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HomeMy WebLinkAboutENERGY BOARD - MINUTES - 09/12/2024 ENERGY BOARD September 12, 2024 – 5:30 pm 222 Laporte Ave – Colorado Room ROLL CALL Board Members Present: Alan Braslau, Thomas Loran, Frederick Wegert, Wendell Stainsby, Scott Canonico, Brian Smith, Marge Moore (remote) Board Members Absent: Jeremy Giovando, Eric Shenk OTHERS PRESENT Staff Members Present: Christie Fredrickson, Brian Tholl, Travis Walker, Randy Reuscher, Phil Ladd, Michael Authier, Brad Smith, Kimberly…, Mary Horsey (remote), Yvette Lewis-Molok (remote) Members of the Public: George Weston, Barbara Krupnik Goldman, Bill Althouse (remote), Leigh Gibson (PRPA, remote), Sue McFaddin (remote) MEETING CALLED TO ORDER Chairperson Loran called the meeting to order at 5:30 pm. ANNOUNCEMENTS & AGENDA CHANGES Chairperson Loran announced that beginning in October the online meeting platform will be moving to Microsoft Teams (away from Zoom). Ms. Fredrickson noted that instructions will be included with next month’s agenda for both the Board and members of the public. She noted that meeting attendees will not be required to have a Microsoft account in order to join or participate in the meeting. PUBLIC COMMENT Ms. Krupnik Goldman said she is a believer in climate change, and changing words or goals will not change the reality that the climate emergency is real and happening now. She said our actions should align with reality. She hopes the Board will ask City Council to pass a resolution requiring oversight by NREL before Platte River moves forward with the Integrated Resources Plan. Ms. Krupnik Goldman went on to say she realizes that though City Council is not the Platte River Board, they do have a fiduciary duty to the rate payers and the City of Fort Collins; they should want to be sure it is the best plan, the fairest plan, and especially that the plan is framed around climate and climate impact. Chairperson Loran asked Ms. Krupnik Goldman for clarification, would she rather see the “no additional carbon” option? She confirmed yes, that is her preferred option. Mr. Althouse said that under state law, all retail rates must be regulated. In this case, as a municipal utility, the fiduciary obligation lies with City Council; they should be the one conducting or authorizing the review. APPROVAL OF MINUTES In preparation for the meeting, board members submitted amendments via email for the August 8, 2024, minutes. The minutes were approved as amended. BUILDING ENERGY CODE AND PATH TO ZERO CARBON NEW CONSTRUCTION UPDATES Brad Smith, Energy Code Project Manager ENERGY BOARD REGULAR MEETING As a home rule state, Colorado does not have a state-adopted energy code. This is beneficial because jurisdictions can amend and adopt building codes as they see fit. The City of Fort Collins has one of the most progressive building codes in the nation. The Colorado Energy Office is spearheading new legislation that could change how the City adopts and amends building codes in the future; House Bill 19-1260 establishes a minimum energy code (must adopt a code from the last three code cycles), and HB 22-1362 is legislation around code for building greenhouse gas emissions. HB 1362 drove the establishment of a statewide energy code board which was tasked with developing with EV, PV, and electric ready codes, and a low energy and carbon code is currently in development. Mr. Smith noted that we can only push so hard because we do not have the workforce across the entire state to get super aggressive with building energy code. In addition, the Colorado Energy Office will develop a Model Green Code that local governments may voluntarily adopt, alongside 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. The International Code Council (ICC) body of codes is published every three years (2015, 2018, 2021, etc.) The 2021 body of code was adopted with local amendments on April 15, 2022. Staff is currently reviewing the 2024 code, which will be adopted and layered with the code that is in development. Mr. Smith explained the three approaches to code adoption: open hearing, private process, and somewhere in between. The approach will vary by jurisdiction, but generally during an open hearing anyone can propose a change, and a committee hears and votes on all proposals. In a private process, staff pour through the codes to see what has changed and if any amendments are needed, then they make a list of recommendations to their city council. The “in between” allows stakeholders to be involved in the process (voice concerns or ideas) so that they are a part of the process and not just hearing about