STAFF REPORT

ACTION REQUIRED

Toronto Atmospheric Fund – Report Back on

Transactions under Council Authority Delegated to
Board of Directors

Date: December 22, 2010

To: Executive Committee

From: Julia Langer, Executive Director, Toronto Atmospheric Fund

Wards: All

Reference
Number:

SUMMARY

As a requirement of City Council’s delegation of authority to TAF (August 25, 26 and 27,
2010), Toronto Atmospheric Fund is required to report any transactions carried out
under this authority no later than the second regular meeting of City Council in the new
term. This report fulfills that requirement to report back to Council.

RECOMMENDATION
The Executive Director of the Toronto Atmospheric Fund recommends that:

Council receive this report for information.

Financial Impact

There are no financial implications arising from this report.

DECISION HISTORY
On August 25, 26 and 27 City Council delegated the authority to the Board of Directors
of the Toronto Atmospheric Fund to approve, on behalf of Council, transactions
described in subsections 11(8) and 11(9) of the Toronto Atmospheric Fund Act 2005,
provided that:

Staff report for action on transactions delegated to TAF

a.The proposed transaction is of a type, and for an amount, as set out in a line item in
the TAF budget approved by council; or

b.The proposed transaction constitutes an investment permitted to be made by TAF, as

set out in TAF’s Statement of Investment Objectives and Principles approved by Council.

c.The proposed transaction is specifically permitted by a provision of the Relationship

Framework for TAF, 2006, as amended.

d.This delegation is limited to the period commencing on the day following the last
Council meeting on August 25, 2010, up to the first regular meeting of Council on
December 16, 2010.

e.TAF certify that any approval given by the TAF Board pursuant to this delegated
authority will be disclosed in the audited financial statements which TAF is required to
provide annually to Council and that the TAF Board ensure that any transactions carried
out under this delegated authority are separately reported to Council no later than the
second regular meeting of Council in the new term.

ISSUE BACKGROUND
Under the TAF Act, 2005, TAF’s mandate is to provide support and funding for projects
related to energy efficiency, global climate stabilization and air quality improvement in
co-operation with non-government organizations, governments, industries, corporations,
official committees, neighbourhood organizations, universities and public and private
schools. All grant applications are reviewed by TAF’s Grants & Special Projects
Committee, which makes recommendations to the Board of Directors.

Under the Statement of Investment Objectives and Principles, approved by Council May
12, 2010, TAF manages a diversified portfolio including a) direct investments, as per
Section 6.4, which states that TAF will provide capital to for-profit and not-for-profit
organizations in a manner that complies with applicable legislation and any relevant and
applicable aspects of City Council's investment and governance policies. Investments
can include (but would not be limited to) mortgages, debentures, options, securities and
loan guarantees, and b) Private Equities, as per Section 6.5 which specifies a pooled or
third party portfolio of private equities comprised of companies which help in addressing
climate change and air quality issues and minimize exposure to companies whose share
value may be at risk from climate change. All investments are reviewed by TAF’s
Investment Committee, which makes recommendations to the Board of Directors.

COMMENTS
Report on Transactions

The following seventeen (17) transactions were approved by the TAF Board of Directors
subsequent to this decision, and all transactions meet the requirements set out by
Council (that is, a to e above).

Staff report for action on transactions delegated to TAF

Approved at the meeting of September 20, 2010:

1. Loan of up to a maximum of $300,000 to SolarShare (to be invested by

SolarShare in Penguin Power) for a period of two years. Penguin Power has
microFIT contracts in place at 80.2¢/kWh to install twenty (20) 10 kW solar
tracking systems on leased rural Ontario locations. The loan will be for a period
of two years. This opportunity is well-aligned with TAF’s mandate of advancing
renewable energy and transforming the market by educating the public about
innovative financing solutions for community power.

This transaction constitutes an investment permitted to be made by TAF, as set

out in TAF’s Statement of Investment Objectives and Principles approved by
Council on May 12, 2010, comply with the provisions of the TAF Act, 2005, the
TAF Relationship Framework 2006, and are set out in the TAF Budget approved
by Council for 2010.

