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HomeMy WebLinkAboutENERGY BOARD - MINUTES - 04/10/2025 ENERGY BOARD April 10, 2025 – 5:30 pm 222 Laporte Ave – Colorado Room ROLL CALL Board Members Present: Aleksander Thorstensen, Jason Hevelone, Natalie Montecino, Frederick Wegert, Wendell Stainsby, Scott Canonico, Brian Smith, Jeremy Giovando, Marge Moore Board Members Absent: OTHERS PRESENT Staff Members Present: Christie Fredrickson, Brian Tholl, Michael Authier, Gabe Stuhr, Joe Wimmer, Katie Varney (remote), Yvette Lewis-Molock (remote), Mary Horsey (remote) Members of the Public: Halee Wahl MEETING CALLED TO ORDER Chairperson Smith called the meeting to order at 5:30 pm. ANNOUNCEMENTS & AGENDA CHANGES None. PUBLIC COMMENT None. APPROVAL OF MINUTES In preparation for the meeting, board members submitted amendments via email for the March 13, 2025, minutes. The minutes were approved as amended. NEW BOARD MEMBER INTRODUCTIONS Board members went around the room to introduce themselves. 2024 YEAR-END FINANCIAL UPDATE Joe Wimmer, Director, Utilities Finance Gabe Stuhr, Analyst II, Finance Revenues ended favorably in 2024, coming in over budget by a total of $11.7 million. That was mostly driven by development fees, but Mr. Wimmer explained that while it’s great to have those fees in excess, they can be somewhat volatile (since they are driven by new development) and can’t be counted on from year to year. Interest also contributed to the favorable revenues, which is typically budgeted for conservatively since it also can’t be planned for year to year. Expenses for the year ended under budget, ending the year $7.5 million under budget. The Utility is working on several capital projects, inclusive of about $65 million worth of capital projects ongoing right now, spending about $6 million from the comprehensive list in 2024. Mr. Stuhr called out some of the trends the Utility is currently seeing. As Mr. Wimmer stated earlier, the City had some large projects this year that drove development fees to be higher than normal, and the ENERGY BOARD REGULAR MEETING same was true for interest revenue. Mr. Stuhr noted that the Utility was able to take advantage of bond rates and get more interest revenue than it typically would, which is great. Vice Chairperson Moore asked what new developments influenced fees in 2024. Mr. Stuhr said the biggest driver was a large capacity expansion project for Hewlett Packard. On the operating expense side ($142.7 million), expenses are mostly driven by wholesale costs of purchase power from Platte River Power Authority, which is 73% of Light & Power’s Operating expense. Rates will continue to increase as Platte River increases their wholesale costs, plus any inflation. Mr. Stuhr noted that inflation is also hitting many of the Utility’s goods, such as transformers. Board member Giovando asked if staff could break down the expense categories for the Board’s new members. Mr. Stuhr explained the following: Purchase Power is the Utility buying wholesale power from the generation Utility (Platte River). L&P Operations are personnel costs. PILOTs are Payment in Lieu of Taxes, which is payment made to compensate a government for some or all of the property tax revenue lost due to tax exempt ownership. Admin Services are for Customer Service and Administration (which works with all four utilities). Energy Services are the Utility’s incentive and rebate programs. Other Payments & Transfers include internal services outside of utilities for general governmental support (HR, finance, IT, City Attorney, etc.). Mr. Stuhr explained there are two categories within capital projects: system additions and replacements (for development that is expanding the electric system—funded by development fees), and other capital (improvement projects of the existing system). Ideally, if you took all of operations, staff would want 25% rolling over the next year to serve as a buffer for resiliency and volatility of costs going up. The available fund balance would be anything the Utility would want available for capital project escalation. Board member Canonico commented that as a rate payer, it is a little bit concerning that there is a surplus of revenue when electric rates are going up by 6.5% this year. Staff understood and noted that much of that revenue is going to be spent on capital projects that have already been committed to and approved but the projects haven’t been started yet. Mr. Stuhr said compared to a private entity, it is unusual to hold a lot of capital, but the Utility doesn’t issue debt and does not like to take on debt. Board member Thorstensen asked if rate increases are passed along evenly among electric rate classes. Mr. Wimmer explained that every few years, staff completes a cost-of-service study to determine how those increases are applied. The next rate cycle will pass evenly among all, and then a cost-of-service will be completed to determine the split for the next cycle. 