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HomeMy WebLinkAbout09/12/2024 - ENERGY BOARD - AGENDA - Regular Meeting ENERGY BOARD REGULAR MEETING September 12, 2024 – 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 AUGUST 8, 2024 MINUTES 4. [5:45] BUILDING ENERGY CODE AND PATH TO ZERO CARBON NEW CONSTRUCTION UPDATES (30 Min, Discussion) Brad Smith, Energy Code Project Manager 5. [6:15] CAPITAL IMPROVEMENT PLAN AND INPUTS TO UTILITY RATES (30 Min, Discussion) Randy Reuscher, Lead Analyst, Utility Rates Phil Ladd, Manager, Financial Planning & Assets 6. [6:45] CITY MANAGER’S RECOMMENDED BUDGET (30 Min, Discussion) Brian Tholl, Senior Manager, Mechanical Engineer 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 Public Attendance & Comment Members of the public are encouraged to attend either in person or online. Members of the public attending in person are expected to sign in on the public sign-in sheet. During the “Public Comment” segment of each meeting, comment will be allowed on matters of interest or concern to members of the public, including items the Board will consider at that night’s meeting. Each speaker will only be allowed to speak one time during Public Comment. Online Public Participation: The online meeting will be available to join at approximately 5:15 pm, September 12, 2024. 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 7. [7:15] MEMO: PLATTE RIVER’S INTEGRATED RESOURCES PLAN (30 Min, Decision) 8. [7:45] BOARD MEMBER REPORTS (5 min.) 9. [7:50] FUTURE AGENDA REVIEW (5 min.) 10. [7:55] ADJOURNMENT ENERGY BOARD August 8, 2024 – 5:30 pm 222 Laporte Ave – Colorado Room ROLL CALL Board Members Present: Marge Moore, Alan Braslau, Thomas Loran, Frederick Wegert, Wendell Stainsby, Scott Canonico, Brian Smith, Jeremy Giovando, Eric Shenk Board Members Absent: OTHERS PRESENT Staff Members Present: Christie Fredrickson, Brian Tholl, Yvette Lewis-Molok (remote), Tyler Marr, Michael Authier, Travis Walker, Mary Horsey, Leland Keller, Jay Stowe (remote), Leland Keller, Masood Ahmad (PRPA), Jason Frisbie (PRPA), Leigh Gibson (PRPA, remote), Paul Davis (PRPA), Jennifer Hammit (PRPA, remote), Bryce Brady (PRPA, remote), Zach Borton (PRPA, remote), Pat Connors (PRPA, remote), Members of the Public: Sue McFaddin, Kevin Cross, Doug Henderson, Bill Althouse, Will Walters, Nancy York, Barb Krupnik-Goldman, Natalie Pierce, Zoe Young, Sam Killmeyer, Joachim Vogl, Rick Casey, Don Kipp, David Novella, Rick Coen, Roger Simpson (remote), Sonia Koetting (remote), George Weston (remote), Rhonda Gatzke (remote) MEETING CALLED TO ORDER Interim Chairperson Loran called the meeting to order at 5:30 pm. ANNOUNCEMENTS & AGENDA CHANGES None. PUBLIC COMMENT • Barbara Krupnik-Goldman expressed gratitude to the Energy Board for their opposition against Platte River’s plans to build a natural gas turbine. Platte River’s three pillars (reliability, environmental responsibility, and financial sustainability) have served as solid guidelines for the last 50 years; however, we are now living in a new world in which the heating of the atmosphere is producing a climate crisis. All decisions now and going forward must be framed with climate impact first and foremost; climate impact should be a fourth pillar. • Sam Killmeuer encouraged the Board to use their position to embolden City Council and the two City Representatives on the Platte River Board of Directors to stand against the plans for the natural gas turbine. She asked why Platte River is spending a significant amount of money on the turbines when they could be investing it back into clean energy. • Kevin Cross, a member of Fort Collins’ Sustainability Group, thanked the Board for their opposition member about the natural gas turbine. Since the results of the All-Source RFP have not been disclosed, he does not believe Platte River has made a convincing case for the turbine and does not think investing in and building additional generating capacity is necessary at this point. Instead, he would like to see Platte River enter into medium- or long-term contracts for a mix of renewable and fossil fuel dispatchable power that can tide us over until long term energy storage batteries and Virtual Power Plants become a demonstrably reliable option. Building a natural gas turbine will create significant and unsustainable rate increases. He asked that the Board continue to ask the hard questions and advocate for less costly, more climate friendly approaches to ensure a reliable supply electricity for Platte River’s owner communities. • Doug Henderson is speaking for the local Sierra Club, the State Sierra Club, and the Larimer ENERGY BOARD REGULAR MEETING Alliance for Health Safety and Environment. He thanked the Board for their position on gas plant proposal. He asked the Board to request an independent assessment and seek advice from NREL or RMI to evaluate the Platte River assessment and recommendations. These have been put forth by for-profit consulting firms using “black fox planning”, in which the assumptions are kept secret, and the data cannot be questioned. • Bill Althouse, former Energy Board member, implored the board to continue asking the hard questions in the interest of keeping rates low. Platte river is attempting to create a stranded cost barrier so that prosumers cannot claim capacity payments. • Will Walters supports the letter the Board sent in opposition of the natural gas plant, he hopes the Board will stay on track with asking the tough questions and help prevent the building of more fossil fuel generating capacity. • Nancy York expressed enthusiasm about the possibility of hydrogen, but the fact is the hydrogen used in the aero turbines will be made out of methane. She would much rather see the community working together with shared resources and shared batteries to face the climate