Summary of Progress ..............................................................................................................................1 Figure 2: Actual Emissions vs Baseline Emissions ................................................................................................4 Figure 3: Program Performance............................................................................................................................11 Table 1: Emissions Produced (Million tonnes per year) .........................................................................................4 Table 2: Offset and Reduction Targets ...................................................................................................................5 Table 3: Forecasted Impact of Reduction Projects ...............................................................................................11 Table 4: Results Achieved by Reduction Programs..............................................................................................12 Table 6: Results Achieved with Offset Programs ................................................................................................14

1. Executive Summary
EPCOR is a utility that provides electricity, water and technological solutions in the province of Alberta and Canada. EPCOR's three generating stations use fossil fuel for electrical generation. The combustion of fossil fuels results in greenhouse gas emissions. In 1994, EPCOR committed to reducing net greenhouse gas emissions to the levels that were emitted in 1990. To accomplish this goal, the initial target was to reduce and offset carbon dioxide emissions by 1,000,000 tonnes per year. The measures taken by EPCOR to achieve our goal include several offset and reduction activities. Some of the projects currently being conducted include water conservation and energy efficiency initiatives, wood pole recycling, landfill gas utilization, solar power, R-2000 energy efficient homes, and the sale of flyash. The emissions reduced by these projects are used to mitigate the greenhouse gas emissions of the company. Our program of reductions and offsets now totals 1,126,000 tonnes, surpassing our initial target of 1,000,000 tonnes, illustrated in Figure 1: Summary of Progress below. Subsequent to obligations that Canada made in Kyoto, EPCOR established an additional target of achieving a 6% reduction below our 1990 levels in net greenhouse gas emissions from our operations by the first Kyoto budget period (2008-2012). This commitment includes a 100% offset or reduction of emissions from new generation projects. We have identified several new reduction initiatives including a partnership in a Micro Hydro Facility and active participation in emissions trading. Education of ourselves and our stakeholders on the evolving issue of climate change is ongoing. EPCOR will continue to give support to the community through environmental programs and initiatives such as Energy Awareness Week, Environment Week, and EcoFile, a provincial public radio program focusing on sustainability. Figure 1: Summary of Progress
Summary of Progress
Carbon Dioxide Emissions (Millions of tonnes per year)

8.5

7.5

6.5

6 1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

Baseline Emissions

Net Impact with reductions + offsets

Initial Target

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2. Organization Profile
EPCOR is an integrated utility comprised of several business units that provide potable water, electricity, and associated services to the Province of Alberta and Canada. EPCOR was previously the parent company of Edmonton Power, Aqualta and Eltec, providing the services outlined above. In 1999, due to deregulation, these companies have been unified under a single brand of EPCOR. For the purposes of this VCR Report, all previous initiatives of the separate companies are now referred to as EPCOR initiatives. EPCOR is the second largest electricity generator in Alberta, operating three generating stations with a total gross generating capacity of 1,701 megawatts. In 1998, EPCOR's consolidated net income was $121 million, total revenue was $978 million, and total gross assets were $2.2 billion. EPCOR employs 1,700 people. All three of EPCOR's generating stations use fossil fuel for electricity generation. Environmental impact associated with the combustion of fossil fuel is the release of carbon dioxide, methane and nitrous oxide, three known greenhouse gases.

3. Senior Management Support


3.1 Signed Statement of Endorsement In 1995, the Canadian Electricity Association signed a Memorandum of Understanding with Natural Resources Canada, committing Canadas electric power industry to a voluntary program to reduce and offset carbon dioxide emissions. As a signatory to this document, EPCOR endorsed this program, setting our initial target at 1,000,000 tonnes per year of carbon dioxide emission reductions and offsets. Climate change is a serious risk to all of us and requires an appropriate response. We at EPCOR remain committed to voluntary action to respond to this risk. We see Canadas Voluntary Challenge and Registry as a good opportunity to balance our economy and our environment in a sustainable way. In 1998, we re-evaluated our Climate Change Program in light of the commitments that Canada made in Kyoto. We have established a new target of achieving 6% below 1990 greenhouse gas emission levels during the first Kyoto budget period (2008 - 2012). This commitment includes 100% offset of emissions from new generation projects. We are pleased to offer this progress report outlining our continuing voluntary programs and initiatives in support of Canadas National Objectives. Don Lowry President and CEO EPCOR

