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HomeMy WebLinkAboutElectric Board - Minutes - 03/21/2001FORT COLLINS ELECTRIC BOARD REGULAR MEETING MINUTES City of Fort Collins Utilities Training Room 700 Wood Street Wednesday, March 21, 2001 Fort Collins, Colorado ouncil Liaison: Eric Hamrick Staff Liaison: DeEtta Carr - 221-6702 airpeason: ice Chairperson: Richard Smart Phone: Phone: 221-4474 (H MEMBERS PRESENT: Barbara Rutstein, Guy Helme, Richard Smart -Chairperson, Jim Welch STAFF PRESENT: Mike Smith, DeEtta Carr -Staff Liaison, Wendy Williams, Lori Clements -Grote, Bob Kost, Patty Bigner, Dennis Sumner, Eric Dahlgren, Kim Vondy-Recorder OBSERVER: Lu Fisk, League of Women Voters 1. CALL TO ORDER Meeting was called to order by Co -Chairperson Richard Smart at 5:15 p.m. Jim Welch had asked Richard to chair this meeting since it's his last night. Richard expressed his appreciation to Jim. 2. APPROVAL OF MINUTES With the exception of a change on page 3, center of last paragraph, it should be 5,000 megawatts instead of 5,000 MGW; Barbara Rutstein made a motion to approve the minutes of the February 21, 2001 meeting. Guy Helme seconded the motion. Motion passed unanimously. 3. ADDITIONS TO THE AGENDA Mike Smith introduced Kim Vondy who is now taking minutes and DeEtta Carr who is the new staff liaison. No other additions. 4. WIND POWER PROGRAM PIONEERS RECOGNITION Lori Clements -Grote reminded everyone about the wind celebration on Thursday, April 5°i, from 6:30 to 9pm. Lori thanked Jim Welch for being a strong advocate of this program. His support will be missed. Randy Udall, Director of the Community Office for Resource Efficiency, will speak at the celebration. There has been a positive response from subscribers, both to attend the celebration and renew their subscription. Pioneer subscribers will receive certificates signed by the Mayor and City Manager, as well as a poster of the wind site. Pioneers who renew and new subscribers (for a limited time) will receive a complimentary compact fluorescent bulb. A new payment option ($5 block) has been added. Update on totals through February: 15,561,408 kWh have been generated by City's portion of the turbines at the site and we've sold 15,327,716 kWh, which is about 1% difference. This meets our goal of matching output and sales. ELECTRIC BOARD MINUTE MEETINGS PAGE 2 MARCH 21, 2001 The board discussed several issues related to the program, including the price increase, avian mortality, attrition, ratebasing and site expansion. Richard stated that expansion at the existing site would require an upgrade to transformer capacity. Dennis responded that a transformer at the site is a limiting factor, as vTll as transmission. Mike stated that there is a little more capacity than originally thought. Barbara Rutstein asked how the response had been in the other three cities. Mike stated that we have subscribed to 5-1/2 turbines and the other three cities share 1-1/2 turbines together with 2 turbines for the contracts. Longmont is the second largest after Fort Collins. Barbara asked if anyone at the state level is requiring Public Service to do more. Lori stated that there was a recent PUC hearing requiring them to rate base a fairly large portion of wind. Jim added that this is the 65 megawatts that they want to put in LaJunta. 5. CALIFORNIA CRISIS OPTIONS & OPPORTUNITIES Richard stated that as a city and member/owner of Platte River, we should look for ways to promote public power. Mike said there is certainly an opportunity to promote our conservation and design assistance programs. The opportunity to sell excess power is certainly there and Platte River is doing that as much as they can. The downside is that if Platte River needs to shut the facility down, they will have to purchase at market prices. In the next couple of months Doug Swartz will be presenting the results of a code evaluation study. Wendy Williams noted that he has looked at new homes that have been built in the last couple of years to see what kind of impact the energy code has had. Jim stated that we seem to have a good opportunity now that energy costs are going up. Wendy replied that there is heightened interest in the results of the study. Providing training to the builders will be important, as once the house is completed it could be very costly to go back in and correct the problems. Light and Power provided training when changes were made to building code. A similar approach will probably be used again. Barbara commented that what she gathered by looking at all the papers is that so many of the developers are national corporations rather than "local people." Jim believes that we need to couple education with inspection. He thinks this is a great time to do so, with double gas bills etc. Guy Helme asked if the Utilities offer incentives to the builders. Mike reported "No." Jim noted that we are shifting towards being a summer peaker and what we need to do is find better ways for cooling homes. Mike stated that staff was looking at both sides. Our rate person is looking at rates to encourage responsible use. Jim asked if