Three. Sound check. 1 2 3 Three. >> Soundtrack. One, two, three. Sound check one 2 3. soundtrack. One, two, three. This is Craig Casar, your chair for the Hamilton Renewable Power Incorporated board of directors. Uh, today is June 4th, 2026, and welcome to this HRPI board of directors meeting. I see that we have quorum present. Uh so I'll remind everyone to take a look at their phones or any other electronic devices right now and make sure that they are set to a function that will not make any noise. Uh committee members or board directors here today are councelor Moren Wilson and councelor Mark Tatterson. Thank you for joining. We are going to begin with a approval of the agenda. Could I have a mover and second to approve the agenda as presented? Councelor Tison, Councelor Wilson, any discussion on the agenda? Seeing none, a show of hands, please. All those in favor? That carries unanimously. Thank you. Are there any declaration of of interest today? Seeing none, we will proceed to item four, adoption of the minutes of the previous meeting from March 12th, 2026. Could I have a mover and second to adopt the meeting uh the minutes of that meeting, please? Councelor Tison, Councelor Moren Wilson. Any discussion on those minutes? Seeing none, show of hands. All those in favor to adopt them. And that again is unanimous. We are now on to items for information. Uh 5.1 is an operational and business update. We have Yanni Samata, senior vice president of HRP, Inc. and Duncan Robertson, uh soon to be treasur, I guess, treasurer, um to provide the board with the presentation. I'll hand it over to you folks. Good morning uh Cher Kasar and members of the board. Uh my name is Yan Simatis. I'm the senior vice president of Hamilton Renewable Power Inc. Thank you for being here today for this board of directors meeting. >> Are we going to display the presentation? >> Yeah, no problem. >> Perfect. Thank you. Okay, before we begin, I'd like to briefly walk everyone through today's agenda. So, we will start with a financial update from Duncan Robertson, our soon-to-be treasurer, including a review of the 2025 audited financial statements, the proposed 2026 operating budget, year-to-ate results, and the overall financial benefits provided to the city of Hamilton. I will then provide an operational update on both the Woodward wastewater treatment plant and the Glenbrook landfill gas to energy facility including production performance, key operation operational issues and current initiatives underway at each site. Following the operational update, I will present three reports for the board's consideration. These reports relate to the future biogas utilization strategy at the Woodward facility, the long-term direction of the Glenn Brook facility, and a proposed transitional funding and corporate transition strategy for HRP, Inc. I will also provide an update regarding the successful Green Municipal Fund grant application and other corporate matters currently underway. Following the presentations, we will open the floor for discussion, questions, and board direction. With that, I will turn it over to Duncan to begin the financial update. Next slide, please. >> Thanks, Yanni. Good morning, Chair Casar and and uh board members of the Hamilton Renewable Power. My name is Duncan Robertson, prospective treasurer for for HRP. Uh today I have a few slides. will take you through a brief financial update uh which includes uh the 2025 audited financial statements, the 2026 operating budget, financial performance for the first quarter of 2026, and a cumulative summary of the financial benefits provided to the city of Hamilton since HRP's inception. >> Next slide, please. No, sorry. >> No, you had it. Sorry. Uh, so KPMG has completed uh its audit of the 2025 financial statements, resulting in no required adjustments or restatements. HRP is reporting a net loss from operations of $522,000 in 2025 compared to the $393,000 loss in 2024. As a result, there will be no dividend issued to the city of Hamilton in 2026. Next slide, please. HRP has three primary revenue sources. Electricity generation representing approximately 86% of total revenues in 2025. thermal energy produced as hot water at the Woodwork co-generation facility which is sold to the city of Hamilton and supports various municipal operations included including space heating at the wastewater treatment plant. Uh that represented approximately 13% of total revenues and the remaining 1% of revenues are related to interest earned on the company's cash balance. Uh total revenue for 2025 was slightly below $2 million. A 5% decrease compared to 2024. The year-over-year decline uh was driven by reduced operational performance at the Woodward facility. Uh the facility utilization averaged about 77% in 2025 compared to 87% in 2024. Uh resulted in approximately $54,000 in in lower revenues uh for electricity generation. uh in thermal uh energy production was also uh directly impacted uh as the byproduct and was approximately $33,000 less than the previous year. At the Glen Brook facility, production levels remain generally uh consistent with 2024 performance. Engine utilization averaged 49% during the year uh with one of the two available engines operating at any given time. Next slide, please. Total expenses increased by approximately 4% compared to prior year and remain generally consistent with 2024 as well as previous years before that. Uh reflecting ongoing requirements associated with periodic engine overhauls, preventive maintenance programs and routine service activities necessary to support operations. The increase was primarily attributable to