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HomeMy WebLinkAboutElectric Board - Minutes - 09/20/1995Minutes to be Approved by the Board at the October 11, 1995 Meeting FORT COLLINS ELECTRIC BOARD MEETING MINUTES September 20, 1995 BOARD MEMBERS PRESENT: Bill Braydon, JeffEighmy, Richard Smart, and Jim Welch BOARD MEMBERS ABSENT: Mark Fidrych, Len Loomans and Barbara Rutstein STAFF PRESENT: Ellen Alward, Don Botteron, AI Boushee, Delynn Coldiron, Eric Dahlgren, John DeHaes, Paul Folger, Ron King, Bob Kost, Jon McHugh, Tom Rock, Tim Sagen, Rich Shannon, and Dennis Sumner. OTHERS PRESENT: Felix Lee, Gwyn Strand, and John Wappner. BOARD LIAISONS: Council Liaison -- Alan Apt Staff Liaison -- Don Botteron APPROVAL OF MINUTES: A motion was made by Board Member Welch to approve the Minutes. Board Member Eighmy seconded the Motion. The Motion passed unanimously and the Minutes from the August 16, 1995 meeting were approved. 2. ELECTION OF OFFICERS: Chairperson Smart opened the floor for nominations for Chair. Board Member Fidrych was nominated. Upon unanimous vote, Board Member Fidrych was elected Chair. Next, Chairperson Smart opened the floor for nominations for Vice -Chair. Board Member Eighmy was nominated. Upon unanimous vote, Board Member Eighmy was elected Vice -Chair. -1- Board Member Smart thanked Board Members and staff for their support over the last two years while he served as Chair. Board members and staff were appreciative and thanked him for a job well done!! 3. UPDATE ON PLATTE RIVER ACTIVITIES: Jay Hopper provided Board Members with an update on Platte River activities. He briefly discussed the activity surrounding Power Marketing Agency (PMA) sales. As a means to meet the budget, the House Budget Committee has recommended the sale, by auction, of Southeast Power Authority, and has recommended that studies be done on the pros/cons of selling WAPA and Southwest Power Authority. A decision on this is expected in the next month or so. It is anticipated that no PMA sales will take place this year due to the controversy surrounding this issue. The longer these sales are delayed, the better. It gives us more time to educate our customers. Jay next discussed the reorganization that has taken place at Platte River. The new organizational structure reflects work groups that have been formed around specific functions, rather than around education and/or job title. A new power marketing work group was also established. This reorganization resulted in a reduction of management personnel, and a reassignment of various staff members to new work groups. The potential of the big utilities in the West forming one utility that would own all transmission in the Western United States, including WAPA, is under consideration due to pending legislation that is intended to separate the transmission side of a business from the utility side of a business to eliminate the possibility of utilities giving themselves a better deal than others. Setting up a separate entity that does nothing but transmission would accomplish this. This entity would free wheel transmission for profit, with no guaranteed pricing, similar to the airline ticket system. This entity would, however, be regulated. This scenario theoretically makes sense to Platte River. However, there are many issues that have to be addressed, i.e., auction proceeds vs. equity, value of older lines vs. value of newer lines, etc. Platte River would realize benefits from this type of situation because it would provide them with equal access to the market and, since Platte River's generation is cheap, it is anticipated that all or most of the generation would dispatch and the concern for having idle generation would be minimized. Jay mentioned that Platte River is considering adding a gas plant to Rawhide. This would be a very inexpensive fuel supply since Colorado and Wyoming sit on top of 51% of the natural gas reserve in the country. Platte River can reduce its risk by selling half of Unit 1 and moving the same amount of generation to the gas unit. This would diversify the fuel needed for generation and provides a better intermediate load following mechanism. If a sale took place, and a gas generating unit was built, Platte River would end up with generation equal to today's, and cash to pay off current debt. -2- 0 The Utah State University experiment was discussed. Utah State sent out an RFP asking for power quotes, which prompted a suit from their current power provider. Assuming this would happen, Utah State included language in the RFP asking the company who won the bid to file a lawsuit allowing them to buy the low bid power. Lawsuits are pending. Jay next discussed Platte River's stance on wind power. He mentioned that there are four wind projects that Platte River could participate in. From a Platte River business plan perspective, wind power is not a good choice. It is not cost competitive and it provides base, not peaking power. Having wind power available as a customer service remains under consideration. Large customer group activities were discussed. Jay mentioned that there are 12 large customers that make up the bulk of Platte River's load. Losing only a couple of these customers would mean significant price increases to the Cities, unless that power could be sold elsewhere. A Large Customer Focus Group has been established to do an intense study of the needs these customers. This Group will develop a model that will address the Cities' and Platte River's issues, and will include a plan for how the Cities and Platte River will work jointly to meet the needs of these large customers. 