Verification Report Oldman River Hydroelectric Power Plant (January 1, 2016 May 31, 2016)

Transcription

1 Verification Report Oldman River Hydroelectric Power Plant (January 1, 2016 May 31, 2016) PRESENTED TO ATCO Power Canada Ltd. SEPTEMBER 28, 2016 ISSUED FOR USE FILE: ENV.CENV Tetra Tech EBA Inc. Riverbend Atrium One, 115, 200 Rivercrest Drive SE Calgary, AB T2C 2X5 CANADA Tel Fax

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3 SUMMARY Project Title Project Description Project Location Oldman River Hydroelectric Power Plant The project reduces greenhouse gas (GHG) emissions from a theoretical baseline of the emissions that would have been emitted with the generation of an equivalent quantity of electricity based on an established electricity displacement factor. Located 9 km northeast of Pincher Creek, Alberta at the Oldman River Dam; LSD W4M Project Start Date June 1, 2003 Credit Start Date June 1, 2003 Credit Duration Period Expected Lifetime of the Project Actual Emissions Reductions /Removals Achieved Other Environmental Attributes Project Registration Ownership Quantification Protocol Initial Credit Duration: June 1, 2003 to May 31, 2011 Approved Credit Duration Extension: June 1, 2011 to May 31, 2016 The project is expected to last 50 years. 21,697 tonne CO2e for the period of January 1, 2016 May 31, 2016 None This project is only registered once and in one offset system the Alberta Offset Registry. The Project is owned by ATCO Power Canada Ltd. and the Piikani Oldman Hydro Limited Partnership. Quantification Protocol for Quantification Protocol for Low-retention, Water-powered Electricity Generation as Run-of-river or on an Existing Reservoir (Version 1, May 2008) Verification Period This verification covers the period from January 1, 2016 May 31, i Verification Report ATCO Oldman_IFU.docx

4 Project Title Oldman River Hydroelectric Power Plant Project Activity The Oldman River Hydroelectric Power Plant (the Project) meets the requirements for offset eligibility as outlined in Section 3.1 of the Technical Guidance for Offset Project Developers (Version 4.0, February 2013). In particular: 1. The Project occurs in Alberta as outlined above. 2. The Project results from actions not otherwise required by law and beyond business as usual and sector common practices. 3. The Project results from actions taken on or after January 1, 2002, as outlined above. 4. The Project reductions/removals are real, demonstrable, quantifiable and verifiable: The Project is creating real reductions that are not a result of shutdown, cessation of activity or drop in production levels. The emission reductions are demonstrable, quantifiable and verifiable as outlined in the Project Developer s Project plan. 5. The Project has clearly established ownership. 6. The Project will be counted once for compliance purposes: The Project credits will be registered with the Alberta Emissions Offset Registry which tracks the creation, sale and retirement of credits. Credits created from the specified reduction activity have not been, and will not be, created, recorded or registered in more than one trading registry for the same time period. 7. The Project was implemented according to a government approved protocol. 8. The Project is verified by a qualified third party, Tetra Tech EBA Inc. Project Proponent Anne Vigneau Environment Advisor ATCO Power Canada Ltd. 400, th Avenue SW, Calgary, Alberta T2R 1P3 Phone: anne.vigneau@atco.com ii Verification Report ATCO Oldman_IFU.docx

5 VERIFICATION SUMMARY Project Title Objective Summary Lead Verifier Verification Team Subject Matter Expert Independent Peer Reviewer Designated Signing Authority Oldman River Hydroelectric Power Plant Reasonable assurance on Emission Reductions contained in the GHG Assertion. Based on our review, it is our opinion to a reasonable level of assurance that the GHG emission reductions contained in the GHG Assertion are materially correct and presented fairly in accordance with the related criteria. Min Si, M.N.R.M, GHG-V Tetra Tech EBA Inc. 115, 200 Rivercrest Drive SE, Calgary, AB T2C 2X5 Phone: Min.Si@tetratech.com Min Si, M.N.R.M., GHG-V Nelson Lee, M.A.Sc., P.Eng., GHG-V Nancy Wellhausen Kathleen Dunnett, P. Eng. N/A Nancy Wellhausen Nelson Lee, M.A.Sc., P.Eng., GHG-V Verification Date July 15, 2016 September 19, 2016 Site Visit Date August 10, 2016 Report Date September 28, 2016 iii Verification Report ATCO Oldman_IFU.docx

6 TABLE OF CONTENTS SUMMARY... I VERIFICATION SUMMARY... III 1.0 INTRODUCTION Objective Scope Level of Assurance Verification Criteria Materiality METHODOLOGY Verification Strategy Procedure Verification Procedures Verification Steps and Site Visit Risk Assessment Verification / Sampling Plan Team Schedule RESULTS Assessment of Internal Data Management and Controls Assessment of GHG Data and Information B1 Electricity Generation P1 Facility Operation and P2 Fuel Extraction and Processing Assessment Against Criteria Evaluation of GHG Assertion Summary of Findings VERIFICATION STATEMENT CONFIRMATIONS LIMITATIONS OF LIABILITY CLOSURE iv Verification Report ATCO Oldman_IFU.docx

7 LIST OF TABLES IN TEXT Table 1: Verification Scope... 2 Table 2: Verification Procedures... 4 Table 3: Rating Matrix for Inherent Risk and Control Risk... 6 Table 4: Scoring Definition... 7 Table 5: Risk Assessment for Applicable Emission Sources... 7 Table 6: Verification Team... 8 Table 7: Schedule of Verification Activities... 8 Table 8: Summary of Internal Controls Table 9: Eligibility Criteria Assessment LIST OF FIGURES IN TEXT Figure 1: Verification Steps... 5 Figure 2: Summary of Internal Data Management and Data Flow... 9 Figure 3: Verification Procedures for B1 Electricity Generation APPENDIX SECTIONS APPENDICES Appendix A Appendix B Appendix C Appendix D Appendix E Appendix F Verification Plan Statement Of Qualification Finding Log Statement of Verification Conflict of Interest Checklist Tetra Tech s General Conditions v Verification Report ATCO Oldman_IFU.docx