consulting expenses incurred at the Woodward facility as well as higher levels of unscheduled maintenance activity due to aging equipment. Repairs and maintenance continued to represent the largest operating expense category accounting for approximately 55% of total operating costs. Next slide please. In comparison to budget, a net loss of 40 488,000 was budgeted uh uh in comparison to the actual performance of $522,000 loss. As previously mentioned, the decrease in revenue was primarily driven by lower utilization at Woodward, which operated at 77% versus the budgeted 90% uh efficiency. While the engine operated um above 90% capacity for most of the year, it had dropped below between below 50% in July, August, and December uh due to coolant leak repairs, power failure, and engine wiring issues. As thermal energy revenue is a byproduct of electricity generation, the reduced engine runtime at Woodward also negatively impacted thermal en energy revenues at uh at at the location as well. Overall expenses were lower than budget primarily due to lower contractual maintenance costs at Woodward. Lower consulting expenses due to timing differences and lower depreciation expense as depreciation uh is directly attributed to engine run hours. Next slide please. So this slide provides a highle overview of the proposed 2026 operating budget. Uh electricity revenue at Glenbrook uh is expected to continue declining due to reduced methane availability at the site which continues to impact uh gener uh electricity gener or generation capacity at the Woodward facility. The budget assumes production levels uh consistent with 2025 performance. The budget also assumes successful implementation of the proposed behind the meter solution allowing electricity generated at the facil facility to be sold directly to the city uh rather than through the IESO. Under this model, operations are expected to continue at levels similar to those achieved in 2025. The budget forecasts increased unscheduled mainten maintenance costs associated with aging equipment and includes higher consulting costs uh related to initiatives at the Woodward facility. Next slide, please. And lastly, this slide provides the summary of HRP's first quarter financial performance uh in comparison to budget for 2026 uh representing a loss of $150,000. The re total revenue for the period was $464,644 meeting the target. Cost of goods sold was also consistent with budget. Expectations resulting in a gross profit of $350, $382. Uh total operating expenses are approximately $5,000 below budget, primarily reflecting timing differences in planned expenditures and maintenance activities. uh management will continue to monitor operational and financial performance closely throughout 2026. Next slide, please. So, withstanding the operating losses in recent years, since its inception, HRP has provided uh just under $24 million in financial benefits to the city of Hamilton. uh those benefits are realized uh by way of combination of dividend distributions uh salary recovery and payments for methane supply. While dividends have not been issued over the past 5 years and are not planned again for fiscal year 2026, the city continues to receive value through ongoing salary recovery and methane sales. In 2025, payments to the city for methane and salary recovery totaled $767,000. Um so there's still um real net net benefit to to uh to taxpayers provided through through the operation of the HRP. And with that um um that concludes the financial update and I'll turn it back to senior vice president Yani Mattis who will give provide the operations update. Thank you. >> Thank you Duncan. I will now provide an update on the operational performance of HRP Inc.'s existing renewable energy generation facilities. The next few slides summarize production levels, runtime performance, key operational issues encountered during the first four months of 2026, and the status of both the Woodward and Glenn Brook facilities. These operational results provide important context for the strategic recommendations that will be presented later in today's agenda regarding the future direction of both sites. Next slide. Next slide, please. For the for the January to April period, Woodward production decreased by 23% comparing compared to the same period in 2025, while Glen Brook production decreased by 16%. At Woodward, the reduction was primarily related to significant electrical and equipment repairs. March and April accounted for most of the lost production including chiller issues, electrical outage, control system issues, and repairs to oil and coolant leaks. At Glenbrook, lower production was primarily driven by equipment downtime associated with repeated theft of bell communication cables, which resulted in a full plant outage from February 9 to 16 while replacement cabling was installed. Next slide, please. So engine runtime hours followed a similar trend. Woodward run hours were down approximately 17% year-over-year and Glen Brook run hours were down approximately 12%. At Glenbrook average monthly fuel flow remains approximately 40 uh 450,000 standard cubic meters and current fuel availability only supports operation of one engine at a time. These runtime reductions directly contributed to the lower production levels uh shown on the previous slide. Next slide please. >> The current ISO electricity sales contract for the woodworker generation unit expires on July 9, 2026. In preparation for that expiry, HRP, Inc. has been advancing a transition to a net metering configuration in order to continue utilizing the existing combined heat to power asset following the