Loading...
HomeMy WebLinkAboutElectric Board - Minutes - 06/21/2000Minutes approved by the Board at the August 16, 2000 meeting FORT COLLINs ELECTRIC BOARD MINUTES Regular Meeting June 21, 2000 Council Liaison: Scott Mason Staff Liaison: Heather HoxenR - 221-6700 (W) Chairperson: Jim Welch Phone: 498-8947 (W/H) Vice Chair: Richard Smart Phone: 221-4474 (H) A regular meeting of the Fort Collins Electric Board was held at 5 p.m. on Wednesday, June 21, 2000, in the Utilities Training Room at 700 Wood Street, Fort Collins, Colorado. BOARD PRESENT: Barbara Rutstein, Doug Sinith, Ginger Pmvis, Jeff Eighmy, Jim Welch, Richard Smart STAFF PRESENT: Bill Switzer, Dave Agee, Eric Dahlgren, Gaq Schroeder, Heather Hoxeng, Mike Smith, Wendy- Williams GUESTS: Brian Mocck, Platte River Power Authority OBSERVER: Lu Fisk, League of Women Voters \PPROVAL OF MINUTES: Barbara Rutstein motioned to approve the minutes of the May 17 meeting with revisions. Jeff Eighmy seconded the motion and it passed unanimously. INTRODUCTION OF A NEW BOARD MEMBER: Jim Welch introduced Doug Smith who is to fill the vacancy created by Bill Brayden's recent resignation. Mr. Smith said he hoped his three years of experience at Platte River would make him an asset to the Board. UPDATE FROM BRIAN MOECK: Brian Moeck, General Manager of Platte River PROVIDED THE Board with a summary of Platte River's performance this past year and responded to questions. When Mr. Moeck joined Platte River he spoke with its board members Mike Smith, Vice -Chair and Ralph Mullnix, Chair about creating a vision for Platte River. The recently completed visioning process focused on issues surrounding possible deregulation. Platte River, together with three other Colorado power generations, is funding a study, initiated by Colorado Association of Municipal Utilities (CANIU), to more closely look at deregulation. The study report should be out in September. Mr. Moeck informed the Board about two new wholesale rates Platte River is offering its customers. One is a contract or set rate and the other a blended energy and demand rate, which varies with customer load. A Federal and State Issues paper was prepared, reviewed, and adopted by the Platte River Board of Directors. Its purpose was to coordinate Platte River's political positions with those of the member cities and provide direction to lobbyists dealing with Platte River issues. It was completed in December 1999 and will be reviewed at least annually. Platte River staff is concerned about increasing summer and winter peak demands. The peak has grown faster than the base load requirement causing concern as to how to meet peak conditions. Historically, power has been readily available from the power pool; however, availability and price are growing concerns. Consequently, a 63-Megawatt (DIIXO gas combustion turbine has been approved for installation at Rawhide, and Platte River is currently investigating an additional base load unit. Mr. Moeck informed the Board that Platte R ver is planning a major outage for Rawhide this fall. Contracts are being negotiated to cover the delivery of power during the outage. In addition to the turbine, Platte River is looking at opportunities to contract or partner with others to build future power generation. Once they have looked at all the options for future generation capacity they will look at timing. Ms. Rutstein asked how the change in availability of gas has affected utilities. Mr. Dloeck said that almost everyone building generation is using natural gas. Availability and price volatility are factors that must be considered if Platte River is to seriously consider a combined cycle unit for either intermediate or base load. At the tune Mr. Moeck was hired, Platte River was negotiating power contracts and contract extensions with the Federal Government. One -quarter to one-third of Platte River's power is purchased from federal hydro projects. Platte River has successfully extended both the Loveland Area Project (LAP) and Salt Lake Integrated Project (SLIP) contracts to 2024. The Wind Power Program continues to be successful. In July, contractors will begin erecting the ninth and tenth turbines at Medicine Bow, bringing the total capacity to 6 MW. A 10-year capital plan was recently developed, which is a longer term plan than has been developed previously. Financially and operationally, PRPA is in very good shape. They, still expect to have cash equal to their debt by year 2005 or 2006. Richard Smart asked Mr. Moeck about his 10-15 year vision for Platte River. Mr. Moeck replied that PRPA will continue to focus on its core competency of responsibly providing reliable wholesale electricity. He said Platte River will need to watch emerging technologies, such as inicroturbines and fuel cells and