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Home My WebLink About07/13/2023 - Energy Board - Agenda - Regular Meeting ENERGY BOARD REGULAR MEETING July 13, 2023 – 5:30 pm 222 Laporte Ave – Colorado Room Zoom – See Link Below 1. [5:30] CALL MEETING TO ORDER 2. [5:30] PUBLIC COMMENT 3. [5:35] APPROVAL OF JUNE 8, 2023 MINUTES 4. [5:45] PACKET ITEMS Q&A (Discussion, 15 Min.) • Quarterly Financial Report (Packet Only) Lance Smith, Director, Financial Planning & Assets, Utilities • Light & Power Operational Update (Packet Only) Phillip Amaya, Deputy Director, Utilities Light & Power 5. [6:00] SECOND APPROPRIATION OF FUNDS FOR A MODERN CUSTOMER INFORMATION AND BILLING SYSTEM (Decision, 30 Min.) Lance Smith, Director, Financial Planning & Assets, Utilities 6. [6:30] VICE CHAIRPERSON ELECTION (Decision, 15 Min.) 7. [6:45] ENERGY BOARD OBJECTIVES (Discussion, 60 Min.) 8. [7:45] BOARD MEMBER REPORTS (5 min.) 9. [7:50] FUTURE AGENDA REVIEW (5 min.) Participation for this Energy Board Meeting will be in person in the Colorado Room at 222 Laporte Ave. You may also join online via Zoom, using this link: https://fcgov.zoom.us/j/96707441862 Online Public Participation: The meeting will be available to join beginning at 5:15 pm, July 13, 2023. Participants should try to sign in prior to the 5:30 pm meeting start time, if possible. For public comments, the Chair will ask participants to click the “Raise Hand” button to indicate you would like to speak at that time. Staff will moderate the Zoom session to ensure all participants have an opportunity to address the Board or Commission. To participate: • Use a laptop, computer, or internet-enabled smartphone. (Using earphones with a microphone will greatly improve your audio). • You need to have access to the internet. • Keep yourself on muted status. ENERGY BOARD REGULAR MEETING 10. [7:55] ADJOURNMENT ENERGY BOARD June 8, 2023 – 5:30 pm 222 Laporte Ave – Colorado Room ROLL CALL Board Members Present: Jeremy Giovando, Bill Althouse, Thomas Loran, Vanessa Paul, Marge Moore Board Members Absent: Bill Becker, Brian Smith, Alan Braslau, Steve Tenbrink OTHERS PRESENT Staff Members Present: Christie Fredrickson, Phillip Amaya, Kendall Minor, Cyril Vidergar, John Phelan, Brad Smith, Randy Reuscher, Rhonda Gatzke (remote) Members of the Public: Jan Jones (remote) MEETING CALLED TO ORDER Meeting Chairperson Paul called the meeting to order at 5:38 pm. ANNOUNCEMENTS & AGENDA CHANGES Board member Loran will defer his presentation to another meeting when more of the Board is present to ensure a thorough discussion. PUBLIC COMMENT None. APPROVAL OF MINUTES In preparation for the meeting, board members submitted amendments via email for the May 11, 2023, minutes. The minutes were approved as amended. STAFF REPORTS Executive Director Update Kendall Minor, Utilities Executive Director Mr. Minor asked the Board what their thoughts were after attending Platte River’s Integrated Resources Plan Community Listening Session. Board member Loran said he thought the presentation was good and the PowerPoint slides were well done, his main concern is that Platte River believes they can only hit 88% renewable energy by 2030 but they don’t have any steps to close the gap to 100%. Mr. Loran viewed that as a major shortfall. Board member Althouse wants to know if local resources provide capacity, would that reduce Platte River’s investment in utility-scale? He said Platte River did not answer his question at the session. Mr. Minor said the short answer is likely that it is a possibility. Board member Moore wondered if the cost to reach the last 10-12% is astronomical, would that money be better spent on the many other projects that would help people locally. She hopes that pathway is being considered. Mr. Minor said he thinks the answer to that question lies more within what that looks like, what is the cost, and where is the best use of the investment. There are many challenges to consider ENERGY BOARD REGULAR MEETING along the way. Board members discussed the retirement of coal power plants (Rawhide). Mr. Phelan said there are federal and state requirements to close Rawhide by December 31, 2029.The alternative was to install additional pollution controls for haze, but the choice was made to commit to closing because the cost for the additional pollution controls were very high. Board member Loran said his concern is that as of today there does not appear to be a plan to backfill the electricity from Rawhide after its closing. If it is taking 