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3.2 Internal Practices and Management Systems Dealing With Climate Change EPCOR has a team whose main focus is climate change mitigation. The purpose of this team is to identify new projects that will reduce our greenhouse gas emissions, recording and implementing projects, and educating the company on new advances and challenges related to the climate change issue. EPCOR is committed to annual reporting to the Voluntary Challenge and Registry Inc. and the Canadian Electricity Association's Environmental Commitment and Responsibility Program. The results of these reports are internally audited each year. To ensure the environmental practices are upheld throughout EPCOR, frequent reporting to senior management is conducted (see Section 6.2). This includes annual goal setting, emissions tracking and an employee financial incentive program (see Section 9.1). The strength of the EPCOR's environmental management systems allowed our Clover Bar and Rossdale Generating Stations to become the first two fossil fuel power plants in Canada to achieve ISO 14001 registration. Our Genesee Generating Station is slated to be ISO 14001 registered by the end of 1999.

4. Base Year Quantification


4.1 Methodology In order to set a realistic target for reductions and offsets, we first had to calculate our 1990 baseline emissions and forecast those levels to the year 2000. Reduction and offset targets were derived from this projection. The situation was complicated by the construction of the second generating unit at the Genesee Generating Station. This unit, originally targeted for construction in the early 1980s, was not completed until 1994. Had it been completed when originally planned and approved, the added emission impact would have been included in our 1990 baseline emissions. Including Genesees total output in our baseline effectively increases our 1990 emission levels by approximately 2.9 million tonnes per year of carbon dioxide, as illustrated in Figure 2: Actual Emissions vs. Baseline Emissions below. This year the baseline has been adjusted to include methane and nitrous oxide emissions from our operations. To calculate the carbon dioxide emissions produced by our generating stations, factors from the Environment Canada publication, Canada's Greenhouse Gas Inventory, 1997 Emissions and Removals with Trends were used. To calculate the carbon dioxide produced when coal is combusted, the heat rate and electrical energy rate of the plant was used. The factors used to convert methane and nitrous oxide to an equivalent amount of carbon dioxide are 21 and 310 respectively.

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Figure 2: Actual Emissions vs Baseline Emissions

Actual Emissions vs Baseline Emissions


9

Carbon Dioxide Emissions (Million tonnes per year)

8 7 6 5 4 3 2 1 0 1990

1991

1992

1993

1994

Baseline Emissions 1995 1996 1997 Actual Emissions 1998 1999 2000

Actual Emissions

Baseline Emissions

4.2 Quantification Table 1: Emissions Produced (Millions of tonnes per year)


Type of Emission Carbon Dioxide (CO2) Methane (CH4) Nitrous Oxide (N2O) Total Baseline Emissions 1990 3.425 0.001 0.024 3.450 7.367 1991 3.596 0.001 0.025 3.622 7.367 1992 4.614 0.001 0.033 4.647 7.367 1993 1994 1995 1996 1997 1998 4.372 7.021 7.212 7.494 7.676 8.776 0.001 0.002 0.002 0.020 0.002 0.003 0.031 0.049 0.051 0.053 0.054 0.062 4.404 7.072 7.265 7.567 7.732 8.841 7.367 7.367 7.367 7.691 7.955 8.097 8.138 8.280 1999 2000

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5. Projection
5.1 Methodology In this report, EPCOR's definition of a reduction project is one in which the methods of calculation and accounting principles are well developed and generally accepted. An offset project is one where the methods of calculation and accounting principles are still being developed. A conservative approach is used when calculating the values projected to the year 2000. If an initiative is expected to continue reducing emissions to the year 2000, it is assumed that the amount of carbon dioxide reduced this year can be forecasted to subsequent years. Factors and assumptions stated in Section 4.1 of this Report are also used when calculating these projections. 5.2 Quantification EPCOR owns three generating stations: Clover Bar, Rossdale, and Genesee. These are the three major sources of emissions from our company. Clover Bar and Rossdale use natural gas and Genesee uses coal to generate electricity. As a result, these plants produce carbon dioxide (CO2), methane (CH4), and nitrous oxide (N2O) as outlined in Table 1, Section 4.2.

