1. Integrated Resource Plan Technical Conference 2 October 4, 2011

2. Today’s Meeting Background Purpose of IRP Stakeholder Process Break IRP Drivers and Constraints Demand and Supply Options Lunch Round Table Discussion Next Steps www.halifaxwater.ca2

3. Halifax Water – Background www.halifaxwater.ca3 1945 – through the Halifax Public Utilities Commission Act – Utility and Review Board begins regulating water utilities 1996 – Municipal amalgamation occurred – City of Dartmouth, City of Halifax, Town of Bedford and Halifax County merge Wastewater (WW) & Stormwater (SW) assets become responsibility of new Halifax Regional Municipality (HRM) Water system assets transferred from City of Dartmouth & Halifax County – Halifax Regional Water Commission

4. Halifax Water – Background…continued 2007 – HRM transferred WW & SW assets to Halifax Water Regulatory oversight by UARB (WW & SW assets) Required a few years to understand the value of the inherited assets Historical underinvestment in WW & SW assets 2010 – Halifax Water rate case made it clear that a long term planning approach was needed 2011 – NSUARB orders Halifax Water to prepare IRP www.halifaxwater.ca4

5. Regulatory Oversight Government oversight of municipal water utilities is provided by two government agencies: www.hrwc.ca5 Nova Scotia Environment (NSE) Regulates water safety issues Nova Scotia Utility and Review Board (NSUARB) Regulates water rates

6. Integrated Resource Plan (IRP) Overview An Integrated Resource Plan (IRP) is a comprehensive planning method that: Uses a long-term planning horizon Recognizes environmental constraints Includes stakeholder participation Assesses supply-side & demand-side management options Uses scenario analysis Conducts least cost financial analysis on scenarios that fulfill the performance requirements Recommends a preferred plan www.halifaxwater.ca6

7. The purpose of the IRP is to create: Method for evaluating alternative servicing scenarios Long-term direction for Halifax Water Comprehensive assessment of system & investment options Framework for detailed capital investment analysis (more detailed will be done as capital needs are budgeted and approvals requested) Risk management plans for issues & key uncertainties facing Halifax Water Confidence in financial analysis in support of future rate applications to the NSUARB www.halifaxwater.ca7 Integrated Resource Plan (IRP) Overview

8. IRP Charter “We will create an Integrated Resource Plan (IRP) that provides clear direction for Halifax Water and its rate-payers on the resources required to develop world-class cost-effective water, wastewater and stormwater infrastructure systems that meets the needs of the present and future generations. The IRP will also determine the capital and operating costs required to support the present and future infrastructure systems.” www.halifaxwater.ca8

9. IRP Scope www.halifaxwater.ca9 IRP will address infrastructure within Halifax Water’s mandate Water system Wastewater system Stormwater system IRP scheduled for completion by June 2012

10. Halifax Watersheds www.halifaxwater.ca10

11. Asset Renewal www.halifaxwater.ca11 Water, Wastewater & Stormwater Infrastructure Private and On-lot Not Included in IRP

12. www.halifaxwater.ca12 Lakes, Streams and Rivers, Wetlands - Nova Scotia Environment Floodplains - Nova Scotia Environment and Halifax Regional Municipality On-Lot Drainage - Halifax Regional Municipality and Property Owner Major Drainage Routes - Halifax Regional Municipality Storm Sewers, Inlets, Ditches Culverts and SWM Ponds – Halifax Water Stormwater Systems: Multiple Jurisdictions

13. Integration in the IRP www.halifaxwater.ca13 Common planning and land use projections used to integrate requirements across all infrastructure systems Common decision framework and criteria used to determine integrated project/program priorities Wastewater priorities assessed on a sewershed basis for WWTF effluents, CSOs and SSOs

14. Integration in the IRP… continued www.halifaxwater.ca14 Integrated analysis of WW & SW systems to assess impacts on WW collections and treatment facilities Demand & supply integration options (e.g. water efficiency) will provide benefits to both water and wastewater systems Common costing and financial analysis framework

15. Real time collaboration with Halifax Water & NSUARB IRP Process www.hrwc.ca15 NSUARB Halifax Water Tellus / Wright-Pierce / Hydrologics Tellus / Wright-Pierce / Hydrologics Genivar / XCG / Halcrow IRP Stakeholders Consultation

16. IRP Stakeholder Process Technical Conferences Terms of Reference Assumptions & Plan Considerations Resource Plans & Sensitivities Resource Plan Analysis Present Draft IRP One-on-One Stakeholder Meetings Early identification of issues www.halifaxwater.ca16 March 24, 2011 October 4, 2011 December 6, 2011 March 6, 2012 May 9, 2012

