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HomeMy WebLinkAboutENERGY BOARD - MINUTES - 12/12/2024 ENERGY BOARD December 12, 2024 – 5:30 pm 222 Laporte Ave – Colorado Room ROLL CALL Board Members Present: Thomas Loran, Alan Braslau, Frederick Wegert, Wendell Stainsby, Scott Canonico, Brian Smith, Jeremy Giovando, Marge Moore Board Members Absent: OTHERS PRESENT Staff Members Present: Christie Fredrickson, Brian Tholl, Katherine Bailey, Leland Keller, Michael Authier, Katie Miller (remote), Yvette Lewis-Molock (remote) Members of the Public: George Weston, Rick Coen MEETING CALLED TO ORDER Chairperson Loran called the meeting to order at 5:30 pm. ANNOUNCEMENTS & AGENDA CHANGES None. PUBLIC COMMENT Rick Coen is a panel owner within the Riverside Community Solar Garden. He shared that he and several other owners have formed an advocacy group for the repowering project, and he hopes to continue to engage the Board for support on the project. APPROVAL OF MINUTES In preparation for the meeting, board members submitted amendments via email for the November 14, 2024, minutes. The minutes were approved as amended. BUILDING PERFORMANCE STANDARDS COUNCIL WORK SESSION OVERVIEW Katherine Bailey, Project Manager, Utilities Customer Connections Ms. Bailey gave a brief refresher on Building Performance Standards (BPS) for the Board. BPS is a regulatory efficiency policy that's being proposed to City Council which requires existing commercial and multifamily buildings to meet energy targets. BPS sets efficiency targets accounting for a building’s current usage, or energy use intensity (EUI). More efficient buildings may already meet their BPS targets, and buildings not meeting their target should make behavioral or efficiency changes but can seek customized solutions for special circumstances. Staff has been able to reference several case studies and use them as tangible examples within the community of how the targets have been achieved. For example, a city building (281 N. College Ave.) was not meeting its targets at the time of their case study, but is meeting them now. When staff asked if the facility manager if they had followed through with the case study recommendations, he said no, but he did have the HVAC coils cleaned, which reduced building energy usage by 11.5%. ENERGY BOARD REGULAR MEETING While BPS can provide a number of environmental health benefits in the community (reduced emissions) and physical health benefits for building occupants (health, safety, comfort), it can also provide a significant number of economic benefits. Several white paper studies have come out of the EPA (and other trusted sources) that show that more efficient buildings have higher occupancy and tenant occupancy, tenant retention, and higher resale value, and it is also associated with economic growth and competitiveness. Some of these benefits can be hard to quantify locally, but anecdotally people do come to Fort Collins because we have a reputation for taking care of what we're lucky enough to have and there is value in that. Ms. Bailey said that when talking about benefits and costs associated with building performance standards, it's easy to think building owners pay all the costs and building tenants reap all the benefits, but it is not that cut and dry. She explained it’s good to think about who the owners and occupants are. Staff has solid data on building owners (a little under 550 in Fort Collins), but occupants are slightly more opaque and staff has less of a sense of quantity. Office use and multifamily buildings are the two most common property types that BPS would cover, making up about 17% of our properties, but that equates to a larger share in square footage (roughly 45%). Multifamily building owners reported 17,000 bedrooms within the covered properties and office building owners reported 11,500 workers on the main shift (or just under 12,000 computers in use each day). Ms. Bailey said the reason she brings this point up is because it’s important to consider the idea of buildings being community assets; they may only be owned by the same owner for 5-10 years on average, but they will remain in the community beyond that owner. It is a benefit to the entire community when we think about investing in them. Ms. Bailey said staff recognizes they are behind schedule from when they thought they’d be adopting and implementing BPS because they also recognize the community concern around potential negative repercussions, which fell into three main categories: inequitable impacts (small buildings or affordable housing), accuracy of projected impact on all properties, and buildings not having sufficient staff to learn about and implement requirements. Ms. Bailey reminded the Board that there are specifically designed alternate pathways for smaller buildings to be able to achieve their BPS targets, as well as a pathway for under-resourced buildings, which includes affordable housing and potentially all multifamily housing. While Fort Collins has access to much more robust data than other jurisdictions [implementing BPS] because of our municipal utility, it is of course difficult to predict the future and those who work in data know that there is no such thing as 100% perfect data. Ms. Bailey said it is important to think of the proposed BPS as a framework in which different levers can be adjusted to affect the impact throughout implementation. Finally, staff understands that not every building has a skilled facility manager who has a lot of free time to look