18 months to procure a transformer, how long will it take to build enough capacity to fill Rawhide’s void? Mr. Minor agreed and said the Utility needs to think through this process through holistically, he added it’s the right thing to do for the ratepayers. Board member Althouse asked what will happen to the water that is used at Rawhide once its closed. Mr. Minor said much of it is tied to the Windy Gap (Northern Water’s water diversion dam on the Colorado River). Nothing has been finalized yet and the Utility still needs determine the best use of that resource. Board member Paul asked if Platte River and the City have a good partnership to align with these goals. Mr. Minor said historically the relationship has been strained, but the goals are similar and both organizations have been working to improve the relationship. Mr. Amaya added many of the Utility’s staff have great relationships and partnerships with staff at Platte River. Board members asked if Platte River’s Integrated Resource Plan has been distributed yet. Mr. Minor advised the report is not yet finalized and remains a work in progress. Mr. Phelan added the IRP is required by WAPA (Western Area Power Administration), but it is not a roadmap for Platte River like it might be in an Investor-Owned Utility. The Board should consider it a milestone in an ongoing planning process. The board has the ability to act outside of that document, it is not binding. Mr. Minor asked the Board to consider the climate goals and their larger meaning; if the City does not hit 100% renewable electricity by 2030, would 80% still be commendable? What about 90% or 95%? Packet Item Q&A No questions on the included packet items. BUILDING ENERGY CODE STRATEGY DEVELOPMENT UPDATE Brad Smith, Energy Code Project Manager Mr. Smith reviewed the current status of Energy Code adoption at the State level; Colorado is a home rule state, so there is not a state-enforced energy code, and each jurisdiction can enforce codes as they see fit. Mr. Smith said he views that as a positive because it allows the City to amend and strengthen the current code. In August 2019, HB 19-1260 established a minimum energy code for any jurisdiction adopting building energy codes, requiring adopting one of the three most recent building energy codes. Then, HB 22-1362 put in place building greenhouse gas emissions, which mandated the state put in place a state Energy Code Board to develop EV, PV, and Electric Ready code (by June 1, 2023), as well as Low Energy and Carbon Code (by July 1, 2026). Board member Loran asked if the codes apply only to new construction. Smith said mostly new construction, but some parts of the code would apply to alterations or renovations. Repairs are typically not required to adhere. ENERGY BOARD REGULAR MEETING The International Code Council (ICC) publishes new code editions every three years. Fort Collins adopts the most recent code edition within one year of issuance from the ICC. Fort Collins is currently operating under the 2021 I-Codes, which were adopted on April 15, 2022, with local amendments. Mr. Smith said a grass roots effort was started by several jurisdictions across the nation to become governmental voting members of the ICC. These members were able to help get the code moving in an energy conscious direction, which had previously not been able to gain a lot of traction. The Department of Energy (DOE) provided estimated improvement in energy codes, which shows residential improvement 9.3% over 2018, and commercial 4.7% over ASHRAE 90.1 2016 (adopted from 2018 IECC). The 2021 IECC and ASHRAE 90.1-2019 are now the most closely aligned. Our Climate Future outlines in Big Move 6 (Efficient, emissions free buildings) to “develop an energy performance path for new construction to zero carbon building by 2030.” The proposed approach begins in the 2024 code cycle: Develop EUI (Energy Use Intensity) and CO2e reduction targets, then develop performance code path and language, followed by creating an implementation guide and training offerings, from there staff will begin community engagement and work toward City Council adoption, and finally they will evaluate effectiveness, measure performance, and adapt the targets. The benefit to this approach is that it runs on one code path, and everything modeled for performance, there is flexibility for builders, and this could result in reduced cost of construction. Mr. Phelan noted this is approach is unique because of the development of an EUI target. Mr. Smith