3. DSM PROGRAM Jon McHugh provided Board Members with an update on DSM activities: Lighting Design Review: Two lighting design consultants have been selected to work with us on evaluating any new or remodel lighting project in the City. To date, two customers have taken advantage of this offer. Marketing for this program has been primarily by word of mouth. Work is continuing to automate procedures, and to increase the quality of the reports. Once this is accomplished, marketing efforts will increase. Commercial Lighting Workshop: In August, Light and Power cosponsored an all -day lighting workshop. We had 42 participants, mainly contractors and architects. The workshop focused on selling efficient quality lighting. CSU Occupancy Sensor Studv: Light and Power will be working with CSU on an occupancy sensor study. Although CSU has had some bad experience with occupancy sensors in the past, the Utility has proposed to provide them with some equipment and free occupancy sensors as a means of obtaining data on the savings that can be realized by using sensors. Fifty areas have been identified as potential candidates for the automatic controls. This project has been ongoing since this Summer. It was mentioned that this type of customer service might have long-time beneficial paybacks for the Utility when customers are offered power provider choices in the upcoming competitive arena. City Facilities Efficient Lighting: Utility staff met with the new City Facilities Director and discussed several opportunities for energy efficiency improvements in City buildings. The first opportunity being explored is to eliminate existing magnetic ballasts. As these ballasts fail, staff is recommending that these be replaced with electronic ballasts. Staff -3- will be contacting the various department heads to educate them on lighting upgrades, not just in terms of efficiency, but also in terms of lighting quality, in an effort to improve the efficiency of the City's lighting systems. Integrated Building Design: This program continues as a pilot program and targets new commercial/industrial construction. Through this program, Light and Power staff has provided technical assistance on the Larimer County Courthouse project, the new City Stormwater facility, and the Value Plastics project. The Neenan Company plans to incorporate many of the design techniques that were identified and used in the Value Plastics Building in their new construction projects. They are planning to construct a building that will be used to demonstrate the design techniques and changes that were recommended by Light and Power staff and consultants. Large Customer Energy Audits: The first large customer energy audit has been completed for Symbios Logic. Staff were able to recommend some energy conservation options and identified other things that has the potential to save the company thousands of dollars by minimizing water losses, etc. Staff will be completing energy audits for several other large customers over the next four months. Large commercial/industrial customer peak cling: This project has been put on hold pending the Platte River rate change planned for early 1996. Residential Electric Heat Conversions: Furnaces were installed in five customer households. Once the specific details for this program have been defined, testing of the new furnaces and duct systems will be done to evaluate how closely their actual performance matches the rated performance. Efficient Motor Initiative: During the large customer audits, all 5hp motors and larger will be tested to determine if they are correctly sized. The MotorMaster software program will be used to determine the cost-effectiveness of reducing the motor size for any motors that a found to be severely oversized. Platte River Large Customer Needs Assessment: For the next three months, Jon will be spending three days a week at Platte River to help assess the needs of our large customers. Some of this time will be used doing energy audits. The group that will be assessing large customer needs will be developing an integrated customer retention strategy that will evaluate other customer services that either Light and Power or Platte River will need to provide to these large customers to remain competitive. Energy Code Update: The commercial energy code has not drawn much comment -- good or bad. The residential code, however, is surrounded by controversy. The residential code has been reviewed by the four City boards and generated many comments -- good and bad. These comments are being addressed and will be taken back to the dissenting boards in September/October. 0 9 Getting buy -in from the Building Review Board is important. However, this may turn out to be an issue where each of the involved Boards agrees to disagree and lets Council decide. Board Members showed interest in attending Council meetings, or other meetings necessary to support their decision on this issue. Staff will inform Board Members of the dates, times, etc., of any pertinent meetings. 