Loading...
HomeMy WebLinkAboutElectric Board - Minutes - 10/15/1997-1 Council Liaison: Scott Mason Staff Liaison: Delynn Coldiron Chairperson: Jeff Eighmy rPhone: 491-5784 (W) 223-9487 (II) Vice Chair: m Welch TiPhone: 498-8947 (W) 498-8947 (H) A regular meeting of the Fort Collins Electric Board was held on Wednesday, October 15, 1997, in the Light and Power Training Room, at 700 Wood Street, Ft. Collins. BOARD MEMBERS PRESENT: Bill Brayden, Jeff Eighmy, Len Loomans, Barbara Rutstein, and Richard Smart. Mark Fidrych and Jim Welch. STAFF PRESENT: Delynn Coldiron, Eric Dahlgren, Suzanne Jarboe -Simpson, Bob Kost, Rich Shannon, Dennis Sumner and Steve VanderMeer. OTHERS PRESENT: Bob Abiecunas, John Bleem and Council Member Mason. AGENDA: APPROVE MINUTES On page 2, last sentence, "current" should be changed to "currently". Names and phone numbers of Chairperson and Vice Chairperson at the top of page 1 need to be revised. Board Member Smart made a motion to approve the Minutes as amended. Board Member Loomans seconded the Motion. The Motion passed unanimously, and the Minutes from the September 17, 1997 meeting were approved as amended. 2. PRPA -- COMPETITIVE POSITION: Bob Abiecunas gave Board Members a presentation on the competitive review of Platte River Power Authority. Bob shared graphs that discussed Platte River's market position. The graphs showed Platte River's current market share; comparisons between residential and industrial rates of the four cities with other utilities in Colorado, New Mexico, Wyoming and Utah; prices of non -firm on peak electricity which is sold by Platte River; and a comparison of how Platte River's commodity cost compares to the market. This information showed Platte River has very competitive rates, and Platte River staff is confident that this will continue. Bob mentioned that Platte River's financial position remains strong. Factors contributing to this included strong local economies; strong credit ratings; competitive rates; strong reserves; declining debt; and competitive operating costs. Bob shared some significant events that have happened or will be happening relatively soon. Some key items included an increase in mergers and acquisitions (1996); an increase in ISO planning (1997); an increase in national and regional aggregation activities (1997-1998); implementation of retail wheeling in California (1998); estimated implementation date for retail wheeling in Colorado (2001); and Public Service Company's contract with Platte River ends (2004). Key goals for Platte River include: an anticipated rate reduction beginning in 2001; resolution of the Public Service Company audit claims; removal of barriers that could prevent load retention or market participation; formation of alliances to retain post 2001 at -risk load; continued development of gas operations and other products and services that provide customer value and revenue opportunities for Platte River; meeting or exceeding operation and maintenance targets; and continuing to seek debt reduction opportunities; and negotiating market prices for B/N rail contract. Overall, Platte River staff feels they are very well positioned to be able to compete. There was brief discussion on the information that was presented. Chairperson Eighmy thanked Bob for taking the time to share this information with the Board . WIND ENERGY: A. Utility's Wind Project: Steve VanderMeer provided an update on the Utility's wind project. John Bleem from Platte River Power Authority has been working with a representative from NAE to determine the length of the delay that is anticipated due to the inavailability of the steel needed to construct the wind turbines. Based on the information that was provided by the NAE representative, the worst case scenario is project implementation by February 1, 1998. The representative was fairly confident, however, that the project will be running by the first of the year (1998). Staff is exploring utilization of contract penalty clauses to provide additional incentive for NAE to complete the project in a timely manner. Steve mentioned that the positive side to the delay is that wind project activity throughout the country is on the increase. This onslaught of wind projects is the reason suppliers are straining to provide adequate materials for construction. There was some concern that -2- this increased activity would thwart the Utility's efforts to be first to offer wind power in Colorado. However, based on information that has been received from NAE and others in the electric industry, staff is confident that Light and Power will be the first Colorado Utility to offer wind power. As a result of the delay, NAE has offered to provide all of the energy output from a 65 kW turbine that is currently at the Medicine Bow site to our system at no charge. This would allow the Utility to start distributing wind power through its system immediately. Utility wind power customers would not be charged any additional amounts until the two