8 LIMITATIONS OF REPORT This report and its contents are intended for the sole use of ATCO Power Canada Ltd. and their agents. Tetra Tech EBA Inc. (Tetra Tech EBA) does not accept any responsibility for the accuracy of any of the data, the analysis, or the recommendations contained or referenced in the report when the report is used or relied upon by any Party other than ATCO Power Canada Ltd., or for any Project other than the proposed development at the subject site. Any such unauthorized use of this report is at the sole risk of the user. Use of this report is subject to the terms and conditions stated in Tetra Tech EBA s Services Agreement. Tetra Tech EBA s General Conditions are provided in Appendix F of this report. Verification Report ATCO Oldman_IFU.docx vi

9 1.0 INTRODUCTION Tetra Tech EBA Inc. (Tetra Tech) was contracted by ATCO Power Canada Ltd. (ATCO Power) to conduct verification of greenhouse gas (GHG) emission reductions from the Oldman River Hydroelectric Power Plant (the Project) for the period of January 1, 2016 May 31, The Oldman plant was implemented on an existing reservoir at the Oldman River Dam. The Project is a water powered electricity generation project located at LSD W4M, 9 km northeast of Pincher Creek, Alberta, at the Oldman River Dam. The Project is owned by ATCO Power and the Piikani Oldman Hydro Limited Partnership (POHLP). The Project is operated by ATCO Power (Facility Operator). The project is comprised of two 16 MW turbines for a total capacity of approximately 32 MW. Electricity is generated year round, with higher generation loads occurring between May to September when the water level is highest in the reservoir. Summary of Offset Project Baseline The baseline condition for the Project is that an equivalent quantity of electricity would have been generated from either grid-connected or off-grid facilities Summary of Changes to Baseline or at the Project Condition There are no changes to the Project operation since baseline. Since October 2010, the 15-minute data for electricity generation provided to the Alberta Electric System Operator (AESO) has been used, instead of hourly data prior to October OBJECTIVE The objective of the verification is to provide an independent assessment of the offset project to identify any material and immaterial errors, omission or misrepresentations and to provide our opinion on the GHG Assertion in the Offset Project Report. 1.2 SCOPE The scope of this project level emission reduction verification includes the project boundaries, physical infrastructure, activities, technologies, and processes of the project, GHG sources, sinks, and/or reservoirs (SSRs), types of GHGs, and time periods covered. The scope of the verification is listed in Table 1. \Verification Report ATCO Oldman_IFU.docx 1

10 Table 1: Verification Scope Project Oldman River Hydroelectric Power Plant Geography Organization Activities and Processes SSRs * GHG GHG Assertion Located 9km northeast of Pincher Creek, Alberta at the Oldman River Dam; LSD W4M ATCO Power Canada Ltd. Hydroelectricity Generation Baseline: B1 Electricity Generation Project: P1 Facility Operation and P2 Fuel Extraction and Processing Carbon dioxide (CO2), Methane (CH4), Nitrous oxide (N2O) 21,697 t CO2 Time Period January 1, 2016 to May 31, 2016 * Emission sources are specified in the Quantification Protocol for Low-retention, Water-powered Electricity Generation as Run-of-river or on an Existing Reservoir (Version 1, May 2008). Alphanumerics refer to specific sources in the Protocol. 1.3 LEVEL OF ASSURANCE The scope and level of effort of this verification is planned to achieve a reasonable level of assurance as required to satisfy requirements of the Specified Gas Emitter Regulation (SGER). The level of assurance is used to determine the depth of detail that a verifier designs into their verification plan to determine if there are any material errors, omissions, or misrepresentations. Reasonable level of assurance is to evaluate whether the GHG assertion is deemed to be presented fairly and substantiated by sufficient and appropriate evidence. As such, the verification is to provide positive, but not absolute assurance regarding the GHG assertions. 1.4 VERIFICATION CRITERIA The verification assesses the Project against Alberta Offset program eligibility criteria, including: Occur in Alberta; Result from actions not otherwise required by laws and be beyond business as usual and sector common practices; Result from actions taken on or after January 1, 2002; Be real, demonstrable, quantifiable, and verifiable; Have clearly established ownership; and Be counted once for compliance purpose. \Verification Report ATCO Oldman_IFU.docx 2

11 The verification assesses the Project against the following program criteria and relevant supporting documentation: Alberta s Climate Change and Emissions Management Act, S.A. 2003, c. C-16.7; Alberta Specified Gas Emitters Regulation (SGER), 2007; Alberta SGER, Technical Guidance Document for Offset Project Developers (Version 4.0, February 2013); Alberta SGER, Technical Guidance for Greenhouse Gas Verification at Reasonable Level Assurance (Version 1.0, January 2013); Quantification Protocol for Quantification Protocol for Low-retention, Water-powered Electricity Generation as Run-of-river or on an Existing Reservoir (Version 1, May 2008); Offset Project Plan for Oldman River Hydroelectric Power Plant; and Offset Project Report for Oldman River Hydroelectric Power Plant. 1.5 MATERIALITY A 5% materiality threshold is set to assess errors, omissions, and misrepresentations in the GHG assertion as required by the SGER. Quantitative discrepancies are aggregated and assessed on the basis of net and absolute values. Qualitative discrepancies are evaluated by professional judgement of the verification body, and determined if the discrepancies could be deemed to be material errors. 2.0 METHODOLOGY The verification is performed according to ISO : Specification with Guidance for the Validation and Verification of GHG Assertions. 2.1 VERIFICATION STRATEGY The approach used in this verification includes a combination of substantive procedures and test of controls. Tetra Tech uses predominantly substantive procedures during the verification process, with a focus on source data and evidence gathered during site visits and sampling procedures. Tetra Tech has developed the following steps to substantiate the GHG assertion: Conducted a site visit to confirm the boundary, physical sources and sinks within the Project boundary. Observed, interviewed personnel, and verified various processes, instrumentation and data management procedures during the site visit. Conducted sampling on primary documentation to confirm the processes resulting in the GHG assertions. Reviewed original data sources and calculations. Controls reliance was used in supporting the substantive approach as described above. Procedures used in this verification include inspection, observation, inquiry, confirmation, recalculation, and analytics test. The detailed verification procedures are provided in Section 2.2. Verification Report ATCO Oldman_IFU.docx 3