Platte River's peak rate is going to go up. Mike responded that there has not been any discussion on that. Richard asked whether there has been any discussion about paying people to ELECTRIC BOARD MINUTE MEETINGS PAGE 3 MARCH 21, 2001 conserve. Mike responded that Platte River is looking at that. They are trying to identify systems that could be installed or sold to businesses, where Platte River would pay for a certain percentage to put these in, because it is cheaper than production. Platte River would pay for the equipment and the companies would have to be willing to operate in that manner. It is more productive to do this than approach the homeowner. m,11 Mike reported that Platte River was in th ist of a study on the next major unit, the options, emissions and costs issues. Gas peckers costs S400 per kWh. The initial capital cost for a coal unit is $1,200 per kWh. Gas is currently 10 times more expensive per megawatt hour than coal. The next issue is we are going to run out of base capacity. We are in a tight spot with transmission constraints. We could possibly get some power from other Wyoming prole e added if we were to need backup power from someone else that could be a problem. is looking at a new facility in the soft1 �,' steapart of the state and is looking for partners. lore a potential partner, but how -get the power here? Barbara spoke of an article she read in Public Power Weekly regarding transmission or import power. Mike noted that it was a state problem, but not here. However, if we had to get that much power here, it would be a problem. The price of power out in the market is outrageous. Jim commented that whatever happens we have unleashed deregulation in the generation side for better or worse, that invariably it is going to mean that the cost is going to go up. What he is hearing is that the summer load has shifted to where it is the dominant peak, which seems to suggest we need to put out pricing or peaking signals to help customers and control their use. In response, Dennis stated that we have a coincident pricing rate, which gives our customers a $12 per kW incentive to be concerned with what they're doing at the peak. Platte River staff is going to bring a number of options to their board. Dennis has been working with John Bleem and meeting with some of the large customers and help them explore options as to how they can take advantage of the coincident pricing rate. Mike added that our rate person is looking at options to encourage customers not to use so much power during these hours. We do have sophisticated meter capabilities for our big customers. Right now, we are tracking their peaks. The problem in California is that they are paying the premium to get power from somewhere else. We don't want to assume that we won't have to go out and pay a premium for power if a unit breaks down. Resources have been lined up for the summer, but if whideior Craig Fs dowT before unexpectedly, there could be concerns about how long es � aci4 up; how much power have to buy, and for how much. Barbara commented that it sounded to her like there was no where to buy it from. Dennis replied that that is where the issue of the Front Range-beft transmission constraints comes in to play, because although relatively speaking we are in pretty good shape, Colorado Springs is not in very good shape and Public Service is not in as good shape as we are. The market place is very limited. Richard asked whether there were forced outages, could it result in blackouts in August. Mike responded yes, there is no doubt about that. Our energy situation is not � �t,.$ht as California, but it's on the edge. Everyone needs additional generation and that is why Vuying peaking units. ELECTRIC BOARD MINUTE MEETINGS PAGE 4 MARCH 21, 2001 Within 2 years we will have another 190 megawatts of peaking power available. Platte River projects that by 2009 (depending on the rategf llc�growth), we will need additional base load. We don't want to turn those 3 gas peakers on a•time, because they are really expensive and they are not made to do that. This is the last year that we have a contract to sell power from Rawhide to .Pu1Lic.Service. 2.009 would be the drop.dead.dale w.e.cn_uld need additional base load, so we need to be looking at it now with the current projected growth increases. Platte River is projecting a load of 601 megawatts: 88 to Public Service, 489 for the cities, and 24 in reserves. They have 20 megawatts of spot purchases they have asked Western Power to make for us, (which is pricey) and they've leased temporary generators until next year when the Public Service contract expires. Guy asked what the timetable is for building a fossil plant. Mike responded at least 5-years, decision would have to be made in 3-years. Richard suggested that this be kept as an ongoing agenda item. 6. ICG Contract Issue - (Information in Packet) Eric stated that they had hired a CEO. Don't know what's go'n t h pen, but there is a fairly high confidence factor at Platte River that ICG is going to_Q9W th lease money for their fiber this year. They owe us $289,622, which