6. Target Setting
6.1 Targets Each year our Executive Council and Board of Directors set a target for emission reductions and offsets. Our overall objective is to maintain our initial reduction and offset target of 1,000,000 tonnes per year. For 1999, our target was 30,000 tonnes. Our progress to date is outlined in Table 2. Table 2: Offset and Reduction Targets

OBJECTIVE (tonnes)
1996 1997 1998 1999 to Date 70,000 140,000 100,000 30,000

OFFSET / REDUCTION ACHIEVED (tonnes) 78,000 261,000 104,000 125,000

6.2 Process for Target Review and Update Progress towards our objectives and targets is measured and reported monthly to senior management and quarterly to our Executive Council and Board of Directors. A portion of annual compensation to all employees depends upon our overall success in achieving these objectives.

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7. Measures to Achieve Targets


7.1 List of Key Activities / Projects To reach our projected target we have numerous ongoing projects, as well as new projects that are being pursued. Projects that are under evaluation or in the early stages of development are not counted against our emissions. Ongoing Projects: New Projects: Micro Hydro Facility Partnership Emissions Trading Green Power Water Efficiency Initiatives Customer Energy Awareness Internal Energy Efficiency Initiatives EnVest Alberta Flyash Sales Landfill Gas Operations Alberta R-2000 Small Power Research & Development Program Wood Pole Recycling

Description of Reduction Projects: Reduction values show the amount of carbon dioxide emissions reduced forecasted to the year 2000. ONGOING PROJECTS: Water Efficiency Initiatives Reduction: 72,000 tonnes/year When water is conserved, considerable energy is saved through reduced pumping, treatment, distribution and sewage treatment after use. Since 1990, EPCOR water conservation programs have allowed us to defer the expansion of our E.L. Smith Water Treatment Plant. In addition, a smaller water treatment facility located within our Rossdale Water Treatment Plant site was shut down in 1994. Customer Energy Awareness Reduction: 145,000 tonnes/year Electricity demand can be reduced by providing our customers with information about the wise use of energy. We conduct awareness programs promoting efficient energy and water use with our customers through seasonal newsletters distributed with bills, trade shows and other public events. EPCOR is a major sponsor of both Energy Awareness Week and Environment Week.

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For a number of years we have placed co-op engineering students from the University of Alberta with some of our larger industrial customers. These students work for our customers in their facilities and identify ways to improve energy use. When these projects are implemented, emissions reductions are realized. In 1998, we placed a Co-op Engineering Student in the Physical Plant facilities of the University of Alberta to assist that institution in identifying energy efficiency opportunities. This work identified ongoing and new efficiency options. Internal Energy Efficiency Initiatives Reduction: 39,000 tonnes/year The thermal efficiency of EPCOR's three generating stations has been improved through a series of initiatives, including: Recalibration Tuning Enhanced maintenance On-line performance monitoring

In 1996, training of our generating station staff was conducted in order to enhance their sensitivity to technical issues that can affect heat rate. In 1997, we undertook a program to identify and evaluate additional cost-effective methods of heat rate improvement that can be implemented at our facilities. In 1997 and continuing in 1998, we conducted specialized energy efficiency training for our operations personnel. This training enhances the ability of staff to identify opportunities for improving efficiency in their day-to-day operation of our generating facility. EnVest Alberta Reduction: 21,000 tonnes/year EPCORs corporate headquarters has been transformed into a model of energy efficiency. In 1995, the building was retrofitted with over 18 energy saving innovations. This has resulted in energy reductions of almost 50%, saving the building over $200,000 per year. These services are now offered to our commercial customers through the EnVest Alberta program. EnVest offers a complete package of services to our commercial customers, including: Energy savings assessments Pre-qualified listing of energy service companies Financing Utility bill repayment plans Monitoring post program performance EnVest is presently working with more than 30 customers and has completed a number of contracts.

