Loading...
HomeMy WebLinkAboutElectric Board - Minutes - 06/21/1995Minutes to be Approved by the Board at the August 16, 1995 Meeting. FORT COLLINS ELECTRIC BOARD MEETING MINUTES June 21, 1995, 5:00 - 7:30 p.m. BOARD MEMBERS PRESENT: John Allum, Bill Brayden, Jeff Eighmy, Mark Fidrych, Barbara Rutstein, Richard Smart, and Jim Welch. None STAFF PRESENT: Ellen Alward, Don Botteron, Al Boushee, Delynn Coldiron, John DeHaes, Paul Folger, Ron King, Bob Kost, Tom Rock, Tim Sagen, Rich Shannon, and Dennis Sumner. OTHERS PRESENT: Alan Apt, Mike Dahl, Scott Harder, and Len Loomans BOARD LIAISONS: Council Liaison -- Alan Apt Staff Liaison -- Don Botteron APPROVAL OF MINUTES: A correction was noted on page 2, last paragraph, last line -- "appropriated" should be "reappropriated." There were no other changes. 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 minutes from the May 31, 1995 meeting were approved as amended. 2. PLATTE RIVER POWER AUTHORITY ENVIRONMENTAL POLICY AND PRINCIPLES: Chairperson Smart opened the floor for discussion on this issue. Electric Board Members expressed general support for the commitment by Platte River Power Authority to the Environmental Principles recently adopted by Platte River's Board. Electric Board members discussed, at length, recommending an annual evaluation/audit process to assess the effectiveness of Platte River's Environmental Policy. -1- There was discussion on the type of audit or evaluation the Board would support. There was some concern that the audit or evaluation should have appropriate standards, and it was suggested that Platte River follow the audit process set out in the Ceres Principles. Another suggestion was that Platte River reorganize their annual environmental report to cover each of the 10 items shown in their Environmental Policy and Principles, and give examples of what they have done for each. Also discussed was whether the audit/ evaluation should be done internally by Platte River staff, or by an outside entity. Board Members were in agreement that an annual evaluation is important and something they wanted to support. There was some feeling that by adopting the Environmental Policy and Principles, Platte River shows a good faith effort on their part. Board Members were concerned that their recommendation show positive support to Platte River's environmental commitment. Therefore, Board Members thought it was appropriate to recommend that Platte River do an internal evaluation, at least for the first year, and reorganize their current annual environmental report around the 10 items shown in the Environmental Policy and Principles as the basis for this evaluation. Adherence to the audit process set out in the Ceres Principles seemed a possibility for the future. Board Members discussed the appropriate procedure for making this recommendation to Platte River. Because the Board is advisory to the City Council, it was determined that the Board should send a letter to Council explaining the Board's recommendation, and have Council forward the recommendation to the Platte River Board through their Platte River Board representative. Council Member Apt approved of this and mentioned that City Council is interested in and appreciative of the opinions/recommendations they receive from Boards and Commissions. Board Member Eighmy made a motion that Rich Shannon prepare a letter on behalf of the Electric Board stating they support the commitment contained in the Environmental Policy and Principles, feel that Platte River is headed in the right direction, are appreciative of Platte River's efforts in articulating their Environmental Policy and Principles, and asking Council to support a motion urging Platte River Power Authority to organize their annual environmental report around these issues to show, publicly, their activity and progress relating to their Environmental Policy and Principles, and to direct Ft. Collins representatives to the Platte River Power Authority Board to urge the Platte River Board to agree to do this. Board Member Fidrych seconded the Motion. The Motion passed unanimously 6-0. Board Member Allum abstained from the vote due to potential conflict of interest. The Board briefly discussed L&P environmental activities. Light and Power periodicly conducts environmental audits on operating practices. An energy efficiency and environmental study was done approximately four years ago that looked extensively at the Utility's design and construction practices, the type of equipment that is purchased, recycling efforts, etc. Among other things, the study quantified the energy savings realized due to the design of the system and materials used, and noted the chemicals that -2- we use in lieu of PCBs. Removing PCB contaminated transformers, the undergrounding program, and the energy -efficient design of our electric system are just some of the examples of how the Utility has taken an aggressive stance on environmental issues. DISCUSSION ON A DRAFT COUNCIL RESOLUTION AUTHORIZING LIGHT AND POWER TO PARTICIPATE WITH PLATTE RIVER POWER AUTHORITY AND THE CONSTITUENT CITIES TO INVESTIGATE CONSOLIDATION OF SPECIFIC SERVICES THAT PRESENT THE OPPORTUNITY FOR INCREASED EFFICIENCY OR ENHANCED CUSTOMER SERVICE: Rich said that this Resolution would authorize a study to answer the basic