emergency. APPROVAL OF MINUTES In preparation for the meeting, board members submitted amendments via email for the July 11, 2024, minutes. The minutes were approved as amended. PLATTE RIVER’S INTEGRATED RESOURCES PLAN Masood Ahmad, Platte River Power Authority Paul Davis, Platte River Power Authority Jason Frisbie, GM & CEO, Platte River Power Authority An Integrated Resources Plan (IRP) is a planning process that integrates customer demand and resources with utility resources to meet a utility’s future electricity needs as per the policy and guidelines of the governing body. In Platte River’s case, the IRP is a 20-year plan to meet: Goals of the Resource Diversification Policy (RDP) and the State Clean Energy Plan. The Typical IRP process is repeated every 3-5 years to plan for industry changes including: Technological progress, Consumer preferences, and Regulatory mandates. The Western Area Power Administration (WAPA) requires Platte River to prepare an IRP every five years, but they have accelerated filing the IRP due to the 2030 RDP goals. Mr. Ahmad explained the challenge of the IRP is to create a transition plan to retire 431 MW of coal, currently providing over half of the low-cost energy and reliable capacity to the owner communities. That capacity will need replaced with low or no-carbon energy and capacity within six years. Reliable grid operation requires energy, capacity and flexibility. The IRP must plan for all three attributes. While wind and solar are excellent sources of energy, they are not able to provide capacity and flexibility. These two vital attributes must be procured from other sources for successful grid operation. Chairperson Loran said he recognizes that we do not have a lot of water in this region, but we do have a lot of elevation, so he wondered why hydropower is not feasible for Platte River. Mr. Ahmad said that the target is for 2030, and the last reservoir that was approved took roughly 20 years to build after approval. Mr. Ahmad added that Platte River is in contact with several companies trying to build reservoirs in the area, but it is not an option for 2030. Board members inquired about hydrogen fuel cells. Mr. Ahmad said in the size that would be needed, the challenge is availability and reliability by 2030, even in distributed format. Mr. Ahmad noted that one of their consulting firms, Black & Read, has noted that utility scale fuel ENERGY BOARD REGULAR MEETING cells are not commercially viable at this time. Platte River will not rely on any technology that is not commercially proven, because once the Rawhide coal plant is decommissioned, reliability is paramount. If folks lose power during a severe cold snap, it becomes a matter of life and death. Mr. Ahmad displayed a graphic comparing a summer day supply and demand, and a dark calm event (Winter Storm Uri) in 2021. Weather events can take place in other parts of the country, and we might still feel the effects here, as we did with Winter Storm Uri. In the west, population centers are sparse and there is not enough transmission to be connected across the country and bring the power to this area. Dark Calm events (meaning no wind or solar), can be common; a three-day event happen up to three times a year, a five-day event happens once a year, six- or seven-day events happen once every three to four years. It is important to plan and forecast for these events. Chairperson Loran asked what happens when the prices go negative, would there be a pricing signal. Mr. Ahmad said they would communicate it’s a good time to charge your battery, your car, your power all etc. At the time the RDP was drafted in 2018, the cost of renewables was continually dropping, and many were forecasting that it would continue to do so. However, after the COVID-19 pandemic, renewable prices have more than doubled (since 2002) in the United States. Board member Giovando wondered if Platte River has to spend money on to create a generation source to build capacity, are renewables still less compared to fossil fuel alternatives. Mr. Ahmad said he does not have exact numbers, but he is very confident that fossil fuels have not doubled (as renewables have). He will follow up with the Board as that is data that is publicly available. Mr. Frisbie added that Platte River must show a plan that shows they can meet their load no matter what, then they can interact with the market and the most efficient resources run. The gas turbine enables the renewables, because without them, the coal plant must continue to run in order to meet the load. Batteries are still cost prohibitive at utility scale. Mr. Frisbie also said that when their Board passed the policy the goal was to go zero carbon by 2030, to go as far possible as quickly as possible while maintaining the three pillars. They knew when that goal was set that it meant no more coal, and the only way to get past 85% is to put in some kind of dispatchable capacity, even if there is tremendous success with VPPs within the owner communities. He said there is not one solution to this issue, and decisions need to be made right now to ensure everything works as intended through a couple years, before the metaphorical switch is turned off. It is not simple, if it were simple, everyone would already be doing it. Chairperson Loran said part of what the Board is asking tonight is for Platte River to educate them and provide the context the Board may be missing. His concern is that power purchase agreements (PPAs) don’t take advantage of the marginal cost of renewable energy, which is approximately zero. Platte River staff disagreed; Mr. Frisbie said right now they pay $5.00 per every MWh of wind they produce, because that has to be balanced by the balancing authority (Xcel Energy). He said Mr. Loran is correct if it is serving a municipal load or charging a