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EnVest Alberta would like to publicly acknowledge the leadership and vision demonstrated by the following new customers who participated in this program in 1998: Agora Food Merchants-Data Centre Bedford Holdings CKER Radio Clareco Industries Ericksen Infiniti Nissan Foothills Creamery Ford Motor Company of Canada Manulife Financial Mountbatten Apartments Pleasantview IGA GKC Financial Can Con Gas Good Will Industries

Flyash Reduction: 19,000 tonnes/year One form of ash produced by coal-fired power plants is called flyash. Flyash has many properties similar to cement and can be used to displace limestone in concrete production. When this is done, energy used to produce the cement is significantly reduced, resulting in large carbon dioxide reductions. In 1998, EPCOR produced 402,000 tonnes of flyash and sold 38,000 tonnes of ash for cement production. This represents a net carbon dioxide reduction of 18,850 tonnes. EPCOR has contracts for flyash sales that are expected to increase emissions reductions to 22,000 tonnes per year by 2000. Landfill Gas Recovery Reduction: 202,000 tonnes/year Decomposing garbage produces methane gas. Starting in 1992, the methane gas from the Clover Bar Landfill has been collected, purified and routed to the Clover Bar Generating Station to augment the natural gas fuel supply. In 1996, the supply of methane gas to the generating station was 8,014,000 cubic metres. EPCOR purchased the collection, purification and distribution system in 1996. Since then, process improvements have increased the output of the operation to 28,000,000 cubic metres in 1998, with a total carbon dioxide reduction of 202,000 tonnes per year. Alberta R-2000 Reduction: 2,300 tonnes/year The R-2000 program was developed in the early 1980s to promote energy efficient new homes and is a co-operative initiative of the Canadian Home Builders Association and Natural Resources Canada.

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Since its initiation, the R-2000 program focus has broadened to include: energy efficiency lighting and appliances indoor air quality water conservation recycled construction material

To qualify as an R-2000 home, a new house must be built to the R-2000 technical standards, pass an audit and be certified. On average there are ten R-2000 homes certified in Alberta each year. Our sustainable development objectives are complimentary to the R-2000 program. In 1996, EPCOR became a full partner in the Alberta R-2000 program and in 1998 became a member of the Alberta R-2000 Steering Committee. The strong synergies from our partnership are yielding significant water and energy efficiency improvements in the new home sector. Alberta R-2000 has agreed to EPCOR receiving all carbon dioxide reductions accrued by the Program for each year of our participation. Small Power Research and Development Program Reduction: 106,000 tonnes/year In 1992, the Alberta Government initiated the Small Power Research and Development Program to promote renewable electrical energy sources in Alberta. The Program has added approximately 108 MW of renewable power from wind, biomass, and hydro sources, to the Alberta Interconnected System. This energy displaces power produced from conventional fossil fuel sources and therefore effectively reduces the carbon dioxide emissions provincially. The program is paid for by all Albertans through the power pool system. EPCORs share is approximately 20% of this program, representing a carbon dioxide reduction of 106,000 tonnes per year. Wood Pole Recycling Program Reduction: 21,000 tonnes/year In August 1996, EPCOR entered an agreement with Moen Lumber Sales of Edmonton, to recycle used cedar power poles. The recycled wood displaces virgin lumber in the retail market. This initiative has a number of positive environmental effects: discarded power poles are no longer sent to landfill fewer cedar trees are harvested energy consumption associated with harvesting is reduced

Each year approximately 600 wood poles are recycled though this program. This year 638 poles were recycled. These activities result in carbon dioxide reductions of 20,505 tonnes per year.