into what is needed to meet their building’s BPS requirements. Staff has tried to build out significant resources for education, financial, and technical support to help out building owners. If these resources are not deemed to be enough, there are a number of ways to change the framework of BPS, including pushing back the timeline, policy changes, changing the covered building list (by size, property use, etc.), or by altering the requirements of BPS. Building Performance Standards is the most powerful direct action that we can take as a city to reduce emissions by 20-30. Ms. Bailey displayed a graph charting the community BPS emissions reduction; once all buildings have met their targets (in 2030) the community is expected to see a 65,000 MCCo2e avoided annually, which is equivalent to the use of almost 10,000 homes. By 2050 the cumulative projected savings is 1.5 million MTCO2e (over 227,000 homes). This also demonstrates the impact of moving back the timeline, and it will be very important to clearly demonstrate the potential impacts to Our Climate Future goals. Building performance standards has more impact than anything else that we do, including ENERGY BOARD REGULAR MEETING electrification, but it does enable further electrification through efficiency. Another big concern about BPS is that it's got a big upfront cost associated with it, and then it takes a little bit longer to see the ROI in terms of energy savings. The total program costs $270 million, including $44 million of administrative costs, which is inclusive a lot of things that are happening already and will happen whether or not there's a BPS, such as staff salaries, and some efficiency works rebates and incentives. The projected community cost for the upgrades is $226 million, which is a conservative and high-end estimate that doesn’t factor in any rebates, incentives, or tax deductions. Taking all that into consideration, staff is projecting BPS would pay for itself (in terms of the energy costs avoided) by 2038. By 2050, the community (meaning those buildings who’ve made upgrades) would see $630 million in energy savings by 2050, equating to a benefit of $2.80 for every $1.00 spent. Ms. Bailey said if the community feels like the spike is too big and that ROI is too long, does the City need to consider if it is their responsibility to put more rate payer dollars towards levelling out that initial cost. Board members wondered if the investment costs are normalized for today’s dollars or the value at the time of ROI. Mr. Authier said these numbers are not net present value, and he agreed that would be a valuable point to add. Ms. Bailey noted that efficiency is actually cheaper than electric rates. Administratively, BPS is a lower administrative cost than our average cost of conserved energy. The average cost of conserved energy is $28 per mWh saved, which is 26.7% less than wholesale energy costs; however, BPS costs $12 per mWh saved. In the community, the BPS cost is $105 per mWh avoided, and the 2024 community electric rate are $118 per mWh. Additionally, efficiency reduces load in dark calm periods and is cheaper than new generation; lowering consumption means there is less need for new renewables in the future to meet and maintain renewable energy goals. Ms. Bailey added that she would be remiss if she didn't end with a reminder that at the end of the day, BPS is a climate change mitigation effort. Climate change is exorbitantly expensive, and we know it’s going to require a global investment to start tackling these issues. Many Americans don’t believe in climate change, but insurance companies do. The US has spent trillions of dollars on climate disasters, and we are already seeing huge increases nationwide in insurance costs with more increases projected in the future. Ms. Bailey displayed a graph of local weather data from the CSU weather station, dated back to 1900. The plot shows a steady increase in the number of days over 90 degrees by year, which is Larimer County’s threshold for extreme heat. Extreme heat is associated with more fires and higher ozone levels which are linked to increased respiratory morbidity. It’s also linked to a significant price tag, as insurance premiums in Larimer County have increased 37%. Ms. Bailey said there are many ways you could look at those numbers to evaluate the economic impact on the community, but end story is we're already paying for this, and it is unlikely to get better. Board member Canonico asked if there are off-ramps if a building can demonstrate that BPS is not feasible for them. Ms. Bailey said some of it is more cut and dry, such as the opportunity to add renewables for EUI credit. There are also wavers, timeline adjustments, or target adjustments. Mr. Canonico said these options are an area to emphasize if a building owner is putting forth an honest effort. Board member Smith asked what happens if a building owner doesn’t meet their target. Ms. Bailey said there has to be a penalty associated with regulatory policy; the general rule of thumb is the penalty has to be higher than the projected cost of compliance. BPS is not a revenue generating program so the City does not want to make money off it. Penalties will be assessed in the form of a recurring fine and enforced through the municipal court system. Recurring fines are attention grabbing, but it also allows for a cure period. As long as the building owner can show they have a pathway forward, fines will desist, and ENERGY BOARD REGULAR MEETING owners can submit