it after it’s already law—this is where the City of Fort Collins currently sits. There are four compliance paths available for energy code: prescriptive, UA alternative, performance, and ERI (residential)/ASHRAE 90.1 (commercial). Prescriptive is known as the more traditional way of adhering to building code and dictates how to build exactly. UA Alternative requires building energy modeling, and the UA score cannot exceed the code’s maximum UA. Performance also requires building modeling, but the modeling demonstrates an annual energy cost that does not exceed the code baseline. ERI/ASHRAE requires modeling to an energy score annual cost which cannot exceed the code baseline. Fort Collins uses the Performance Path for new construction because it provides flexibility, transparency, real energy outcomes in both kWh and therms, fossil fuel de-biasing of the code, and data-informed decision-making. Building codes are aligned with the Our Climate Future Plan under Big Move 6: Efficient, Emissions Free buildings. The next move that supports Big Move 6 is to develop an energy performance path for new construction to zero carbon building by 2030. Mr. Smith pointed out the word carbon to emphasize that it is not zero energy so we can move toward electrification. Chairperson Loran asked if that is inclusive of materials like concrete and steel. Mr. Smith said embodied carbon is difficult to calculate right now, but it is something staff plans to keep an eye on and adapt as available. The Department of Energy Bipartisan Infrastructure Law presented a funding opportunity at the end of 2022 to award $45 million over a five-year period. An anticipated 10-30 awards would be given to receive a share of the $45 million for project teams ready to advance building energy codes and efficiency policies within a particular region, state, or local jurisdiction. Fort Collins submitted an application on ENERGY BOARD REGULAR MEETING March 27, 2023, and was awarded $693,595 on July 12, 2023, to develop methodology that establishes Energy Use Intensity (EUI) and CO2e targets as well as a performance code. Fort Collins was the only jurisdiction awarded funding out of the 27 awarded applications. CAPITAL IMPROVEMENT PLAN AND INPUTS TO UTILITY RATES Randy Reuscher, Lead Analyst, Utility Rates Phil Ladd, Manager, Financial Planning & Assets The Utility has several operational goals throughout the budgeting process: maintain current level of reliability, achieve carbon-reduction objectives related to Our Climate Future, provide adequate substation distribution and capacity, and balance financial impacts to customers. In 2023, the Utility brought in about $163 million. Residential electric services were 39% of revenues, commercial were 30%, industrial charges for services was 21%. Pilots (5%), developmental fees (3%), and interest/miscellaneous revenue (2%) all make up the remaining 10%. Light & Power’s operating revenue budget is roughly $170 million in 2025 and $180 million in 2026. Public improvement and development fees are budgeted fairly conservatively since they are highly influenced by the economy and supply chain. Expenses in 2023 totaled about $159 million, the largest expense being purchase power from Platte River (63%). Chairperson Loran asked if overhead is proportionally increasing, overhead. Mr. Reuscher said it has generally been consistent, but going forward the capital side of things presents a new challenge. Board member Smith asked how our operations compare to the other electric Utilities. Mr. Reuscher said we don’t have exact numbers, but things are very similar within the other three owner communities. Mr. Tholl added the more common metric is called blended retail rate from CAMU. Mr. Reuscher said staff is not prepared with that information tonight but would be happy to share with the Board in October when they return. The Capital Improvement Plan (CIP) has inflated threefold since 2016. Mr. Reuscher explained that some of the increase is inflationary, and some of it is larger projects (substations, technology upgrades, etc.). He reiterated this is a big-picture plan, and as the two-year budget cycle evolves, things will be revised. Mr. Reuscher displayed a chart showing the rate increase forecast for all four City utilities over the next 10 years. The Utility is budgeting for 6.5% and 6% electric rate increases in 2025 and 2026, respectively. Platte River is the Utility’s largest rate driver due to wholesale costs, making up about two-thirds of the electric rate (the remaining third is made up of distribution and operational costs). Platte River is forecasting 6% wholesale increases from 