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HomeMy WebLinkAboutElectric Board - Minutes - 02/21/1996Council Liaison: Alan Apt Staff Liaison: Don Botteron Chairperson: Mark Fidrych Phone: 490-7240 (W) 223-7140 (Ii) Vice Chair: Jeff Eighmy Phone: 491-5784 223-9487 A regular meeting of the Fort Collins Electric Board was held on Wednesday, February 21, 1996, in the Light and Power Training Room, at 700 Wood Street, Ft. Collins. BOARD MEMBERS PRESENT: Jeff Eighmy, Mark Fidrych, Len Loomans, Barbara Rutstein, Richard Smart and Jim Welch BOARD MEMBERS ABSENT: Bill Brayden STAFF PRESENT: Ellen Alward, Don Botteron, Delynn Coldiron, Eric Dahlgren, John DeHaes, Bob Kost, Jon McHugh, Rich Shannon, Dennis Sumner, Kevin Westhuis OTHERSPRESENT: John Bleem and Gail Doxtader BOARD LIAISONS: Council Liaison -- Alan Apt Staff Liaison -- Don Botteron APPROVAL OF MINUTES: The Minutes were amended to change the title on item 4 from "Wind Power Update" to "Green Resource Update." A Motion was made by Board Member Eighmy to approve the Minutes as amended. Board Member Rutstein seconded the Motion. The Motion passed unanimously and the amended Minutes from the January 17, 1996 meeting were approved. -1- 2. CITY COUNCIL STUDY SESSION: Rich mentioned that the Council study session on governance has been moved to June 25, 1996. He briefly reviewed City Council's six-month planning calendar and explained the process and timing issues related to scheduling agenda items. Because the study session date is so far in the future, staff decided to change its approach and communicate with Council in writing. Draft information was included in Board Member packets. Board Members discussed this information. Staff clarified the matrix -- the keep/lose side of the matrix is intended to reflect the way things -currently exist; the get/avoid side of the matrix is intended to reflect the future. Board Members were in agreement that the matrix correctly captured the discussions the Board has had on this issue. The information was succinct and accurately reflected the position of the Board. Board Members voiced some concern that statements in the Avoid category might be perceived as criticisms of the way things are currently done, or perceived as being negative. It was suggested that these statements be eliminated or re -written to emphasize the positive. Staff will review the matrix and make any necessary changes/adjustments based on the feedback that has been received from the Board. Board Members next discussed a proposed timeline for this issue. There are three scheduled Board meetings prior to the June 25 Council study session. This gives us some time to do research, answer the list of preliminary questions, and prepare a draft recommendation to forward to the Charter Review Committee and Council for review. It is anticipated that the Board will continue to work with the Charter Review Committee during June, July and August to finalize the recommendation for Council. Staff proposed that research be done on thirteen public power utilities that have been identified that are larger or similar in size to Ft. Collins and that have independent boards. Staff would contact utility representatives to get copies of charters, board by-laws, etc. This would be followed by telephone interviews with the General Manager of the Utility, the City Manager and/or the Mayor, and the board chair. Staff would then summarize the information obtained and forward it to Board Members when available. Once Board Members had a chance to review the summary information, the Board would determine what further information would be useful and if personal visits would be necessary. There was some discussion on independent vs. elected boards. Elected boards, by nature, institutionalize conflict between City Council and the utility. This is important to keep in mind since staying proactive and reacting quickly when needed, would be difficult in a confrontative environment. It was suggested that it might make sense to keep final authority with Council to avoid restructuring that adds yet another layer of governance to the City, and has the potential to have two boards with equal authority deadlocked over issues due to power struggles. -2- Having an independent appointed board would mean that Council would transfer some level of authority and responsibility to them. Being independent, however, is a step down from being autonomous. Eugene, Oregon comes closest to being autonomous from the examples we have so far. The only thing they cannot do is condemn property. A part of the charter review process might be to define the amount of authority Council should grant to an independent appointed board. Board Members were in agreement with staffs proposal to research the thirteen public power utilities that have been identified. Staff will move forward with this and will provide Board Members with summary information as soon as it is available. 3. RENEWABLE ENERGY RESOURCES: Dennis provided Board Members with an update on this issue. There are numerous renewable energy projects that the Utility could potentially participate in -- Zond Energy, Kenetech, and UPVG/Solarex were just some of the available projects that were mentioned. Dennis asked Board Members for some feedback on the information that was provided in Board Member packets regarding the criteria that should be used in considering the various renewable energy options: There was discussion on the five question areas that were highlighted in that information. Technical assessment of renewable options: Board Members were in agreement that the utility should not waste time duplicating research, analysis and technical assessment efforts being done by others in the renewable energy resources industry. However, the Utility should keep reasonably informed on industry activities and trends to assure responsiveness to customer wants and needs. 2. Maintenance: Board Members discussed whether or not the Utility should be involved in providing maintenance services for renewable energy resource products. This is another area where it might not make sense to duplicate services already available in the marketplace. Board Members generally agreed with attempting to utilize existing services and minimizing ventures where services are already available. It was suggested that the Utility should focus on becoming an energy services expert and know how and where to get requested services, the pricing of such services, etc., without becoming the actual provider for each and every service. It was clarified that the Utility should not be reluctant to consider new customer services that would provide value to the Community. -3- 3. Role of promoting renewable resources: The role of Light and Power in promoting renewable resources was discussed. Some conceptual ideas including acting as a facilitator to bring buyers and sellers together, providing education, providing and/or seeking funding through grants and utility financing, becoming a retail provider of a renewable product or service, and developing demonstration sites for renewable technology were considered. There was some concern about using Light and Power funds for direct grants without having a policy in place that assures that the grant is being used for projects that show substantial benefit to the Community and the Utility's rate payers. One answer to the question of whether or not providing these types of grants would be a benefit to the