2024 ENERGY SERVICES PROGRAM ACHIEVEMENTS Michael Authier, Mechanical Engineer III Energy services hosts about 40 Utilities-led energy programs. There are many methods that the Utility can support customers, but they generally fall within four mechanisms: economic, behavioral, infrastructure, regulatory. For example, Building Performance Standards would fall under a regulatory program, and it affects commercial and multifamily customers. All of the programs fall under an area of focus (ordered by earliest implementation): financing, grid flexibility, income qualified efficiency, business efficiency, home efficiency, distributed generation, new construction, or behavioral efficiency. The primary guiding policy for these programs is Our Climate Future (OCF). OCF was adopted by City Council in 2021 and encompasses the previous plans for Climate Action, Energy Policy, and Zero Waste. OCF was built around equity, resilience, and mitigation and developed in partnership with the community ENERGY BOARD REGULAR MEETING including Big Moves (transformational outcomes), Next Moves (actions to achieve outcomes), and goals (progress indicators but not comprehensive of outcomes). Light & Power and Energy Services both focus in on Big Move 12 (100% Renewable Electricity) and Big Move 6 (Efficient Emission Free Buildings). Mr. Authier explained that though the goal is measurable (ex. 100% renewable electricity), the outcome is more nuanced: “Everyone in the community receives affordable and reliable 100% renewable electricity, including from local sources,” -- there is not a goal around affordability, but that is a clearly stated outcome. He added that though there may not be a goal for some of these outcomes, it’s still important to track progress to it and identify what the best way to do that through the rest of the Next Moves. OCF Next Moves started with over 1,000 initial community-generated ideas. They were consolidated down to 450, and there are currently over 100 in process across the inventory areas (including 40 energy- related moves). These are grouped into pathways; for example, the emissions 2030 pathway has electricity (27.3%), buildings (10%), transportation (5.8%), industry (2.3%), waste (1.6%), and land use (0.1%). Mr. Authier noted that the ones that are in progress are generally the ones that are the most cost effective or have the biggest impact, and the remaining ones for energy, for example, are mostly regulatory education-based moves with lower cost effectiveness. Along with OCF and its energy-related goals, there are also related policies that directly affect the work that staff does. These policies are Platte River’s Resource Diversification Policy and the State’s Clean Energy Plan. Platte River’s Resource Diversification Policy is for proactively working toward the goal of reaching a 100% non-carbon resource mix by 2030, while maintaining Platte River’s three pillars of providing reliable, environmentally responsible and financially sustainable electricity. The Clean Energy Plan states that any clean energy plan at the public utilities commission that, as filed, will achieve at least an 80% reduction in greenhouse gas emissions caused by the utility's Colorado retail electricity sales by 2030 relative to 2005 levels. Board member Canonico asked if there is any clarity or interpretation provided for 100% renewable energy and what that means within these documents. Mr. Authier said the goals are indicators of the outcomes and the outcomes are where there's additional clarifying information, within the big moves, but they don’t have any specificity in how things are accounted for, included, or excluded. Ultimately, it is written as a consumption-based goal rather than a resource diversification policy—the community has expressed that they want the community’s consumption to be 100% renewable electricity. Mr. Canonico said that’s the first he’s heard it expressed that way, and that it differs from what many people are advocating for; his opinion is that when you start to pursue 100% and reach that final increment, there is increasing likelihood of choosing cost-ineffective pathways that might also not be the best environmental solution either. He added that having a balanced perspective would be very healthy and help set reasonable expectations with better outcomes for all. Mr. Tholl added that maybe that is the question, what is the community interested in? Maybe the context is to do whatever you can do to get as close to those goals in the next six years or is there a desire to get into the details and consider setting a new goal for Fort Collins. Mr. Canonico thinks that would be helpful to City Council, to be able to say, “we looked at it and this is practical, and this isn't, this is the one way to interpret it.” Within the OCF outcome areas, there are several energy related outcomes: building energy code adoption & performance, electric grid flexibility, electric grid reliability, electricity affordability, electricity consumption and renewable energy, natural gas consumption, and greenhouse gas emissions. A 2018 study of community new home energy use per built aera showed local energy code compliance of 73%. Since then, a code compliance position was hired, and compliance is now currently