is the cost for them to lease 24 strands of our fiber this year, which was due January Is`. Our recourse is to take over their system, which is not really what we want to do. We can't run their system or offer the same kind of telecom services that they offer customers. Part of their Chapter 11 process says that not only can they not drop their customers, but that their customers cannot drop them. This involves CSU, HP, Front Range Internet, and PVH, which is scrambling to get backup service. Our relationship doesn't apply to this court case, because the court case applies to franchises. ICG is serving customers through Platte River and Platte River already has a contract with the City. Court determines a path on Chapter I 1 and it can become complicated and take a good deal of time. �nct�c= Dennis noted that there lussbeen 4 other telecommunication companies that have taken a look at Fort Collins with the idea of overbuilding the present proprietors which nSomclufla,�ne and cable TV, and offering that full range of services. So far nobody has �: e co panies have gone so far as doing what they call walk arounds, where they do their initial engineering work and then walked away. Not sure why, unless it is more expensive here because we are all underground. Maybe the compelling factor is that both AT&T Broadband and Qwest are well entrenched here and have both done system upgrades in the recent past. Given that, it is kind of interesting that no one is willing to do the kind of investment it would take to build up Fort Collins. Eric pointed out that one day subcontractors for McLeod received notice that they were supposed to close up and leave their job site with no further explanation leaving 1,500 feet incomplete. Not sure if they are looking at a buy-out or what and if they had to stop and count their assets, it was very odd. All they were doing was putting in empty conduit, but they hadn't applied for a franchise so not quite sure why they were putting it in. It did have an effect on our traffic department. ELECTRIC BOARD MINUTE MEETINGS PAGE 5 MARCH 21, 2001 7. Workplan Richard explained that until the new council comes on and appoints new board members, remaining members would have to attend to meet a quorum. Richard asked what items members would like to see addressed. e Guy'vr'ill now painIcipate on the Hydrogen Task Force, in JIrn's absence. • Mike reported that the consultants are basically done. They may be able to include an update in the packet. Mikeaddedthat they identified a few things that needs to work on, and VSe are doing those things. • Wendy reported that a new manager was recently hired to oversee the public relations group. • Deregulation - Mike stated that it is quiet right now, but suspects it will be back again once people have a better understanding of what happened, what went wrong, and does this stuff really work, and if it works what has to happen to make it work. • Budget will have to be worked on in the summer. • The report from Doug on the energy code will begin in June or July. • Mike will get back to board if the staff starts looking at rate structures, nothing firm on it yet. • Conservation Issue - Richard feels if there is a way we could collaborate somehow with council on this issue and certain things, like the peak demand and other issues discussed, would be good. Mike noted that Platte River and Wendy's group would be working more on that. Richard also commented that he also continues to be impressed by the Energy Score and would like to do what he can to keep things moving. Wendy noted that they were starting to do an environmental scan of what kind of programs are out there, which hasn't been done for awhile. Richard noted that he has seen advertisements for rural people retrofitting their pumps with more efficient motors. Tri-State will give a substantial rebate to users. Richard assumes that there would be quite a few older homes in town with blowers on furnaces with insufficient motors. Wendy stated that there is a large company in California that has been very successful in selling their homes because they use energy to differentiate what they do; they actually guarantee your utility bill. They are planning on coming to Fort Collins and they are hoping that they will provide the local builders with an incentive to do the same. • LA has public power and their lights are on, it is the lights around LA that are in question. Richard feels that the fire is hot. How do we make a point that public power is one heck of a deal in this city? Mike replied that Articles have been written in the Coloradoan and business newsletter. The question is how much do you want to sell, why do you want to sell, and what is it going to get you right now? • Wendy reported that Triple I sessions (Issues, Impacts, and Innovations), includes a session on cooling, "Alternatives to Air Condition on March 28t' at the Senior Center. Schedule was included in the utility bills. • Barbara thanked Jim for his service. Jim stated he would like to continue to receive the packet. 8. ADJOURNMENT Meeting was adjourned at 7:25 p.m.