determine whether there is a role for Platte River in distributed generation markets. Ginger Purvis asked about Platte River's plans to expand their commitment to telecommunications. Mr. Moeck said it would depend on direction from the Platte River's Board. Platte River has experience with the current fiber project and is trying to determine whether they are a big enough player. When the fiber system was installed, Platte River determined that leasing dark fiber was the best market strategy. Mr. Smartasked what the other Cities would do if an IOU or investment company wanted to buy their systems. Mr. Moeck said that he believed all of the owner cities were strong supporters of public power and recognize the long-term advantages of owning and controlling their own systems. He said he did not know of any interest in selling their investment in Platte River or their distribution systems. Mr. Smart also asked if Platte River was going to be more aggressive in marketing. Mr. Moeck said he would like to see Platte River and the City of Fort Collins be more in the public's eye. For Platte River, this will mean their fleet cars will have a standard color and logo and the company will be more involved in community programs like Earth Day and the Chamber's Business After Hours. Ms. Rutstein asked if there is a way for Platte River to join the City to create greater visibility in the community. She suggested a joint logo. Mr. Moeck said the idea has merit but may be difficult to achieve with four utilities. He said PRPA could pursue the idea if its Board were interested. Mr. Smart asked if the Utilities was planning any major celebration to promote public power and communitn ownership during Public Power Week in October. Mr. Moeck said PRPA would be available to support community activities. Mr. Welch asked if PRPA has been involved with global warning on a national level. Mr. Moeck said he watched the two-hour Public Service program on global warming two months ago, which portrayed a very balanced perspective of the issue. He offered a copy of the program to the Board. Platte River has been exceeding State Health Department and EPA requirements, but is still looking at ways to further reduce emissions. They arc also doing voluntary reporting of green house gases but have not set target levels of control at this point. PHOTOVOLTAIC UPDATE: Gary° Schroeder and Bill Switzer provided an update on the Utilities first residential photovoltaic s'xstem. Mr. Schroeder explained how the system works, and 'Mr. Switzer explained the process used to determine the appropriate rates. The residential customer, Mr. Shipman, completed an interconnection application with the Utilities Department as well as a City building permit application. Altair Energy constructed the system. Colorado Solar Energy Industries Association (COSEIA) granted him a rebate of about $2,000. The total system cost was approximately $10,000 ($8,000 net cost after the rebate). The basic system is a 740Watt PV array on the roof. The panels feed into an inverter, which changes the DC power to 120V AC power and continues to an emergency disconnect. From there, the line feeds into a house breaker panel in front of the utility meter. The meter will spin either direction depending on how much power is being used in the house relative to the amount being generated. The system also has a data logger attached to it and Mr. Shipman downloads the information every two weeks and sends it to the City. The logger measures amps every 90 seconds. If the grid loses power, there is no battery back up and the inverter automatically disconnects the PV system from the grid. This elmunates the possibility of power being sent back through the system, into the grid, and potentially injuring crews working on the lines. This also means the home is without power during an outage even if the PV array is generating power. Mr. Schroeder estimates the system generates approximately 20-25 percent of Mr. Shipman's annual electric energy use. His usage averages about 400 kWh per month. The PV system generates about 100 kWh. Mr. Switzer discussed the rate structure for the photovoltaic system. He said purchase power energy (or what we pay to Platte River Power Authority to operate the turbines), purchase power demand (the price we pay Platte River Power Authority to transmit power from the plant to us) make up 2/3 of our rates. The billing and distribution costs of the City are fixed. The City tries to protect these costs and still provide the customer with the best rate. Rate "R" states that parallel generation is prohibited because the Cite does not want to be crediting money that pays fixed costs. When someone on the rate "RD" has a parallel generation system, there are tunes they are not using it