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NEW PROJECTS: Micro Hydro EPCOR has formed a partnership with Canadian Hydro Developers Inc. to develop a 13 MW micro hydro project in Southern Alberta. The energy produced by this project will displace power generated from conventional fossil fuel sources and therefore effectively reduce the carbon dioxide emissions provincially. As part of our arrangement with Canadian Hydro, all emission reductions associated with the project will accrue to EPCOR. This project is expected to be commissioned and in full service in mid-2000. Emissions Trading There are a number of emissions trading models currently vying for general acceptance. Some companies, including EPCOR, have started to conduct emissions trades in order to establish appropriate trading models, contract language, and to gain a fundamental understanding of emissions market pricing This is an evolving market designed to establish a carbon reduction credit trading mechanism for Canada. It must be clear that no credit exists until the regulator agrees that the certificates can be cashed-in against some regulatory obligation. Several pro-active companies are now trading carbon reduction in order to demonstrate the viability of market mechanisms. In EPCORs case bi-lateral trading through brokerages, multi-party trading through commodities exchanges and joint ventures will be conducted. Green Power EPCOR introduced its Green Power Program in July 1999. Green Power customers agree to pay a premium to ensure that their power is supplied from Eco Logo certified low impact, alternative source electrical generation. Eco Logo certification is administered under the Environmental Choice Program of Environment Canada. Initially the power in the program is from biomass power generation. Ultimately, the program will offer a complete portfolio of green power sources. Customers can participate in the program at four levels: ECO-PACK (10% of household power for $5/month), ECO-PACK Premium (20% of household power for $10/month), Premium Plus (50% of household power for $20/month), and Premium Plus (100% of household power for $40/month)

The program is designed to encourage the development of renewable energy options and stimulate their introduction into the marketplace through the identification of a core group of committed customers.

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7.2 Estimated Impact of Activities and Projects Table 3: Forecasted Impact of Reduction Projects
PROGRAM (tonnes per year) Water Efficiency Initiatives Capitol Square Solar Power Array Customer Energy Efficiency Internal Energy Efficiency Initiatives EnVest Alberta Flyash Sales Landfill Gas Operations Landfill Gas Operations - Upstream Impacts R-2000 Small Power Research & Development Program Transmission Losses Management in AIS Wood Pole Recycling - Avoided Landfill Total Emissions Reductions 1999 72,235 14 144,961 46,097 21,379 18,850 202,003 3,144 1,807 106,098 1,003 20,505 638,096 2000 72,235 14 144,961 47,624 21,379 18,850 202,003 3,144 2,317 106,098 1,003 20,505 640,133

8. Results Achieved
8.1 Current Reporting Year In 1999, we achieved 125,000 tonnes of new reductions and offsets, surpassing our target of 30,000 tonnes. This supports our portfolio of similar initiatives. Our overall program now totals 1,125,000 tonnes, exceeding our goal of 1,000,000 tonnes. A detailed account is given in Table 4 and illustrated in the Program Performance graph. Figure 3: Program Performance

Program Performance
Carbon Dioxide Emissions (Million tonnes per year)
8.5

7.5

6.5

6 1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

Baseline Emissions

Net Impact with reductions

Net Impact with reductions + offsets

Initial Target

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Table 4: Results Achieved by Reduction Programs Reductions


PROGRAM (tonnes per year) Water Efficiency Initiatives Capitol Square Solar Power Array Customer Energy Efficiency Internal Energy Efficiency Initiatives EnVest Alberta Flyash Sales Landfill Gas Operations Landfill Gas Operations - Upstream Impacts R-2000 Small Power Research & Development Program Transmission Losses Management in AIS Wood Pole Recycling - Avoided Landfill Total Emissions Reductions 1998 72,224 14 115,737 44,571 19,000 18,850 202,003 3,144 1,297 106,098 1,003 20,505 604,445

Offsets
PROGRAM Tree Initiatives Wood Pole Recycling - Displaced Forestry Wood Pole Recycling - GWP Impacts Wood Pole Recycling - Root System Impacts Landfill Gas Operations - GWP Impacts REAP R-2000 Impact on Marketplace Total Emissions Offsets Total Emission Reductions + Offsets 1998 16,227 3,710 93,338 27,339 336,672 9,014 35,213 521,513 1,125,958

