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HomeMy WebLinkAboutENERGY BOARD - MINUTES - 06/13/2024 ENERGY BOARD June 13, 2024 – 5:30 pm 222 Laporte Ave – Colorado Room ROLL CALL Board Members Present: Marge Moore (remote), Alan Braslau, Thomas Loran, Jeremy Giovando, Erick Shenk (remote), Frederick Wegert, Wendell Stainsby, Scott Canonico (remote) Board Members Absent: OTHERS PRESENT Staff Members Present: Christie Fredrickson, Brian Tholl, Michael Authier, Coy Althoff, Cyril Vidergar, Phil Ladd, Leland Keller, Yvette Lewis-Molok, Leigh Gibson (Platte River, remote), Mary Horsey Members of the Public: Sue McFaddin, Jennifer Hammit MEETING CALLED TO ORDER Interim Chairperson Loran called the meeting to order at 5:30 pm. ANNOUNCEMENTS & AGENDA CHANGES None. PUBLIC COMMENT Sue McFaddin, a former Energy Board member, asked the Board to review Platte River Power Authority’s draft Integrated Resource Plan. The draft includes five scenarios, and she asked the Board if they would encourage Platte River (through the City’s appointed board members) to explore a sixth scenario. The scenario she would like to see considered is to not purchase a new aeroderivative gas turbine and continue to use the existing 388 MW of combustion turbines (CTs) they already have. United Power recently learned that between their existing CTs, and their Western Area Power Administration (WAPA) allocations creates enough capacity to join the Southwest Power Pool regional transmission network. As a ratepayer, we cannot afford 6.3% increases over the next 10 years. APPROVAL OF MINUTES In preparation for the meeting, board members submitted amendments via email for the May 9, 2024, minutes. The minutes were approved as amended. STAFF REPORTS Introduction to the Integrated Resource Plan (Packet Item Only) Brian Tholl, Senior Manager, Mechanical Engineer The Board was provided a packet item to refresh and/or introduce them to the concept of Platte River’s Integrated Resource Plan, which they reviewed ahead of the meeting. IRPs use the best information available today to evaluate potential future resource scenarios for meeting customer electricity needs. IRPs started appearing in the 1980s in response to the energy crises of the 1970s and rising fuel costs. They were required in most states by the 1990s, with specifics varying by state legislation and regulations, utility ownership type (municipal vs inventor), and utility size. IRPs are ENERGY BOARD REGULAR MEETING generally updated on a frequency of 2-5 years, with a defined maximum number of years between updates, but it can be updated more frequently if deemed relevant. The planning horizon typically spans between 10-20 years out. Specifically, Platte River currently performs an IRP every four years looking 20 years ahead. IRPs will include background information (such as the what, the why, and the how), as well as multiple future scenarios balancing generation, capacity, reliability, emissions, and cost. They will also include a staff recommendation of which scenario to pursue for now and an action plan with specific activities needed prior to the next IRP. This process is usually a multiyear timeline including community listening sessions, scenario research, studies, development and analysis, document generation, stakeholder review and refinement, and finally filing the submission to WAPA (in the case of Platte River). Chairperson Loran said when Platte River presents the IRP to the Energy Board in August, he hopes the Board can collectively say they support or don’t support the final recommendation and provide context as to why. In his opinion, there are glaring omissions and he also found it confusing that some units of measurement used seem to change throughout the report. Board member Wegert commented that the usage of undefined acronyms is confusing. Board member Braslau said it is contradictory to invest in a gas plant and simultaneously claim to provide 100% renewable electricity and be carbon free. Platte River is marketing a 100% renewable future, but this is in direct opposition to their current plans and investments. Board member Moore asked if Platte River has addressed the potentially needed new transmission lines, since we know it takes years to build transmission lines. She noted that the president and CEO of United Power, Mark Gabriel, has said that gas will be a 50-year “bridge” fuel as technology and construction is catching up. Mr. Tholl said it would be reasonable to include a question for Platte River about transmission lines. He also encouraged the Board to review the May Platte River Board of Directors meeting packet. OVERVIEW OF POWER SUPPLY AGREEMENT Cyril Vidergar, Assistant City Attorney II Power Mr. Vidergar explained there are two principal agreements which form the basis of the City’s relationship with Platte River, the Organic Contract and the Power Supply Agreement (aka “The All-Requirements Contract”). Both agreements expire in 2060, but prior to 2019 they expired on a ten-year cycle. The Organic Contract establishes Platte River Power Authority as a separate governmental entity created by the municipalities of Estes Park, Fort Collins, Longmont, and Loveland. The contract was originally made and entered into as of June 17, 1975. Mr. Vidergar highlighted some provisions from the agreement that are of interest to Fort Collins in particular. One provision designates Platte River as a separate governmental authority, which empowers them to take any action that any of the municipalities can take in their governmental role, such as incur debt and enter into contracts. In 2019, a clause was added to clarify that due to increased complexity and risk in the electric utility industry, the Organic Contract authorizes the Platte River to engage in a broad range of services (not just