highlighted a potential funding opportunity under the Bipartisan Infrastructure Law that the City hopes to be granted: Resilient and Efficient Code Implementation (RECI). The Funding Opportunity Announcement (FOA) seeks applications with project teams ready to advance building energy codes and other building efficiency policies within a particular region, state, or local jurisdiction and includes $45 million over five years (anticipating 10-30 awards). The full application was submitted March 27 and selection notifications will be sent on June 26. Mr. Smith noted a few ways the Board can support this process by continuing to be aware and informed, sharing with their network and disseminating the importance of codes, be prepared to plug-in during the third quarter in 2024 (Code Review Committee), inform City Council and support Building Services in adoption of code, and support the upcoming Building Forward event on July 15. BOARD MEMBER REPORTS None. FUTURE AGENDA REVIEW The Board’s June work session will focus on aligning their planning calendar with City Council’s 6-month planning calendar, as well as a brief presentation from Board member Loran about the Board’s prioritization process. Their July meeting will include quarterly updates from Light and Power and Utilities Finance, an update on the Customer Information/Billing system project, and a field trip out to see the Ice Box Challenge. ADJOURNMENT The Energy Board adjourned at 7:48 pm. 1 2023 Mid-end Financial Update Energy Board 07/13/2023 Light & Power Annual Financial Metrics 2 The outstanding debt associated with Connexion is not considered above nor is the anticipated debt issuance for 2023 which will not have a debt service payment until 2024. Strategic Financial Plan Target 2023 Target 2022 2021 2020 2019 Operating Margin > 2.0%3.0%2.6%5.0%2.5%-1.1% Debt Coverage Ratio > 2.0 ----- Rate Adjustment < 5.0%5.0%2.0%3.0%5.0%5.0% Light & Power Year End 2022 Revenues 3 Light & Power Year over Year Revenues 4 Light & Power Year End 2022 Expenses 5 Light & Power Year over Year Expenses 6 Light & Power Year over Year Purchased Power Expense 7 Light & Power Year over Year Community Renewables Purchased Power Expense 8 Light & Power Year-to-date Financial Update Notes Through June 2023 9 •Operating Revenues are over budget •Operating Expenses continue to be challenging in 2023 •Operating Income is below target due to higher OpEx •Non-operating Revenues from new development and earned interest are over budget but new development seems to be slowing 10 Light & Power Operations Quarterly Service Area Report –Q2 2023 Phillip Amaya, L&P Director, Utilities Outline 2 •L&P/PFA Joint Training Field •CIP Projects •Substation Work •Current Outage Stats •Digital Transformation •Small Cells •Vacancies •Collaboration & Planning with Gail Current Work & Updates Challenges Culture Project Status: •Initial poles for climbing and pole rescue training have been set. •10x10 vault has been set. •Worked in cooperation with Streets to build an area of crushed concrete in the vehicle extrication training area to minimize mud and mud tracking. •Working through technical rescue props and plans using water/sewer props and various trench scenarios. 3Current Work & Updates •L&P and PFA Joint Training Field L&P and PFA Joint Training Field – Whole Map View L&P and PFA Joint Training Field – L&P Section View Overhead to Underground (OH-UG) Projects: Overland OH-UG Conversion (In Design): •Two customer conversions at 620 & 720 Overland Trail. Drake Road OH-UG Conversion (In Design) •Two customer conversions at 2407 & 2411 Drake Road. 6Current Work & Updates •Capital Improvement Projects Cable Replacement Projects: Skyway South (Under Construction) •27 sections of single-phase power and four sections of three- phase power. Scotch Pines (Under Construction) •18 sections of single-phase power and five sections of three- phase power. Stonehenge (Under Construction) •56 sections of single-phase power and one sections of three- phase power. Foothills Green (Under Construction) •21 sections of single-phase power and nine sections of three- phase power within the Village West 9th subdivision. Harmony Park MHP (In Design) •21 sections of single-phase power. College & Horsetooth (In Design) •Three sections of single-phase power and 12 sections of three- phase power within the Kreger Plaza subdivision. Wable Drive (In Design) •28 sections of single-phase power within the Larkborough subdivision. •Improved the high-side and transformer protection