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Commercial <br />A minimum 20-year contract term is contemplated; with provisions for extension, under which <br />the University would compensate the County through - <br />1. Payments based on two components - (A) Monthly, a 15 percent share based on energy <br />generated/heating values delivered compared to an agreed upon monthly published <br />natural gas index, with a maximum cap; and (B) Intervals to be determined, a 15 percent <br />share based on methane destruction (carbon credits), either through flaring of the gas or <br />its use in power production. The 15 per cent value is subject to change to 10 per cent if <br />landfill gas quantities collected are significantly below projected levels, or the value of <br />carbon credits does not exceed a prescribed level by 2015. <br />2. The County will have the right to sell its carbon credits to the University, sell in the "open <br />market", or retain as off-sets for its own qualifying projects or conservation interests. <br />3. The County and UNC both recognize that the methodologies to equate the carbon <br />equivalents -methane destruction -and convert them to monetary value are continuing <br />to evolve. This significant aspect of final contract negotiations will. require careful <br />attention and considerable discussion. The County will obtain specialized legal <br />assistance in the final contract review <br />4. No payments would be made to the County for the heating value of the landfill gas flared, <br />nor for methane destroyed prior to flaring <br />5. The University proposes to assume the full cost of capital construction and annual <br />maintenance and operations <br />Attachment 2 provides further detail on the preliminary commercial terms. <br />legal <br />1. Transfer point of ownership of the landfill gas to be precisely defined <br />2. Issues of possible odor, gas, and noise migration to be examined and reconciled <br />3. Conditions precedent to "Go Decision" will address governmental and regulatory agency <br />permits and approvals <br />Attachment 3 provides further detail on the preliminary legal terms. As referenced above, the <br />County will seek specialized legal counsel with experience in waste to energy contracts to assist <br />in final negotiations. Special consideration must be given to maintaining compliance with <br />existing solid waste permits. Also provided with Attachment 3 are a proposed project schedule <br />and siting map. <br />A complete copy of the draft report, "Landfill Gas to Energy Feasibility Study", prepared for UNC <br />and Orange County by Richardson Smith Gardner & Associates and Affiliated Engineers <br />