end of the ISO contract. As approved by the board early this year, HRP Inc. retained Trinity Engineering to prepare and submit the required connection impact assessment application to Electra Utilities. The CIA application was submitted on April 30th, 2026 and is currently under review by Electra Utilities. Under the proposed net metering configuration, electricity generated by the co-generation unit would offset electricity consumed directly at the Woodward wastewater treatment plant rather than being sold to the ISO. Since the Woodward facilities electrical demand significantly exceeds the approximately 1.6 6 megawatt output of the cogeneration unit. All electricity generated is expected to be consumed on site. While net metering is not intended to be the long-term biogas utilization strategy for the facility, it provides an important interim solution that allows HRP Inc. to continue utilizing the existing CHP asset while advancing the preferred long-term strategy that will be that will be presented in the next section. Next slide, please. Following board direction, GHD completed technical memorandum 2, which evaluated long-term biogas utilization strategies for the Woodward facility. Four scenarios were assessed. 100% RNG for third party sale, 100% RNG for city cell consumption, 100% CHP, and a hybrid RNG CHP scenario. The analysis confirmed that both the RNG and CHP pathways were technically feasible and closely ranked overall. However, the hybrid scenario ranked significantly lower due to the additional operational complexity associated with operating both systems simultaneously. From a broader strategic and financial perspective, the 100% R&D third party sale scenario demonstrated the strongest overall projected financial performance and the greatest long-term flexibility. Importantly, an RNG facility will provide HRP Inc. in the city with multiple future utilization options, including selling RNG to a third party to maximize financial returns or utilizing RNG internally to offset the city's natural gas consumption and retain the associated environmental attributes and carbon reduction benefits. One of the key considerations supporting the RNG recommendation is long-term decarbonization. As electricity grids continue to become cleaner through increased renewable generation, electricity will become easier to decarbonize over time. By comparison, sectors such as fleet vehicles, heavy equipment, and other natural gas dependent applications are expected to be more difficult and costly to decarbonize. RNG provides the city with a valuable tool to support these hard to abate applications while maintaining flexibility to adapt to future energy and climate priorities. In addition, an RNG facility positions the city to take advantage of future environmental credit programs and carbon markets while maintaining the ability to achieve direct greenhouse gas reductions regardless of future market conditions. As a result, the recommendation before the board today is to proceed with the RNG strategy and advance the project into the next phase, including 30% design development and refined capital costing. In addition to selecting the RNG pathway, the report also seeks board authorization to negotiate a new 5-year maintenance agreement with Tormon CAT. This agreement would include a major overhaul of the existing CHP equipment and ongoing maintenance support which is required to keep the code generation system operating reliably during the transition period while RNG planning, design, approvals and implementation are advanced. I would also note that HRP successfully secured approximately 140,000 in green municipal fund funding representing 50% of the physibility study costs. Next slide please. As part of the technical memorandum 2 evaluation process, it became clear that there are somewhat different perspectives when evaluating the preferred long-term pathway from the standpoint of HRP Inc. versus the broader city. From the HRP Inc. perspective. The existing CHP facility is an HRP owned operational asset and the CHP pathway provides the strongest standalone operational and financial benefits directly to HRP Inc. The CHP pathway also supports continued electricity generation, operational resiliency and continued utilization of the existing generating infrastructure. However, from the broader city perspective, the R&D pathway demonstrated the strongest overall projected long-term financial performance and aligns more closely with the city's broader decarbonization objectives. The RNG pathway also preserves long-term flexibility, allowing the city to either pursue thirdparty RNG sales or potentially utilize RNG internally in the future, depending on corporate priorities and market conditions. These broader strategic considerations ultimately supported the recommendation to proceed with the RNG pathway. Next slide please. Okay, now shifting to um Glennbrook. Report HRP 260003 included in today's agenda provides an updated environmental, financial, and operational assessment of the Glenbrook landfill gas to energy facility. The analysis confirms that the facility continues to experience declining land landfill gas volumes and reduced methane availability which directly impacts electricity generation capacity and overall revenue generation. As outlined in the report, the facility has experienced sustained annual operating losses of approximately 300,000 annually and those pressures are expected to continue as methane availability further declines over time. One important consideration identified through the analysis is that under Ontario environmental regulations, the city of Hamilton