17. www.halifaxwater.ca17 Technical Conference 2 Technical Conference 1 IRP Terms of Reference IRP Terms of Reference Technical Conference 3 Assemble Resource Plans Stakeholder Meetings  IRP Drivers  Demand / Supply Options  Assumptions  IRP Drivers  Demand / Supply Options  Assumptions Finding the Preferred IRP

18. www.halifaxwater.ca18 Evaluate Performance/ Assess Costs Technical Conference 4 Prepare Draft IRP Technical Conference 5 Halifax Water Integrated Resource Plan Candidate Plan Analysis Finding the Preferred IRP…continued

19. What We Heard Have Halifax Water to be the leader on a number of issues outside Halifax Water’s mandate watershed planning on-site systems monitoring and programs land use planning stormwater management Explain the jurisdictional constraints across the infrastructures Broaden the IRP outreach to include the general public Prepare ratepayers / stakeholders for the rate increases that will likely come out of the subsequent rate application www.halifaxwater.ca19

20. www.halifaxwater.ca20 Break

21. IRP Integrates Three Drivers www.halifaxwater.ca21 GROWTH COMPLIANCE ASSET RENEWAL ASSET RENEWAL

22. www.halifaxwater.ca22 Asset Renewal

23. Current Asset Profile Water System Large Water Supply Plants – 3 Small Community Water Supply Plants – 2 Small Community Well Systems – 3 Storage – 18 Reservoirs Pumping Stations – 20 Transmission/Distribution Mains – 1,307 km Control chambers – 110 Appurtenances ~21,000 Water Meters – 79,000+ Dams – 6 www.halifaxwater.ca23

24. Current Asset Profile Wastewater System Harbour Solutions Wastewater Treatment Facilities – 3 Large Wastewater Treatment Facilities – 4 Small Community Wastewater Treatment Facilities – 8 Pumping Stations – 172 Sewers – 1,400 km Storage – 5 Appurtenances ~22,000 www.halifaxwater.ca24

25. Current Asset Profile Stormwater System Storm Sewers – 789 km Cross culverts – 8 km (estimated) Ditches – 130 km Retention Ponds – 25 Appurtenances ~32,000 www.halifaxwater.ca25

26. Expected Asset Lives Tools & work equipment5 – 30 years Office equipment, transportation3 – 10 years Pumping equipment5 – 20 years Treatment works equipment10 – 20 years Water meters20 – 25 years Service connections50 – 60 years Distribution reservoirs75 years Structures, buildings50 – 100 years Water, wastewater & storm pipes60 – 100 years www.halifaxwater.ca26

27. Infrastructure Asset Serviceability The capability of a system of assets to deliver a reference level of service to customers and to the environment now and into the future Assets are not maintained for their own sake but for the service they perform Service indicators used to measure Levels of Service e.g. Service outages of water (target 200 connection hrs./1000 customers per year) www.halifaxwater.ca27 “Serviceability to Customers and the Environment”

28. www.halifaxwater.ca28 HW Corporate Balanced Scorecard HRWC embarked on a Continuous Improvement Program in 1999 Introduced the concept of Corporate Balanced Scorecard (CBS) in 2001 Developed a new mission statement in 2007 Identified critical success factors (CSFs) in support of the new mission (e.g. High Quality Drinking Water)

29. www.halifaxwater.ca29 HW Corporate Balanced Scorecard Developed organizational indicators (OIs) to measure performance (e.g. Bacteriological tests – target 99.3% free of Total Coliform) With the 2007 merger, Halifax Water expanded the CSFs and OIs across wastewater and stormwater infrastructure Periodic reviews of the CSFs and OIs are done to confirm the continued relevance of specific performance indicators or in response to changing requirements Provides the basis for establishing Levels of Service

30. www.halifaxwater.ca30 System Asset Management (OIs) Water supply leakage target of 200-210 L/service connection/day Inflow and Infiltration (I&I) target of 200 inspections on private property/year

31. Major Asset Renewal Issues Inherited wastewater and stormwater systems asset renewal deficit Recapitalization needed over 30 year timeframe across all wastewater and stormwater asset classes Water systems will also require renewal of key assets Pockwock WSP 34 years old in need of refurbishment Transmission mains require timely replacement to avoid catastrophic failure and strengthen system Halifax Water extending Asset Management Program Improving knowledge of assets and determination of optimal asset renewal rates www.halifaxwater.ca31