battery, but after that, what is its cost if Platte River paid $0.04 a kw for it and only received half a cent for it; furthermore, to curtail it, Platte River has to pay the developers the tax credit price and the PPA price. The marginal cost is not zero. We need to understand the consumption and behaviors of the customers, and everyone needs to be educated within the four cities, not just City Collins City Council, staff, and engaged members of the community. Board member Braslau said the short-term storage and balancing needs can be met by other resources, such as batteries. Mr. Frisbie disagreed, noting the cost is prohibitive at utility scale. If the community is concerned about a 6.3% rate increase now, battery storage would be significantly more. Mr. Braslau said the point he is trying to make is that there is short term balancing cost because it jumps around on a short time scale, but that is not that expensive to do with batteries and it is perfectly good technology. The other ENERGY BOARD REGULAR MEETING costs with excess production, and something it can be used for is electrolyze water. Mr. Ahmad said that is too expensive, it is not commercial, nowhere in the world is storing green hydrogen for utility scale. Mr. Braslau clarified he is not talking about utility scale; this could happen every substation. Mr. Ahmad said Platte River sought an estimate to store five days’ worth of hydrogen to run the turbine and it was a billion dollars. Mr. Braslau asked how much it cost to store gas, and said it is no different technology than storing hydrogen. Platte River staff disagreed on the cost and said there are hydrogen-specific tools for storage, so it is not the same as storing gas. Mr. Ahmad displayed a chart summarizing the resources and associated costs of five different portfolios Platte River considered during the IRP planning process. A plan with no new carbon and 2850 MW of 4- hour battery storage has a net present value (NPV) of $5.34 billion over 20 years. A minimal carbon plan includes 80 MW of new thermal resources and drops the battery down to 1100 MW, and the plan NPV drops to $3.37 billion. Mr. Ahmad pointed out that while it is possible to throw a lot of money into it, financial stability is one of Platte River’s three pillars and the rate shock with a no new carbon portfolio would be significant. A carbon-imposed cost plan ($60 per ton), with 160 MW of thermal energy built, will bring the NPV down to $2.78 billion. An optimal new carbon plan includes 200 MW of new thermal has an NPV of $2.77 billion. Finally, the additional new carbon plan with 280 MW of new thermal has an NPV of $2.76 billion. Platte River ultimately selected the optimal new carbon portfolio, and the Platte River Board approved it earlier this summer. Mr. Frisbie said one thing that is sometimes overlooked in the portfolio options is the CO2 tons. There will be three coal units shut down (Rawhide), and Mr. Frisbie pointed out that in the selected portfolio (optimal new carbon) there are 241,000 tons of carbon in 2030 from the existing gas resources and the new gas resources that will be built (in this portfolio). That 241,000 tons in a year is equivalent to what Rawhide produces in six weeks. Mr. Frisbie said he struggles with why that is perceived as a failure when it gets us 90% of the way there. Mr. Ahmad added that in 2005 when Rawhide was running all coal, it emitted about 3 million tons of carbon. In 2024, we are just over 2 million, so a reduction of almost one third. By 2028 with coal retirement and the current renewables projection, carbon emissions are expected to be closer to 1.5 million tons. When Rawhide is officially retired, it will drop to that 250,000 mark. By 2035, hydrogen is expected to be economical, and carbon emissions are expected to drop to 74,000 tons. Board members asked for more information about the turbines’ ability to convert to green hydrogen in the future. Mr. Ahmad explained that the manufacturer (GE) has committed to a 35% blend of green hydrogen by 2027, by 2032 they will be capable of burning 100% hydrogen (with additional equipment). Mr. Ahmad added that hydrogen production and burnability are not the problem, but the actual problem lies in hydrogen storage, transportation, and cost. Mr. Frisbie also pointed out that all five portfolio options include the five existing combustion turbines that Platte River already has, which are currently not capable of burning hydrogen; however, in the event there is not a newer technology or resource that displaces them, Mr. Ahmad said that by 2040 there may be technology available to retrofit the older combustion turbines. Board member Braslau asked why Platte River isn’t immediately starting with hydrogen with the new turbines. Mr. Ahmad said it is an emerging technology, and while there are many government rebates and incentives to switch to hydrogen (effectively making it cheaper than burning gas), no one is doing it because it is very difficult to store and transport it. Mr. Braslau said it should be produced where it will be used and stored in smaller, distributed quantities. The Board approved portfolio, Optimal New Carbon, is consistent with the goals of the RDP, maintains optionality for the future, and equitable access for all citizens. Mr. Ahmad said they can say with ENERGY BOARD REGULAR MEETING confidence that their non carbon generation will be 85%, and they may reach 90-95%, but it is important to remember that the IRP is a dynamic process. The portfolio passed this year will not be the portfolio that Platte River builds because it is ever evolving with changes in technology and resource availability. Board member Smith asked if Platte River plans to power the turbines and sell the extra capacity into the market when the price is extremely high. Mr. Amahd said Platte River is joining