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HomeMy WebLinkAboutElectric Board - Minutes - 08/25/2003Citv Council Liaison Ray Martinez Staff Liaison Leslie Mooney 416-2703 Fort Collins Utilities Electric Board Minutes Monday, August 25, 2003 Electric Board Chairman Electric Board Vice Chairman Alison Mason 493-1295 Jeff Lebesch 221-0543 Roll Call: Board Present Chairperson Alison Mason, Board members Tracy Babst-Wiedenbrug, Dan Bihn, and Lisa Skolds and Jeff Lebesch Absent: Board members Barbara Rutstein and Linda Stewart Visitors John Bleem and Paul Warila of Platte River Power Authority Staff Present Patty Bigner, Bill Bray, Eric Dahlgren, Leslie Mooney, John Phelan, Tom Rock, Suzanne Jarboe - Simpson, Mike Smith, Dennis Sumner, Bill Switzer, Ellen Switzer and Wendy Williams Meetine Convened Chairperson Alison Mason called the meeting to order at 5:17 p.m. Approval of Minutes Chairperson Mason asked if there were any corrections to the minutes of July 7 and July 30, 2003. Board member Jeff Lebesch made a motion, seconded by Board member Tracy Babst- Wiedenbrug to approve the minutes of the July 7 and July 30 meetings as written. The motion passed unanimously. Proposed 2004 — 2005 Budeet — Ellen Switzer Ellen Switzer, Acting Finance Director, presented the proposed 2004 — 2005 budget for the Light and Power and the Utility Customer Service funds. There are no significant changes in the 0 Electric Board Meeting Minutes • August 25, 2003 Page 2 proposed budget, except for no salary increases for the next two years. This is because of the poor economy and loss of sales tax revenue for the City's General Fund. Electric rates are proposed to increase due to an increase in the price of power from Platte River Power Authority, a 2% increase for renewable energy, and because some rate classes are currently paying below the cost of service. Overall, the total proposed rate increase for 2004 will be 5.3% and 3.5% for 2005. Board member Tracy Babst-Wiedenbrug commented that she was concerned about the salaries and new positions being frozen for two years because of the negative effects on employee morale and on their ability to maintain services at a high level. The Board questioned how the proposed 2% rate increase for renewables will be affected by their decision on demand side management after Council approves the budget in November. Wendy Williams, Deputy General Manager, responded that it depends which renewables option is pursued. A less expensive option would allow some of the revenue generated by the 2% increase to be used to fund demand side management programs. The Board asked about the progress of the under grounding program. Bill Bray, Electric Planning and Engineering Services Department, responded that Light & Power crews have been working aggressively toward the goal of having it completed by 2006. Chairperson Alison Mason suggested a motion to recommend adoption of the proposed 2004- 2005 budget with the suggestion that the City Council re-evaluate the potential for salary adjustments for the staff as soon as the City's financial condition allows. Board member Dan Bihn adopted the motion, seconded by Board member Tracy Babst-Wiedenbrug. The motion passed unanimously. Renewables Options Discussion John Bleem and Paul Warila of Platte River Power Authority presented a matrix of Options A thru D for the Board to score. These were: Option A New plant with delivered energy — participate in development of new wind project via long term power purchase agreement (PPA). Take delivery of energy. Option B New Plant without Delivery of Energy Sign long-term Power Purchase Agreement(s) with developer(s) for output of new wind facilities. Do not take delivery of energy. Option C Short Term Energy Purchases Sign an ongoing series of short-term Power Purchase Agreements or shaped (schedulable) renewable energy product. Purchase transmission separately -2- Electric Board Meeting Minutes August 25, 2003 Page 3 Option D Attributes Only — Green Tags Purchase Green Tags (also known as Renewable Energy Certificates or Tradable Renewable Certificates) The Board discussed and agreed upon the weighting factors to use for making a decision with the matrix. These included: reduce regional emissions, construct new renewable generation, take delivery of the output of the renewable generation, proximity of renewable generation to Fort Collins, diversity of resources, price, hedging value, effect on current operating procedures of the business, and explainability and perceived effectiveness. Mike Smith stated that policy #8 in the Electric Energy Supply Policy seems to be in conflict with the wishes of the Board in that the policy doesn't allow for anything but delivered renewable energy. He said he thought he heard the Board say that they wanted to focus on benefits not necessarily on renewable energy. The Board agreed that they want to rewrite the policy and make it clear that it is not important that the energy be delivered, but it is important that the environmental benefit be attached to our system. They agreed that the policy needs to be rewritten. The Board scored the options using the matrix and then discussed whether they would be more interested in a mix of options instead of just one. The discussion was that the greentags option was desirable but there was also strong support for option B. Since it was getting late and some of the members needed to leave, the Board members decided to schedule an additional meeting to finalize their recommendation regarding renewables. Chairperson Mason asked when this item is scheduled to go to a Council study session. Mike Smith responded that it is scheduled for September 23, 2003. The Board agreed to meet again to finalize their recommendation on September 9, 2003 at 6:00 p.m. Adjournment The meeting adjourned at 8:30 p.m. ]Leslie Mooney, Electric B6&rd Liaison -3-