MDU Representatives. Larry Oswald- Manager Business Development & Marketing Doug Hansen Region Director Bob Morman Director of Gas Supply

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1 Agenda Items

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3 MDU Representatives Larry Oswald- Manager Business Development & Marketing Doug Hansen Region Director Bob Morman Director of Gas Supply

4 Partnership Recap City of Billings and MDU entered into a Landfill Gas Sales Agreement on August 25, Agreement amended on May 10, Year initial term from commissioning date of the plant. Plant was commissioned on December 7, City of Billings receives 15% royalty on landfill gas produced from the plant and 15% of any renewable energy credits. MDU has invested over $10 Million to build the plant and install the gas collection system.

5 Royalty Payments CIG City of Billings City of Billings Production Average Average Royalty Banked Year DK's Price/dk Price / dk Payments CRT's ,903 $ $5, ,216 $ $73, , ,535 $ $33, , ,811 $ $57, , ,962 $ $82, Totals 471,427 $253, ,207

6 Banked Carbon Offsets Montana-Dakota is looking to sell the Carbon Offsets (CRT s) produced from the landfill for calendar years. A total of 173,207 CRT s have been verified and banked with CARB. Currently working on an agreement to sell vintage CRT s for $0.25, $0.35, $0.45/CRT, respectively. City of Billings will receive 15% of revenue, net of expenses and verification costs. Total revenue is expected to be immaterial due to high registration and compliance costs.

7 2015 Update September 5, 2014 Montana-Dakota entered in agreement with Clean Energy Renewable Fuels (CERF) to sell the Landfill gas production, including environmental attributes. EPA pathway approval was obtained in 2015 to show that the physical pipeline exists to move the Landfill gas to market under the CERF agreement. Landfill gas was sold under the agreement beginning in February Feb and March landfill gas included stored production from August 2014 to January 2015

8 Production Royalties The 15% production royalties continue as they have in the past. Total annual royalties will vary based on production and CIG gas prices. Production is expected to increase with additional horizontal collectors. Natural gas commodity prices are projected to remain flat YTD (Aug) production is 79,310 dk and YTD royalty payments are $30,262.43

9 Renewable Fuel Standard The Federal Renewable Fuel Standard (RFS) currently requires transportation fuel sold in the United states to contain a certain amount of renewable fuels. Gasoline and diesel refineries may satisfy their RFS requirements by blending renewable fuels such as ethanol or biodiesel, or acquiring Renewable Identification Numbers (RIN s) from biofuel producers. Landfill gas is eligible to produce advanced biofuels D5 RIN s by converting the biogas to a transportation fuel, generally CNG or LNG.

10 RFS - Continued Under the CERF Agreement: The Billings Landfill Green gas is swapped for Blue gas at the Billings Landfill meter. Montana-Dakota gas supply then purchases the Blue gas for supply to customers. The Landfill Green gas is purchased by CERF and transported by a third party gas marketer through the EPA Certified Pathway to CERF s processing facility in California.

11 RFS - Continued The Landfill gas is then processed at CERF s Boron LNG plant in Boron, CA. The conversion to LNG/CNG for transportation fuel generates the RIN s for sale into the market. RIN revenue is paid to MDU less CERF brokerage fees. City of Billings receives 15% of RIN revenue, net of expenses YTD (Aug) City of Billings RIN revenue is $146,785.74

12 CA Low Carbon Fuel Standard The California Low Carbon Fuel Standard (LCFS) calls for reduction of at least 10% in the carbon intensity (CI) of California s transportation fuels by Landfill biogas cleaned to pipeline quality specifications and compressed or liquefied in California is eligible to generate LCFS credits. The Landfill s default CI is currently determined by the difference in emissions from diesel to natural gas. However, with the voluntary designation of the landfill gas collection, Montana-Dakota has an application pending with CARB that proposes a significantly lower CI.

13 CA Low Carbon Fuel Standard The Billings Landfill Gas is compressed or liquefied in California by CERF and therefore also generates the LCFS credits. LCFS Credits are paid to MDU less CERF brokerage fees. City of Billings also receives 15% of the LCFS credit revenues, net of expenses. LCFS credits are sold quarterly 2015 YTD (Aug) City of Billings LCFS Credit revenue $9,245.63

14 2015 Summary Landfill gas revenues have increased significantly YTD (Aug) revenue is $186, total revenue expected to be approximately $250,000. Production increases are expected in 2016 Gas Commodity prices forecasted to remain flat and RIN/LCFS markets expected to continue to see large variances.

15 2016 City of Billings Revenue Projections Based on historical production and estimated commodity, RIN, and LCFS pricing. Production Royalties $45,000 RIN revenue - $100,000 LCFS Credit - $15,000 Total City of Billings 2016 projected revenue is $165,000

16 Questions?

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18 City of Billings UPDATE: Major System Conversions October 5, 2015 David Watterson Chief Information Officer Barb McRae Application Development Manager

19 Major System Conversions Why Are We Presenting This to Council? o Substantial Projects that Affect Every Employee o Update Council on Project Status (last update was Oct. 20, 2014)

20 Major System Conversions o Business Applications o Converting from HTE o Purchased in 2009 Utility Billing o Public Safety Applications o Initially purchased in 1990 o Supports both City & County

21 Innoprise Conversion Conversion Overview: o Software Purchased in Spring 2009 at $0 Additional Cost Completed Modules: Outstanding Conversions/Installations: Building Permits Employee Portal (1Q 2016) Business Licenses Fleet/Inventory (Spring 2016) Code Enforcement Property Taxes (Fall 2016) Planning Mobile Apps including inspections, Land Management service orders, invoice approvals Budget (2Q 2016) G/L & Accounts Payable Miscellaneous Receivables Fixed Assets Payroll Citizen Access Utility Billing (completed 2/2015)

22 New World Conversion Conversion Overview: o Major Upgrade Purchased in June 2013 with Council Support o $600,000 from Excess SID Revolving Fund o 10 Year Cooperative Support Contract with City & County o 2 Years of Conversion Planning, Coordination, & Training o Go-Live for ALL Modules was March 22, 2015 Main Modules: o Mobile Computing for Police, Sheriff, & Fire o Police/Sheriff Records o Fire Records o Computer Aided Dispatch (CAD/911) o Includes E-911 & CAD Mapping o Corrections o Includes Mugshots/Fingerprinting

23 New World Conversion CAD/911 Challenges: o CAD Software Represented the Most Change o Staff is Addressing Changes to Procedures o Software Issues are Being Identified & Resolved o IT & Communications Center Staff Working with New World o NW is Addressing Problems and Providing Software Updates o Some Known Problems will be Resolved in Future Software Releases Major Release Upgrade in February 2016: o Further Leverages Our Investment in GIS o Enhancements to Civil Papers o Additional software enhancements and fixes o Mobile Fire Inspections 2 nd Quarter 2016

24 Conversion Success

25 Questions

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27 Other Items

28 October 2015 Sun MON TUE WED THU FRI SAT Special Event Calendar *Approval Pending For questions or details: Last Farmers Market! Eva s Run 7am-12pm West end Harvestfest 9-4pm Downtown

29 November 2015 SUN MON TUE WED THU FRI SAT Special Event Calendar *Approval Pending For questions or details: wellbrooks@ci.billings.mt.us Run Turkey Run Downtown 5am-Noon

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