the Southwest Power Pool Regional Transmission Organization-West. The market’s total participant load is about 4500 MW, compared to Platte River’s peak demand of 700 MW. Every participant brings their generation and bids into the pool, and every participant also bids their load forecast into the pool. The market operator then combines all the load, the resources, and completes and economic dispatch. In that dispatch, zero margin cost resources come in at the bottom, utilizing all renewables first. Once those are used, hydrogen (which is also considered inflexible) will be used next, and then the next unit to be dispatched would typically be coal or gas. The market takes bids from sellers in ascending order and stop when they have enough bids to supply power to buyers. All sellers in that time interval receive the price of the last bid accepted. This process will happen once an hour, every hour. If there is more generation than there is load, the market price may be zero, or even negative. In that case, the generator would pay to sell the generation, or curtail it at a penalty. Board member Braslau asked what gas prices are projected to sell into the market for. Mr. Ahmad said the consultant assumes roughly $40 in 2030. Mr. Braslau said then it is fair to assume that the turbines will run, and it is necessary for them to run in order to recoup the capital costs. He suggested setting the price higher to get the most out of running it. Mr. Ahmad noted that as market participants, all resources must be bid at cost, so it is not possible to set a price for any resource. Mr. Braslau said if the goal is to be environmentally responsible, then we should not be running or selling gas on the market. Mr. Ahmad said Platte River is building a portfolio where reliability comes first, and yes there will be days when the turbines will be needed, so is it better to spin more efficient and cost effective aeroderivative turbines, or the more expensive combustion turbines. Some Board and staff members reiterated that renewables will always be utilized first, making the average cost lower and allowing Platte River to back off thermal generation. That said, the market requires a balanced and reliable portfolio. Chairperson Loran asked if, hypothetically, the gas turbine only runs when it is absolutely necessary (less than 10%), how will it be paid for? Mr. Frisbie said the rate projections are composed of about 20% cost due to the turbines, and the remaining 80% are due to the additional renewables and storage that are being added. Board member Giovando said because Rawhide is going away, there is going to be a cost no matter what because we have to bring generation with the loss of Rawhide. Mr. Frisbie clarified that he is trying to say that renewables cost twice as much to bring online than what they are replacing (Rawhide), he is not trying to say it is good, but he believes if someone is concerned about stranded costs, their smallest concerns should be the aeroderivative turbines. Board member Smith asked if the price of electricity goes up to $1,000.00 a MW, would it be sensible to run the gas turbines and sell into the market? Platte River staff said electricity costs will and have gone up that high before, running the turbine during electricity pricing surges will help to balance the profit & loss statement (unless gas pricing surges as well). Mr. Davis said when talking about DER (Distributed Energy Resources) integration, there are generally five categories: energy efficiency, electrification, distributed generation, demand response, and distributed energy storage; the latter three representing flexible DER as part of a VPP. DERs being deployed as part of a VPP will enable dispatchable capacity for Platte River and the owner ENERGY BOARD REGULAR MEETING communities based on integrated flexible DERs, including customer DERs and utility DERs Dispatchable capacity that can provide electric system benefits, such as reliability (power supply and delivery), managing costs of DER integration, and making better use of intermittent, noncarbon generation. VPPs are operated through advanced technologies including communication, monitoring and control, analytics and optimization, as well as data engineering and management. Since VPPs aggregate dispatchable resources, there is stronger resource adequacy, energy value, better ancillary services (operating and regulating reserves), and distribution system capacity and reliability. However, VPPs don’t come without challenges. Achieving a VPP that is visible, measurable, predictable and responsive in near real time is difficult. It is also important to consider value stacking vs. mutually exclusive benefits, and the coordination among the owner communities, Platte River, and the VPP ecosystem. The VPP ecosystem includes customers, DER aggregators, local service providers, DER original equipment manufacturers (OEM), with Platte River and its owner communities at the center each of the aforementioned. The role of Platte River and owner communities is to invest in new systems, DER management systems (DERMS), advanced distribution management systems, data management systems, invest in VPP programs, customer engagement and support, incentives for participation, and to operate the VPP to achieve system benefits. The customer’s role is to adopt DERs (such as electric vehicles, storage, and smart devices, and to enroll and participate in the VPP. Going forward, Platte River will continue collaboration with owner communities, as well as complete the vendor selection and contracting for DERMS and VPP. They will also build DERMS infrastructure and initiate VPP programs. Vice Chairperson Moore wondered how artificial intelligence might play into Platte River’s operations. Mr. Frisbie said Platte River staff do all the buying and selling