remains required to collect, manage, and destroy landfill gas regardless of whether cogeneration operations continue. As a result, this is not a decision between managing and not managing landfill gas, but rather a decision between different compliant approaches to methane destruction. The environmental analysis confirmed that both cogeneration and 100% flaring continue to achieve methane destruction and regulatory compliance requirements. While co-generation does provide greenhouse gas displacement benefits through electricity generation, those benefits continue to decline as landfall gas production decreases over time. Next slide, please. Based on the environmental, financial, and operational analysis completed, the recommendation before the board is to today is to approve a planned transition of HRP Inc.'s operations at the Glen Brook facility. It is important to note that this that this does not represent an immediate shutdown of operations. HRP Inc. will continue operating the facility during a managed transition period in order to fulfill existing contractual, operational, and regulatory obligations. Throughout this process, HRP, Inc. officers and the Waste Management Division will continue working together to develop a business case outlining the operational, staffing, financial, and ownership requirements associated with the city assuming responsibility for for landfill gas management at the site. In parallel, the external tax review contemplated under HRP 260004 report would help support future asset transfer evaluation, ownership structure considerations, and broader corporate transition planning. Based on the work completed to date, a managed transition is considered the most practical and operationally aligned path forward. The report also seeks authorization for the president or designate to execute any agreements and documents required to implement the approved transition strategy. Next slide, please. As outlined in report HRP 26004 included in today's agenda, HRP Inc. is currently operating in a broader transitional phase across both the Glenbrook and Woodward facilities. While transition planning continues, HRP Inc. must still maintain operations, fulfill contractual and regulatory obligations, and continue advancing technical and operational work associated with both facilities. Earlier this year, the board approved a direction to pursue a line of credit arrangement. However, following further financial and strategic review, the line of credit approach is no longer considered the most appropriate funding mechanism given the ongoing operation operating losses and the anticipated transition of HRP Inc.'s operations and assets over time. The recommendation before the board today is to seek sole shareholder approval for a forgivable loan from the city of Hamilton in an amount of up to 1.5 million to support continued operations and transition activities during this period. In parallel, the report also recommends retaining an external tax consultant to assess the tax legal and corporate structuring considerations associated with future asset transfers, ownership options, and broader corporate transition activities. Next slide, please. That concludes our presentation. At this point, we'd like to open the floor for any questions or comments you may have. >> Okay. Thank you very much to both of you for the presentation. So uh we have an opportunity for questions now. Just noting that uh there was reference to the three reports that we have laid on the agenda. So any questions for those could be held till any questions starting with uh member Tatison. Go ahead. >> Hi, thanks for the presentation. Um just said there's going to be a transition phase for the Glenn Brook landfill site. What's the timeline on that transition phase? through the chair. Thank you for the question, counselor. Uh the timeline is up to the external tax consultant to explain exactly the steps required for this transition to happen. So at this at this at this point, we don't have a clear uh timeline. >> Okay. Thanks for that. So, um, we've just completed a whole series of horizontal drilling wells and some extra vertical wells that are supposed to, you know, continue onward. Has that did that have that that I'm I'm I'm assuming there must have been some downtime as we were drilling those um, wells and so forth. Did that contribute to the 16% decrease in um I guess electrical uh generation output or was it just the fact that or or I guess what I'm saying is yeah that's my question. Did that did that contribute was there any downtime that contributed to that um less output? >> Who would like to tackle that question? uh senior project Paul Mahan senior project manager landfills through the chair uh counselor those the vertical wells I believe you're referring to are in the design phase as well as the horizontal wells there was no construction in recent years the last infrastructure we installed was um 2021 >> okay so that's okay thank you very much for that so then um Paul would it would would your anticipation be that um more gas would be more methane would come to you know, be be available for use if we if we complete those wells or are we shutting or are we not going to drill the wells >> through the chair? Uh there should be an increase in gas based on more wells being installed. Yes. Um I've previously provided estimates on that there. We're very we're conservative on estimates with that because it's not a easily predicted amount. Um, and sorry, what was the second part of your question? >> No, it's okay. You you you basically answered my question. My I guess my my point is that, you