12 2.2 PROCEDURE Verification Procedures Verification procedures for the key components are provided in Table 2. Table 2: Verification Procedures Verification Component Description of the nature, scale and complexity of the verification activity Procedures The verification is conducted for the Oldman River Hydroelectric Power Plant (Oldman plant) for the period of January 1, 2016 May 31, Emission reductions are calculated from a theoretical baseline of the emissions that would have been emitted with the generation of an equivalent quantity of electricity based on an established electricity displacement factor. The baseline is dynamic as the quantity of electricity produced will change each year. As specified in the Protocol, the GHG sources include: Baseline: B1 Electricity Generation Project: P1 Facility Operation and P2 Fuel Extraction and Processing Comparability with the baseline Confidence and completeness of the responsible party s GHG information and assertion Assessment of GHG information system and its controls Assessment of GHG data and information Assessment against criteria Evaluation of the GHG Assertion ISO Principle Relevance ISO Principle Completeness The Project has a dynamic baseline Conduct a site tour to determine GHG sources and compare with the Protocol and calculation tool for completeness. Check the quantification against the Protocol. Interview personnel for completing GHG quantification. Review data collection and transfer processes. Interview personnel for internal control procedures. Inquiry of data verification procedures for double entries. Examine diesel fuel inspection. Examine the electricity generation. Compare SSRs inspected through site visit to the GHG identified in the Project Report and calculator. Review raw data, including metering data and third party records. Review emission factors used. Review and check against related criteria. Conduct site visit for physical boundary. Recalculate GHG assertions. Evaluate supporting documents. Review the supporting documents to determine if the appropriate data sources are used to quantify, monitor, or estimate emission sources. Review the justification of exclusion or aggregation of minor GHG sources or the number of data points monitored. Conduct a site tour to determine GHG sources and compare with the Protocol and calculator for completeness. Review the process diagram for facility boundary. 4 \Verification Report ATCO Oldman_IFU.docx

13 Verification Component ISO Principle Consistency ISO Principle Accuracy ISO Principle Transparency ISO Principle Conservativeness Procedures Confirm the uniform calculations are employed to enable meaningful comparisons. Review the justification for changes made for the reporting period. Review the measurements and estimates used to support the GHG assertion. Review the procedures and estimates for missing data. Review the calculations and supporting documents. Confirm assumptions, calculations, and supporting materials are clearly stated and referenced. Inspect highly uncertain data sources. Confirm the uncertain data sources utilized result in an underestimation of the GHG assertion Verification Steps and Site Visit The verification follows the steps outlined in the following diagram (Figure 1). Planning Gain understanding of technical operations and processes Gain understanding of data management Assessment Risk assessment and planning analytics Contribution analysis and Materiality analysis Verification plan and Sampling plan Verification Conduct verification procedures Conduct site visit Discuss findings log Report Senior review and independent peer review Issued for Review verification report Issued for Use report Figure 1: Verification Steps 5 Verification Report ATCO Oldman_IFU.docx

14 Site Visit Mr. Min Si conducted the site visit on August 10, The purpose of the site visit was to gain understanding of the offset project s operation, equipment, and control processes for assessment of the Project s conformance with the criteria. During the site visit, Mr. Si was accompanied by Ms. Anne Vigneau of ATCO. The emission sources, various processes, data acquisition, on-site records handling process, and meter location were observed. The control devices that are used to collect and monitor activity data for emission calculations were observed. Electricity meter serial numbers were crosschecked against the numbers in the OPP. On-site operator was interviewed for data transfer process, diesel dip procedures, data transfer processes Risk Assessment As part of the verification process, a risked-based verification and sampling plan must be developed that outlines: The amount and type of evidence necessary to achieve the agreed level of assurances; Methodologies for determining representative samples; and Risks of potential errors, omissions, or misrepresentation. Tetra Tech s verification team utilizes the risk assessment process to develop a compliant verification and sampling plan. The risk assessment includes considerations associated with regulatory requirements, GHG program requirements, industry/sector specific factors, and other non-technical risks. The risk assessment considers inherent risk, control risk and detection risk. Inherent risk is the Responsible Party s risk of material error, omission, or discrepancy due to the complexity of the facility or lack of capacity by staff at the facility. Control risk is the risk that the Responsible Party s control system will not detect and rectify a material error, omission or discrepancy. Detection risk is the risk that the Tetra Tech verification team will not identify a material discrepancy. The inherent risk and control risk are rated by likelihood multiplied by consequence in accordance with the matrix provided in Table 3. The detection risk is to balance out the combination of the inherent and control risks. Table 3: Rating Matrix for Inherent Risk and Control Risk Consequence Likelihood Risk Matrix Immaterial Minor Moderate Major Material Almost Certain Likely Possible Unlikely The definition for the scoring is provided in Table 4, adapted from IPCC \Verification Report ATCO Oldman_IFU.docx 6

15 Table 4: Scoring Definition Score Likelihood Consequence 5 Possibility of Misstatement >95% Misstated GHG Assertion (threshold) >5% 4 66% < Possibility of Misstatement <95% 4% < Misstated GHG Assertion <5% 3 33% < Possibility of Misstatement <66% 3% < Misstated GHG Assertion <4% 2 5% < Possibility of Misstatement <33% 1% < Misstated GHG Assertion<3% 1 Possibility of Misstatement <5% <1% Misstated GHG Assertion Inherent risk is determined to be low based on the following: Quantification methodology is established by the Protocol; Limited emission sources; and Major source is metered Control risk is determined to be low based on the following: ATCO has completed several years of offset project reporting; and ATCO completes an internal senior review in order to check both calculations and reports for transcription errors and omissions, correctly functioning links and formulas as part of their quality assurance/quality control (low risk). Detection risk is the risk that Tetra Tech s procedures do not detect a misstatement in the GHG Assertion. The overall verification risk must be low to achieve a reasonable level of assurance. As specified in the Verification Technical Guidance, the design of Tetra Tech s detection risk procedures will as a minimum, satisfy a medium risk level as both the inherent risk and control risk are low. The application of Tetra Tech s procedures are designed to achieve an overall low verification risk. The risk assessment for the applicable emission sources is provided in Table 5. Table 5: Risk Assessment for Applicable Emission Sources Applicable Emission Sources Inherent Control B1 Electricity Generation Low Low P1 Facility Operation and P2 Fuel Extraction and Processing Low Low Verification Report ATCO Oldman_IFU.docx 7