themselves, but several models use historical data for machine learning—this helps us build better models and forecasts. Mr. Ahmad noted that Platte River’s AI policy is being finalized, but AI has been used in some capacity at Rawhide for roughly 12 years. Ms. Moore asked how AI data centers might be built into the IRP, since they require a significant amount of power. Mr. Frisbie said at this time they are not, but they could be a good opportunity for a VPP. At the beginning of their contracts, they use a lot of power, but once the machine has completed the bulk of its learning, its power usage significantly drops off. Platte River and the Board summarized that within market operations, renewable energy is cheaper than fossil fuels, and the lowest cost will always be called for first. The gas turbine falls somewhere in the middle (pricing wise), but it is designed to be a last resort. Mr. Frisbie reiterated that Platte River is trying to eliminate carbon as fast as possible, while still upholding their three pillars. He wants Platte River to go all the way (to zero carbon) while recognizing that there are and will be things that are out of their control. He also said that Platte River is trying to make a consorted effort to be more communicative, more collaborative, and present. He wants to know how they can help, so everyone from the four communities, city staff, boards and commissions, and customers all feel like they are working toward the same goal and understand why we’re on that pathway. Mr. Frisbie said he is stunned that 90% of the goal is considered a failure, but there is no way Platte River gets all the way to zero without the City’s help, and it doesn’t help to have intellectually dishonest conversations. Platte River and Board members agreed it is mutually beneficial to have regular and candid dialogue to avoid misconceptions in the future. The Board plans to discuss the IRP further at their August 22 work session and draft a position memo to send to the Mayor and City Council. They will vote on the final copy at their September 12 regular meeting. ENERGY BOARD REGULAR MEETING BOARD MEMBER REPORTS None. FUTURE AGENDA REVIEW In September, the Board will hear presentations about the City Manager’s recommended budget, how the Capital Improvement Plan affects utility rates, and updates regarding building energy code and new construction. The Board will also vote on the memo they draft at their August Work Session regarding Platte River’s IRP. ADJOURNMENT The Energy Board adjourned at 9:00 pm. Headline Copy Goes Here Energy Code Project Manager Brad Smith Fort Collins Building Energy Code 09-12-2024 Headline Copy Goes HereStatus of State Energy Code State of Colorado •No adopted state building code - “home rule” Headline Copy Goes Here Energy Code in Colorado 3 •Energy code legislation •CO HB 19-1260 established min energy code •Important date: •August 2, 2019 •CO HB 22-1362 Building Greenhouse Gas Emissions •Important dates: •June 1, 2023 - EV, PV, Electric Ready Codes •July 1, 2026 – Low Energy and Carbon Code •In addition, the Colorado Energy Office will develop a Model Green Code that local governments may voluntarily adopt, in addition to the required energy code. The model green code will address building attributes such as energy efficiency (above minimum code), water efficiency, and embodied carbon in building materials. Headline Copy Goes Here 4 Energy Code Adoption International Code Council (ICC) body of codes are published every three years •ex: 2012, 2015, 2018, 2021, etc. Current Building Code •The 2021 body of codes were adopted on April 15, 2022 oWith local amendments Headline Copy Goes Here 5 Energy Code Adoption Continued Open Hearing Private Process Somewhere in Between Three Approaches to Code Adoption: Headline Copy Goes Here 6 Energy Code Paths to Compliance There are four compliance paths available: Prescriptive •Dictates how to build exactly •More traditional way of doing things UA Alternative •Requires Modeling of the building •Modeled building overall UA score cannot exceed code maximum UA •*UA is used to measure whole-building heat loss Performance •Requires Modeling of the building •Modeling demonstrates annual energy cost does not exceed code baseline ERI (Res)/ ASHRAE 90.1 (Comm) •Requires Modeling of the building •Modeling to an energy score (ERI)/ annual energy cost does not exceed code baseline Fort Collins will use the Performance Path for new construction because it provides: •Flexibility •Transparency •Real energy outcomes (kWh & Therms) •Fossil fuel de-biasing of the code •Data-informed decision-making Headline Copy Goes Here 7 Our Climate Future Big Move 6 EFFICIENT, EMISSIONS FREE BUILDINGS EEFB2: Develop and energy performance path for new construction to zero carbon building by 2030. Headline Copy Goes Here 8 City Council OCF Action Roadmap 2022 •Adopt Land Use Changes •Develop Rental Registration •Adopt Active Modes Plan •Develop Sustainable Funding •Develop contracted single-family service including yard trimmings 2023 •Develop Building Performance Standards •Develop home energy listing requirement •Adopt contracted single-family service including yard trimmings 2024 •Adopt Building Performance Standards •Adopt Home listing requirements •Develop energy code step towards net-zero carbon •Adopt Land Use Phase 2 •Start single-family service including yard trimmings •Develop/adopt commercial & industrial policy for yard trimmings 2025 •Adopt Energy code •Start home energy listing requirements •Start commercial/ industrial policy for yard trimmings Headline Copy Goes Here 9 Funding Opportunity U.S. Department of Energy: Bipartisan Infrastructure Law Funding opportunity as of 12/19/2022 $45 million over 5-year period Anticipated 10-30 awards get a share of the $45 million This 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. Areas