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8.2 Interim Years

Table 5: CARBON DIOXIDE EMISSION INVENTORY PROGRAM PERFORMANCE TO OCTOBER 31, 1998 (Tonnes Per Year)
1990 0 0 0 586 0 0 0 0 0 0 0 0 586 1991 0 0 322 1,256 0 0 0 0 0 0 0 0 1,578 1992 0 0 924 1,700 0 0 85,228 1,327 0 14,695 0 0 103,874 1993 65,110 0 2,660 2,145 0 0 90,660 1,411 0 24,892 0 0 186,878 1994 71,583 0 14,103 5,769 753 0 136,160 2,119 0 48,099 0 0 278,586 1995 72,136 0 12,534 39,990 4,546 14,310 137,607 2,142 0 79,548 0 0 362,813 1996 72,121 0 13,874 41,517 9,509 17,022 113,492 1,766 486 99,308 0 8,924 378,019 1997 72,247 10 15,420 43,044 16,069 27,160 181,470 2,824 787 107,708 1,003 13,387 481,129 1998 72,224 14 115,737 44,571 19,000 18,850 202,003 3,144 1,297 106,098 1,003 20,505 604,445 1999 72,235 14 144,961 46,097 21,379 18,850 202,003 3,144 1,807 106,098 1,003 20,505 638,096 2000 72,235 14 144,961 47,624 21,379 18,850 202,003 3,144 2,317 106,098 1,003 20,505 640,133

Reductions PROGRAM Water Efficiency Initiatives Capitol Square Solar Power Array Customer Energy Efficiency Internal Energy Efficiency Initiatives EnVest Alberta Flyash Sales Landfill Gas Operations Landfill Gas Operations - Upstream Impacts R-2000 Small Power Research & Development Program Transmission Losses Management in AIS Wood Pole Recycling - Avoided Landfill Total Emissions Reductions

Offsets PROGRAM Tree Initiatives Wood Pole Recycling - Displaced Forestry Wood Pole Recycling - GWP Impacts Wood Pole Recycling - Root System Impacts Landfill Gas Operations - GWP Impacts REAP R-2000 Impact on Marketplace Total Emissions Offsets

1990 0 0 0 0 0 0 0 0

1991 0 0 0 0 0 0 0 0

1992 0 0 0 0 142,047 0 0 142,047

1993 0 0 0 0 151,100 0 0 151,100

1994 0 0 0 0 226,933 0 0 226,933

1995 2,719 0 0 0 229,345 0 0 232,064

1996 5,665 1,614 41,740 11,899 189,153 9,014 14,406 273,491

1997 10,461 2,422 65,032 17,849 302,450 9,014 22,408 429,636

1998 16,227 3,710 93,338 27,339 336,672 9,014 35,213 521,513

1999 16,227 3,710 93,338 27,339 336,672 9,014 48,018 534,317

2000 16,227 3,710 93,338 27,339 336,672 9,014 60,823 547,122

Total Emission Reductions + Offsets

586

1,578

245,921

337,978

505,519

594,877

651,510

910,765

1,125,958 1,172,413 1,187,255

Table 5: Carbon Dioxide Emission Inventory

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8.3 Verification The calculations of the reductions and offsets are internally audited on a yearly basis. This consists of: 8.4 Offsets Table 6: Results Achieved with Offset Programs Offsets
PROGRAM (tonnes per year) Tree Initiatives Wood Pole Recycling - Displaced Forestry Wood Pole Recycling - GWP Impacts Wood Pole Recycling - Root System Impacts Landfill Gas Operations - GWP Impacts REAP R-2000 Impact on Marketplace Total Emissions Offsets 1998 16,227 3,710 93,338 27,339 336,672 9,014 35,213 521,513

confirming baselines interviewing project managers re-calculating emissions with updated emission factors verifying numbers statistical testing assessing forecasted numbers, quantifying and explaining differences

Projects Offset values show the amount of carbon dioxide emissions offset by the year 2000. Tree Planting Initiatives Offset: 16,000 tonnes/year Trees remove carbon dioxide from the environment. In 1995, EPCOR joined with 40 other Canadian and American electric utilities in the UtiliTree consortium. Based on a worldwide search, UtiliTree has invested in six forestry-based carbon sequestration projects. One of the goals of UtiliTree is to promote economically and ecologically sustainable forest management. The projects vary in complexity from basic protection and reforestation, development and application of different forestry management practices. In 1996, EPCOR designed the Partnering with Alberta Communities for Trees (PACT) Program. Approximately 20,000 trees were planted in 19 Alberta communities. In addition to carbon sequestration by the trees, other benefits of PACT include the creation of wildlife habitats, increased energy conservation, and the protection of watersheds from erosion. In the spring of 1997, EPCOR's PACT Program was recognized with the presentation of the Trees Canada Foundation Eterne Award.