16 2.2.4 Verification / Sampling Plan Verifier sampled 100% of evidence. The type and amount of evidence reviewed for each emission source is provided in the final Verification Plan (Appendix A). 2.3 TEAM The verification team is included in Table 6 and the Statement of Qualification is provided in Appendix B. Table 6: Verification Team Name Min Si, M.N.R.M., GHG-V Nelson Lee, M.A.Sc., P.Eng. Nancy Wellhausen Kathleen Dunnett, P.Eng. Role Lead Verifier Designated Signing Authority Independent Peer Reviewer Verifier 2.4 SCHEDULE The schedule for the verification is presented in Table 7. Table 7: Schedule of Verification Activities Task Completion Date Kick-off Meeting July 15, 2016 Site Visit August 10, 2016 Submit Issued for Review Report September 16, 2016 Issued for Use Report Delivered September 28, 2016 \Verification Report ATCO Oldman_IFU.docx 8

17 3.0 RESULTS The included GHG emissions identified in the Protocol were observed, assessed, and evaluated. 3.1 ASSESSMENT OF INTERNAL DATA MANAGEMENT AND CONTROLS A summary of ATCO s internal data management and data flow is provided in Figure 2. ATCO Electric Meter Monthly diesel fuel dips Diesel supplier's invoice 15 minute generation Fuel dips and invoice reconciliation data SAS Information Delivery Portal 2016 OMRH Fuel Dip Records Hourly net generation spreadsheet GHG Calculation Tool Offset Project Report Manual Automatic Figure 2: Summary of Internal Data Management and Data Flow The GHG data management system and its controls are assessed through a combination of verifier site visit activities, interviews with staff involved in the data flow and review of the data itself. These activities verify the data flow process and information management system. A summary of ATCO s internal controls are provided in Table 8. Verification Report ATCO Oldman_IFU.docx 9

18 Table 8: Summary of Internal Controls Reporting Element Data Source Controls Electricity Diesel GHG Calculator ATCO Electric meter (3 rd party) SAS information delivery portal 2016 Hourly Net Generation OMRH Monthly inspection Custom Excel based calculator SAS data downloaded monthly by commercial analyst Data manually entered into GHG quantification tool Data input and calculation reviewed by ATCO environmental staff Weekly and monthly inspection reports were reviewed and signed off by Supervisor, and then transferred to environmental personnel Environment personnel reviewed the electronic record against the hard copy records Quantification completed by Environment Advisor and reviewed by another personnel of ATCO Offset report Reviewed by Environmental Team at ATCO The internal data management and controls are assessed based on the review of the Offset Project Plan, observations during the site visits, and interviews with key project personnel. Based on the controls procedures established and performed by ATCO, the internal data management and controls for the offset project are deemed to be adequate. 3.2 ASSESSMENT OF GHG DATA AND INFORMATION B1 Electricity Generation The emissions from electricity generation is calculated from the metered electricity data multiplied by electricity grid displacement factor. The verification procedures along the data flow are provided in Figure 3. \Verification Report ATCO Oldman_IFU.docx 10

19 ACTO Data flow Verifier Procedures ATCO Electric Meter Observe meter location Review calibration 15 minute generation data Review the raw data SAS Information Delivery Portal Review the data transfer process Hourly net generation spreadsheet Compare hourly data with 15 minute data GHG Calculator Review calculation Check data use Offset project report Check for consistency Manual Automatic Figure 3: Verification Procedures for B1 Electricity Generation Small discrepancies of MWH in some months were noted between hourly electricity generation data and 15 minutes generation data file. The discrepancy is considered as a rounding issue. The GHG data and information provided to support the GHG assertion is deemed to be appropriate and sufficient P1 Facility Operation and P2 Fuel Extraction and Processing Diesel is used by an on-site backup generator that is tested monthly. The on-site operator produces monthly inspection reports. The inspection reports were reviewed and signed off by the supervisor and manually entered into the spreadsheet. The hard copy inspection reports are stored on site. The diesel consumption is based on the dip measurement before and after the generator test. The emission factors for diesel combustion and production are taken from the Alberta Environment and Parks (AEP) Emission Factor handbook. The GHG data and supporting information are deemed to be appropriate and sufficient. Verification Report ATCO Oldman_IFU.docx 11

20 3.3 ASSESSMENT AGAINST CRITERIA The result of the assessment against program eligibility criteria is provided in Table 9. Table 9: Eligibility Criteria Assessment Offset Eligibility Criteria Assessment of Eligibility Criteria Occur in Alberta Result from actions not required by law Result from actions taken on or after January 1, 2002 and occur on or after January 1, 2002 Real and demonstrable Quantifiable and measurable Have clearly established ownership Counted once for compliance purposes Implemented according to a government approved protocol (for offset projects) Verified by a qualified person meeting the requirements under Section 18 of SGER. Registered on the Alberta Emission Offset Registry Site visit confirmed the project physical location. No regulations required for the project implementation. Project was implemented in June Site visit confirmed the existence of the project. Activity data is measured and emissions are quantified using approved protocol. Ownership of emissions credits is clearly established in the Joint Venture Agreement between the Project owners. The Facility Operator has a written agreement from the Project owners to register all available carbon dioxide equivalent emission reduction credits associated with the Project on behalf of the owners. The offset credits will be serialized on the CSA Carbon Registry. Approved Protocol is used. Verifier meets the requirement under Section 18 of SGER. Project registered under CSA Carbon Registry Alberta Emission Offset Registry. 3.4 EVALUATION OF GHG ASSERTION The verification opinion is that the GHG Assertion meets the requirements of the SGER. The GHG data and supporting documents are deemed to be sufficient and appropriate. The GHG Assertion is calculated in accordance with the approved quantification protocol. It is our opinion that 21,697 t CO2e of the emission reductions meet the materiality requirements and the reasonable level assurance. 3.5 SUMMARY OF FINDINGS There are unresolved discrepancies in the GHG Assertion. A findings log is provided in Appendix C. \Verification Report ATCO Oldman_IFU.docx 12