know, this is still worth pursuing. And if we're going to give the power to an external consultant to either continue or shut down, I have issues with that when I think um Paul is probably the best person to make those decisions. Is there a response to that? Yanni, go ahead. >> I just want to make clear to make clear that we're not suggesting shutting down the code generation operation at Glen Brook. We're suggesting to change the model that we're currently operating HRP in the current governance and operating model. It's not sustainable and we don't expect to be sustainable. We believe that under that it makes sense to transition and operate under the city. We still have a contract with the ISO until the end of 2028. According to Tormmont, the two co-generation units are still have operating life for at least 7 to eight years just because we run them 50% of the time. Uh I just so I just want to make clear again that we're not suggesting to shut down operations and go to 100% flaring. This was part of the uh direction that we received from the board last time. So that's why we explored uh the difference between if we go 100% flaring or continue code generation and if there's a different in emissions in the environment and the answer is no. It's basically the same thing. uh but for the reasons I explained before uh we believe that it better it's suitable better under uh waste management division comparing to the current governance of HRP Inc. >> Okay. Thanks. I I understand that more fully now. So I appreciate those answers. Thank you. >> Thank you, Councelor Wilson. Go ahead. >> Thank you, Chair. My apologies. Can I get just get some procedural um advice from you? I'm I'm sorry. Are all three um recommendation reports on the floor? >> Uh no, they are not yet. Just the presentation, although the presentation did touch on them. >> So there's a little bit of overlap. So if you want to focus any clarification questions to the presentation, you can do that now and then when we get to the reports, dive deeper if that works for you. >> Thank you. Appreciate that guidance. Um I'm I I I am just trying to understand better the sequence of steps. um with as an example a particular focus on um the reference to they'll have to assess the the the the tax issue with any kind of change from this entity to the city for example. Can I just have a a a brief review of the the sequence of steps to ensure that I have a good handle that that step that assessment is being done uh at the most appropriate time uh to in inform deliberations and provide assurance if that question makes any sense. Yeah, through the chair. Um, so at this stage we're really looking at exploratory uh measures on on government. So, so we're looking for recommendations from the consultant on the proposed governance model. um not necessarily committing to to um what operations would look like in the future, but at this stage recognizing that our current uh operating model in the chargebacks to the city in terms of supply of of methane and electricity is not going to result in a sustainable enterprise in HRP. Um so looking at a and you know also recognizing that the the estab you know the rules under the electricity act and establishment of HRP is no longer in play that there are other options in terms of governments available uh that we that we then explore those and in terms of whether there's tax implications or not or whether it makes more sense for this to be a publicly funded and cityrun asset. um getting that advice through external consultation and then making the decision at that point on what what the future looks like for for running at at Glenn Brook in in HRP. So hopefully that that provides a little bit of clarity. So if if I've understood you correctly, the assessment of the full tax implication is in relation to the ultimate governance model, whether it's with the city or city waste or whether it's with this entity. It it's it's not vital for us to receive that assessment prior to any decision to to wind up. I'm just forgive my uh ignorance. I'm just trying to understand the sequence and what that information is going to be used to inform what Thank you. >> Yeah. through the chair. So, so that's correct. It's really to make an assessment of of governance and and ultimately who who governance and who who would be responsible for operations of the assets on the go forward basis and and >> really you know establishing the rules under under you know um whether it's we're considering transfer pricing from a from an external entity to the city or if it's cityrun assets and they're generating um the energy on on its behalf. Okay. Uh, thank you. Uh, now or at the Y >> Director Story just wanted to jump in, I think, on that topic if that's okay. >> Oh, thank you. Yep. I I sure can. Thank you so much. Uh, good morning. It's Angela Story, director of waste management and perhaps councelor Wilson, um, what I could add when our team with HRP, Inc. met with the city legal staff. Um what we were told there because we talked a lot about asset transfer. So uh the two co-gen um operators at the Glamborrook landfill, we would need to own those. So we thought, okay, great. Just give them to us, right? And then we'll we'll kind of we'll go forward. What we learned was the lawyer said there could be capital gains. So there could be a range of dollars that we might need to pay to take ownership of that equipment. So that's the part from a Glamrook landfill perspective is really about the asset transfer on um you know we have we have done a decent business case. We kind of know what go forward looks like except we don't know