turbines that have been contracted for are up and running. Steve shared some information on a couple of articles from the October edition of Windpower Monthly. The first article pertained to Public Service Company's wind project. It stated that Public Service company had replaced their initial supplier, Zahn (an American company), with Nordex (a Danish company). Since DOE guidelines require that monies be used to support American companies, there was some question as to whether the DOE monies that had been allocated to this project would remain applicable. Public Service Company representatives suggested that this issue will not affect the timeline for their project, and anticipate completion by March, 1998. The second article pertained to wind activities that are being pursued in Colorado and Wyoming. The article notes that government officials for Boulder County, who had subscribed to provide wind power for a number of the County's buildings, have since reconsidered their decision due to the avian mortality issue. The wind turbines from which Boulder County would be obtaining renewable energy utilized lattice structure design and County officials are fearful of the impact this design has on the avian population. Steve provided copies of these articles for Board Members who were interested. He also mentioned that the Utility made a correct decision in contracting for wind turbines with a monolithic structure design. This should eliminate a lot of the adversity surrounding the Utility's wind project related to avian mortality. Staff has taken the position that there is some advantage to adding the energy from the 65 kW wind turbine to our system as soon as possible and will be pursuing this. Staff will also be pressing NAE to assure that the Utility remains a high -priority project for them. Staff will keep Board Members advised of any developments. B. City Participation in the Wind Program: Council Member Mason and Chairperson Eighmy had discussed this issue and were recommending that City Council consider having the City supplement a percentage of its energy usage with the energy that is generated from the wind project. Chairperson Eighmy asked Board Members for feedback. -3- Board Members briefly reviewed the information that was provided in packets. Council Member Mason mentioned that he chose the 20% figure as a starting point, without realizing the magnitude of the power used by the City, or that this would cause the Utility to have to construct a third wind turbine. Based on this information, Council Member Mason offered an alternative where the City would match, kWh per kWh, the customers who have shown interest in the program (currently approximately 1 1/2%), until maximum energy consumption for the two wind turbines had been reached. He did not encourage the purchase of a third wind turbine at this point. He mentioned that there are many activities in place that mimic this, i.e., public radio station fund drives where they match participants dollar per dollar. There was some discussion on the argument that the City should not be using citizens' tax revenues for its own wind program. Council Member Mason mentioned that by reducing the percentage from 20% to I - 1 1/2%, the dollar figure is minuscule compared to the entire City budget and is feasible. There was some discussion on what happens to additional customers that want to sign up for the wind program if the City is purchasing all of the excess capacity from the turbines. There was some feeling that customers should not be turned away because the City was purchasing the excess capacity. It was mentioned that customers could sign up on waiting lists which is different from actually being turned away from participating in the program. There was some feeling, however, that customers should take precedence over the Utility's participation and should not be placed on waiting lists. It was suggested that the City serve as a buffer and simply purchase any unused capacity. This would allow for additional subscribers to sign up, etc. The City's participation would simply shrink as the excess capacity is purchased by customers. It was also suggested that the Utility might consider tying the wind program to the City's efforts to clean up the air, or the country's efforts to reduce green house gases, etc. Rich offered that staffs primary mission in implementing this project was to determine whether or not green pricing was viable. It is staffs opinion that, in terms of value of promoting renewable resources, it needs to be proved that green pricing will work without subsidization. Having the City participate at any percentage hurts the primary mission. Having the City participate also, in some ways, defeats the strategy for the second phase of this project, which is intended to focus on, and obtain subscriptions from, larger corporate entities. Staff is not concerned that the City is buying wind power, but, that by participating in the pilot phase of the project, we ruin one of