32. IRP Asset Renewal Assumptions www.halifaxwater.ca32

33. IRP Asset Renewal Assumptions Renewal requirements and rates will be determined individually for each asset class Renewal rates will be based upon: Current condition Expected remaining asset life Current performance with respect to existing Levels of Service indicators Industry benchmarks Best professional judgment will be applied where there are data gaps Preliminary, rough estimates for minimum asset reinvestment – $67M/year ($1.6B over 25 years) www.halifaxwater.ca33

34. www.halifaxwater.ca34 Regulatory Compliance

35. Regulatory Perspectives Principal regulation specific to each system Water – Nova Scotia Environment (NSE), Health Canada Wastewater – NSE, Environment Canada Stormwater – NSE, HRM Considers three perspectives Existing – Current regulatory requirements Expected – Regulatory requirements in near future Future – Possible future regulatory requirements www.halifaxwater.ca35

36. Existing Water System Regulation Guidelines for Canadian Drinking Water Quality http://www.hc-sc.gc.ca/ewh-semt/water-eau/drink- potab/guide/index-eng.php http://www.hc-sc.gc.ca/ewh-semt/water-eau/drink- potab/guide/index-eng.php Nova Scotia Environment Capacity Drinking Water Quality Monitoring & Reporting Halifax Water Response Water Quality Management Plan Compliance Monitoring and Reporting CBS – Organizational Indicators www.halifaxwater.ca36

37. www.halifaxwater.ca37 Water System OIs Percentage of water supply plants meeting product regulations of their permits (ongoing) Bacteriological tests (Monthly target of 99.3% free of Total Coliform) Customer satisfaction about water quality (Target of 85% rating water quality as good to excellent) (annual)

38. www.halifaxwater.ca38 Expected Water System Requirements Halifax Water adopted OIs for expected requirements (extended goals) for five drinking water parameters that exceed current compliance requirements for residual disinfectant (chlorine), trihalomethanes (THM), haloacetic acid (HAA), particle removal, corrosion control (lead) Meet all current compliance requirements Meet most but not all OI extended goals for the water quality parameters Water Quality Master Plan being implemented to reach compliance for all extended goals

39. www.halifaxwater.ca39 Future Water Regulatory Requirements Continued emphasis on reducing disinfection by- products e.g. THMs, HAAs and other compounds Ensuring distribution system water quality Residential lead Minimum disinfectant residual Ongoing assessment of microbial risk (e.g. Quantitative Microbial Risk Assessment (QMRA)) New contaminants

40. www.halifaxwater.ca40 IRP Water System Assumptions Water supply systems meet current compliance requirements Water Quality Master Plan through operational improvements will meet extended goals Future regulatory requirements will emerge (may result in different assumptions and scenarios for future IRPs)

41. www.halifaxwater.ca41 Current Wastewater Treatment Facility Regulation Nova Scotia Environment Capacity Effluent Quality Monitoring & Reporting Biosolids Quality Canadian Food Inspection Agency – Fertilizer Act Biosolids Quality Halifax Water Response Wastewater Treatment Facilities Compliance Plan (DRAFT) Compliance Monitoring and Reporting CBS – Organizational Indicators

42. www.halifaxwater.ca42 Environment Canada – Atlantic Canada Wastewater Guidelines Manual (2006) Combined Sewer Overflows (CSOs) All new sewer systems be designed as separate sewers Requirements for CSO treatment specified by the regulatory agency having jurisdiction Reduce, where possible and practical, the frequency and duration of CSOs to minimize impacts on receiving water Current Wastewater Treatment Facility Regulation

43. www.halifaxwater.ca43 Environment Canada – Atlantic Canada Wastewater Guidelines Manual (2006) Sanitary Sewer Overflows (SSOs) Chlorination unless waived by the regulatory agencies Alarmed and equipped to indicate frequency and duration of overflows, and designed to permit manual flow measurement All overflows should be recorded and reported to the regulatory agencies Current Wastewater Treatment Facility Regulation

44. www.halifaxwater.ca44 Wastewater System OIs Percentage of wastewater treatment facilities meeting discharge regulations of their permits (excludes Harbour Solutions plants) # of CSO and SSO events per year # of public health and environmental regulatory infractions resulting in a written warning # of public health and environmental regulatory infractions resulting in a conviction

45. Expected WWTF Regulatory Requirements Environment Canada – Draft Wastewater Systems Effluent Regulations (WSER - 2011) National Performance Standards – minimum requirements cBOD 5 <= 25 mg/L TSS <= 25 mg/L TRC <= 0.02 mg/L Un-ionized ammonia <=1.25 mg/L at 15 ˚C Effluent Discharge Objectives Based on the result of Environmental Risk Assessments (ERA’s) Site specific – assimilative capacity of the receiver