21 4.0 VERIFICATION STATEMENT Based on our review, it is our opinion that the Emission Reductions of 21,697 t CO2e contained in the GHG Assertion generated from the Oldman River Hydroelectric Power Plant for the period of January 1, 2016 May 31, 2016 are materially correct and presented fairly in accordance with the relevant criteria. The Statement of Verification is provided in Appendix D. 5.0 CONFIRMATIONS As required by AEP, the verifier has confirmed the following information: Consistency of offset project information across offset project documentation; Offset project location; Methodology document/project Report exists; Offset project contact and the amount of GHG emission reductions; and Completeness and accuracy of process and data flow diagram. 6.0 LIMITATIONS OF LIABILITY Tetra Tech has undertaken the verification of the asserted emission reductions associated with the ATCO Power Canada Ltd. (ATCO) s Oldman River Hydroelectric Power Plant for the period of January 1, 2016 May 31, 2016 in accordance with Technical Guidance for Offset Project Developers (Version 4.0, February 2013). Tetra Tech has assessed the offset project GHG assertions using reasonably ascertainable information as defined by ISO The assessment represents the condition in the subject area at the time of the assessment. Tetra Tech did not conduct direct GHG emissions monitoring or other actual environmental data sampling or analysis as part of this verification. The purpose of this report is to identify noted exceptions and observations, in the quantification of emission reductions. This report is not intended to imply exhaustive compliance or non-compliance by the verification team. The verification team has made diligent effort to sample applicable information available regarding emission reductions during the verification. It should be noted that the inherent limitation in verification sampling and review practices may result in the verifier not identifying all potential aspects of the project. Observations, exceptions and conclusions are based on the judgement of the verifier. The Conflict of Interest Checklist is provided in Appendix E. Verification Report ATCO Oldman_IFU.docx 13

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23 APPENDIX A VERIFICATION PLAN 1 Verification Report ATCO Oldman_IFU.docx

24 September 28, 2016 ATCO Power Canada Ltd. 400, th Avenue SW Calgary, AB T2R 1P3 ISSUED FOR USE FILE: ENV.CENV Via Attention: Subject: Anne Vigneau Environment Advisor Verification Plan Oldman River Hydroelectric Power Plant Project (January 1, 2016 May 31, 2016) 1.0 INTRODUCTION Tetra Tech EBA Inc. (Tetra Tech) was contracted by ATCO Power Canada Ltd. (ATCO) to verify Greenhouse Gas (GHG) emission reductions from the Oldman River Hydroelectric Power Plant (Oldman plant) for the period of January 1, 2016 May 31, The Oldman plant was installed in June 2003 on an existing reservoir at the Oldman River Dam. 1.1 OBJECTIVE The objective of the verification is to provide an independent assessment of the offset project to identify any material and immaterial errors, omissions or misrepresentations and to provide our opinion that the GHG assertion in the Offset Project Report is reliable, and of sufficient quality, and that it meets applicable eligibility and performance criteria. 1.2 ASSURANCE The scope and level of effort of this verification is planned to achieve a reasonable level of assurance as required by the Specified Gas Emitter Regulation (SGER). The level of assurance is used to determine the depth of detail that a verifier designs into their verification plan to identify if there are any material errors, omissions, or misrepresentations. A reasonable level of assurance is to evaluate whether the GHG assertion is deemed to be presented fairly and substantiated by sufficient and appropriate evidence. As such, the verification is to provide positive, but not absolute assurance regarding the GHG assertions 1.3 SCOPE The scope of this project level emission reduction verification includes the project boundaries, physical infrastructure, activities, technologies, and processes of the project, GHG sources, sinks, and/or reservoirs (SSRs), types of GHGs, and time periods covered. The scope of the verification is listed in Table 1. Tetra Tech EBA Inc. Riverbend Atrium One, 115, 200 Rivercrest Drive SE Calgary, AB T2C 2X5 CANADA Tel Fax

25 VERIFICATION PLAN FOR 2016 ATCO OLDMAN RIVER PROJECT Table 1: Verification Scope Project Geography Organization Activities and Processes SSRs * GHG GHG Assertion Oldman River Hydroelectric Power Plant Located 9km northeast of Pincher Creek, Alberta at the Oldman River Dam; LSD W4M ATCO Power Canada Ltd. Power Generation Baseline: B1 Electricity Generation Project: P1 Facility Operation and P2 Fuel Extraction and Processing Carbon dioxide (CO2), Methane (CH4), Nitrous oxide (N2O) 21,697 tonne CO2e Time Period January 1, 2016 May 31, 2016 * Emission sources are specified in the Quantification Protocol for Low-retention, Water-powered Electricity Generation as Run-of-river or on an Existing Reservoir (Version 1, May 2008). Alphanumerics refer to specific sources in the Protocol. 1.4 VERIFICATION STANDARDS The verification is performed according to ISO : Specification with Guidance for the Validation and Verification of GHG Assertions. 1.5 VERIFICATION CRITERIA The verification assesses the project against Alberta Offset program eligibility criteria, including: Occur in Alberta; Result from actions not otherwise required by laws and be beyond business as usual and sector common practices; Result from actions taken on or after January 1, 2002; Occur on or after January, 2002; Be real, demonstrable, quantifiable, and verifiable; Have clearly established ownership; and Be counted once for compliance purpose. The verification assesses the project against the following program criteria and relevant supporting documentation: Alberta s Climate Change and Emissions Management Act, S.A. 2003, c. C-16.7; Alberta Specified Gas Emitter Regulation (SGER), 2007; Alberta SGER, Technical Guidance Document for Offset Project Developers (Version 4.0, February 2013); Alberta SGER, Technical Guidance for Greenhouse Gas Verification at Reasonable Level Assurance (Version 1.0, January 2013); \Verification Plan ATCO Oldman.docx 2