what it's going to cost for us to take over. >> And so from that perspective from a sequence perspective we know that this is a great idea based on our assumptions. Mhm. >> We just don't quite know what it's going to cost yet and we couldn't go forward without that. >> Right. So, this is the part where I insert the joke about the lawyers >> right now. Okay. Thank you. >> Um, thank you for that clarity. Uh, I I do have a question uh either now or or later. Uh, just so I could better understand the shift of um the previous recommendation of um a line of credit to a forgivable loan. uh just further information of when when does that come up and who brings it up and how and the relationship to the next budget cycle. Thank you. >> Yeah. So, I think we could just bring that up again when we get to that item on the agenda if that's okay. >> Absolutely. >> Okay. Any further questions? >> Um not at this time. >> Okay. I just have one question so I'll pass the chair to councelor Tatison. Uh it was just about the uh connection impacts uh assessment application and the transition from the contract to de metering. Um so the contract expires July 9th. The submission was April 30th. Is there any expected downtime or gap in production revenue or anything? Because are we going to get the application approved in time? If that's clear. >> Thank you for the question through the chair. Uh we're not sure. We met the deadline according to Electra. There was a delay from the Electra. They required 45 days to process the application. Uh but we know with they did not process it as soon as they received it from us from our consultant. Uh we hope that there's not going to be a gap. Uh but I can't be 100% sure. >> Okay. But it is possible then that there's some gap of not being able to sell electricity or output the electricity. Is that correct? >> Okay. Just want to understand that. >> Okay. I will take back >> take take back the chair. Thank you. Okay. So, uh I think we're good on that item. So, I have a mover and second to receive the presentation. Councelor Tatterson, Councelor Wilson. All those in favor? And that carries unanimously. Thank you. So, we are on to uh the report then. So on the memo that accompanies the presentation and we will if there's any questions we can have those now but I think they've probably already been asked and then we will receive that as part of the board of director resolutions at the end of the meeting. Okay. So moving on to 5.2. It's report HRP260005 green municipal fund grant approval for the Woodward bio gas to RNG enhancement feasibility study. Okay. So now would be an appropriate time for any questions on this report. It was touched on in the presentation. The grant will cover up to half of the costs. Okay. So I'm seeing we're okay to move on. Again, we will receive that with the resolutions. So now moving on to items for consideration. We have three items. 6.1 is HRP260002. It's the Woodward wastewater treatment plant bio gas utilization strategy recommended. So, now would be a time for any questions on this report. I'll pause and just let everyone reference their notes. >> Councelor Wilson. Thank you chair. Uh if I have the correct report um the the transition strategy that's referenced um I know it's speculative but it's referenced in the report the reasons that the other party Toront could could back out and you know it's explaining the the need for termination provisions. So if I could just have further information on that. Thank you >> through the chair. Uh the termination clause is a standard commercial provision that provides flexibility to both parties if future circumstances circumstances change. For example, if the RNG project advances faster than anticipated, if the facilities retired earlier than expected, or if operating conditions change significantly, either party would have the ability to terminate the agreement with appropriate notice. Uh, at this time, Tormund has indicated a willingness to continue supporting the facility and has provided pricing assumptions for the proposed maintenance agreement. And uh as staff we do not view termination as a significant risk but rather as a prudent contractual safeguard. >> Thank you for that assurance. >> Those are my questions. >> Okay. Uh I do have a question. I'll pass the chair again to council Tatison. Um it's on page seven uh where the net present values are discussed and it's the options for RNG between um selling it and using internally and the net present value for selling is 27 to $35 million over the project life cycle whereas keeping it in use for use internally it's a negative uh value of 30 to 35 million. So quite a wide swing there. So, it's the same product being output. Uh, and I understand that if the HRPI is not selling it, then there's no revenue. Uh, but there's got to be an offset somewhere. Maybe it's on the I guess on the city side where there's Can you just help explain that wide variance in net present value >> through the chair? The difference comes down to whether we sell the RNG or use it ourselves under the RNG sales scenario. would generate significant revenue because renewable natural gas commands a premium market price. Under the self- consumption scenario, the city avoids purchasing conventional natural gas, but it also gives up the opportunity to sell the RNG. So, to put it in perspective, uh GHD estimated the life cycle cost of producing RNG at approximately 40 cents per cubic meter compared to the city's historical natural gas cost of approximately 34 cents per cubic meter. So under the self- consumption scenario, the city is essentially paying a premium to use