46. Expected WWTF Regulatory Requirements Halifax Harbour Solutions plants will require upgrade to secondary treatment to comply with expected Environment Canada WSER Three community WWTFs will require upgrade to comply with expected Environment Canada WSER chlorine residual requirements One WWTF (Eastern Passage) is being designed to comply with expected Environment Canada WSER (currently under expansion/upgrade)

47. www.halifaxwater.ca47 Future WWTF Requirements Discharge to limited receiving streams or lakes Increased requirements for advanced nutrient removal nitrogen and phosphorus Requirements for emerging pollutants e.g. personal care products, pharmaceuticals and endocrine disruptors

48. www.halifaxwater.ca48 Expected CSO/SSO Requirements Environment Canada - Wastewater Systems Effluent Regulations (WSER - 2011) Monitoring and Reporting (5 years) Duration of overflow Volume No of days in month Annual report Development of CSO Management Plan

49. www.halifaxwater.ca49 Future CSO/SSO Requirements CSO No increase in CSO frequency related to development or re-development unless it occurs as part of an approved CSO management plan No CSO discharge during dry weather, except during spring thaw and emergencies Floatable material will be removed, where feasible SSO SSO frequencies should not increase due to development or re-development SSOs should not occur during dry weather, except during spring thaw and emergencies

50. www.halifaxwater.ca50 IRP WWTF Assumptions A number of existing WWTFs are a current compliance priority Harbour Solutions WWTFs will require upgrade to meet expected Environment Canada WSER requirements A number of other WWTFs will require upgrade to meet WSER requirements The WWTFs discharging to sensitive receiving streams and lakes will likely require significant upgrades beyond current effluent limits or WSER requirements over the planning period of the IRP (could require very costly treatment system upgrades to serve small customer base)

51. www.halifaxwater.ca51 IRP CSO/SSO Assumptions Halifax Water will be developing plan to improve overflow compliance SSO Fresh water discharges Set target frequency based on events per average year Prioritization by public health & receiving water impacts CSO Marine water discharges Set target frequency for recreational areas based on events per aquatic recreation season (e.g. NW Arm) Set target frequency for other marine waters based on events per average year Prioritization by public health & receiving water impacts

52. www.halifaxwater.ca52 CSO/SSO Knee-of-the-Curve Analysis

53. www.halifaxwater.ca53 CSO/SSO Knee-of-the-Curve Analysis

54. www.halifaxwater.ca54 Current Stormwater System Regulation Nova Scotia Environment (NSE) Water Strategy Stormwater approvals Watercourse alterations Wetlands Conservation Policy Floodplain delineation and management Erosion and Sediment Control Guidelines

55. www.halifaxwater.ca55 Current Stormwater System Regulation Halifax Regional Municipality Land use planning Stormwater management and planning Development approvals Stormwater Management Guidelines Lot grading

56. www.halifaxwater.ca56 Future Stormwater System Regulation Watershed based planning and requirements Ecosystem based requirements Water balance criteria Water quality requirements Climate change adaptation Low Impact Development

57. www.halifaxwater.ca57 Growth

58. www.halifaxwater.ca58 Growth Forecasting Actual growth rates for period 1996 to 2006 ~ +0.8% Based on estimates for Regional Plan (2006 – 2026) by HRM Planning 2006 - 2026 growth rates extended to 2041 Range of growth rates being considered by IRP Low ~ 0.47% Baseline ~ 0.81% High ~ 1.14%

59. www.halifaxwater.ca59 Growth Forecasting Growth allocation as per 2006 Regional Plan targets: Rural areas ~25% Suburban ~ 50% Regional Centre ~ 25% Includes three suburban greenfield areas as per Regional Plan : Port Wallace Susie Lake Sandy Lake

60. www.halifaxwater.ca60 Funding of Growth Benefits-based funding approach will be used for growth (i.e. those who benefit should pay) Rate-based funding will cover regulatory and asset renewal system improvements

61. Rate of Growth Determines Timing of Needed Infrastructure Expansion www.halifaxwater.ca61

62. www.halifaxwater.ca62 IRP Growth Assumptions IRP will plan infrastructure to meet requirements of future growth in a timely manner Planning period 2011 - 2041 IRP will follow Regional Plan/HRM Planning growth projections IRP will include a range of growth rates Low ~ 0.47% Baseline ~ 0.81% High ~1.14%

63. www.halifaxwater.ca63 Demand Reduction Options

64. www.halifaxwater.ca64 Demand Reduction Options* *IRP Terms of Reference

65. www.halifaxwater.ca65 Water Demand Reduction Options Water options aggregated into Leakage reduction (e.g. non-revenue water, customer leakage reduction, etc.) Indoor/outdoor water efficiency Water rates considered in separate study Water efficiency may also benefit wastewater system