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In 1997, our work with the Trees Canada Foundation continued with our participation in the Lets Root for Canada Program. Our efforts that year resulted in planting another 50,000 trees across Canada.

Wood Pole Recycling: Indirect Benefits Offset: 124,000 tonnes/year When trees are harvested, their root systems remain underground to decompose slowly. This process is analogous to the rotting of wood waste in a landfill. The Wood Pole Recycling Program prevents the harvesting of approximately 600 trees. This has the effect of reducing the equivalent of 124,000 tonnes per year of carbon dioxide emissions resulting from the anaerobic decomposition of root systems. Alberta R-2000: Indirect Benefits Offset: 61,000 tonnes/year R-2000 was initially developed to promote new home development, which went beyond existing standards, to provide more efficient and comfortable homes. The program has influenced the market, resulting in many new homes exceeding code requirements but not meeting 100% of the R-2000 technical specifications. This positive influence creates market desirability and provides a technical basis for home efficiency improvement, which is progressing outside of the direct context of the Program. Offsets, from new homes being built to higher efficiency levels than required by code, are a result of the R-2000 influence. Within Alberta, these indirect offsets grow by an average of 13,000 tonnes per year. Landfill Gas Recovery: 20-Year Horizon Offset: 337,000 tonnes/year Greenhouse gases all have different climate change potentials. The International Panel on Climate Change (IPCC) has developed conversion factors that allow the climate change impacts of these different gases to be compared to carbon dioxide. The Global Warming Potential (GWP) factor measures the difference in climate change caused by a specific greenhouse gas over a given period of time, and compares it with the effects of carbon dioxide over the same period. GWPs for 20, 100 and 500-year horizons have been developed by the IPCC. To date, there is no scientifically based standard regarding which GWP to use, but it has become common practice to use the 100-year horizon. Based on this scale, each tonne of methane that is reduced is the same as 21 tonnes of carbon dioxide. In some instances, it is more appropriate to apply a GWP factor based on a 20-year horizon. This is especially true in situations where the duration of an initiative and its impact will be observed on a much shorter time horizon. This is clearly the case with the Clover Bar Landfill Gas Plant operation. This initiative will be removing methane from

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the landfill for a period of approximately 15 years. Using the 100-year horizon, the GWP factor significantly under-estimates the positive climate change impact of the project in the short-term. At the same time, this approach over-estimates the long-term impact of the project by spreading reduction impacts over an 85-year period when the plant will no longer be in operation. The value of the 20-year horizon GWP factor for methane is 56. When the climate change impact of the Clover Bar Landfill Gas Plant operation is calculated on this basis, it results in an additional 337,000 tonnes per year of equivalent carbon dioxide offsets.

9. Education, Training, and Awareness


9.1 Our Corporate Response to Climate Change Issue Our environmental targets and action plans are formulated into an annual Environmental Performance Index (EPI). Progress is measured and communicated monthly to employees throughout the company. Achieving EPI targets is factored into the calculation of employee compensation awards at the end of each year. EPCOR introduced its Green Power Program in July, 1999. EPCOR financially rewards Call Center employees who sell Green Power. More information about Green Power is provided in Section 7.1. EPCOR has a sustainable development policy that mandates effective use of resources and materials; supporting environmentally sound and sustainable technologies and operations; the process of continuous improvement; and reporting our environmental performance to both our employees and our customers. A quarterly Environmental newsletter, Essential Balance, is distributed to inform our key stakeholders, describing our environmental performance and new initiatives in our Sustainable Development Program. 9.2 Climate Change and Our Employees In 1996, EPCOR launched a highly innovative employee training program based on CD ROM multi-media software. Every employee in our operations areas must undertake this self-directed training and pass a test. The climate change issue is addressed in a module of this training program. Operations personnel at our generating stations also receive specific training in optimizing operations to improve plant heat rate performance. This can significantly contribute emissions reductions. Several publications such as: the VCR Report, a company newsletter, Essential Balance, and bulletins on the Intranet are available throughout the company to improve employee awareness about environmental issues. An update of EPCOR's environmental progress is presented at the Annual General Meetings for all employees.