26 VERIFICATION PLAN FOR 2016 ATCO OLDMAN RIVER PROJECT Quantification Protocol for Quantification Protocol for Low-retention, Water-powered Electricity Generation as Run-of-river or on an Existing Reservoir (Version 1, May 2008); Offset Project Plan for Oldman River Hydroelectric Power Plant; and Offset Project Report for Oldman River Hydroelectric Power Plant. 1.6 MATERIALITY A 5% materiality threshold is set to assess errors, omissions, and misrepresentations in the GHG assertion as required by the SGER for offset projects. Quantitative discrepancies are aggregated and assessed on the basis of net and absolute values. Qualitative discrepancies are evaluated by the verification body using professional judgement to determine if the discrepancies could be deemed to be material errors. 2.0 DATA MANAGEMENT AND CONTROLS A summary of ATCO s internal data management and data flow is provided in Figure 1. ATCO Electric Meter Monthly diesel fuel dips Diesel supplier's invoice 15 minute generation Fuel dips and invoice reconciliation data SAS Information Delivery Portal 2016 OMRH Fuel Dip Records Hourly net generation spreadsheet GHG Calculation Tool Offset Project Report Manual Automatic Figure 1: Data Management and Data Flow 3 Verification Plan ATCO Oldman.docx

27 VERIFICATION PLAN FOR 2016 ATCO OLDMAN RIVER PROJECT The GHG data management system and its controls are assessed through a combination of verifier site visit activities, interviews with staff involved in the data flow, and review of the data itself. These activities verify the data flow process and information management system. A summary of ATCO s control is provided in Table 2. Table 2: Summary of Internal Controls Reporting Element Data Source Controls Electricity Diesel GHG Calculator ATCO electric meter SAS information delivery portal 2016 Hourly Net Generation OMRH Monthly fuel dip records Third party invoices Custom Excel based calculator SAS data downloaded monthly by commercial analyst Data manually entered into GHG quantification tool Data input and calculation reviewed by ATCO environmental staff. Reviewed by accounting and reconciled with fuel dip records Quantification completed by Environment Advisor and reviewed by other ATCO personnel Offset report Reviewed by Environmental Team at ATCO 3.0 TEAM The verification team is presented in Table 3. Table 3: Verification Team Name Min Si, M.N.R.M., GHG-V Nelson Lee, M.A.Sc., P.Eng., GHG-V Nancy Wellhausen Kathleen Dunnett, P.Eng. Role Lead Verifier Designated Signing Authority Independent Peer Reviewer Verifier 4.0 SCHEDULE The schedule for the verification is presented in Table 4. Table 4: Schedule of Verification Activities Task Completion Date Kick-off Meeting July 15, 2016 Site Visit August 10, 2016 Submit Issued for Review Report September 16, 2016 Issued for Use Report Delivered September 28, 2016 \Verification Plan ATCO Oldman.docx 4

28 VERIFICATION PLAN FOR 2016 ATCO OLDMAN RIVER PROJECT 5.0 RISK ASSESSMENT A summary of potential risks identified and the procedure to check these during the verification is provided in Table 5. Table 5: Summary of Risk Identified Category/ Line Item Verification Objective Risk/Concern Identified Procedure Accuracy Inaccuracy Conduct a site visit to determine meter locations and meter ID Review calculations Occurrence and responsibility Non-existence Conduct a site visit GHG Assertion Completeness Cut-off Incomplete emission sources disclosed Improper metering and recording Conduct a site visit Conduct a site visit Review records Consistency Inconsistent quantification Review calculations Review Project Plan and Project Report Classification Inappropriate emissions types, presentation, and description Review calculations Review Project Plan and Project Report Electricity Generation Completeness Improper measurement of electricity import and export Conduct a site visit to determine meter locations and identification numbers Reconcile meter identification numbers with meters identified in Project Plan and Report Trace meter records to emissions calculations Accuracy Inaccurate calculations and measurement for the electricity export Check calculations Inspect calibration records Review QA/QC procedures Diesel Accuracy Inaccurate measurement Inspect raw data Diesel dip records Review QA/QC procedures SF6 Accuracy Leaks and top-ups Interview staff Check reports/records 5 Verification Plan ATCO Oldman.docx

29 VERIFICATION PLAN FOR 2016 ATCO OLDMAN RIVER PROJECT 6.0 SAMPLING PLAN The type and amount of evidence reviewed during the verification are summarized in Table 6. Table 6. Type of Evidence Reporting Element Type of Evidence Amount of Evidence Reviewed Electricity Diesel consumption SF6 Metering data Dip record Inspection Records Records/invoices/reports 12 month hourly records 12 month 15 minute metering data records One fuel Fuel dip record Six monthly inspection reports Leak or top-up record invoices 7.0 CLOSURE We trust this report meets your present requirements. If you have any questions or comments, please contact Min Si ( , Respectfully submitted, Tetra Tech EBA Inc. Prepared by: Min Si, M.N.R.M., GHG-V Lead Verifier Reviewed by: Nelson Lee, M.A.Sc., P.Eng, GHG-V Designated Signing Verifier 6 \Verification Plan ATCO Oldman.docx