schemes, with Platte River, to match the standard design. •Successfully programmed, installed, and tested PM8, utilizing Connexion’s fiber for SCADA communications. •Performed extensive investigation of PM6 following malfunction. •Replaced problematic 900MHZ radio at PM5 with ONT and fiber. •Replaced Richard’s Lake Substation switchgear north HVAC unit. •Replaced Linden Tech battery charger. •Drake FDR 216 termination. •Implemented new Everlock shared locking mechanism at Linden Tech Substation gate. •Quarterly switchgear battery maintenance. o Procurement of replacement battery banks (Richard’s Lake & Linden Tech). •Design & Fabrication of grounding breaker transportation/lifting device. •Replaced eyewash solution cartridges at all substations. 7Current Work & Updates •Substation/Distribution Automation Work •During the one-year period from 6/1/2022 -5/31/2023: •Reliability of the distribution system was 99.9945% (Average Service Availability Index) •Customers that experienced an outage were out an average of 67.12 minutes (Customer Average Interruption Duration Index) •If all customers had been out of power for an equal amount of time, they would have been out for 29.06 minutes. (System Average Interruption Duration Index) •Customers experienced an average of 1 power outage every 2.33 years. (System Average Interruption Frequency Index of 0.43) •No outages lasting less than a minute during the period. (Momentary Average Interruption Frequency Index) •A total of 133 unplanned outages occurred. •The wet weather this spring resulted in increased number of secondary cable failures. •A secondary cable with a crack or nick in its insulation can remain operational in drier soil, but water ingress tends to accelerate the failure mode. •Between March 1 and May 31, a total of 12 secondary cables failed compared with just two over the same period in 2022. 8Current Work & Updates •Outage Stats •Converting to modernized systems for grid operations & management (ADMS TBD) and asset management (Maximo)will yield high value in many ways; currently felt the lack as follows: •EDAR resides on a server appliance with an OS that is obsolete requiring a significant planning effort for a physical software system move to an appliance where OS is supported. Our new ADMS can be selected so that we are running SaaS or a modernized system where hardware is maintained and managed for us. •Continued reliance on EDAR will challenge any investigation efforts (i.e., legal reasons, audits, or otherwise) that require an understanding of the operational state(s) of the FC electric grid for a given period. It would be a cumbersome effort to restore multiple backups of EDAR to get the full story. With our modernized ADMS we should expect the ability to query the operational state for a given date/time range from an ongoing historical dataset managed in FC data warehouse. •Discovered numerous data quality issues in our custom asset management applications. This is delaying progress for transformer loading/data analytics project, with a target due date 6/15/2023. For example, in SED we had transformers that were set multiple times in a row without removal of transactions in between. This is a combination of a data governance issue (making sure users understand how to properly reflect activity), and a byproduct of using a custom-built application that doesn't present a user- friendly UI that supports business process steps. 9Current Work & Updates Challenges: Digital Transformation: 10Current Work & Updates •Vacancies Vacant Position Manager Reason for vacancy Classification Department Status L&P Safety Manager Amaya New add through budget Unclassified Mgmt? tbd L&P Ops HR leveling pending Director, Electrical Engineering Amaya Bromley Unclassified Mgmt O&T Sr Manager, Electrical Engineering Amaya Hover Unclassifed Mgmt? tbd O&T Analyst I, GIS Margenau Classified O&T Electrical Engineer III Bader New add through budget Classified Engineering Sr Technical Project Manager Snowdon Kovacs Classified Engineering Re-grade pending for PM's? Coordinator, Customer Support Stanley .75 FTE Classifed 1.0 tbd Engineering Business Support I Serna new add to= 1.0 w Cindy .5 FTE Classified Engineering Engineering Intern Spaulding 2 budgeted, 2 vacant Hourly Engineering Line Groundworker King Behrman Classified EFS Cade Steel, starts 6/26 Line Groundworker King Flores promotion Classified EFS Colby Scott, starts 6/26 Line Groundworker King Harras promotion Classified EFS John Ferree, starts 7/10 Locator, Elec