renewable uh gas instead of conventional gas. That premium supports greenhouse gas reductions and allows the city to retain the environmental attributes, but it doesn't generate the same financial return as selling the RNG into the marketplace. That's why the self- consumption scenario has a much lower net present value despite providing significant environmental benefits. >> Okay. Thank you for that. So it's just a financial construct really. So if this was all managed by the city then that whole piece of it financial bit of it would be well they'd still have to produce it I guess but would there I guess be a different conclusion if it's not having to be a transaction between HRPI and the city and is that considered in the the windup business case? >> Yeah. So the city would absolutely to realize value through avoided natural gas purchases. Uh so GHD estimated that over the 20 year project uh life the RNG produced could offset more than $40 million in conventional natural gas purchases. However, under the self- consumption scenario the city is choosing to use the RNG itself rather than sell it into the marketplace where RNG commands a premium value. So as a result, the financial return is significantly lower than the RNG sale scenario even though there are meaningful environmental and avoided fuel purchase benefits. Yeah. Okay. So there's natural gas being purchased, there's natural gas being generated and sold. Uh in the bigger picture, that's a wash because energy consumption arguably isn't going to change. So then it comes down to how it's accounted whether it's just financial, whether it's environmental benefits, whether it's the city's emission reduction targets and does it get credit for that versus not. Okay. Okay. I understand that. So it's really um the externalities are being considered in one scenario and not in the other. Okay. Um and then just a second question on appendix B in the report is just about the methane slip and the methane slip was if you could a define what that means. I got a sense of that, but uh and why it's so significantly greater on the CHP option versus RNG, please. >> Yeah. So, methane sleep refers to methane that passes through the combustion process without being completely destroyed. So, in a C CHP engine, a small percentage of methane remains unccombusted and exits through the exhaust. Because methane is a significantly more potent greenhouse gas than carbon dioxide, even relatively small amounts can have a material impact on greenhouse gas calculations. Uh the analysis assumes approximately 6.4% methane slip for CHP and approximately 1% methane slip for RNG systems. So as a result, CHP has a higher life cycle greenhouse gas emissions even though both systems are effectively utilizing the bio gas. Okay. So, uh, methane released into the environment is obviously a main priority to prevent and so what I heard you say is just the technology of the energy conversion and the CHP it is not as efficient in using the the um the gas or the the input. Okay. Uh, that makes sense. Thank you for that. Okay. Um, those are all the questions I had. I'll take back the chair. Did that spur any other questions on this report? No. We're good to move on. Okay, we will um approve that report as part of the board of director resolutions. So that moves us on to 6.2. It is report HRP260003, Glenn Brook facility planned windup and transition strategy. We did touch on this this of course in the presentation and some questions. Uh but now would be a time to ask any additional questions. I'll pause there to see if there are any. I'm seeing no from councelor Tison. Councelor Wilson, go ahead. >> Thank you, Chair. uh really swimming in un unfamiliar waters for me. But um just wondering if I could hear from staff um and perhaps director's story just trying to understand the relationship between um this work um and uh the waste management strategy and our efforts at um changing our plateaued uh diversion rates. Um, could it could I could I hear the context of that in terms of organic waste and implications and expectations and goals and any consequence? Thank you. >> Uh, for sure. Thank you again, Angela Story, director of waste management, uh, through the chair to councelor Wilson. Great question. Councelor Kazar actually sent some, uh, written questions across and had a very similar one. So, thank you for bringing it forward. Um, as you saw, we did bring our solid waste management master plan for the next 25 years to a public works committee last week. And so in there, a big driver is uh reducing waste from the landfill um primarily through increased participation in our green bin program. Yeah. >> Um the relationship between methane and the green bin program though is the more actual household garbage and food that goes into the landfill increases the methane which would increase our profitability with with this program. However, right now we have a composting facility that is capped at 20,000 tons for processing each year. Um and that was a ministry um approved level based on some uh closure of our facilities back in 2018. So right now uh in this report it references our 2024 tonnage and we brought in just over 19,000 uh tons in 2025. However, it dipped a little bit so we're just below 19,000 tons. Uh what we're working on now with the approval of the master plan would be implementing a number of um strategies to increase green bin participation. However, it takes uh a pretty lengthy time with small initiatives um for increasing the amount of food waste that will go to our composting facility. So, we're currently working with the Ministry of the Environment