2. Loan of up to a maximum of $350,000 for up to a 12 year term to Ledcor

Properties to assist with the incremental costs associated with implementing
energy efficiency upgrades in their commercial office building. This project fits
well within TAF’s mandate of advancing energy efficiency and transforming the
market for climate change solutions. The proposed approach creates a replicable
model that demonstrates the business case for energy efficiency upgrades in the
commercial office-space sector and addresses the issue of landlord and tenant
interests.

This transaction constitutes an investment permitted to be made by TAF, as set

out in TAF’s Statement of Investment Objectives and Principles approved by
Council on May 12, 2010, comply with the provisions of the TAF Act, 2005, the
TAF Relationship Framework 2006, and are set out in the TAF Budget approved
by Council for 2010.

3. Loan of up to a maximum of $210,000, structured as revolving purchase order

financing (drawn as sales occur), to Wind Power Media to assist with the
installation of two wind turbines in the parking lots of a national retailer. This
opportunity is well-aligned with TAF’s mandate of advancing renewable energy
and demonstrating the viability of small urban wind facilities, transforming the
market by paving the way for more conventional lending channels, and educating
the public about climate change solutions.

This transaction constitutes an investment permitted to be made by TAF, as set

out in TAF’s Statement of Investment Objectives and Principles approved by
Council on May 12, 2010, comply with the provisions of the TAF Act, 2005, the
TAF Relationship Framework 2006, and are set out in the TAF Budget approved
by Council for 2010.

Approved at the meeting of December 15, 2010:

1. Financing of up to a maximum of $500,000 for the Pukwis Energy Co-operative

to erect the 20MW Pukwis Community Wind Park. The co-operative will be
comprised of members from within the GTA. Project construction will be financed
through equity raised within the GTA through a co-operative share offering and

Staff report for action on transactions delegated to TAF

 by traditional commercial loans, backed by a long term power purchase
agreement with the Ontario Power Authority. This advances TAF’s mandate of
encouraging renewable energy and transforming the market by using innovative
financing solutions.

This transaction constitutes an investment permitted to be made by TAF, as set

out in TAF’s Statement of Investment Objectives and Principles approved by
Council on May 12, 2010, comply with the provisions of the TAF Act, 2005, the
TAF Relationship Framework 2006, and are set out in the TAF Budget approved
by Council for 2010.

2. Bridge financing for NewCo of up to a maximum of $630,000, structured as a

revolving loan, or a term loan of up to a maximum $630,000 to take out the
bridge loan, if necessary. The revolving loan will support the installation of an
initial 60 residential rooftop photovoltaic (PV) systems in existing and new
housing (expected 80% existing, 20% new). The business model involves
GreenSaver providing the installation, servicing and monitoring while the
homeowner assigns the microFIT revenues. GreenSaver aims to refinance
installed systems from an outside source and will only rely on TAF for long term
take out financing if necessary; GreenSaver has provided a 100% guarantee.
This transaction also advances TAF’s mandate of encouraging renewable energy
and transforming the market by using innovative financing solutions.

This transaction constitutes an investment permitted to be made by TAF, as set

out in TAF’s Statement of Investment Objectives and Principles approved by
Council on May 12, 2010, comply with the provisions of the TAF Act, 2005, the
TAF Relationship Framework 2006, and are set out in the TAF Budget approved
by Council for 2010.

3. An investment of $200,000 in Investeco Fund III, which encompasses investment

in infrastructure, energy efficiency technologies and services, smart grid
technologies, renewable power, water quality and efficiency technologies and
services, real estate and other categories aligned with TAF’s mandate. TAF will
have Limited Partner status on the basis of holding two percent of the pooled
subscriptions.