of Interest State and Local Code Adoption Workforce Development Implementation and Compliance Innovative Approaches Equity, Energy and Environmental Justice Partnerships Headline Copy Goes Here 10 RECI Application & Award Technical Summary: Project Lead: •City of Fort Collins Supporting Team: •Florida Solar Energy Center •New Buildings Institute •International Code Council •Colorado Energy Office *Building Energy and Water Scoring – Fort Collins Commercial Buildings Benchmarking program. www.fcgov.com/BEWS Develop methodology that establishes Energy Use Intensity (EUI) and CO2e targets Form stakeholder group Document baseline performance from utility analysis - *include utilizing BEWS data •Implementation guide and trainings Develop and adopt performance code in Fort Collins Evaluate effectiveness of implementation from compliance performance perspectives Full application submitted March 27, 2023 – Fort Collins awarded $693,595 July 12, 2023! Headline Copy Goes Here 11 Zero Carbon Energy Code Timeline Preview Proposed approach (Fort Collins) – Beginning w/ 2024 code cycle 2nd quarter 20253rd / 4th quarter 2024 ~2nd quarter 2025 / 3rd quarter 2025 4th quarter 2026 thru 2nd quarter 2027 1st quarter 2025 / 2nd quarter 2025 Develop EUI & CO2e reduction targets Develop performance code path & language Create implementation guide & training offerings Community engagement & Council adoption Evaluate effectiveness, measure performance, adapt targets publish date 8/15/2024 Headline Copy Goes Here 12 Energy Code Estimated Improvement Rooftop PV Potential (hypothetical) IECC 2024 ~↓ 6% (projected) Headline Copy Goes Here 13 Fort Collins Energy Use Fort Collins specific residential utility use analysis of homes by code year. En e r g y U s e I n t e n s i t y ( E U I ) State Avg EUI Recently adopted Headline Copy Goes Here Utilities: 2025-26 Light & Power Budget / CIP / Rates 9-12-2024 Energy Board Randy Reuscher, Lead Analyst, Utility Rates 1 Phil Ladd, Interim Utilities Finance Director 2Budget Timeline Sellers Feb – Jun •Narratives •Enhancements Utility Finance Mar - Jul •Revenue Projections •Revised Revenue BFO/BLT Jun – Jul •Review Offers •Deliberation Budget Aug – Dec •Submit Budget •Load Budget into JDE Council Sep – Nov •Council Work Sessions •Public Hearings •Approval of Budget Ordinance 3Light & Power Goals •Maintain current level of reliability •Achieve carbon-reduction objectives related to the City’s Our Climate Future (OCF) plan •Provide adequate substation & distribution capacity •Balance financial impacts to customers Operational Goals 4 L & P Fund Summary 52023 Revenue 6Revenue Budget 72023 Expenses Purchase Power -Tariff 1 PRPA 63% L&P Operations 7% PILOTs 6% Admin Services - CS&A 5% Internal Transfers Out 5% System Addition/Replacement 4% Capital(other than Sys Add) 4% Energy Services 3% Purchase Pwr - Community Renewables 1% Other Payments & Transfers 1% Admin Services - General Fund 1% Light & Power Total Expenses for 2023 - $158.5M 8Expense Budget 9Expense Budget Expense 2025 Budget 2026 Budget Utilities: Light & Power - Payments and Transfers $24,115,499 $24,876,600 Wholesale Purchased Power $113,400,000 $120,545,000 Purchase Pwr - Community Renewables $2,934,326 $3,171,618 L&P Operations $11,822,559 $12,144,610 Energy Services $4,220,804 $4,225,948 Utilities: Light & Power - Renewable Customer Programs $962,500 $1,013,000 Demand Response $1,785,000 $1,900,000 City Manager's Office $131,035 $134,966 General Legal Services $99,224 $102,201 City Managers Office: Office of Emergency Management $17,612 $17,758 Operations 1 0Expense Budget Expense 2025 Budget 2026 Budget Utilities: Light & Power - System Additions & Replacements - Ongoing $6,256,551 $6,442,831 Utilities: Light & Power - Vehicles & Equipment - Ongoing $1,049,250 $968,440 Utilities: Light & Power - Electric Substation Capital Upgrade Program - Ongoing $800,000 $800,000 Utilities: Light & Power - Electric Distribution Transformer Replacement Program - Ongoing $2,000,000 $2,000,000 Utilities: Light & Power - Attrition Based LED Streetlight Conversion Program - Ongoing $1,106,866 $1,106,866 Utilities: Light & Power - Electric System Cable Replacement Program - Ongoing $500,000 $500,000 Utilities: Light & Power - Distribution Automation $200,000 $200,000 Utilities: CAPITAL PROJECT - Art in Public Places $14,000 $14,000 Asset Management 1 1Expense Budget Expense 2025 Budget 2026 Budget Utilities: Light & Power - Electric Vehicle Monitoring and Management Demonstration $75,000 $75,000 Utilities: Light & Power - Substation access control and security technology upgrades $500,000 $500,000 Utilities: Light & Power - Maximo Software $375,000 $375,000 Utilities: Light & Power - GIS & Electrical System Study Consultation $75,000 $75,000 Utilities: Light & Power - System Relocations Due to Road, Intersection & Alley Improvements $400,000 $400,000 Utilities: Light & Power - AEDs andTools $100,000 $0 Utilities: Light & Power - Training Field and Lab Enhancements $100,000 $100,000 Utilities: Light & Power - Rear Lot to Front Lot Conversions $400,000 $400,000 Utilities: Light & Power: Virtual Power Plant Development and Enrollment $1,215,000 $1,315,000 1.0 FTE Geodatabase Administrator, Utilities GIS (Connexion)$48,123 $66,233 Utilities: Motorola 800 MHz radio equipment replacement $1,465,000 $0 Capital / Enhancements 1 210-Year CIP 1 3 L & P Fund Narratives L & P Fund Narrative 1 4Example Narrative 1 5 Long Term Forecast 1 6Rate Forecast Actual Utility 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 Electric 5%6.5%6%5-8%7-8%7-8%7-8%3-5%3-5%3-5% Water 4%7%9%7-10%7-10%7-10%7-10%7-10%7-10%7-10% Wastewater 4%6%8%6-8%6-8%6-8%6-8%6-8%6-8%6-8% Stormwater 3%6%6%5-7%3-5%4-6%4-6%6-8%6-8%6-8% Budget Forecast For More Information, Visit THANK YOU! fcgov.com/utilities 2025/2026 Budget Update 9.12.2024Brian Tholl, Energy Services Manager 22025-2026 Budget The City of Fort Collins follows a two-year budget cycle for the 2025-2026 Budget. The process begins with Council adoption of the Strategic Plan and council priorities which are used to create the Offers for the programs and services that are provided to our Community. 