2027 through 2030 (which is passed on to resale customers), but Platte River and Utilities Staff both expect lower wholesale and distribution increases beginning in 2031 (3-5% instead of 7-8%). Mr. Reuscher noted that these are iterative projections and will continue to change as things evolve locally. Mr. Reuscher and Mr. Ladd will be back next month to present 2025 rates and fees and will be seeking a formal recommendation from the Board. If possible, the Board would also like to see more granularity regarding rate changes between 2030-2031 since it is such a significant change. Board member Braslau noticed that there are large rate increases across all four utilities in the rate forecast, which will have significant impacts to utilities customers. Mr. Reuscher said Capital Projects are planned in all the utilities, which is significant rate driver but as the projects get closer the costs and associated rate impact will become more concrete. Board member Smith asked if it is possible to stagger the capital projects to help ease the rate impact. Mr. Reuscher said staff does try to rate smooth whenever possible and look for funding or bonding opportunities to help reduce significant spikes. ENERGY BOARD REGULAR MEETING CITY MANAGER’S RECOMMENDED BUDGET Brian Tholl, Senior Manager, Mechanical Engineer 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. The City Manager’s recommended budget is published and available to review at www.fcgov.com/budget There are several opportunities for public comment about the budget, including Council meetings and public hearings; the final adoption of the 2025/26 budget is scheduled for November 15. Mr. Tholl briefly discussed five Energy Services ongoing budget offers (7.1, 7.2, 7.3, 7.4, 7.5) and displayed how the budget changed from 2023/24 to 2025/26. There are also four enhancement offers (7.6, 7.23, 7.24, 7.25) that Mr. Tholl thought the Board may be interested in. Offer 7.26 is for 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 startup 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. Offer 7.23 is for 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. Offer 7.24 is for Strategic Electrification Design Assistance. Funding from this offer is sourced from the 2050 Tax for Climate and 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. Offer 7.25 is for the Epic Loan Program Funding. Funding from this offer is sourced from the 2050 Tax for Climate and 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 higher bank rates. Adding this offer to the mix would allow the program to continue to grow and find ways to continue to scale ENERGY BOARD REGULAR MEETING budget offers that relate to Environmental Health Outcomes in the Strategic Plan. Mr. Tholl explained how budget offers become eligible to use funding from the 2050 Tax Appropriation. At a minimum, a proposed project or program (offer) needed to align with the ballot language to be “eligible” As an organization, the City always strives to invest resources to achieve multiple outcomes at once, with the acknowledgement that many of our systems, services, and goals intersect in community members’ daily experiences. Offers that aligned with the ballot language and had multiple benefits were considered “optimized.” Mr. Tholl noted that this is a long game, and the focus should remain on the foundational and transformational actions we can take now to become a carbon neutral community. He also said that not all available revenue from the 2050 Tax is accounted for, which is intentional as staff anticipates Council wanting to have resources available for the 2026 budget revision process next spring. MEMO: PLATTE RIVER’S INTEGRATED RESOURCES PLAN Board members reviewed the drafted memo and discussed some changes they may like to make to the final copy. Board members Canonico and Smith volunteered to complete the memo. Board member Wegert moved Board members Canonico and Smith work together to complete the memo with changes as discussed. Board member Braslau seconded the motion. Discussion: None. Vote on the Motion: It passed unanimously, 7-0, with two board members absent. BOARD MEMBER REPORTS Board member Braslau it is extremely difficult to work with contractors, especially when it comes to efficiency upgrades. He said there is more to be done in educating and supporting contractors and the building community. FUTURE AGENDA REVIEW In October, the Board will hear a presentation about 2025 utility rates and fees, operational updates from Light & Power and Energy Services, and the Board will begin drafting their 2025 Work Plan. ADJOURNMENT The Energy Board adjourned at 8:08 pm.