providing electricity) which are incidental to or supportive of the Municipalities' continued ability to provide electric power and energy services to their customers on a competitive basis. ENERGY BOARD REGULAR MEETING The core purposes of Platte River and the agreement are to conduct its business and affairs for the benefit of the Municipalities and their inhabitants, including to provide the electric power and energy; to engage in business activities related to the provision of electric power and energy services that the Board determines are likely to enhance the competitive position of Platte River or the Municipalities; and to provide any additional designated function, service, or facility lawfully authorized to any combination of two or more of the Municipalities. Functions, services, or facilities of Platte River include the supplying of the electric power and energy requirements of the Municipalities and retail customers within the Municipalities; and the provision of any additional function, service, or facility, by means of: acquiring, constructing, owning, etc. [facilities to produce and transmit electric power], purchasing electric power and energy from electric utilities and other producers, selling energy at wholesale to Municipalities, selling and disposing of any surplus energy or capacity, and developing electric energy resources (including renewable sources). Platte River Power Authority has a Board of Directors in which all legislative power of Platte River is vested. The board is composed of eight members, with two member representatives from each municipality: the Mayor (or their appointee) and a representative appointed by City Council, typically the Utilities Director. The General Manager shall be the principal executive officer of the Authority with full responsibility for the planning, operations, and administrative affairs of the Authority, and the coordination thereof, pursuant to policies and programs approved by the Board of Directors. Mr. Vidergar noted that the term of the contract with continue until December 31, 2060, and until thereafter terminated by any Municipality following note less than 12-months written notice. All municipalities must agree to the termination. He also noted that the bonds, notes, and other obligations of Platte River are not the debts, liabilities, or obligations of the Municipalities; however, the contract may not in any event be terminated so long as Platte River has bonds, notes, or other obligations outstanding. Chairperson Loran said something he understood from his review is that each municipality has two votes, but if there were to be a tie in a voting matter, the votes are then weighted by electricity purchases. Mr. Vidergar said he would have to review to confirm if that is accurate or not. Board member Braslau asked if it is true that the members of the Board are bound by contract or bylaw to vote in the interest of Platte River Power Authority as opposed to the individual interests of Municipalities they represent. Mr. Vidergar said the Organic Contract does not contain anything expressly written preventing board members from advocating for their municipalities. (He said there are likely bylaws of the Board of Directors which could indicate otherwise, but he does not have those at the ready to reference. The Power Supply Agreement, or the All-Requirements Contract, outlines the terms of electricity purchase from Platte River to the Municipalities. Mr. Vidergar also outlined several clauses in this agreement that would be of interest to Fort Collins. The Platte River Board of Directors approved a Resource Diversification Policy (RDP) with the goal of becoming 100% non-carbon by 2030, in doing so the Board recognized that distributed generation will be needed to achieve this goal. The agreement states intermittent resources must be managed to ensure continued system reliability; and Platte River will equitably manage the impact of adding and firming intermittent resources amongst the four communities to ensure continued financial sustainability. Board member Giovando asked, from a legal standpoint, what it means to set a goal in a contract, such ENERGY BOARD REGULAR MEETING as 100% non-carbon by 2030. Mr. Vidergar explained that the “whereas clauses” present in these agreements are not enforceable authorities and serve to frame the context and background of the agreement. In order to meet the goal of the RDP, the parties are committed to use an incremental amendment process (recognizing Platte River is not intended to be the only means by which the parties either singularly or in coordination work toward meeting the goal of the RDP) to explore expanding opportunities for distributed generation resources that likely become an increasingly important component of our future resource mix and to amend this agreement when appropriate to accommodate technologies and business models that are not contemplated today. At its core, the Power Supply Agreement states that Platte River shall sell and deliver, and Fort Collins (et al) shall buy, all electricity needed for the Utility’s electric system; however, Fort Collins shall have the right to generate its own power to the extent of the capacity of its generating facilities on September 5, 1974 and may generate power for its own use, provided that the total rated capacity of new generation is < 1,000 kW or 1% its peak load, whichever is greater, provided further that if Fort Collins develops new resources as set forth above Platte River commits to meet with Fort Collins to discuss in good faith an increase in the total rated capacity limit. Mr. Tholl added that the 1% capacity limit is in reference to Utilities-owned assets and would not be inclusive of anything behind the meter such as residential or commercial rooftop