3City Manager’s Recommended Budget Now available and published: www.fcgov.com/budget •Sept. 10:Council Work Session #1 •Sept. 17:Council Meeting –Public Hearing #1 •Sept. 24:Council Work Session #2 •Oct. 1:Council Meeting –Public Hearing #2 •Oct. 8:Council Work Session #3 •Nov. 4:Council Meeting –First Reading of the Budget Ordinance (NOTE: this meeting is on a Monday to accommodate Election Day on Tuesday, Nov. 5.) •Nov. 15:Council Meeting –Second Reading of the Budget Ordinance & Final Adoption 4Key Next Budget Dates Energy Services Ongoing Offers Offer Name (#)2023 / 2024 2025 / 2026 Community renewable purchased power (7.1) Supports renewable energy power purchases from multiple renewable sources $2,390,291 / $2,581,094 $2,934,326 / $3,171,618 Energy Services (7.2)Sustain and expand programs led by Utilities Energy Services, including the staffing and resources $4,511,206 / $4,481,930 $4,220,804 / $4,225,948 Demand Response (7.3)Sustain and expand ongoing operations of the Peak Partners Program and DERMs $860,000 / $900,000 $1,785,000 / $1,900,000 Community renewable programs (7.4) Funds community renewable programs in support of energy and climate goals $1,181,000 / $1,291,000 $962,500 / $1,013,000 Epic loans capital accounting (7.5) accounting mechanism for the customer loan payments and debt service $3,440,000 / $3,980,000 $4,250,000 / $5,430,000 Offer owner: Brian ThollOngoing offers funded in CMO budget Offer 7.6 – Utilities:Electric Vehicle Monitoring and Management Demonstration Funding this offer will add an additional 200 electric vehicles to existing telematics based and to proposed new EV charger based. Grid flexibility programs staff negotiated a waiver of all fixed program start up costs with the vendor (Available FY 2025 only), a savings of over $100,000. The Utilities Smart Charging program, part of the larger Peak Partners branded programs, integrates a variety of distributed energy resources into our software platform, which is the foundation for a virtual power plant. Outcome Area Environmental Health Offer Type Continuing Enhancement Funding 25/26 $75,000 / $75,000 Funding Source L&P Enterprise Fund Offer owner: Brian Tholl Offer 7.23 – Utilities: Light & Power – Virtual Power Plant Development Funding this offer will enroll and deploy 2,300 additional customer sited Peak Partners program VPP resources toward achieving 2030 Our Climate Future (OCF) goals. Resources include Wi Fi thermostats (direct install and Bring Your Own), distributed thermal batteries (standard and grid interactive water heaters [GIWH]) and electric vehicle charge management controls (charger and telematics based). This enhancement offer aligns with the deployment of devices necessary to achieve the Our Climate Future goal of 5% bidirectional grid flexibility of peak loads by 2030. Outcome Area Environmental Health Offer Type Enhancement Funding 25/26 $1,215,000 / $1,315,000 Funding Source L&P Enterprise Fund Offer owner: Brian Tholl Offer 7.24 – Utilities:Strategic Electrification Design Assistance Funding this offer will accelerate strategic electrification in the community by providing design assistance for commercial and residential new construction projects as well as consulting for deep retrofit renovations for affordable housing. This design assistance will provide expert influence in high efficiency electrification strategies that will accelerate the community’s 2030 climate goals. This proposed enhancement would allow IDAP to provide the energy consultant at no cost, making participation easier for underserved affordable housing projects. Additionally, funding from this offer will be used to implement an innovative home design program that will provide no cost, preapproved design plans with ultra high efficiency panelized construction that will reduce community greenhouse gas emissions. Outcome Area Environmental Health Offer Type Enhancement Funding 25 / 26 $350,000 / $400,000 Source 2050 Tax Offer 7.25 – Utilities Light & Power Epic Loan Program Funding Funding this offer will help the Epic Loans program continue to resource electrification and renewable projects by buffering interest rates in the Fort Collins on bill financing program. Blending low-cost capital with capital loans through agreements with private banks has a proven track record of stretching limited low- cost capital and helps to meet the growing demands of the community. The key to success is to have enough low-cost capital to blend into the portfolio to help buffer the higher bank rates. Adding this offer to the mix would allow the program to continue to grow and find ways to continue to scale Outcome Area Environmental Health Offer Type Enhancement Funding 25 / 26 $550,000 / $500,000 Funding Source 2050 Tax Offer owner: Brian Tholl 102050 Tax Offer Review Process •Evaluate enhancement offers related to Environmental Health Outcome Area •Eligible Offers – Alignment with ballot language •Optimized Offers – Alignment + advance OCF across multiple outcomes •Recommended strategy for 2050 tax investment: •Maximize ability to achieve 2050 goals •Complement existing (significant) climate investments across City budget •Scale & accelerate rather than replace existing funding •Support projects that advance multiple outcomes •including resilience and equity •Maintain reserves for upcoming developments in progress 11Criteria for 2050 Tax Funding Recommendations Ballot alignment Advance at least one OCF Big Move/strategy Direct community benefit