Dist. Field Ops Griffin New from Exception Classified EFS/CS&A Posted, interviews late June Locator, Elec Dist. Field Ops Griffin New from Exception Classified EFS/CS&A Posted, interviews late June •Challenges: L&P discovered a problem with a new “cobrahead” collocated small cell design that will not accommodate a Form 2S electric meter without modification. •This design differs from the 45 poles that have already been installed for Verizon, which can accommodate the 2S meter. •L&P is working with Crown Castle to come to a resolution on the 120 poles that they have already had manufactured. •Good News: Collocated Post Top small cell design has been coordinated with Crown Castle. •This design will be applied to the Small Cell Design Standards document •Crown Castle Projects: •2 project constructed •124 approved site applications •27 approved building permits •7 scheduled installs to be constructed in the next month 11Current Work & Updates •Small Cell Update Collocated Post Top Streetlight Design •Work with Gail Gumminger, Innovative Connections Inc.: •L&P Director and L&P Business Supports are working with Gail one-on-one to strategize culture and engagement within the department and on an individual contributor level. •With dynamic communication and trust building as a couple of the main targets •Gail will work with L&P’s Employee Committee and Management Committee to understand and guide the groups wants, needs, and partnership. •Off-Site Meetings with L&P individual departments. •Open dialogue with L&P staff, in their work groups, regarding collaboration and processes. •Gail helping to plan the agenda and discussion questions to ensure engagement from staff. 12Current Work & Updates •Culture Work 13Current Work & Updates •Culture Work Cont. 14Current Work & Updates •Culture Work Cont. 15Current Work & Updates •Culture Work Cont. 16Current Work & Updates •Culture Work Cont. Utilities Billing System Appropriation 07/13/2023 Lance Smith Senior Director of Finance for Utilities 2Customer Information System – Customer Self-Service Portal What: A modern customer portal and billing system on a hosted platform Why: Replacing our 22-year-old billing system is essential to providing Fort Collins Utilities customers the best and safest best customer experience to interact with their community owned utility. Our priority is to provide accurate billing, convenient billing solutions, and comprehensive real time data that enhances our customer's understanding of how they use energy and water and how much they cost. When: October 2023 – 2025 At what cost: 1st Appropriation $4,250,000 2nd Appropriation $9,700,000 Total Solution Implementation $13,950,000 Ongoing Annual Subscription Fees $1,250,000 / yr. 3Use of Funds From the First Appropriation Request Project Management •Managing project scope, installation plans, schedule and budget •Minimizing project risks by proactively addressing issues as they arise •Addressing staffing challenges for the Solution Provider and City Quality Assurance •Product testing and process validation •Establishing clear service level expectations •Ensuring project requirements are met within the initial project scope Contract Review •Outside Counsel review of the Vendor of Choice’s agreement and functional requirements are met Contractual Staffing •Allow existing staff to focus on ensuring the new solution will meet business requirements 4Additional Appropriation Requested Software as a Service Implementation $3,250,000 Software Licensing through Implementation $2,400,000 Organizational Change Management (OCM) $1,500,000 Testing Protocol Development and Management $900,000 Training Development and Initial Training $900,000 Business Process Analysis and Alignment $750,000 Total $9,700,000 5Use of Funds From the Second Appropriation Request Software as a Service (SaaS) •Dedicated host platform created and subscribed software modules loaded •Software interfaces established and customer data transferred Software Licensing •Software subscription fees are paid monthly Organizational Change Management •Outside certified Change Management Consultants will partner with internal Change Agents to ensure a successful implementation and engaged end users •Increased organizational change management capabilities Testing Protocol Development and Management •Testing protocols will be developed and executed throughout implementation and future releases Training Development and Initial Training •Training strategies and materials will be developed and