around 83% (compared to the national rate of approximately 70%). ENERGY BOARD REGULAR MEETING Grid flexibility is designed to help reduce peak demand. Doing things like preheating a water heater, or setting back the thermostat temperature, so these devices can coast through the peak shed and reduce usage during peak demand periods. Periods immediately before and after the peak demand are known as sinks, and they pull more energy to try and prepare or catch up. The two of these combined are known as bidirectional flexibility, and there is a goal for its capacity in OCF of 2.6% of the 2024 peak demand. In 2030 that goal increases to 5%. There are five metrics in electricity reliability: SAIDI (System Average Interruption Duration Index), SAIFI (System Average Interruption Frequency Index), CAIDI (Customer Average Interruption Duration Index), and MAIFI (Momentary Average Interruption Frequency Index), and ASAI (Average System Availability Index). For ASAI, the goal is 99.9956%, and in 2024 the Utility was at 99.9979%. One of the takeaways is that since 1995, the number of services provided has doubled but reliability has remained consistent. Services have doubled since 1985, but reliability has remained consistent. In 2024, SAIDI averaged 11 minutes (of average outage length). As a point of reference, the Colorado average in 2023 was 99 minutes and the national average was 342 minutes. Mr. Tholl highlighted that in the written goals for both Platte River and Fort Collins is that both organizations do call out the environmental, reliable, and affordable components of it, meaning none of the steps toward 100% renewable electricity should be done at the expense of electric reliability. In residential affordability, there has been an 89% residential rate increase since 2005, but only a 68% monthly cost increase (~$32 monthly bill, not adjusted for inflation). Mr. Authier said there are a couple contributing factors: consumption per residential customer has come down, and there are more components available to leverage (ex. on peak rates vs. off peak), and without energy efficiency programs, 2024 electricity consumption would have been 22% higher. He highlighted that Fort Collins Utilities rates remain some of the lowest in Colorado and below average nationally. Additionally, within consumption, 2024 wholesale energy purchases would’ve been 25% higher without efficiency & local generation, and 2024 consumption from carbon generation would’ve been 132% higher without efficiency & renewables. Mr. Authier pointed out a significant drop in carbon consumption in 2020, which is attributed to the Roundhouse Wind facility coming online. He expects to see a similar drop when the Black Hollow Solar project comes online this spring. Even though the Utility’s programs are focused on electric savings, there is a specific natural gas goal and some of the plan’s Next Moves are reducing natural gas usage, including things like Building Performance Standards (which has a significant impact on natural gas). With all the Next Moves factored in, the community can get to a reduction of 17% of natural gas by 2030. With all next moves factored in, Staff is projecting 69.8% total emissions reduction by 2030 (the goal is 80%). Mr. Tholl noted that 70% is only attainable if there is budget and federal funding, as well as regulatory and political support. There are pathways to achieve it, but it needs several levels of support to get there. Mr. Authier also said that utility-scale renewables (Platte River) have the most potential to make a sweeping impact, as well as local buildings. Board member Wegert asked what “5% local sources” entail. Mr. Tholl explained that local resources refer to distributed energy resources generated in Fort Collins, such as local solar connected to the distribution grid (different than utility scale from Platte River). OFFICER ELECTIONS ENERGY BOARD REGULAR MEETING Board member Moore’s is unable to serve another term as Vice Chair at this time because she is focused on several professional commitments, so the Board is holding an officer election for Vice Chairperson. Chairperson Smith called on the Board to suggest nominations for the seat. Board member Stainsby nominated Board member Wegert to serve as Vice Chairperson of the Energy Board. Board member Wegert accepted the nomination. With no other nominations brought to the floor, Chairperson Smith declared nominations closed. Board member Canonico moved Board member Wegert to serve as the new Vice Chairperson of the Energy Board. Board member Moore seconded the motion. Additional Discussion: None. Vote on the motion: It passed unanimously, 9-0. BOARD MEMBER REPORTS Vice Chairperson Wegert said a canvasser from Community for Sustainable Energy stopped by his home and was advocating for the OCF local renewable resource goals to be higher. He encouraged them to come to a future Energy Board meeting to speak during public comment. FUTURE AGENDA REVIEW The Board’s May meeting will have presentations about 2024 IECC codes and a preview of City Council Priority 6. ADJOURNMENT The Energy Board adjourned at 7:55 pm.