Advance equitable outcomes for most impacted groups Advance trusting partnerships Inclusion of considerations of climate change implications Supports communities’ well-being in disruptive events 12Summary of 2025-26 2050 Tax Offers Optimized Offers’ Potential Impacts: •Building and vehicle electrification •Residential building efficiency loan program •Active Modes infrastructure and transportation programming •Outdoor and indoor air quality •Small business support •Urban forestry •Staff and community innovation funding •OCF / 2050 Tax strategic management 13Recommended 2050 Tax Budget Offers 9/8/2024 Please note - Offers in bold text are those recommended to be funded by the 2050 Tax - OCF Funding; those in gray have been recommended to be funded by other sources. In these calculations, "lifetime" varies from 2-25 years , depending on the project. OCF staff define "foundational" as a necessary next step for future GHG reduction. 100 MTCO2e is approx. equivalent to the emissions generated from 13 single-family homes' energy use in one year (EPA Equivalencies Calculator)Key high confidence Total - 2025-26 2050 Tax Investments 4,581,707$ 2,647,853$ 125,530 Lifetime MTCO2e medium confidence Total - 2025-26 Enhancement Offers 13,095,078$ 4,087,853$ 163,395 Lifetime MTCO2e low confidence Offer # Offer Name 2025 Funding 2026 Funding Lifetime GHG Impacts (MTCO2e) Description of Impact Overall Equity Overall Resilience Waste Impacts Notes 7.24 Utilities Light & Power: Strategic Electrification Design Assistance Programs to support affordable housing 350,000$ 400,000$ 51,870 Provides stock plans for energy efficient, affordable housing developments Medium Low None 7.25 Utilities Light & Power: Epic Loan Program Funding 550,000$ 500,000$ 850 Foundational / needed next step for increasing efficiency of buildings (reducing electricity and natural gas use) Medium Medium None 18.13 Mini-Grant Expansion to Address the Climate/Housing Nexus in Affordable Housing Units 200,000$ 200,000$ 2,450 Supports residents in increasing energy efficiency in their homes (reducing electricity and/or natural gas use) High High None 19.1 Active Modes Plan Infrastructure Implementation 1,680,000$ -$ 24,800 Provides infrastructure for safe and accessible active mode travel, resulting in VMT and fuel use reductions Low Low None Offer is supportive of this GHG reduction; though will only be achieved with full implementation Our Climate Future Review: 2050 Tax - OCF Funding 19.7 Shift Your Ride Program 150,000$ 150,000$ 45,430 Provides programs and support for community members transitioning trips away from single-occupancy vehicles, resulting in VMT and fuel use reductions Medium Low None 42.4 Air Quality Monitoring Fund 100,000$ 100,000$ N/A Continues regional air quality monitoring foundational to developing successful emissions reduction strategies High High None Offer's primary impacts are on non-GHG air pollution; though often GHG and non-GHG emissions have the same sources 42.6 1.0 FTE Enhancing The Healthy Homes Program 242,780$ 264,733$ 100 Foundational for improving indoor air quality and supporting households in navigating climate action programs High Medium None 42.8 2.0 FTE Investing 2050 Tax Revenue to Accelerate Our Climate Future 565,307$ 619,329$ foundational Foundational for accelerating and coordinating climate action across the City and community Medium Low foundational 67.1 NoCoBiz Connect (NBC) - Sustainable Business Program (Equitable Business Support and Recognition) 149,900$ 75,000$ foundational Supports local businesses in accessing environmental efficiency and conservation programs High Low Low 71.1 Parks Lawn and Garden Equipment Replacement 25,000$ 25,000$ ~100 - 200 Reduces fuel use and therefore reduces GHG and non-GHG air pollutants Low Low None 73.1 1.5 FTE - 1.0 Urban Forestry Planner, .5 Hourly, and Tree Infrastructure Replacement 568,720$ 313,791$ 30 Foundational for ongoing and new carbon sequestration from the public canopy Low Medium Low Calculation only represents sequestration potential from newly planted trees identified in this offer. Full tree canopy supports ~2,800 MTCO2e sequestration and is dependent upon Offers 59.14, 59.15 7.23 Utilities Light & Power: Virtual Power Plant Development and Enrollment 1,215,000$ 1,315,000$ 30,280 Supports installation of more local renewables and battery storage, to enable alignment of electricity consumption with renewable availability None High None 7.6 Utilities: Light & Power - Electric Vehicle Monitoring and Management Demonstration 75,000$ 75,000$ 640 Increases electric vehicles and chargers within the community for use as a virtual power plant None Medium None 16.14 Building HVAC Electrification and Efficiency Replacements 6,500,000$ -$ 3,845 Increases energy efficiency of City buildings None None None 20.13 Power Trail at Harmony Road Grade- Separated Crossing 673,371$ -$ 3,100 Provides infrastructure for safe and accessible active mode travel, resulting in VMT and fuel use reductions Low Low None 42.9 Low Income Offset - Contract for Waste 50,000$ 50,000$ foundational Foundational for organic waste diversion High None Low Total - 2025-26 2050 Tax Investments 4,581,707$ 2,647,853$ 125,530 Lifetime MTCO2e Total - 2025-26 Enhancement Offers 13,095,078$ 4,087,853$ 163,395 Lifetime MTCO2e Please note - Key Offers in bold text are those recommended to be funded by the 2050 Tax - OCF Funding; those in gray have been recommended to be funded by other sources. high confidence In these calculations, "lifetime" varies from 2-25 years , depending on the project.medium confidence OCF staff define "foundational" as a necessary next step for future GHG reduction.low confidence 100 MTCO2e is approx. equivalent to the emissions generated from 13 single-family homes' energy use in one year (EPA Equivalencies Calculator)