4. ELECTRIC RATE ADJUSTMENTS and 1996 BUDGET: Don presented proposed electric rate adjustments to the Board: Reducing the service charge from $15.87 to $10.65 for the processing of a request for electrical service, except when a request is made for after-hours service. This service charge is also applicable for special meter readings and/or fractional period billings. This results in a reduction in non -operating revenue of approximately $100,000 per year. The service charge will be reduced for the residential and general service rate schedules. - Providing periodic billing for "special services." This would be a charge for services or capabilities provided which are beyond those required for basic service. Services, capabilities and associated charges would be specified in a separate agreement between the customer and the Utility. The proposed addition will be made to all residential, commercial and industrial rate schedules. Reducing level at which the Utility may establish contract rates for large customers. The proposed change is that the Utility can, at its option, establish a contract rate to provide service to individual customers with an aggregated connected load of 5,000* kilowatts or more. The current level is 10,000 kilowatts or more. This change applies to the industrial rate schedules GS750 and GS750T. *Note: Subsequent to the Board's discussion, this recommendation was reduced to 1, 000 kilowatts, which will increase the eligibilityfor this contract rate from approximately five customers, to twenty. Don next reminded the Board of highlights from the proposed 1996 budget: - No rate increase -- $100,000 revenue reduction due to the decrease in the charge for processing requests for electrical service. - Overall budget increase of 4.5% vs. a 7.8% increase in combined kWh sales growth plus inflation. - Positive net income of $617,819. - No personnel increases -- Current plan is to decrease by 1.5 person years. - The undergrounding program is ahead of schedule and on budget. -5- - There is adequate funding ($841,251) for an aggressive Energy Services program. Board members discussed the rate and budget proposals. Board members were supportive of the proposed rate changes and the recommended 1996 budget. Board Member Smart made a motion to endorse the proposed rate schedule adjustments and the proposed 1996 budget. Board Member Braydon seconded the motion. The motion passed unanimously. A memo reflecting the Board's recommendation will be prepared for Chairperson Fidrych's signature. 6. STAFF REPORTS: 1. Governance Issues Update Don mentioned that City Council is forming a new Governance Committee. This committee will be identifying changes to the City Charter that will be put to a vote of the electorate in April, 1997. This committee will be soliciting feedback from at least three of the City's boards and commissions. The Electric Board has been named as one of those boards. This is a great opportunity to implement the changes that are necessary for the Utility to be successful in a competitive environment. Board Members will consider adding this item to the 1996 Electric Board Work Plan. It is anticipated that this committee will be formed in January, 1996, and will be ready for Board input by February, 1996. It was suggested that as a first step the Board think about developing a menu of options for the Governance Committee to look at. Issues that do not require any changes in Charter can be included -- they will eventually "fall out" of discussions held by the Charter Committee. Service Directors will be contacted to talk about those things that are working, not working, etc. This is an opportunity for Board Members to share ideas with Rich so he can forward those ideas during these discussions. Board Members will discuss this issue during next month's meeting. Staff will continue to update Board Members on any pertinent items. 2. Legislative Update (Retail Wheeling): Paul Folger will be tracking legislative issues. The retail wheeling bill being introduced into the legislature by Rep. Paul Schauer was briefly discussed. CAMU is playing the counterpart to APPA at the national level on retail wheeling lobbying activities. They are trying to develop legal and legislative strategies, and hope to develop a retail wheeling model that is fair to all of the parties. The REAs have opposed the Schauer bill outright. CAMU has contacted Schauer to point out that the bill exempts REAs from legislation on retail wheeling. Lobbyists are scheduled to meet with Schauer to share their perspectives on the effects of retail wheeling, and to advise him that CAMU will oppose the bill the way it is written. They will encourage him to initiate a study to explore retail wheeling and put together a comprehensive law that includes principles that make it fair for C� n u everyone. The final draft will be shared with the Board. Staff will keep Board Members updated on other retail wheeling legislation as this information becomes available. 7. INFORMATIONAL REQUESTS: None. 8. OTHER BUSINESS: 1. Memorandum from Council Member Smith Rich shared that Council Member Smith was reacting to the potential of residential customers being squeezed out when market pricing becomes effective. He wanted Board Members to consider this information in future efforts. 2. Powerlines John DeHaes puts these together for staff. Staff gets a lot of information sent to them that is pertinent to current industry trends. John captures the essence of this information in these editions of Powerlines. We will continue to share this information with the Board. 9. NEXT MEETING'S AGENDA: PRPA Update CAMU Principles of Retail Wheeling 1996 Work Plan Governance Issues Strategy Plan (Nov.) ADJOURNMENT: The meeting adjourned at 7:40 p.m. Delynn Coldiron, Board Secretary -7-