question of whether or not there are areas where Platte River and the four members cities need to have added cooperation to be successful in the new competitive environment. Although Platte River and the four member cities view themselves as cooperating very well, areas where there should be more cooperation, need to be further explored. Pros and cons of consolidation, in whole or in part, also need to be explored. Rich mentioned that there may not be overwhelming enthusiasm from the others cities to participate in this study. There is strong sense of loyalty within each City for its utility and the thought of change, even if change comes in small increments, might meet resistance. However, whether the information gained from this study is used now, or a year from now, it will be useful. In an effort to keep the study as objective as possible, it is being proposed that each of the four cities take a part in funding the study and managing the contract. In response to a question on why the study had to be done in cooperation with the other cities, Rich mentioned that to do the study right, some pointed questions will need to be addressed and it will take participation and cooperation from all of the cities to make this possible. Also, conducting this study without the cooperation of all of the cities, might be perceived as a "self serving" study; both Light and Power and Platte River want to avoid this perception. Two distinct areas will be explored initially; possibly others later. One of these areas is Energy Services. Study on this area will focus more around the menu of services we need to be able to provide to our customers in the future, in addition to how we could consolidate current Energy Service efforts, and whether they are best provided jointly or separately. The other area includes operating issues, i.e., substation maintenance, dispatching, procurement, billing, etc. There was some discussion on the risks that would be involved if a large company offered to purchase our system, or the system of one or more of the other cities, if consolidation had occurred. There was some concern that this might create an untenable commitment on the part of the Utility and the remaining cities, should one or more of the other cities become unattached. Prudent structuring in a consolidation contract would need to be explored to avoid this. -3- There was some discussion on whether or not this type of resolution was being proposed in the other cities. Rich mentioned that all of the other cities have seen a copy of our proposed Resolution. Whether or not the other cities intend to move forward with their own resolution is unknown. The Director of the Loveland Utility has expressed an interest in this study and would like to see Longmont included as well. The Director of the Longmont Utility has not had a chance to touch base with the City Manager or City Council and could not give any indication of whether or not Longmont will participate. Indications from Estes Park are that this is not a high priority for them at this point, but that they may be willing to participate. Necessary funding for the study was discussed. Rich mentioned that $100,000 - $150,000 would help us get a lot done; however, it is too premature to know exactly how much will be required. The proposed Resolution limits Fort Collins' share to $50,000. There was some discussion on the correct way of presenting this Resolution to the other cities without pushing our local values on them. There was concern that the Utility not commit money to studies that are unsuccessful due to lackluster participation from those who need to be involved. There are a number of issues where it is important that the Mayor and our members on the Platte River Board have the right and authority, by Resolution or whatever means necessary, to get involved in investigating things that will help us prepare for the future. The discussions on telecommunications, simultaneous conduit installations, involvement in the local information highway, etc., are examples of this. Rich mentioned that if the other cities do not feel that this is the right time for these discussions, Utility staff will regroup and find out what the other cities are interested in, i.e., partnering opportunities. Council Member and Electric Board Liaison Apt mentioned that given the potential outcomes in the future, the more proactive we can be, the better. Council has been alerted to the new environment. The sentiment of Council is to do whatever can be done to anticipate these changes. Council would like the Utility to look at all of the issues before they are forced on us. There are a lot of grim stories about the companies that did not do this type of leg work. Council doesn't want to see layoffs, etc., because we were ill prepared. Council fears being caught flat footed and being forced to make a bad decision. Council Member Apt thought this initiative is a step in the right direction, but cautioned that it be couched appropriately to eliminate being looked at by the other cities as "the smart kid up the street." Board Member Rutstein made a motion that the Board send a letter to Council recommending approval of the proposed Resolution, that the Board has discussed the Resolution, and that the Board thinks it is appropriate. Board