This transaction constitutes an investment permitted to be made by TAF, as set

out in TAF’s Statement of Investment Objectives and Principles approved by
Council on May 12, 2010, comply with the provisions of the TAF Act, 2005, the
TAF Relationship Framework 2006, and are set out in the TAF Budget approved
by Council for 2010.

The following grant transactions are specifically permitted by Section 11.2 of the
Relationship Framework for TAF, June 2006.

1. Grant of $15,000 to City of Toronto, Economic Development & Culture -

Roadmap for eco-business zones in Toronto. Economic Development & Culture
is proposing the development of targeted emission reduction programs for the
business sector by evaluating and replicating the successes of the Partners in
Project Green Pearson Eco-Business Zone project. Activities include the
development of a deployment plan, identification of replicable components from

Staff report for action on transactions delegated to TAF

 the Pearson project and establishment of baseline metrics and criteria for
bringing the Eco-Business Zone program to a selection of Toronto’s remaining 33
business parks.

This grant complies with the provisions of the TAF Act, 2005, the TAF
Relationship Framework 2006, and is included in the TAF Budget approved by
Council for 2010.

2. Grant of $10,000 to City of Toronto, Economic Development & Culture - Toronto

Innovation Partnership. Economic Development & Culture is proposing the
development and management of a municipal innovation network within the City
of Toronto that would identify key innovators and provide them with the space to
share ideas and experiences. This network will help to develop and incubate
innovative projects being advanced and supported by the City of Toronto and is
complementary to TAF’s new focus on social innovation.

This grant complies with the provisions of the TAF Act, 2005, the TAF
Relationship Framework 2006, and is included in the TAF Budget approved by
Council for 2010.

3. Grant of $57,300 to Centre for Social Innovation – “Community Bonds” The

Centre for Social Innovation is proposing an outreach strategy to educate the
municipal, academic, school and hospital sector in Toronto on the use of
community bonds to help finance energy efficiency retrofits and the purchase of
energy efficient buildings. This advances TAF’s mandate of encouraging energy
efficiency and innovative financing solutions.

This grant complies with the provisions of the TAF Act, 2005, the TAF
Relationship Framework 2006, and is included in the TAF Budget approved by
Council for 2010.

4. Grant of up to $75,000 to the Community Power Fund - Community Power

Capital: Phase I implementation. The Community Power Fund is seeking
financial support towards the development of CP Capital, a new fund that would
help provide needed capital in a timely fashion for community power projects
registered under the province’s feed-in tariff (FIT) program. Recognizing the
limited capacity of community power co-operatives to raise large sums of money
to finance their projects, CP Fund is developing a resource that would allow non-
community investors to provide interim funding with a return commensurate with
the risk as a placeholder while the community-based co-ops raise funds from the
public through their share offerings.

This grant complies with the provisions of the TAF Act, 2005, the TAF
Relationship Framework 2006, and is included in the TAF Budget approved by
Council for 2010.

5. Grant of $50,000 to Environmental Defence – overcoming provincial barriers to

electric vehicles (EVs) in Ontario. Environmental Defence is proposing a multi-
year policy advocacy campaign to help overcome barriers to electric vehicle
development and deployment in Ontario. Recognizing that the provincial
government has yet to put forth a comprehensive strategy or even a lead agency

Staff report for action on transactions delegated to TAF

 responsible for the EV portfolio, Environmental Defence will establish a
consortium of key stakeholders to advocate for immediate resolution to key
issues. In the long term, the use of EV’s will lead to significant emission
reductions in the transportation sector in the City of Toronto.

This grant complies with the provisions of the TAF Act, 2005, the TAF
Relationship Framework 2006, and is included in the TAF Budget approved by
Council for 2010.

6. Grant of $35,000 to Ontario Clean Air Alliance – Ontario’s new energy efficiency
strategy. The Ontario Clean Air Alliance (OCAA) is proposing a research project
in support of a campaign to have the provincial government establish a
coordinated approach for advancing energy efficiency in the electricity and
natural gas sectors. OCAA’s plan is to present a compelling economic case for
improving efficiency as well as the identification of key policies needed to support
faster and deeper conservation and demand management (CDM) activities.