deployed following a needs assessment Business Process Analysis and Alignment •All business processes in the Meter to Cash lifecycle will be documented and optimized 6Available Reserves ($ are in millions)Light & Power Water Wastewater Stormwater Available Reserves EOY 2022 $29.0 $45.1 $19.5 $15.0 LESS 2023-24 BFO Investments ($4.7)($19.1)($7.2)($1.6) LESS Initial CIS-CX Appropriation ($2.1)($1.1)($0.5)($0.5) Estimated Available Reserves $22.2 $24.9 $11.8 $12.9 Amount Being Requested ($4.9)($2.4)($1.2)($1.2) Remaing Available Reserves $17.3 $22.5 $10.6 $11.7 7Suggested Motion I move that the Energy Board supports bringing an appropriation ordinance forward for the consideration of the full City Council to support the licensing and full implementation of the modernization of the Utilities Customer Information System – Customer Self Service Portal Thomas Loran July 13, 2023 Energy Services Business Unit Business Process Management Framework For Energy Board Discussions Secon d Draft Disclaimer •Not a Powerpoint Artist •Not a consulting engagement, just observations based on consulting background •This is a work in progress / needs word smithing •Categories and subcategories are not inclusive but are designed to stimulate discussion •Primary source of goals is Our Climate Future Plan Revised - March 31, 2021 •Secondary source of goals comes from discussions with City Staff • Council Level Policies Renewable Electricity Pricing Electriﬁcation Service Level 100% by 2030 99.996% Availability Four Competing and Interdependent Lanes 80% Reduction in Greenhouse Gas by 2030 No More Than 5% Price Increase Equity Renewable Electricity Primary Environmental Goal: •Provide 100% renewable electricity by 2030 with grid and local sources Additional primary goals: •Bidirectional demand ﬂexibility capacity of 5% of peak loads •Provide 5% of community electricity from local distributed renewable sources  Renewable Electricity PRPA Local Constant Variable (Base)(Peak) (Not Under Direct Control)Equitable ProcessEquitable ProcessPlanning 88% by 2030 Need Metrics Electrification Primary Environmental Goal: •80% Reduction in Greenhouse Gas by 2030 Additional primary goals: •20% reduction in forecast electricity •10% reduction in forecast natural gas use •Adoption and enforcement of updated energy codes on a three year cycle. Electriﬁcation Oil Gas Commercial Residential ProcessProcessSubstitue Reduce Personal Vehicles Fleet Vehicles Public Transportation ProcessProcessMulti-Family Unit Single-Family Unit ProcessProcessNew Existing New Existing ReduceSubstitue Substitue ProcessProcessReduceSubstitue Substitue ProcessProcessProcessNeed MetricsNeed Metrics All Processes Must Be Equitable Service Level 99.996% Availability Plan Implement ProcessProcessOperate Maintain ProcessProcessAnnual reliability metrics of: •Customer Average Interruption Duration Index (CAIDI) < 45 min •System Average Interruption Duration Index (SAIDI) < 30 Min •System Average Interruption Frequency Index (SAIFI) < 0.66 Annually  All Processes Must Be Equitable The pricing of electrical energy should strive to balance the following principles: •Reﬂect the short-term and long-term costs, both direct and indirect, of generating and delivering electricity •Demonstrate equity and fairness by distributing costs over the customer base in proportion to the cost of service •Consider both per unit costs (rates) and total bills in comparisons of competitiveness and affordability •Promote efficiency and conservation with meaningful price signals •Set a clear, transparent, long-term direction for electric rates with gradual changes •Develop rates in the context of long-term asset planning, ﬁxed cost recovery and ﬁnancial stability •Reﬂect the short-term and long-term costs, both direct and indirect, of generating and delivering electricity ELECTRICITY PRICING Pricing No More Than 5% Increase (Soft Goal) Residential Connection PeakOff Peak ProcessProcessProcessCommercial Connection Peak ProcessProcessAll Processes Must Be Equitable Board Responsibilities For Discussion •Monitor progress in achieving the Council Level Guidance and advise council of any potential policy shortfalls •Advise council of any recommended policy additions or changes •Working with City Staff identify missing categories, subcategories, and / or processes •At a high level, review City Staff process presentations for applicability and completeness towards achieving Council Level Guidance Not Board Responsibilities For Discussion •How to do a process