to increase our tonnage with no capital improvements required to 25,000 tons. And so, we're hoping, we've already applied for that. that we've met with the local offices of the ministry and um that information will come forward in the organic strategy report later this year. Um so we're looking at a capacity availability of 25,000 tons which will take us a few years to get there with the smaller strategies. The big jump will be um if in the next waste collection contract um a service level change such as moving to bi-weekly garbage um if that was approved and that's what came in after 2029 or 2030 uh we would see a bigger spike around the province when municipalities implement bi-weekly waste collection. Uh generally they see an increase of 5 to 15%. >> Yep. >> In their diversion rate. So we would we would expect a bigger jump at that point. So, we're not anticipating um having to divert or having to send any green bin waste that should be going to the composting facility to the landfill. Um so, regardless of the uh items that were the initiatives that we're putting forward, we don't expect to exceed our cap in such a way over the next 5 to seven years that we would need to divert that waste up to the the landfill. >> Thank you, Director Story. I understand that. Good. Okay, I think that's Mr. McKenna, if I have it correct, who has his hand up. Would you like to add to that? >> Through the chair to the council. Apologies, uh, counselor. I accidentally hit that, so please ignore me. >> Okay, so no legal implications to that question. That's good to know. Thank you. >> You missed the earlier uh joke reference to lawyers, so good thing. Okay. >> Oh, I heard a counselor. >> Order. I'll have order. I've heard them all. >> Okay. Uh, councelor Wilson, did you have any other questions? >> No. Thank you, chair. >> Okay. I had questions, but I think they've been sufficiently answered. Um, so I don't need to ask anything. Uh, quick check. Anything further? Councelor Tatterson, you're okay on this report? Okay. So, we will keep moving along and deal with that approval under the resolutions. So that moves us on, if I'm following properly, to 6.3 HRP2604, forgivable loan and external tax consultant to support transitional operations. And there was a question earlier on this council Wilson, I think you had. If you still have that, >> but I'll open it up. >> Sorry, chair, it's a little challenging virtually. Are you recognizing me now or sorry is that is the question? Okay. >> Yes. If you'd like to be recognized, you are. No, >> I am so recognized. Thank you. Um I was just wondering if I could receive more information on um some of the particulars of of this um timing, who champions it, whether there's been discussion with city financing on is this tax stabilization? Is this what possible sources? When will this be known? When will this committee know it? Thank you. >> Thanks through the chair uh to councelor Wilson. Um so in terms of the shift from from what was previously considered as a line of credit uh to the forgivable loan really it's about um you know the pro the for the foreseeable profitability profitability of of the company and whether we be able to repay those obligations uh through a line of credit. Uh so really this is looking at a more transparent uh lens um in that we don't have perceivable or foreseeable profitability or ability to repay. So wanting to then switch to a vehicle that's that's more transparent with the with the with the sole shareholder and that this would be a a essentially shifting the risk of of transition to the sole shareholder uh through a forgivable loan uh that would see us through through the next essentially uh 3 years uh potentially in a in a windup scenario um to to be able to cover losses. Uh in terms of the strategy, this was discussed with city finance uh treasur and general manager uh Ziggger uh which is um you know the the recommendations done in consultation with him. Um in terms of the actual source of funds that would be decision by by city staff at that point in terms of direction from from sole shareholder. Uh but um and you know the sources would likely be either investment stabilization reserve as the as you know what was what was being uh or what was re receiving the funds over dividends from from past years uh or or as you mentioned tax stabilization but that would be a decision uh by city staff at that time. >> Okay. Thanks councelor Wilson and I guess I would just add to that um because this would go to sole shareholder and then to city council and of course overlap in those decision makers and we just need to have a very clear rationale business case on the importance which of course has been summarized here in different segments uh but just could potentially see uh challenges if it's not clear um so I want to make that as smooth as possible assuming the resolution passes today. Uh, councelor Tatterson, any questions on this? >> No, I'm good. Thank you. >> Okay. So, then we are on to the board of director resolutions if I have that correct. Right. Yes. Okay. Item 10 10.1 is resolutions of the Hamilton Renewable Power Incorporated board of directors. So I'll need a mover and seconder to put the resolutions on the floor for report 02 03 04 05 06 and then some additional uh resolutions including uh appointing Duncan Robertson as treasurer. So move and second for that please councelor Tison and councelor Wilson. Any further discussion? None. Okay. And that's just a show of hands report or approval. Okay. Show of hands. And that carries unanimously. Thank you. And there being no further business, we are adjourned at 10:24 a.m.