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HomeMy WebLinkAboutElectric Board - Minutes - 10/19/1994Minutes to be Approved by the Board at the November 16, 1994 Meeting. FORT COLLINS ELECTRIC BOARD MEETING MINUTES October 19, 1994, 5:00 - 7:30 p.m. BOARD MEMBERS PRESENT: John Allum, Bill Brayden, Jeff Eighmy, Mark Fidrych, Barbara Rutstein, Richard Smart, and Jim Welch. BOARD MEMBERS ABSENT: None. STAFF PRESENT: Ellen Alward, Don Botteron, Al Boushee, Delynn Coldiron, John DeHaes, Bob Kost, Jon McHugh, Bob Nastan, Rich Shannon and Dennis Sumner [�7IY:i�l:7. • : �� John Bleem and Roy Rohla Council Liaison -- Alan Apt Staff Liaison -- Don Botteron 1. APPROVAL OF MINUTES: A Motion was made by Board Member Rutstein to approve the Minutes as submitted. Board Member Fidrych seconded the Motion. The Motion passed unanimously and the Minutes from the September 21,1994 meeting were approved. 2. IRP: Board Member Allum reminded the Board that he works for Platte River and because of the potential conflict that exists because the IRP was developed by Platte River, he would abstain from voting and his discussion would be minimal on this issue. Dennis gave a brief introduction. He suggested that discussion on this issue be split into three parts: 1) John Bleem's overview of the IRP; 2) General discussion, including clarification of some questions received from Council Member Apt; and 3) Board recommendation on the IRP. -1- John Bleem shared the three main reasons why Platte River is developing an IRP: 1) Potential change of flow through the Glen Canyon Dam resulting in loss of peaking power; 2) Changes necessitated by the National Energy Policy Act of 1992 requirements; and 3) Importance of obtaining public input. John mentioned that the operation of the Dam has already been changed. As a result, worst case scenario is that Platte River will lose 70-75 MW of peak power as early as next winter. A more realistic scenario is that Platte River will lose 25-40 MW of peak power in 1998-1999. To date there has been a lot of public input. During public meetings, approximately 40% of those who attended wanted to see increased DSM efforts. There was concern for environmental sensitivity from nearly all people who responded. Approximately 11 % of those attending wanted to see increased efforts for renewable sources of energy. When the public was given a choice between raising rates and not building a peaker, or building a peaker and maintaining rates, over 70 % chose to go with a peaker. Keeping rates low was very important to the large commercial/industrial customers, as well as residential customers. John next explained some of the findings shown in the Cambridge Report which surveyed residents in the four cities. Power plant issues ranked lowest of a list of eleven public issues facing Platte River communities. Customer attitudes toward city -owned utilities ranked favorably compared to national averages. In the survey, respondents were given six options for replacing the lost peaking capability from Glen Canyon Dam. Their initial preference was renewables. Once they were provided with information on costs associated with the replacement options and the reality of whether or not the replacement options could meet the lost hydropower peaking need, the preference of the respondents changed to building a gas peaking resource (gas generator plant was favored after weighing environmental, economic and peak capability concerns). Current DSM efforts and renewables cannot completely meet the need for additional peak power and would impact rates. Renewables are not always available at the time of peak. Although building a peaking resource will slightly impact rates, it is the only option available that will completely meet the need. The outcome of the survey shows that respondents support developing a peaking resource, continuing DSM efforts, and exploring renewable sources. John mentioned that there are several peaking options, including: purchasing peaking power; building a peaking unit at Rawhide; becoming joint partners with Ft. St. Vrain, etc. John summarized the key recommendations of the IRP which are DSM, renewables and the new peaking resource. Public hearings are continuing on the IRP. The Platte River Board has scheduled a public hearing for October 27. Electric Board Members were invited to attend. Consideration of the IRP by the Platte River Board is scheduled for December 8. Board Members shifted their focus to the questions submitted by Council Member Apt. A summary of his questions and responses to them follows: -2- r E Question 1: With electric power demand growing and public support for conservation and renewables overwhelming in the survey, I suggest that PRPA should fund more than 1% for demand side. How does that compare nationally? Response 1: 1 % was chosen based on consideration of what was technically feasible, recommendations from the NEOS study, consulting