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9.3 Climate Change and our External Contacts GEMCo EPCOR is one of the original seven, western Canadian energy companies that formed the Greenhouse Emissions Management Consortium (GEMCo). GEMCo is a not-for-profit Canadian corporation created to provide leadership in greenhouse gas management by: identifying and developing projects creating emissions trading methodologies providing scientific, policy, and technical information

EPCOR is on the Board of Directors of GEMCo. Electric Vehicle Program Electric power generation is a more efficient method of producing energy than conventional internal combustion engines. Over the past several years, significant advances have been made in electric vehicles, batteries and battery charging. Ultimately, electric vehicles will offer reduced emissions per kilometer driven. EPCOR is the incoming Chair of the Environmental Subcommittee of the Infrastructure Council of the Electric Vehicle Association of Canada and is an active member of the Electric Vehicle Infrastructure Council. Through these two bodies, EPCOR will help bring electric vehicles to the marketplace and reduce carbon dioxide emissions from transportation sources at the same time. North Sun 99 In August 1999, EPCOR was the major sponsor and Co-Chair of the 8th international conference on solar energy in high latitudes, North Sun 99. It was the first time this conference has been held outside of Europe. The meeting also incorporated the 25th Annual Conference of the Solar Energy Society of Canada. The conference comprised three streams critical to the development of renewable energy: Attracting mainstream business; Developing leading edge technology; and Engaging the public.

The conference focused on: Understanding the technological infrastructure; Economic challenges and commercial opportunities for renewable energy; and Integration of renewable energy into traditional technologies.

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An integral part of the conference was a public forum on Climate Change focusing on individual actions that can be taken to positively contribute to Canadas Climate Change objectives. Other EPCOR was a participant in the National Climate Change Consultation Process serving on the Credit for Early Action Table, Kyoto Mechanisms Table and the Municipalities Table. EPCOR also provided advice and assistance to the Electricity Sector Table. EPCOR is involved with several other groups that are addressing the issue of climate change. Some of these groups include the Canadian Energy Association (CEA), Conference Board of Canada, Canadian Energy Research Institute (CERI), Alberta Climate Change Central, E Source Inc., and Alberta's KEFI Exchange. EPCOR sits on the Board of Directors for UtiliTree, which participates in Clean Development Mechanism (CDM) and Joint Implementation (JI) projects focusing on reforestation and improved forestry management. More information on UtiliTree is provided in Section 8.4. EPCOR was represented at several major national and international conferences addressing new techniques and technology for reducing greenhouse gas emissions. 9.4 Other Public Education on Climate Change EPCOR gives many presentations each year on Landfill Gas Utilization, Climate Change, the environment, and energy efficiency. Tours of our solar array and Landfill Gas Plant are given to the public on request. Answering public enquiry about the environment, climate change or any of our programs is considered an essential role of our Environmental Affairs and Sustainable Development Group. EPCOR provides a lecturer to teach a fourth year Engineering course at the University of Alberta. The focus of the course is sensitizing new engineers to broader social and environmental issues. Each year approximately 80 students take this course. EPCOR helped develop Vision Kids; a city wide program using interactive booths and tours to educate children on energy efficiency in their own homes. Together with the Alberta Provincial Museum, EPCOR sponsored Earth Quest in Edmonton. Earth Quest was a travelling exhibit that educates people on reducing, reusing and recycling. The focus of the Program is to create a dialogue between children and adults to help them realize potential changes in their homes and lives to improve the environment. EPCOR helped to put a Canadian spin on Earth Quest by creating displays pertaining to more regional environmental initiatives including solar power and landfill gas utilization. EPCOR now sponsors EcoFile, a weekly radio series on the economy, society and the environment. EcoFile is broadcast by CKUA, a province wide public radio station.

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EPCOR is Chair of the Board of Directors for both the Alberta Emerald Foundation for Environmental Excellence and the Edmonton Space and Science Centre. EPCOR is also a patron sponsor of the Alberta Emerald Foundation. EPCOR will be sponsoring the Triple Bottom Line Award, a part of the Alberta Business Awards of Distinction, presented by the Alberta Chamber of Commerce. This award is earned by a business that has financial success, environmental commitment and achievement, and community involvement.

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