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~~ <br />Commercial Terms <br />1.1 Payments to the County <br />A. The University of North Carolina at Chapel Hill (the "University") shall make <br />payments to Orange County based on the heating content and use of landfill gas <br />(LFG) collected. The payments shall have two components, one related to the <br />energy content of the LFG, the other resulting from the destruction of methane <br />and associated reduction in greenhouse gas (GHG) emissions. <br />1. Energy Component <br />a. The University will make monthly cash payments to the County for the <br />useful energy content of the LFG delivered to the University in the <br />preceding calendar month. The payments shall be based on the total <br />measured heating value of the gas transmitted to the University to <br />produce power and/or thermal energy. No payment will be made for <br />the heating value of LFG that is flared. <br />b. The LFG shall be deemed delivered to the University at the point it <br />enters the pipeline for transport to the University facilities where it will <br />be used to produce power and/or thermal energy. <br />c. The heating value of the delivered LFG will be based on its measured <br />methane content. The methane content of the gas will be continuously <br />monitored and the resulting heating value will be measured in British <br />Thermal Units per Standard Cubic Foot (Btu/scf). The total gas flow <br />delivered to campus will be measured, recorded, and totalized on an <br />hourly, daily and monthly basis. The total monthly heating value of the <br />gas will be calculated from the totalized flow and heating value <br />measured and will be expressed in millions of Btu's higher heating <br />value (wlMBtu HH~, <br />d. For any month, the purchase price for the delivered gas will be <br />calculated as fifteen percent (15%) of the MMBtu HIIV (Allocated <br />Energy Content) delivered multiplied by a dollar amount per NIMBtu <br />HHV ("Btu Equivalent Gas Price"). <br />e. The Btu Equivalent Gas Price shall be determined monthly in advance <br />as the IFERC Transco Zone 3 settlement price. IFERC Transco Zone 3 <br />is a monthly published index price for the Transco Zone 3 pricing point. <br />The index is published in "Platts Inside FERC Gas Market Report" <br />published by the McGraw Hill Companies. The dollar amount per <br />NIlVIBtu this determined shall be referred to as the Delivered LFG Price. <br />f. Sample calculations of the monthly payment for the energy component <br />of delivered LFG are provided below. (To be provided.) <br />Confidential Preliminary Draft for Discussion Only <br />Attorney Client Privileged <br />March 31, 2008 <br />Page 6 of 15 <br />