the best green pricing examples in the country. The City has made a huge commitment to this program by committing to a 20 year contract. This commitment will continue whether the program is fully supported through customer participation or not. Staff has no reservations to participate in the program once the pilot phase has ended. C! There was some discussion on the length of the pilot project. Staffs intent is to evaluate the project after it has been fully functional for 9 - 12 months, and then determine next steps. This would give staff a reasonable amount of time to collect data, to assure that the equipment was fully functional, to get billing issues resolved, etc. There was also some discussion on plans for any excess energy that is generated by the turbines. Staff contends that there will be times when there will be excess energy generated. There will be seasonal fluctuations, etc. Staff will be looking for ways to figure out the average of that curve and do some balancing. If too much excess exists, the Utility will purchase it and it will go into the pool of power the Utility gets from Platte River. It was viewed by some Board Members that the commitment of the Utility to purchase this excess wind energy constituted participation in the wind program. Chairperson Eighmy thanked Board Members for their feedback. Council Member Mason encouraged staff to move forward with the pilot program as initially planned, and to revisit the issue of City participation in the wind program in a year. COMMUNITY OUTREACH EFFORTS: Steve showed Board Members an advertisement about Light and Power that is being shown on many of the cable television stations that do local advertising. Staff will provide Board Members with a more complete discussion on outreach efforts and how this ties into the Utility's marketing plan on a fixture date. 6. STAFF REPORTS: Telecommunications Update: Eric summarized the discussion from the October 14th Council Study Session. He mentioned that Rich provided Council with an update on Utility telecommunications activities, and the proposed purchasing ordinance which would allow the Utility to conduct a negotiated, competitive process with potential vendors/partners. This information seemed very well received by Council. Details are being worked out to begin laying fiber in two areas of town. The first stretch will be from Platte River's office building to the south edge of town. Staff anticipates ordering materials and equipment for this within the next couple of weeks. The second stretch is from Light & Power's building (700 Wood Street) to the substation on Overland Trail. This will help the City meet the needs of a number of public education and governmental groups. Possible initial users for this stretch of fiber include the City's ICS department, the Poudre School District and the City's Water department. Council Member Mason mentioned that there is strong support from Council for the Utility's telecommunications efforts. There is the potential that one or more Council Members will be attempting to get some citizen champions for the backbone project. It is Council Member Mason's opinion that this is the infrastructure that is needed for the next -5- century and now is the time to get it done. He also mentioned that this is a different, more competitive market, and one that needs to be managed differently than the public power utility business. He is encouraging a philosophical shift so that Utility's management team can make necessary decisions on this issue without a lot of Council intervention. There was brief discussion on Council Members' concerns which had been raised at the Council Study Session. Some of their cautions included assuring that the Utility did not become driven by greed and forget public policy; being cautious when entering into business alliances; assuring that the Utility not exclude potential competition; and assuring that viable technology is chosen. Eric mentioned that staff will be interviewing a couple of electronics equipment vendors within the next week and should have the selection process completed within the next three weeks. Staff intends to utilize a competitive negotiation process. Staff has also narrowed the list of possible alliances with telecom services providers. There is the potential that a pilot project may be arranged with one of these providers. Staff is exploring this opportunity further, as well as continuing discussions with the other service providers. Eric also mentioned that a consultant has been hired to help the Utility with business planning activities, customer interviews and design of pricing methodologies. Staff will continue to keep Board Members apprised of telecommunications activities 7. OTHER BUSINESS: None. 8. NOVEMBER AGENDA ITEMS: 1998 Work Plan Telecommunications Update Wind Power Update FUTURE AGENDA: PRPA IRP Plan PRPA Distributed Generation League of Women Voters Cross Current Program Adjourned: 7:00 p.m. Delynn, oldiron, Board Liaison I M.