efforts of Platte River and the four cities, rate impact studies, and consideration of what other utilities in the region are doing. Based on the findings of an Oak Ridge National Laboratory Study, approximately 10% of the utilities spend 2+% of revenues on DSM. The remaining 90% spend less. The City of Fort Collins and Platte River combined are committing approximately 2.4% of revenues to DSM -- .7% of Fort Collins' revenues from Platte River and 1.7% from the City. This ranks Fort Collins in the top 10% of utilities in the country for the percentage of revenues spent on DSM. According to a study by American Public Power Association (APPA) on DSM in public power, the national average for publicly owned utilities is 2.1 %. Question 2: I also found it surprising that gas fired peakers are seen as environmentally benign vs. renewables -- is that accurate? What are the negative environmental impacts of a gas powered peaker? How does it compare to wind or solar? Response 2: The negative environmental impacts of a gas fired peaker are primarily air quality impacts of SOZ, No., and CO2 emissions. When comparing the emissions with those from a coal burning power plant, the gas fired unit is found to be substantially more "environmentally benign" with respect to all three emissions. Generally, renewables are considered even more "environmentally benign." However, renewables, as well as a gas fired peaker, were both identified in the draft IRP as having some negative environmental impacts. Solar's negative impacts are associated with the production and disposal of photovoltaic cells -- toxic materials and heavy metals. Wind's negative impacts are associated with the hazard turbines create for birds. Question 3: PRPA has been researching solar for years. What are the results? Is it viable to fund and use now as is being done in California? Response 3: The problems with solar include price and time of availability. Based on historic data, Platte River has found the coincidence of available solar energy at the time of summer electric system peak to be approximately 40%. Since the winter peak occurs after dark, the coincidence is 0%. Therefore, solar's best potential to contribute to electric needs is as an energy source -- not a peaking source. Solar energy is 8 to 10 times more expensive than the marginal cost of energy produced for a conventional supply side resource. The addition of solar storage would increase the cost of solar by 50 to 100%. -3- Question 4: Why couldn't some portion of wind power in Wyoming be used for peaking by replacing base load? Is PRPA saying it isn't windy in Wyoming in the winter? Response 4: Wind has similar challenges as solar -- timing and price. Based on historic data from the Medicine Bow area in Wyoming, wind power availability was coincident with electric system peak demand two out of ten times -- 20% availability at time of peak demand. The cost of wind energy is approximately two times the marginal cost of energy produced by a conventional supply side resource. Question 5: In reviewing the Cambridge Report's survey, it appears the public's responses on preferred options were a much stronger endorsement for renewables and energy efficiency than the draft IRP Executive Summary suggests. Please clarify why the Executive Summary suggests such a high level of support for the gas peaker. Response 5: There may be some confusion here due to the poor graphics on page 22 of the Cambridge Report's survey results. This chart compares the level of support for the various alternatives. The replacement power source which received the highest level of support was Gas Generator Plant with 55 to 56% support. Increase Efficiency was 17 to 18%, Wind and Solar was 12 to 10%, and Other or Don't Know was 16%. There was a request for clarification on how the Platte River IRP fits into the federal mandates associated with the National Energy Policy Act. It was clarified that the National Energy Policy Act has basically three requirements that impact Fort Collins and Platte River. The first two elements were satisfied at the recommendation of the Fort Collins Electric Board when the City Council passed Resolution 93-150 and 93-151 defining an Integrated Resource Planning standard and authorizing the development and implementation of an electric utility Integrated Resource Plan. The third item, yet to be finalized by Platte River, concerns preparation of a formal Integrated Resource Planning document. The rules related to the requirements of the Integrated Resource Plan document and procedure have not yet been finalized by the Department of Energy. It is anticipated that Platte River will be required to go through a formal process and submit an Integrated Resource Plan to Western Area Power Administration. The draft IRP currently under discussion is intended to comply with the rules as they are expected to be promulgated. The primary purpose of