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HomeMy WebLinkAboutElectric Board - Minutes - 11/19/1995• Minutes to be approved by the Board at the January 17, 1996Meeting FORT COLLINS ELECTRIC BOARD MEETING MINUTES November 29, 1995 BOARD MEMBERS PRESENT: Bill Brayden, Jeff Eighmy, Mark Fidrych, Len Loomans, and Richard Smart BOARD MEMBERS ABSENT: Barbara Rutstein STAFF PRESENT: Ellen Alward, Don Botteron, Al Boushee, Delynn Coldiron, Eric Dahlgren, John DeHaes, Paul Folger, Ron King, Tom Rock, Tim Sagen, Rich Shannon, and Dennis Sumner OTHERS PRESENT: Gwyn Strand and John Wappner BOARD LIAISONS: Council Liaison -- Alan Apt Staff Liaison -- Don Botteron •'to 4mrS TS "UNL M3 A Motion was made by Board Member Eighmy to approve the Minutes. Board Member Brayden seconded the Motion. The Motion passed unanimously and the Minutes from the October 18, 1995 meeting were approved. 2. WORK PLAN: Don highlighted some changes that had been incorporated into the Work Plan, including: Item 2 -- Charter Review/Governance Issues: A reference to the City Council Governance Committee was added to broaden the perspective and to provide some flexibility for time. Item 3 -- Demand Side Management: A reference to potentially revising wholesale rate structures was added to reflect the added emphasis that will be placed on the energy/cost side of DSM. Item 4 -- Interboard Relationships: Wording was changed in the first bullet regarding work with the Building Review Board to change the emphasis from developing energy options for the revised Building Code, to participating with the Building Review Board to implement the energy options that have now been developed. A reference to consideration of renewable resources was added to the bullet on participation with Platte River. ENE has not been listed as a topic because of receding public interest. Staff will continue to monitor this and will report to the Board any significant issues that develop. Board Members discussed the Work Plan. It was suggested that the language of the second bullet under Item 4 be changed to: ... including but not limited to consideration of the addition and/or replacement of renewable resource generation such as wind power, hydro electric generation, etc. Board Members also wanted to add language to Item 4 that reflected their interest in pursuing opportunities to work with other Boards and Commissions, not limited to the Platte River Board or the Building Review Board. Board Member Eighmy made a Motion to approve the Work Plan as amended. Board Member Brayden seconded the Motion. The Motion passed unanimously and the amended Work Plan was adopted. Staff will revise the Work Plan in accordance with the changes that were suggested by the Board. The Work Plan was submitted to the City Clerk's office on November 30, 1995. In addition to the Work Plan information, Don shared that during the building code presentation to Council, there was some concern expressed by representatives of the building community that adding the cost of the energy savings to the front-end costs of new construction adversely affects affordable housing and first-time home buyers. At least one builder will be speaking against implementation of the revised building code at the next Council meeting. Interested Board Members who had been involved in the building code discussions/presentations were encouraged to attend this Council meeting to support the Board's recommendation to endorse implementation of the revised building code. Board Member Fidrych watched this Council meeting. He thought that Council did a very good job of listening to concerns and keeping the specific issue in the forefront. He commended Doug Swartz for doing an excellent job addressing Council's questions. There was a lot of confusion surrounding investment paybacks, impacts of front-end costs, rolling these costs into mortgages, etc. He suggested that staff simplify these issues for the next Council presentation. He also mentioned that having data available on payback schedules, energy savings realized over the life of the house (to show the benefits to the affordable housing community), and itemized cost information proving that energy efficiency improvements are not responsible for doubling housing costs would be helpful. -2- Chairperson Fidrych is scheduled to be out of town for this Council meeting but offered to send a letter to Council supporting the Board's stance on this issue. Board Member Eighmy volunteered to attend the meeting as the Board's representative. Board Member Loomans made a motion that Board Member Eighmy attend Tuesday's Council meeting to speak on behalf of the Board on this issue. Board Member Brayden seconded the motion. The motion passed unanimously and Board Member Eighmy will attend Tuesday night's Council meeting on behalf of the Board. Staff is available to help Board Member Eighmy prepare for this meeting, if needed. 3. GOVERNANCE: Rich opened discussion on the information included in Board packets regarding governance. Board Members discussed whether or not exploring governance options was too premature. There was agreement that the charter review efforts being initiated by the City gives the Utility an ideal opportunity to address governance options, and other needed charter changes, that will enable the Utility to quickly and effectively respond to the challenges associated with the coming competitive environment. If the Utility is not proactive about these issues today, it might be too late. Based on the Utility's current governance structure, a year or two from now when retail wheeling emerges, charter changes could not be accomplished in a timely enough manner to allow the Utility the flexibility it needs to address customers' needs and demands and the Utility would lose customers. Board Members agreed that governance issues should continue to be explored. It was suggested that the Utility also take a proactive stance on educating the Community on the changes that are occurring, and using this opportunity to let them know who we are, the services we provide, etc. There was some discussion on the conceptual proposal of creating an independent electric board. Although creating independent utility boards is not new, creating an independent electric board would be a landmark decision for the Utility. It would send the message to our customers that we are looking to the future and making necessary adjustments to enable the Utility to operate successfully in this new environment. City Council has innumerable issues to address making it impossible for them to keep abreast of the changes/developments associated