and they set a demand. Then, when they use the system, the meter spins backwards, crediting the customer less than on the "R" rate and more of the fixed costs are protected. For the photovoltaic system on Rate "RD", Mr. Shipman's reduced energy usage means that he uses the grid without paying for it. However his unchanged demand means that he does not get partial credit for the reduced Purchase Power Demand. The result is that this creates a "wash" in costs versus payment and is close enough that the City agreed to allow parallel generation on rate "RD". Mr. Switzer presented the rate structure for the photovoltaic system and an oversight found in the billing rates when creating this rate structure. He said purchase power energy (or what we pay to Platte River Power Authority to operate the turbines), purchase power demand (the price we pay Platte River Power Authority to transmit power from the plant to us) make up 2/3 of our rates. These two costs along with our billing and distribution costs are fixed and cannot be changed by use. The City tries to protect these costs and still provide the customer with the best rate. Rate "R" states that parallel generation is prohibited because the City does not want to be crediting money that pays fixed costs. When someone on the rate "RD" has a parallel generation system, there are times they are not using it and they set a demand. Then, when they use the system, the meter spins back -wards, crediting is less than on the "R" rate and more of the fixed costs are protected. For the photovoltaic system, Mr. Shipman has a reduced peak demand and he uses the grid without paying for it. This creates a "wash" in costs versus payment and is close enough that the City agreed to allow parallel generation on rate "RD". The oversight occurred when the general assumption was that those who were on the "RD" rate were large energy consumers and this is not true in Mr. Shipman's case. The average rates for his residence before the photovoltaic system became operational were low because he was on rate "R", once the system came on-line, he was switched to "RD" and without doing a thing, his rates went up. In essence he was being punished for being a good citizen. To correct this problem, the City spoke with PRPA to confirm that by changing him back to "R" the Utilities wouldn't be violating any legal obligations with them. PRPA called the situation a "diminutive situation" since the problem was concerning matters under 3 kW. This left the problem that the "R" rate has the language prohibiting parallel generation, which was solved by an allowance in 'RD" for a special provision contract. Therefore, Mr. Shipman is technically on "RD" because he cannot be on "R", but he is charged the "R" rates. This problem will be eliminated when the rate -4- ordnance is up for review. A provision will be added to rate "R" stating that special cases of parallel generation will be allowed upon review. As a pilot customer for this program, Mr. Shipman is being charged 6.5 cents per kW and he receives 5.5 cents per kW credit for every kW he produces. In the unlikely situation he should go negative on his billing for the month, he will still have to balance against his fixed costs of $3.15 per month (This is the total of the $0.1 he is not receiving credit for). Mr. Welch stated he believed customers will want microturbines, which he says could help the City reduce peak by guaranteeing the power was dispatchable at needed tunes, create longer life for equipment by unloading transformers and other equipment, and reduce the need for transmission upgrades for new incoming power. Mike Smith said Platte River will take the lead in looking at the benefits of microturbines and possibly selecting customers who could best benefit from them. INRORIvIATION SHARING: Mr. Welch asked the members which month they would like to take off for the summer. The members agreed to take off the month of July and reconvene in August. Mr. Stuart asked about the possibility of small hydro being considered wlvle the raw water system is being designed from Monroe Canal to the Water Treatment Plant. He asked if PRPA would do a preliminary study looking at the incremental costs to install a small hydro in place of or parallel with the energy dissipaters on the new or existing lines. He stated the hydro could be sold like wind power, with a .05 cent/kW additional fee. Mr. South said he is aware of a similar project in Denver and will get additional information. Mr. Welch asked if there was enough time to launch a project that could take advantage of this situation. Mr. Smith said we are a year -and -a -half away from construction so there is plenty of time. The Board agreed to pursue this issue further. I-Ieather Hoxeng, Electric Boar iaison -5-