the current IRP is to deal with the anticipated peak reduction situation resulting from the changes in flows at the Glen Canyon Dam. The IRP is intended to take a responsible view of alternatives that can be considered for addressing the peak capacity shortfall so that the Platte River Board will be able to make an informed choice on this issue. -4- It was further clarified that the Electric Board was being asked to review Platte River's IRP and make a recommendation to City Council for their consideration. The City Council will then consider the Platte River draft IRP along with the comments from the Electric Board and determine their position on endorsing the draft IRP. In review of the Draft Agenda Item Summary and Resolution it was determined that the wording should be modified to clarify that the Fort Collins Electric Board will be endorsing the IRP and that the City Council likewise will be asked to endorse the IRP. It was noted the actual approval of the IRP is a decision which needs to be made by the Platte River Board. After discussion, Board Member Rutstein made a motion that the Resolution and Agenda Item Summary be modified as suggested by the Board. Board Member Eighmy seconded the motion. The motion passed unanimously 6-0. Board Member Allum abstained from the voting. Staff will modify the documents accordingly and forward to City Council for consideration. It was decided that the Board additionally send a memo noting some of the items from the Board discussion concerning the endorsement of the IRP. The memo will note that no effort was made to draw consensus among Board Members, rather these comments are being forwarded to Platte River for consideration in developing the final IRP and forwarded to City Council for their general information. Comments noted at the meeting were: 1) Board noted that as they understood the questions posed by Board Liaison Alan Apt his questions were answered to the satisfaction of the Board. 2) In reviewing the IRP document it was questioned whether the environmental impacts of the alternatives were considered fairly and equally. 3) A comment was offered regarding the lack of consistency in how renewable sources of energy are discussed in the IRP. 4) It was suggested the IRP include comments on how the various alternatives considered fit into such issues as global warming, The Clean Air Act, The National Energy Policy Act, etc. 5) It was suggested that Platte River consider the broader definition of Integrated Resource Planning, similar to that adopted by the Fort Collins City Council. Board Members were encouraged to give any additional comments to Dennis by Friday. Chairperson Smart and Dennis will meet to finalize the memo so that it may be included in the City Council packet which must be submitted to the City Clerk's office by next Tuesday morning. 3. STAFF REPORTS: Next Month's Agenda There was discussion on next month's agenda. Mayor Azari and Council Member Apt are scheduled to come to next month's meeting to discuss citizens' perceptions of Platte River. We have also had a formal request for hearing from a customer that was denied access to Hot Shot. The Work Plan is due November 30 and also needs to be addressed at next month's meeting. -5- Board Members briefly discussed the appeal process. Because the appeal process allows the Board 30 days after the hearing to make a decision, it was suggested that the Board hear the appeal from 5:15 to 5:45 p.m. and that discussion and decision making be delayed to the December meeting to allow adequate time to be spent on the other two agenda items. Board Members were in consensus with this. 4. INFORMATIONAL REQUESTS: Don mentioned that the Human Resources Department and the Utility are working on diversity demographics. This information is almost finished and will be provided in next month's meeting packet. 5. OTHER BUSINESS: Board Members who attended the Longmont seminar on industry change were in agreement that the information in the seminar was informative and well presented. There was brief discussion on the possibility of Platte River taking on retail load outside of the four cities' delivery area as a replacement for potential loss of Public Service Company sales. There was also some discussion on being competitive. City Council's Financial and Management Policies require rates to be set on a cost of service basis and a question was posed of whether or not there is something the Board should be considering as far as recommended changes to the Policies that will allow the Utility to change the way rates are developed in order to remain competitive. No answers to these questions were expected but it was suggested that these items be considered for the 1995 Work Plan. 6. CRITIQUE MEETING/NEXT MEETING'S AGENDA: Customer Appeal Platte River Perception Discussion Work Plan Discussion ADJOURNMENT: Meeting adjourned at 7:30 p.m. Delyn R. Coldiron, Board Secretary In