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HomeMy WebLinkAboutElectric Board - Minutes - 09/20/2000Minutes approved by the Board at the October 18, 2000 meeting FORT COLLINS ELECTRIC BOARD MINUTES II Regular Meeting September 20, 2000 at 5 p.m. Council Liaison: Scott Mason Staff Liaison: Heather Hoxeng — 221-6700 (�V) Chairperson: Jim Welch Phone: 498-8947 (W/H) Vice Chair: Richard Smart Phone: 221-4474 A regular meeting of the Fort Collins Electric Board was held at 5 p.m. on Wednesday, September 20, 2000, in the Utilities Training Room at 700 Wood Street, Fort Collins, Colorado. BOARD PRESENT: Jeff Eighmy, Guy Helme, Barbara Rutstein, Richard Smart, Doug Smith, Jim Welch STAFF PRESENT: Bob Kest, Eric Dahlgren, Heather Hoxeng GUEST: Irina Merson, President of High Energy Group, Inc. OBSERVER: Lu Fisk of the League of Women Voters APPROVAL OF MINUTES: Barbara Rutstein motioned to approve the minutes of the August 16 meeting. Richard Smart seconded the motion and it passed unanimously. DISTRIBUTED GENERATION — NE\X1/OLD TECHNOLOGY Irina Merson, President of High Energy Group, gave a presentation on distributed generation. She said distributed generation is considered old technology because at the beginning of the century, generation in the United States was mainly on -site generation. Distributed generation is also considered new because generation technology has advanced in recent years. Mrs. Merson stated that today's reality is towards a trend of electric deregulation, an era of gas and electricity industry convergence (Gas -driven companies are building electric power plants), toward nuclear plant shutdowns because of environmental concerns and regulations, a need for power quality and reliability, and technology advancements. With the appearance of these trends, California Alliance for Distributed Energy Research (CADER) has begun to seriously look into the issues concerning distributed generation. Distributed generation, or the use of power generation equipment ranging from 5 kW to 50 MW, located close to end users (on site), does have benefits and concerns. The benefits are the reduced loading and losses of the electric system, relieved bulk generation capacity, the ability to defer installation of new transmission lines and large power plants, improved power quality and reliability, and cleaner power sources environmentally. Also, units can be added as loads increase because of the easy installation. The markets Mrs. Merson feels are most suitable for distributed generation are: commercial and small industrial businesses, construction sites, utility companies, (IPP) developers, remote customer sites, and oil fields (because of gas flare reduction). Useful technologies for distributed generation are: small internal combustion generators, small gas turbine generators, small scale hydro plants, wind turbines, fuel cells, solar systems, and energy storage systems. There is a promising market future of applications for this type of generation with co -generation, high -efficiency units and portable power. Companies look for distributed generation for standby power where no interruption in power can be tolerated and outage costs are too high. Other technologies combine heat and power to be used in co- generation applications. Customers also use distributed generation during peak periods when energy costs are too high and when they require high quality power. Many companies that are too isolated to be connected to the grid opt for distributed generation. Microturbines (1,000/kW� are typically installed for $700-1,000, with built-in microprocessor -based controls, in six hours. Initial installations are built in parallel with the electric grid to confirm reliability because turbines are untested products. NoX emissions are very low, efficiency is 30 percent or greater, and single -shaft units with air bearings require less maintenance and have no lubricants. The life expectancy of some turbines is 40,000 hours. Gas turbines in combination with fuel cells create an ultra- high efficiency because the turbines use the waste heat of the fuel cell. Fuel cells were not considered three to four years ago because of their expense. Some fuel cell prices are between $400/kW-900/kW, however, fuel cells in combination with gas -fired microturbines cause efficiency to go up and expenses to decrease. The fuel cell does not run down when energy is depleted like batteries. As long as there is fuel corning into it, the cell is charged. Energy in hydrogen rich fuel (gas, coal, etc.) turns into electricity by converting electrochemical potential into distributed generation. With low emission of sulfur and nitrogen compounds released by conventional generation methods, these cells are relatively safe and they make no sound. Some Japanese companies have even begun to use them in apartment buildings because of their safety. Other possibilities for on -site generations are diesel, gas, wind, or solar energies. Reciprocating engines are well known in technology with established distribution and maintenance infrastructures. Gas engines are the most popular with only a $250-600 cost for generator set and 30-40 percent efficiency. Solar turbines are at a $500/kW installed cost with 40 percent non -combined cycle and wind turbines help with pollution and emission rulings and are installed at $1000/11W. All of these distributive generation concepts have interconnection issues. The dominant concerns are personnel safety and grid stability, and utilities are reluctant to rely on unfamiliar protective relaying schemes. Other hindrances are the costs of interconnection requirements and the cost of a communications infrastructure to dispatch units. The Institute of Electrical and Electronics Engineers (IEEE) is working on a standard interconnection criterion that will outline methodology for classifying interconnection requirements, technical specifications and requirements, test specifications and requirements, and a summary of interconnection requirements. Net metering allows customers to cell excess power back to utility companies within a coordinated net metering program. Customers can use their own generation to offset consumption over the entire billing period, not just at demand periods. The customer is now in a position to help the utility as transmission constraints and growing demands on limited resources occur. The main objective for states implementing net metering programs is to encourage private investment in renewable energy resources. In conclusion, the impact of distributed generation for a utility can be a benefit, concern, and a threat. The benefits are a reduced load on the electric system, reduced system losses, deferred installation of new equipment or system upgrades, improved power quality and reliability, and cleaner power sources. Technical concerns with interconnection, dispatch and operation of the system, and integrated system planning exist, but are manageable. Threats of degeneration are non -recovered stranded costs leading to rate increases, loss of market share in the future, and there is possible system corruption when the system is not properly integrated. TELECOMMUNICATIONS UPDATE Eric Dahlgren updated the Board on the City's telecommunications by referring to an article in the Deamer Pon that Barbara Rutstein had presented to him. The article stated that ICG Communication's stock has lost 96 percent of its value recently and they have lost two CEO's in the last month. The concern is how ICG's financial stability is going to affect telecommunications in Fort Collins since they lease 24 strands of fiber from the City. Mr. Dahlgren explained that ICG's financial stability would not affect us this year because they paid us $281,000 in advance, for this year. Their lease was for twenty years so it will affect concurrent years. Mr. Dahlgren stated that he expects another company to buy ICG and continue their services. All the companies serviced by the new provider will most likely have to renegotiate their contracts (Colorado State University, Plate River, Poudre Valley Hospital, etc.). The contract concerning the City is actually between Platte River and ICG. ICG is riding on Platte River's franchise because they are leasing the fiber from Platte River. A City charter states that anyone having telecommunications within City limits has to have a franchise, and this is in direct conflict with a State mandate, which states that municipalities cannot require telecommunication companies to obtain franchises. The City of Fort Collins gave Platte River a franchise to use the City right-of-ways to avoid the conflict of these two laws, and Platte River has agreed to turn over any profits from the lease of fiber to the City. Therefore, ICG will mainly deal with Platte River, but the City will be involved in some ways. Richard Smart asked if we could do something to recoup our losses and come out ahead. Mr. Dalilgren stated that everything we are doing is a gain. The City did not put any money into the system, so all the revenues we have received are gains. The only loss might be that the customers could be without telecommunications service while waiting for another company to take over the service. INFORMATION SHARING Mr. Smart has been pursuing a small hydro project with the help of Mike Smith and Utilities staff. A pamphlet was handed out to the Board detailing how Boulder has handled this area. The preliminary figures for a small hydro project are encouraging for the City's Water Treatment Plant. There is also a small hydro site being considered at Olympus Dam, in Estes Park, that has very- encouraging figures. Mr. Welch asked what range of size might be expected from the hydro project at the treatment plant and Mr. Smart said it would be a few hundred kW. The Olympus Dam project would create about l30kW unit running year-round. Heather Hoxeng reminded everyone that it is time to complete the 2001 Work Plan, which needs to be turned into the City Clerk by November 1. A copy of this year's plan will be included in packets and it will be on the Agenda for the October 18 meeting. On a side note, she also reminded them that the 2000 Annual Report will need to be compiled and turned in by January 31, 2001.