30 APPENDIX B STATEMENT OF QUALIFICATION 1 Verification Report ATCO Oldman_IFU.docx

31 September 28, 2016 ATCO Power Canada Ltd. 400, th Avenue SW Calgary, Alberta T2R 1P3 ISSUED FOR USE FILE: ENV.CENV Via Attention: Subject: Anne Vigneau Environment Advisor Statement of Qualification Oldman River Hydroelectric Power Plant Offset Project (January 1, 2016 May 31, 2016) 1.0 INTRODUCTION Tetra Tech EBA Inc. (Tetra Tech) has completed the verification for emission reductions for ATCO Power Canada Ltd. (ATCO) Oldman River Hydroelectric Power Plant (Oldman plant) for the period of January 1, 2016 May 31, Table 1 lists the verification team members and their roles. Table 1: Verification Team Name Min Si, M.N.R.M., GHG-V Nelson Lee, M.A.Sc., P.Eng., GHG-V Nancy Wellhausen Kathleen Dunnett, P.Eng. Role Lead Verifier Designated Signing Authority Independent Peer Reviewer Verifier Mr. Nelson Lee is a professional engineer registered by the Association of Professional Engineers and Geoscientists of Alberta. Mr. Lee is the Designated Signing Authority for the report and satisfies the Section 18 (1)(ii)(A) of the Specified Gas Emitter Regulation (SGER). Each team member has the required technical knowledge of greenhouse gas (GHG) emission quantification methodologies and has experience in completing third-party GHG verifications. The team members satisfy the requirement of technical knowledge under Section 18(b)(i-iii) under the SGER. Tetra Tech EBA Inc. Riverbend Atrium One, 115, 200 Rivercrest Drive SE Calgary, AB T2C 2X5 CANADA Tel Fax

32 STATEMENT OF QUALIFICAITON FOR 2016 ATCO OLDMAN RIVER PROJECT 2.0 VERIFICATION TEAM QUALIFICATIONS The verification team meets the requirements under SGER and contains the required knowledge of GHG emission quantification methodologies. They have experience in completing third party reviews and audits related to emission inventories, including verifications in Alberta. The verification member received training under CSA Part 3 from the CSA group. Mr. Min Si, M.N.R.M., GHG-V, was the Lead Verifier for this verification. Mr. Si is an Environmental Scientist with Tetra Tech in Calgary. He has worked on GHG verification and quantification projects for a wide range of sectors, including oil and gas, pulp and paper, agriculture, manufacturing, etc. His emission experience includes GHG life cycle assessment, GHG quantification and verification for carbon offset projects, compliance report verification, National Pollution Registry Inventory (NPRI) and corporate GHG reporting. Mr. Si has completed CSA ISO Part 3 training. Mr. Nelson Lee, M.A.Sc., P.Eng., GHG-V, was the Designated Signing Authority for this verification. Mr. Lee has a B.Sc. in Chemical Engineering from the University of Alberta, and a M.A.Sc. in Environmental Engineering from the University of British Columbia. He has eight years of experience in Alberta SGER system, and has completed over 10 GHG verifications in Alberta and British Columbia. Mr. Lee completed ISO training, and is a CSA certified GHG verifier, and a California Air Resources Board (ARB) registered offset project verifier. Mr. Lee is a member of the CSA Technical Committee on Climate Change which is also a harmonized mirror committee that represents Canada s interest in the development of international standards through the ISO Technical Committee 207 / Subcommittee 7 on GHG Management and Related Activities. This harmonized committee represents Canada s interest in the development of international standards through the ISO (TC 207 / Subcommittee 7: Greenhouse gas management and related activities). The committee also develops new standards and adopts existing international standards at the Canadian national level. Ms. Nancy Wellhausen was the Peer Reviewer for this verification. Ms. Wellhausen is a senior GHG Lead Verifier and air quality and inventory specialist with over 20 years of experience. She has served in the role of Independent Peer Reviewer for over 30 GHG report verifications in British Columbia and Alberta. She is registered with the California Air Resources Board as a GHG Lead Verifier. Ms. Kathleen Dunnett, P.Eng., was a Verifier for this verification. Ms. Dunnett is a Professional Engineer in the Province of Alberta with a degree in Chemical and Petroleum Engineering. Ms. Dunnett is an Environmental Manager and Auditor with over 20 years of regulatory compliance and environmental management systems experience. Ms. Dunnett has been a verifier for nine GHG projects in Alberta in the forest products, agricultural, pulp & paper, and oil & gas sectors. \Statement of Qualifications ATCO Oldman.docx 2

33 STATEMENT OF QUALIFICAITON FOR 2016 ATCO OLDMAN RIVER PROJECT 3.0 CLOSURE If there are any questions or clarifications regarding the team s qualifications or roles, please contact Min Si ( , Min.Si@tetratech.com) Respectfully submitted, Tetra Tech EBA Inc. Prepared by: Min Si, M.N.R.M., GHG-V Environmental Scientist Reviewed by: Nelson Lee, M.A.Sc., P.Eng, GHG-V Designated Signing Authority 3 Statement of Qualifications ATCO Oldman.docx

34 APPENDIX C FINDING LOG 1 Verification Report ATCO Oldman_IFU.docx

35 FILE: ENV.CENV SEPTEMBER 16, 2016 ISSUED FOR REVIEW Item Description Responses Resolution Conclusion B1 Electricity Generation, January hour 24 hour, there are no data ATCO Electric submits 15 minute generation data to ATCO Power to be consistent with available in the 15 minutes recording, please clarify the data source in the the 15 minute data they provide to the Alberta Electric System Operator (AESO). The 15 minute generation data pulled from AESO is provided. hourly data file, and provide clarification why the 15 minutes data is missing data submitted to ATCO Power is through a secure login SAS Information Delivery Portal, which automatically tabulates the data into an hourly format. The Commercial Analyst downloads the hourly data and tabulates it on a monthly basis, and is provided in the file '2016 Hourly Net Generation OMRH'. This is the file that is used to for the generation data for the offset quantification, the source data. At the verifier's request we pull data in the 15 minute increments, this data was not used in the quantification of the offsets. No further issues B1 Electricity Generation, there is no March 13 3:00 hour ending data in the 15 minutes file, please clarify the data source in the hourly data and provide clarification why the 15 min data is missing See response to minute generation data pulled from AESO is provided. No further issues the calculator is taken data from the dip record spreadsheet, column P average liters/hours. Please explain why column M data is not used? The on site operator reported that approx. 600 liter/re fuel for appro.10 months. So approx. 300 liter for 5 months. The diesel consumed seems off a bit according to the Operator's knowledge. Please explain Column M should have been used rather than column P. This has been update in the quantification file saved as v1 and attached for your review. This did not change the net emission reduction total which still is 21,697. In a normal annual operating period or 10 month period there are usually times when it is not possible to take energy from the grid. During that time the emergency generator runs to support site services, therefore consuming more fuel. During the period of January to May 2016 the emergency generator was not used for more than 3.3 hours in a single month therefore there were not extended periods of time when the generator was used therefore diesel consumption was much below the estimated 300 L usage for a 5 moth period. Error corrected the justification is deemed to appropriate No further issues No further issues the dip record Cell A10 show 2015 Jan 4, but cell Q11 explain it is average of Dec and Feb readings. Please explain what data is used to estimate missing data Column M is the 'Fuel Consumption (adjusted)' values where Monthly consumption = the justification is deemed to fuel consumption during the current month's inspection + fuel consumption occurring appropriate between the current and following month's inspections, as inspections are typically conducted near the beginning of the calendar month. December's fuel consumption (adjusted) was calculated in the previous year and provided in cell M10 which is grey and February's consumption is provide in cell M12. To calculate fuel usage in January due to an erroneous dip the average of December and February was used (M10+M12/2). No further issues