Community might be that the Utility has committed to invest a certain amount of money into research, development and promotion of new technologies and there is public good in that. It was mentioned that this concept is widely accepted within the utility industry evidenced by the rebates that are commonly given to promote various types of products and services. In our case, however, it was noted that our current charter might limit the ability of the Utility to offer grants. There was some discussion on the Utility's ZILCH program. This is a good example of how we could offer financing to promote alternative energy items. The theory on ZILCH is that reducing consumption and increasing efficiency benefits the overall electric system to the equivalent of the interest that would have been paid on the loan. It is different from an outright grant in that there is a trackable benefit back to the Utility. The Platte River Power Authority photovoltaics demonstration site was briefly discussed. It was constructed to assist the industry in collecting field data. The site continues to operate. Current research on the site includes durability and persistence testing. 4. Cost criteria: There was some discussion on the types of cost criteria that should be used when exploring various renewable resource options. In today's marketplace, most renewable options tend to be accompanied by a cost premium. Staff asked Board Members for some advice on whether or not we should limit our focus towards renewable options that are relatively more economical, and on how to deal with the issues surrounding promoting these higher -cost energy options to our customers. A related concern is the comparative cost of renewable options -- is an expensive PV system more desirable than a comparatively less expensive centralized wind turbine? Will the PV owner be unhappy if lower cost renewable wind power is offered after they have purchased and committed to the more expensive PV system? M1 There was some feeling that it is difficult to justify promoting a technology that costs significantly more than the present resources that are available to provide electricity. However, research and development into these new technologies is crucial given concerns that present resources are diminishing and have environmental drawbacks. There is some subsidization of technology that the Utility is responsible for providing. There is no blanket amount that is okay or not okay to spend on research and development of renewable resource options; each option should be considered for its potential merits and its possibilities for future applications. There was some feeling that the Utility should start promoting the technologies/ systems that have been endorsed by others; technologies the industry is reasonably comfortable with, despite the higher costs. The Utility could do some limited advertising and could act as a facilitator to bring buyers and sellers together, etc. Once the technology becomes "proven," the Utility could start to promote it more aggressively, and potentially offer financing similar to ZILCH loans to assist customers who are interested in taking advantage of this opportunity. There was some concern that all renewable energy options should be considered. Budget Level: Board Members were uncomfortable with setting a budget level. There was some concern that setting a limit might restrict our ability to participate in a specific project that makes sense, meets paybacks, etc. Board Members were more comfortable with having the flexibility to evaluate projects on an individual basis. The Board preferred to not be limited by a given pot of money available on a first come, first serve basis and running the risk of losing out on good opportunities. TELECOMMUNICATIONS POLICY INTRODUCTION: Eric provided Board Members with an overview of the telecommunication activities being pursued by the City. A Council study session has been scheduled for March 26 to review the policy that was provided in Board packets. The policy covers seven areas including: public access to information; privacy and security; universal access to telecommunications services; expanding telecommunications service opportunities in Ft. Collins; roles of the City in regulatory structure; compensation for use of public rights -of -way by telecommunications service providers; and Ft. Collins as a user and provider of telecommunications services. Utility staff is currently working on research to get up to speed on this technology. Being an underground utility gives us a huge advantage in this marketplace. Construction of a fiberoptics system is very similar to how we currently construct our electric system. Staff is exploring the idea of the Utility becoming the arterial system provider of the fiberoptics system in Ft. Collins. There is the potential that we could build the system and then lease it to others. Research so far has shown that the major expense is connecting at the end of -5- the fiberoptic cable. There is not a huge expense in laying dark fiber. Some of the Utility's large customers have already expressed an interest in having the Utility assist them in constructing a fiberoptic system for them. Although there are numerous opportunities for the Utility to become involved, our approach to this is a cautious one. We still need to do a lot of research and are not anxious to jump in over our heads. Staff will keep Board Members apprised of any developments. Staff will forward a revised policy to the Board sometime after the March 26 Council study session and will ask for Board feedback/support prior to forwarding the policy to Council in April/May. 5. STAFF REPORTS: A. State Legislative Status Board Members were provided with a FAX from William Slimak, regarding retail wheeling stating that both HB-1234 and HB-1318 are dead unless Republican Schauer was able to obtain late bill status. It was assumed that late bill status would not be granted. B. APPA Annual Meeting The APPA Annual Conference is scheduled for June. Delynn will obtain brochures and forward them to any Board Members who are interested in attending. INFORMATIONAL REQUESTS: None. 7. OTHER BUSINESS: Chair Person Fidrych congratulated Board Member Rutstein for her selection to the Charter Review Committee. Barbara reported that there were nine members selected to the Committee, including Susan Kirkpatrick, former Mayor and Platte River Power Authority Board member; Ward Fischer, attorney; Betty Brown, writing specialist; Brad Page, co-owner of Coopersmiths; John Haggerty, attorney; and Mary Carlson, veterinarian, secondary school teacher and former school board member. Barbara mentioned that the charge of the Committee is to review the entire Charter and make any necessary changes and/or adjustments. The Charter Review Committee discussed its interaction with the Electric Board and intends to utilize research efforts of the Board on the governance issue and not duplicating those efforts. It was clarified that the Electric Board should continue with its research on governance issues and ultimately prepare a recommendation for the Committee's review. 0 0 Board Member Rutstein will keep the Board apprised of the efforts of the Charter Review Committee. 8. AGENDA: Governance -- update on research that was done on independent boards Financial policies for 97 budget Update on Telecommunications Policy Adjournment: The meeting adjourned at 7:10 pm Delyc Coldiron, Board Secretary -7-