solar. Chairperson Loran asked if the Riverside Community Solar Garden is the only Utilities-owned asset. Staff clarified there is a small garden on Kyle Avenue as well. Mr. Loran asked what percent of our allowed capacity the Utility is currently producing. Mr. Tholl said Fort Collins peak load is around 380MW, so the 1% capacity limit would be around 3.8MW; he estimates the Utility is currently producing around 0.5MW so there is plenty of overhead available within the capacity restriction. Board member Loran asked about restrictions on DC fast chargers because the contract appears to say we cannot resell energy. Mr. Vidergar said that is an interesting question that would require some additional exploration. He is not aware of proposals that have come through development review for projects such as that. At least once a year, the Platte River Board of Directors review the rates for electric power and energy furnished, and if necessary, shall revise such rates to produce revenues which shall be sufficient, but only sufficient, with the revenues of Platte River from all other sources, to meet costs of O/M, power purchases, bond payments, etc. Mr. Vidergar said there is room, and it is anticipated that this agreement is somewhat of a living document. Board member Giovando asked if Fort Collins wanted to change the capacity limit to above 1%, would that require sign off from all four municipalities since all the agreements are the same. Mr. Vidergar said the language suggests that yes, all municipalities would have to agree to change. VPP DEFINITION & CONSUMER IMPLEMENTATION INTRO Brian Tholl, Senior Manager, Mechanical Engineer A virtual power plant (VPP) is a network of distributed energy resources (DERs) and systems that, when grouped together, can provide a reliable power supply for energy users. This differs from “traditional” ENERGY BOARD REGULAR MEETING centralized, large-scale power generation and delivery. VPPs are regionally unique and built to handle several use cases. VPPs require programs to support DER adoption and VPP best practices continue to emerge. Staff is taking a structured approach to VPP Planning, assessing goals, drivers, desired outcomes, challenges, benefits; identifying services, functional capabilities, target technology roadmap; and determining the current state, performing a gap analysis, and a roadmap. Based on that assessment and identification of what a local VPP should do, staff’s goals are inclusive of things like providing DER (distributed energy resources) to all customers and facilitate DER deployment, instituting common standards and process for DERs among Platte River and other owner communities, complying with cybersecurity and data privacy protection policies, integrating DERs into operations, etc. Mr. Tholl explained the development of a local VPP would facilitate 17 functional capability categories (such as analytics & reporting, forecasting, grid reliability, DER visibility and program management, etc.), as well as over 160 functional use cases, which help define needed technology systems and architecture. Within the VPP ecosystem, you will find customers, Fort Collins and other owner municipalities, Platte River, and the regional market (Southwest Power Pool). Customers adopt DERs and participate in VPPs provide service (productivity, comfort, convenience, reliability, resilience), decarbonize, want to save money. Fort Collins (et al) enable DER adoption and distribution benefits provide customer service, decarbonize, improve reliability and resilience, and manage costs for their respective customers. Platte River enables DER adoption and transmission benefits to serve the owner municipalities, decarbonize, improve reliability and resilience, and manage costs. The Market enables DER adoption and VPP participation to improve reliability and resilience and economically serve load. There is a certain level of complexity between each of these relationships due to differing policies, requirements, agreements, systems, programs, integrations, data and information, and value. Maximum DER benefits will come from a suite of solutions, including control, request, rates and price signals, behavioral, and passive (efficiency, etc.), and not only control of the inventory of DERs. Board members asked if staff has considered incentivizing or providing grants to customers who swap out inefficient, heavy use appliances (such as air conditioning units) and measuring what effect that would have on our rates and energy usage. Mr. Tholl acknowledged that efficiency is king and said staff could potentially provide both numbers in cost and kWh. Mr. Tholl closed his presentation by emphasizing that the Utility cannot be competing with Platte River in this space, there has to be a holistic perspective to the customer. He noted that Fort Collins is committed to continue to share lessons learned on 10+ years of history of local DER management. BOARD MEMBER REPORTS Vice Chairperson Moore said while she found Mark Gabriel’s presentation fascinating, she understands after Mr. Vidergar’s presentation tonight that it may not be an option for us to exit our contract with Platte River. Chairperson Loran commented that one of the problems Utilities are facing is tremendous lead time for transmission facilities, but he recently heard of a new technology that has been deployed in the field using existing transmission towers but changing the lines out for better thermal management, which is providing double the capacity. ENERGY BOARD REGULAR MEETING FUTURE AGENDA REVIEW In July, the Board will hear an update regarding Building Performance Standards, as well as a presentation about how Platte River’s Integrated Resources Plan will affect the City’s Our Climate Future Plan. ADJOURNMENT The Energy Board adjourned at 7:43 pm.