for a timeline adjustment based on what has been shown so far. Staff will bring BPS back in front of City Council for their final considerations at their January 14 Work Session. Ms. Bailey encouraged the Board to reach out with any additional feedback or questions for staff before that date so they can address them or work it into their presentation. RESIDENTIAL BATTERY STORAGE Leland Keller, Mechanical Engineer III Mr. Keller explained how residential battery storage fits within the Our Climate Future plan, which is under Big Move 12 (100% renewable electricity). Under Big Move 12, everyone in the community receives affordable and reliable 100% renewable electricity, including from (at least 5%) local sources. Flexible loads like battery storage, electric vehicles, smart appliances, etc. will help the community hit that 5% goal. Mr. Keller displayed a pyramid graphic about strategies for DER management, noting that maximum DER benefits come from a suite of solutions. He said the research study staff is conducting research to better understand how much participation and how much more of that flexible load could we have access to if we recruited those customers into a control program. Such a control program has a high price tag associated with that level of control over the load, but there is more certainty in performance. There are many battery benefits to residential customers, including carbon footprint reduction, minimizing on peak purchases, the ability to arbitrage time-of-day rates, the ability to back up essential loads in case of an outage, future proofing a solar investment, and the energy delivered and received is netted at 15- minute intervals. Fort Collins Utilities allows charging from and discharging to the grid. Staff conducted a customer survey with the objective to better understand the purchasing decisions and barriers that customers face when considering battery storage. Staff also wanted to understand more about how customers operate their equipment, what their satisfaction levels are with the choices they've made, and how aware they are of the rates and the factors lead to their bills at the end of each month. Additionally, staff wanted to understand from both battery storage customers as well as solar-only customers their willingness to participate in a future control program that might provide signals for them to respond to with their batteries or take discrete control over their storage assets and discharge them according to the utilities’ control. The study compared two groups of participants, those with solar only and those with both solar and storage. The study found that when it comes to purchasing decisions, environmental concerns and reducing energy costs were more important for solar-only customers. Mr. Keller noted that staff was somewhat surprised to learn that having backup power for outages was the lowest purchase motivator; some customers observed that outages happen so infrequently in Fort Collins that this benefit has little value to them. Solar-only customers said the primary barrier to adopting batteries is the upfront cost as well as the associated benefit with the cost in mind. Mr. Keller added that this aligns with what staff has heard anecdotally and helps to form how staff can think about how this program presents to customers and how to try and improve participation rates. When talking to customers who have already invested in battery storage, the study found that most of them are programming the batteries to minimize their costs. The battery storage incentive program requires them to program it to operate according to time-of-day rates, or a solar storage mode (as compared to a back up only mode). With solar storage mode, customers are storing surplus solar to ENERGY BOARD REGULAR MEETING operate their house through the night, so it would respond to follow the house load after dark. In this case, most customers are programming it to the time-of-day rate structure and avoiding purchases during on- peak hours. Mr. Tholl added this is an important distinction because these are all net-metered installations, so staff has little visibility into the battery operation itself. Mr. Keller said when the survey asked customers about their understanding of our net metering policy, as well as the rates that govern their bills both for energy they purchase from the grid and energy they return to the grid, solar and storage customers understood it more frequently than solar-only customers. Less than 50% of customers really understand time-of-day rates and what they're being charged for kilowatt hours they buy and what they're being compensated for and the energy that they return. This has helped staff see there is an opportunity for education in that area. Staff also asked these customers about their concerns about Utilities controlling a battery system, asking solar only customers as a benchmark group to pretend that they had a battery. Solar and storage customers were a little bit more concerned about not having enough power saved in case of an outage, but less concerned about the environmental stuff. Customers also expressed concern about higher energy costs without having visibility or control into when the Utility wants to operate the battery. The survey also asked if customers would be interested in a program where the Utility would pay you to allow control the storage system, and many said they would be very interested, noting that existing storage customers expected a lower annual incentive compared to