Item - 2020.IE14.7

The Infrastructure and Environment Committee recommends that:

1. City Council direct that Renewable Natural Gas (RNG) produced at the Dufferin and Disco Road Organic Processing Facilities be delivered by Solid Waste Management Services via the local gas utility distribution company for distribution to all enrolled City gas accounts under the City Natural Gas Purchasing Program managed by the Environment and Energy Division and to those enrolled accounts for City's agencies, boards and corporations that elect to purchase RNG, at a cost per cubic meter not to exceed the amounts required to fully recover all RNG capital and operating costs.

2. City Council direct City Divisions to include funding in all applicable 2021 and forward Operating Budgets to reflect the fully recoverable incremental costs for acquiring and consuming the Renewable Natural Gas (RNG).

3. City Council direct that all capital and operating costs for the Renewable Natural Gas (RNG) program incurred by Solid Waste Management Services calculated on a full cost recovery basis are to be funded through the general tax rate/utility rate, as proportionally required, and not funded by the Solid Waste Management Services Rate Budget except for Solid Waste Management Services proportional allocation of the RNG and natural gas blend.

4. City Council direct the General Manager, Solid Waste Management Services, to report annually through the budget process to Council on the actual production and operating costs and to report out annually on the Renewable Natural Gas (RNG) program.

5. City Council direct the City Manager or designate to direct the terms and conditions to apply to the delivery, receipt and payment for all Renewable Natural Gas (RNG) to facilitate advancing the above recommendations and to negotiate and enter into any agreement(s) to advance the above recommendations on terms satisfactory to the City Manager or designate and in a form satisfactory to the City Solicitor.

6. City Council direct the General Manager, Solid Waste Management Services, to seek federal and provincial funding for the Solid Waste Management Renewable Natural Gas strategy.

7. City Council direct that any funding obtained through Recommendation 6 be allocated to offset the overall Renewable Natural Gas program costs.

The purpose of this report is to provide an update on Solid Waste Management Services (SWMS) renewable natural gas projects underway, detail the recommended renewable natural gas strategy whereby all the RNG is retained and used by the City of Toronto including options for its agencies, boards and corporations to use, and seek authority to enter into any agreements necessary to execute this strategy, thus taking concrete actions towards advancing the City's TransformTO reduction targets.

In 2016, City Council granted the General Manager, Solid Waste Management Services, delegated authority to enter into Renewable Natural Gas (RNG) Projects and agreements. Further to this authority, in 2019, City Council also granted the General Manager, Solid Waste Management Services delegated authority to negotiate and enter into any new agreements, amendments of existing agreements, or acknowledgements, including on the basis of a non-competitive procurement under Municipal Code Chapter 195, Purchasing, necessary in connection with the efforts to produce, manage, market, distribute, use and sell RNG and other environmental attributes associated with RNG production.

In 2019, City Council declared a Climate Emergency and adopted a stronger emissions reduction target for Toronto – net zero by 2050 or sooner. As a result, Solid Waste Management Services has shifted its focus from the sale of RNG to a third party consumer, to addressing Council's declaration and implementing a program that leverages closed loop innovation towards TransformTO's Greenhouse Gas (GHG) reduction targets.