This grant complies with the provisions of the TAF Act, 2005, the TAF
Relationship Framework 2006, and is included in the TAF Budget approved by
Council for 2010.

7. Grant of $10,000 to Pembina Foundation – Commuter 2.0 concept development.

The Pembina Foundation is seeking a concept development grant to design a
transportation demand management (TDM) project called ‘Commuter 2.0’. This
project will survey top employers in Toronto and the GTA to help identify the
TDM commuter choice programs that are most likely to be taken up by
participants as well as lead to significant emission reductions in the
transportation sector.

This grant complies with the provisions of the TAF Act, 2005, the TAF
Relationship Framework 2006, and is included in the TAF Budget approved by
Council for 2010.

8. Grant of $100,000 to Pollution Probe – business & environmental case for

commercial EVs. Pollution Probe, in partnership with Fleet Challenge Ontario
and CrossChasm Technologies, is proposing the development of a
comprehensive evaluation methodology and business case to assess the
costs/benefits of electric vehicle adoption in commercial fleets. By collecting real-
time data on both conventional vehicles and electric vehicles, the proponents
hope to inform end-users as well as policymakers on the best approaches to
integrating low-emission plug-ins into fleets.

This grant complies with the provisions of the TAF Act, 2005, the TAF
Relationship Framework 2006, and is included in the TAF Budget approved by
Council for 2010.

9. Grant of $50,000 to Toronto Renewable Energy Co-operative - SolarShare

Energy Co-operative Phase II. Since December 2006, TAF has provided
$130,000 in grants to the Toronto Renewable Energy Co-operative (TREC) for
their SolarShare project. The first grant ($75K in December 2006) was a
feasibility assessment to validate the financing model and the second grant

Staff report for action on transactions delegated to TAF

 ($55K in December 2009) was to implement SolarShare in Toronto. The original
plan was for a 250kW PV system in Toronto and this was changed to an
aggregated system outside of Toronto. In light of the challenges faced in
completing the last grant, TREC has returned to TAF seeking additional
resources to complete the SolarShare project.

This grant complies with the provisions of the TAF Act, 2005, the TAF
Relationship Framework 2006, and is included in the TAF Budget approved by
Council for 2010.

10. Grant of $10,000 to The World on my Plate – Electric cargo bikes. The World on
my Plate is proposing a pilot test of an electric cargo bike delivery model for their
food delivery program. Recognizing the potential emission reduction benefits of
replacing conventional vehicles with electric alternatives, the proponent will
establish a case study based on their findings and share these findings with other
interested stakeholders, including the Business Improvement Areas across
Toronto.

This grant complies with the provisions of the TAF Act, 2005, the TAF
Relationship Framework 2006, and is included in the TAF Budget approved by
Council for 2010.

11. Grant of $10,000 to University of Toronto – Non-peak traffic emissions

assessment. Dr. Nurul Habib and his team at the University Of Toronto
Department Of Civil Engineering have put forward a concept development
proposal to determine the emissions impact in Toronto of non-peak travel
demands (i.e. weekend travel). Based on preliminary research, Dr. Habib has
concluded that the exclusive focus on peak demand travel combined with the
large emissions profile of non-peak travel has created a major gap in policies and
programs that can effectively reduce emissions related to personal transportation
in Toronto.

This grant complies with the provisions of the TAF Act, 2005, the TAF
Relationship Framework 2006, and is included in the TAF Budget approved by
Council for 2010.

CONTACT
Julia Langer
Executive Director, Toronto Atmospheric Fund
416-392-0253 jlanger@tafund.org

______________________________
Julia Langer,
Executive Director, Toronto Atmospheric Fund

CC: Joseph P. Pennachetti, City Manager

Cam Weldon, Deputy City Manager and Chief Financial Officer
Giuliana Carbone, City Treasurer
Nancy Autton, CMO
Karen Jones, CMO

Staff report for action on transactions delegated to TAF