Member Eighmy seconded the Motion. The Motion passed unanimously 6-0. Board Member Allum abstained from the discussion and vote due to potential conflict of interest. -4- 4. PRELIMINARY DISCUSSION OF ALTERNATE GOVERNANCE STRUCTURES FOR LIGHT AND POWER TO BETTER MEET THE COMPETITIVE CHALLENGES OF THE FUTURE: Rich initiated discussion on this issue. Although there is not a sense of urgency around this issue right now, determining the type of governance that is appropriate for a competitive business that is part of a City structure is an issue that needs to be addressed if Light and Power is going to survive in this new environment. The Utility's ability to be entrepreneurial, move quickly, be creative, be flexible, be reliable and be responsive is imperative in a competitive environment. There is some concern that these things cannot be successfully achieved under the current governance structure. Charter language and perceived behavioral expectations of entities that are part of a City structure were identified as issues that could prevent us from being successful in the new environment. Authority is also a problem -- in a City government structure decisions take time; possibly too much time to make functioning in a competitive environment feasible. An example of this is being able to develop a rate structure for an "at risk" customer quickly enough to keep from losing them. There was discussion on the fact that the City government structure should not be automatically thrown out. The government bureaucracy can do many good things, but needs to learn how to work well and efficiently within a changing environment. Private enterprise is not inherently better than government. It is important to look at the best of both governance structures and try to develop a model based on those strengths. Board Members brainstormed governance possibilities. Their list included: - Directly elected Electric Board (Board governs the Utility) - Council appoints an Electric Board (Board governs the Utility) - City Councils serves as Board of Directors for the Utility - Current governance structure/new paradigm - "Privatize" L&P - Winter Park example -- competitive as a ski area; owned by Denver - How to combine the best of public governance and private governance - Poudre Fire Authority model/intergovernmental agreements - "Competitive" model provides legitimate criteria for different model - GID board model - Don't lose local control aspect - Be clear about what we need to be able to do -- then ask what governance/what structure is needed to support it - Non-profit corporation - Public/private partnerships - Shared risks - Subdivision of the State (similar to PRPA) - PFA model (without the 2nd entity) - Public Utility Districts - Separate/strong local values -5- Check several existing examples - Eugene, Oregon and Cleveland, Ohio -- already operating in a competitive environment (John Allum can provide a list of others who are operating in a competitive environment.) How does this relate to internal organization, too? Because of the comparisons that have been made between Fort Collins and Eugene, Board Members were interested in getting some information on how they run their electric utility. Staff will obtain this information. Staff will explore a few of the suggested models over the next few months. This issue will be scheduled for another Electric Board meeting in early fall and staff will share the results of these studies, together with results from business planning efforts showing the things that need to be accomplished in order for Light and Power to succeed in the competitive environment, barriers or obstacles that might be associated with this, and, possibly, a recommendation on an alternate governance structure that makes sense for the Utility. 4. STAFF REPORTS: Dennis provided Board Members with minutes from the latest Strategy Team Meetings -- June 14-15, 1995. INFORMATIONAL REQUESTS: None 6. OTHER BUSINESS: 1. Board Membership Changes: Mark Fidrych and Barbara Rutstein were both reappointed to the Board for four year terms. The newest Electric Board Member, Len Loomans, was also introduced. Len has lived in Ft. Collins for 19 years. He went to school at Colorado State University and has a Bachelors Degree in electrical engineering. His work experience includes a few years in the Power Generation Division of Westinghouse where he worked on turbine generator projects and, while working for them, helped install the generator at Rawhide. He went from Westinghouse to Ft. St. Vrain, and is now working in the solar electric field. 171 It was also acknowledged that this was Board Member Allum's last meeting. He mentioned that he has had a great time participating on the Board during the past three years. The changing relationship between the Utility and Platte River has made participation somewhat awkward in recent months. Board Members and staff were grateful for his help in getting the Board started, and for his time and effort since. They were also appreciative of his valuable contributions throughout the years. 2. July meeting: Due to scheduling conflicts, the July Electric Board meeting was canceled. AGENDA (August): Strategic Planning Efforts Building Code Update ADJOURN: The meeting adjourned at 7:30 p.m. Delynn,toldiron, Board Secretary -7-