66. www.halifaxwater.ca66 Wastewater Demand Reduction Options Wastewater options aggregated into I/I reduction (e.g. lateral repairs, lining, manhole rehabilitation, extraneous flow reduction, construction standards) Impact of water efficiency Wastewater rates considered in separate study Wastewater effluent recycling or grey water reuse not considered at this time (would require engagement of Nova Scotia Environment)

67. www.halifaxwater.ca67 Stormwater Demand Reduction Options Stormwater demand reduction not within Halifax Water jurisdiction and hence not considered at this time HRM’s Regional Functional Stormwater Plan should examine this issue Halifax Water collaborating and providing input into the Regional Functional Stormwater Plan

68. Impact of Demand Reduction on Required Infrastructure Capacity www.halifaxwater.ca68 Cost ($) of demand reduction must be balanced by benefits ($) from deferred infrastructure expansion

69. Current I/I Estimates for Selected WWTFs www.halifaxwater.ca69 ADF = average daily flow

70. www.halifaxwater.ca70 I/I Reduction Studies Areas shown represent historical studies where I/I was identified/quantified and efforts made to identify sources

71. www.halifaxwater.ca71 Halifax Urban Core Water Demand Indoor/outdoor water use declined 5.9% since 2006/07 Corresponds to ~ 1.2% per year reduction

72. www.halifaxwater.ca72 IRP Demand Reduction Assumptions IRP will examine both water system and wastewater system demand reduction options Water will include: leakage reduction and indoor/outdoor water efficiency Wastewater will include: I/I reduction and indoor water efficiency Stormwater demand reduction not included at this time A range of water and wastewater system demand reduction levels of implementation will be considered

73. www.halifaxwater.ca73 Supply Options

74. www.halifaxwater.ca74 Supply Options* *IRP Terms of Reference

75. www.halifaxwater.ca75 Water Supply Options Water supply options address expansion & upgrade needs Water supply options aggregated into: Water treatment, pumping, transmission, storage and distribution new facilities and/or upgrade, and expansion of existing facilities to meet growth or regulatory drivers System operational improvement and optimization to enhance capacity or treatment Integration of above Leakage and metering will be addressed in demand reduction Halifax Water already has a well advanced source water protection program including strategic land management

76. www.halifaxwater.ca76 Wastewater Supply Options Wastewater system supply options address system expansion and upgrade needs Wastewater system supply options aggregated into: Wastewater treatment, pumping, transmission, storage and collection new facilities and/or upgrade, and expansion of existing facilities to meet growth or regulatory drivers System operational improvement and optimization to enhance capacity or treatment Integration of above Receiving water quality will be considered in setting wastewater supply option priorities Strategic land management needs consideration

77. www.halifaxwater.ca77 Stormwater Supply Options Stormwater system supply options address system expansion and upgrade needs Stormwater system supply options aggregated into: Stormwater collection (pipes, culverts and ditches) and storage new facilities and/or upgrade and expansion of existing facilities to meet growth or regulatory drivers New deep storm sewers will be considered as part of the I/I reduction approach (look for cost share opportunities) Impacts of stormwater quality on receiving waters and strategic land management for stormwater planning fall outside HW mandate (will require a multi-party approach such as through the Regional Functional Stormwater Plan or watershed based management approach)

78. www.halifaxwater.ca78 IRP Supply Options Assumptions IRP will examine water system, wastewater system and stormwater system supply options that fall within the mandate of Halifax Water and that address system expansion and upgrade needs Options will include: New facilities and/or upgrade and expansion of existing facilities to meet growth or regulatory drivers System operational improvement and optimization to enhance capacity or treatment

79. www.halifaxwater.ca79 IRP Supply Options Assumptions … continued Integration of growth and regulatory upgrades and expansions with operational improvements and optimizations Review of Policy and Procedures (e.g. stormwater responsibilities – who does what?) New deep storm sewers will be considered as part of the I/I reduction approach (look for cost sharing opportunities) Strategic land management is relevant to water and wastewater systems at this time

80. www.halifaxwater.ca80 Lunch

81. www.halifaxwater.ca81 Round Table Discussion

82. www.halifaxwater.ca82 Next Steps

83. Consider comments received in relation to Technical Conference #2 (deadline October 18, 2011, 4:00 PM) Issue summary of meeting actions and key points Assemble resource plans and supporting information Prepare for Technical Conference #3 and issue information package www.halifaxwater.ca83 Next Steps

84. www.halifaxwater.ca84 Questions or Comments?