with individual issues. Time constraints _limit _Council's ability to_engage infrequent dialog with the Platte River Board. Creating an independent board with the power to make decisions, would allow for more frequent dialog between the two decision making bodies. Board Members generally liked the proposal that was submitted. It was mentioned that each of the scenarios had its own strengths and weaknesses and, ultimately, the proposal the Board recommends might be a hybrid of each of these. Board Members liked the idea of having a somewhat autonomous organization that maintained its links with citizens, liked the idea of shifting the responsibility for business operations to an independent -3- board, and liked the three -five year sunset provision where City Council would have an opportunity to readdress these issues to assure that the changes that were implemented continue to make sense and continue to meet our customers' needs. There was brief discussion on whether board members should be elected or appointed, on appropriate service terms for board members, and on adding restrictions that would prohibit City or Platte River staff to be appointed/elected to the board. Board Members agreed that this should be an item for discussion for the January Board meeting. They are interested in obtaining information on the types of governance options being implemented by other municipal organizations. Rich intends to share any feedback he has received from the City Attorney's office on the legal constraints surrounding each of the governance options, etc., at the next meeting. Staff will also provide any information that could be obtained on Colorado utilities that have independent electric boards and how they function under Colorado law. Rich will share the Board's recommended governance option with City Council at a work session in February. If Council supports further exploration of the governance option recommended, staff will begin working through the details. 4. STRATEGIC PLANNING TEAM REPORT: Dennis and Paul gave Board Members an update on Light and Power's strategic planning efforts now nearing completion. A situational analysis and preliminary findings were completed in August, 1995. Since that time, the Strategic Planning Team has focused their energy on developing working mission statements, strategic business objectives, strategic initiatives, operating initiatives and summary issues and trends reports. Dennis reviewed some predictions for the future. In the future, customer choice will be important. Customers will have increased commodity options and will have many suppliers to choose from that are in direct competition with the Utility. It is anticipated that the Utility will likely lose some of its customers, and it is imperative that we prepare for this. Also in the future, it will be necessary for the Utility to assume a new role. There is a need for increased marketplace knowledge -- need to know customer values, interests, business situations, etc. We need to research and learn much more about our competitors -- the types of services they are offering, their strengths/weaknesses, etc. As part of the Utility's new role, rates and fees will have to be market based to match what customers are seeing in the marketplace. Also part of the Utility's new role will be exploring the increased service opportunities that will become available in this new competitive arena. Utility employees are being given the opportunity to participate in the strategic initiative efforts. Participation is voluntary. A high level of emphasis and value will continue to be placed on core Utility tasks which will result in continued high level service to our customers. me Project assignments for each of the strategic initiatives were reviewed. Marketing, power quality, natural gas ventures, service options, environmental profile and cost identification are strategic initiatives that are considered actionable and will be addressed immediately. Governance, on -site generation, green resource and telecommunications are strategic initiatives that need further research, and may or may not be considered actionable in the future. Board Members discussed the information that was presented. It is staffs intent to forward the executive summary of this information to City Council, press and others that are interested in finding out more about the current changes. It was suggested that a cover memo be added that includes background information summarizing the electric industry changes and the pressing issues that the Utility must address. Board Member Smart made a motion endorsing the strategic initiatives that have been developed and stated that the strategic initiatives appropriately respond to the changing environment. Board Member Brayden seconded the Motion. The Motion passed unanimously. Staff will draft a summary memo to add to the strategic initiative package and will forward this information to Council. Final Reports are available for any Board Members who are interested in receiving this. 5. STAFF REPORTS: 1. Wind Power Update: Dennis provided Board Members with an update on wind power. Staff members from Kenetech believe that a Colorado site would be the best place to focus efforts. Financial backers for the Kenetech project are requiring a year's worth of wind data for any site identified before they will commit funds to the project. One potential site has been identified in Weld County. Studies are being done on this and other Colorado sites. Rich is working with the Platte River Board to get a letter of intent to work on this project. Light and Power staff is working on obtaining additional pricing information for use in comparisons. Staff hopes to provide a more in-depth update on this issue in January. 6. INFORMATIONAL REQUESTS: None. -5- 7. OTHER BUSINESS: CLIP Program: Board Members asked for an update on this program. No CLIP loans have been issued. Jon McHugh is working on this. There is a potential that CLIP loans will be requested by the companies who are receiving energy audits in order for them to implement the recommended improvements. There was some discussion that using the money that has been set aside for this program for something else may be a little premature. Staff will keep Board Members informed on the status of this program. OTHER BUSINESS: Rich mentioned that Jay Hopper has resigned from Platte River to take ajob with KN Gas. John Bleem will be now be attending Electric Board meetings. 9. AGENDA: Governance Wind Power Update Year End Report Adjournment: The meeting adjourned at 7:38 p.m. Ile Del " Coldiron, Board Secretary no