36 APPENDIX D STATEMENT OF VERIFICATION 1 Verification Report ATCO Oldman_IFU.docx

37 September 28, 2016 Alberta Environment and Parks 12th Floor, Baker Centre Street Edmonton, AB T5J 1G4 ISSUED FOR USE FILE: ENV.CENV Attention: Subject: Executive Director Statement of Verification Oldman River Hydroelectric Power Plant Offset Project (January 1, 2016 May 31, 2016) 1.0 INTRODUCTION Tetra Tech EBA Inc. (Tetra Tech) has reviewed the greenhouse green (GHG) emission reduction presented by ATCO Power Canada Ltd. (ATCO) for Oldman River Hydroelectric Power Plant for the period of January 1, 2016 May 31, Emission reductions are calculated from a theoretical baseline of the emissions that would have been emitted with the generation of an equivalent quantity of electricity based on an established electricity displacement factor. The baseline is dynamic as the quantity of electricity produced will change each year. 1.1 OBJECTIVE The objective of the verification is to provide an independent assessment of the offset project to identify any material and immaterial errors, omission or misrepresentations and to provide our opinion that the GHG Assertion in the Offset Project Report is reliable, and of sufficient quality. 1.2 GHG ASSERTION Tetra Tech reviewed the GHG Assertion presented by ATCO for the Oldman River Hydroelectric Power Plant. Total Project Emissions: Total Baseline Emissions: Net Reductions: Materiality: 5% 0.5 t CO2e 21,698 t CO2e 21,697 t CO2e Period: January 1, 2016 May 31, 2016 Tetra Tech EBA Inc. Riverbend Atrium One, 115, 200 Rivercrest Drive SE Calgary, AB T2C 2X5 CANADA Tel Fax

38 STATEMENT OF VERIFICATION FOR 2016 ATCO OLDMAN RIVER PROJECT 1.3 ROLE AND RESPONSIBILITIES ATCO was responsible for the preparation and presentation of information within the Project Report and GHG Assertion. Tetra Tech was responsible for determining whether anything has come to our attention to suggest that the GHG emission reduction is not presented fairly in accordance with Alberta Environment and Parks (AEP) approved quantification methodology, Quantification Protocol for Low-retention, Water-powered Electricity Generation as Run-of-river or on an Existing Reservoir (Version 1, May 2008), the Specified Gas Emitters Regulation (SGER), and associated guidance documents. The Tetra Tech verification team, including roles and responsibilities are listed in Table 1. Table 1: Verification Team Name Role Responsibilities Min Si, M.N.R.M., GHG-V Lead Verifier Lead verification, including site visit and desktop review. Review verification deliverables, adherence to ISO , regulatory compliance, and technical soundness. Nelson Lee, M.A.S., P.Eng. Designated Signing Authority Review the verification procedures Nancy Wellhausen Kathleen Dunnett P.Eng. Independent Peer Reviewer Verifier Independently review verification deliverables for adherence to ISO and regulatory compliance Assist with verification activities, including verification planning, desktop review, and verification report. 2.0 SCOPE 2.1 PROGRAM CRITERIA The verification assesses the Project against Alberta Offset program eligibility criteria, including: Occur in Alberta; Result from actions not otherwise required by laws and be beyond business as usual and sector common practices; Result from actions taken on or after January 1, 2002; Occur on or after January, 2002; Be real, demonstrable, quantifiable, and verifiable; Have clearly established ownership; and Be counted once for compliance purpose. \Statement of Verification ATCO Oldman.docx 2

39 STATEMENT OF VERIFICATION FOR 2016 ATCO OLDMAN RIVER PROJECT The verification assesses the Project against the following program criteria and relevant supporting documentation: Alberta s Climate Change and Emissions Management Act, S.A. 2003, c. C-16.7; Alberta Specified Gas Emitters Regulation (SGER), 2007; Alberta SGER, Technical Guidance Document for Offset Project Developers (Version 4.0, February 2013); Alberta SGER, Technical Guidance for Greenhouse Gas Verification at Reasonable Level Assurance (Version 1.0, January 2013); Quantification Protocol for Quantification Protocol for Low-retention, Water-powered Electricity Generation as Run-of-river or on an Existing Reservoir (Version 1, May 2008); Offset Project Plan for Oldman River Hydroelectric Power Plant; and Offset Project Report for Oldman River Hydroelectric Power Plant. 2.2 STANDARD The scope and level of effort of this verification were conducted to a reasonable level of assurance in accordance with ISO : Specification with Guidance for the Validation and Verification of GHG Assertions. 2.3 PROCEDURES The verification procedures were developed based on the results of our risk assessment for the GHG data and information as well as Responsibility s control procedures. Tetra Tech verification team reviewed, recalculated, vouched, retraced, and confirmed GHG data and information provided by the Responsibility Party. The site visit assessed the Responsibility Party s data management system, examined quality assurance/quality control (QA/QC) procedures, and tested controls in the data management system. The Responsibility Party s data flow process, and risks, controls and processes documents were reviewed. The effectiveness of the data management system s QA/QC procedures and controls was assessed. The detailed verification procedures are provided in the Verification Report and Verification Plan. Statement of Verification ATCO Oldman.docx 3

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