solar only customers. Some customers don’t want anyone to control their batteries, mentioning concerns about safety, battery degradation, insufficient backups, etc. Next steps for this program are continuing to build battery program participation, research battery customer load profiles, and evaluate battery capacity for offline control. Staff also plans to do additional education about rates, policies, and performance, work to ease adoption barriers, and understand behavioral influence on battery programing (inform, enable, encourage). Chairperson Loran asked if it is the Utility’s objective to make batteries dispatchable power sources. Mr. Keller said that is one likely outcome, to recruit battery customers into the City’s pool of flexible resources in the virtual power plant. They will need to evaluate how much value is received in exchange for all the dollars paid to be able to push a button and get those stored kilowatt hours. Mr. Loran said he thought, based on a previous presentation, there was not a cost-effective protocol to make these batteries dispatchable. Mr. Keller said staff is assuming that challenge will be addressed in the future, and they are working with Platte River Power Authority as they work to get a DERMs system in place (distributed energy resource management system), that would both interface with the wholesale market as well as interface with distributed resources. Board member Smith commented that the motivation behind individuals installing solar and battery is economic because they're trying to avoid the time of use pricing, so a control program seems in direct conflict knowing that the Utility would be dispatching resources and draw down batteries when the rates are highest. Mr. Keller said it will depend on how the customer sets up their control program, the battery might only be following the load in their house. Board members wondered if there were other ways to motivate customers to install, also discussing the possibility of changing the rate structure in the future. Board member Braslau noticed there are zero customers who are battery only (no solar). He said it is much more efficient for Utilities to do utility-scale projects when it comes to solar and battery storage, but it seems the objective of this project is to leverage private capital. He wondered why not have a targeted program for getting customers to install battery storage that is designed to be controlled, as opposed to private customer installations where there is no control. He is unsurprised that customers are unwilling to ENERGY BOARD REGULAR MEETING install and/or participate in a utility-controlled storage system, and believes the Utility is missing the mark. Mr. Keller said this is an idea that is on the table for Utilities, and one that could hold some appeal in the residential sector as well as in the commercial and industrial sector where customers’ bills are much more correlated to their peak demand. He added there is an opportunity for Utilities to reach out to C&I customers and offer to facilitate (not own) onsite storage. Board member Wegert wondered what, if any, feedback staff has received regarding safety concerns. Mr. Keller said they have received very little feedback from customers. Mr. Wegert has two brothers who are firefighters, and he said having a lithium battery in his home is his primary safety concern because of the fire risk. Mr. Keller agreed and said it is remarkable there isn’t more concern from the market, but then again there aren’t many fire incidents being reported. ENERGY BOARD OFFICERS Board members discussed leadership roles until the 2025 Officer Election in April. Current Vice Chairperson Moore said she would be happy to continue serving as Vice Chair or as Chair for the Board, whatever works best for the Board. Board members discussed who they may like to nominate and what roles they may like to serve in. Chairperson Loran nominated Board member Smith to serve as Chairperson of the Energy Board. Board member Smith accepted the nomination. Chairperson Loran moved to elect Board member Smith as the next Chairperson of the Energy Board. Vice Chairperson Moore seconded the motion. Discussion: There is no need to have a second election since Vice Chairperson Moore’s role is not changing. Vote on the motion: It passed unanimously: 8-0 DRAFT 2024 ANNUAL REPORT The board reviewed their 2023 annual report so it can serve as an example for the 2024 report. Ms. Fredrickson will continue adding content to the report up and through tonight’s meeting, and the Board can edit it up until approval at their January 9 meeting. BOARD MEMBER REPORTS Ms. Fredrickson advised Boards and Commission recruitment is open. The Clerk’s office will be recreating for a of five seats on the Energy Board; however, Chairperson Smith and Vice Chairperson Moore make up two of those vacancies and need to reapply by (if they wish) by January 10. Board member Braslau said there are continuing questions and concern coming from the community about Platte River’s plans to build a natural gas turbine and the financial investment that comes with it. FUTURE AGENDA REVIEW ENERGY BOARD REGULAR MEETING In January, the Board will hear an update from Staff about the Riverside Community Solar Garden repowering project, as well as a presentation on the implementation of the Utility’s Income Qualified Assistance Plan. The Board will also review their planning calendar for 2025 and approve their 2024 Work Plan. ADJOURNMENT The Energy Board adjourned at 7:44 pm.