HomeMy WebLinkAboutElectric Board - Minutes - 05/18/1994Minutes to be Approved by the Board at the June 15, 1994 Meeting.
• FORT COLLINS ELECTRIC BOARD
MEETING MINUTES
May 18, 1994, 5:00 - 7:30 P.M.
BOARD MEMBERS PRESENT:
John Allum, Jeff Eighmy, Mark Fidrych, Richard Smart, and Jim Welch.
BOARD MEMBERS ABSENT:
Barbara Rutstein and Larry Walsh (resigned)
STAFF PRESENT:
Ellen Alward, Don Botteron, Delynn Coldiron, Ron King, Bob Kost, Bob Nastan, Tim Sagen,
and Dennis Sumner.
OTHERS PRESENT:
• None.
BOARD LIAISONS:
Council Liaison -- Alan Apt
Staff Liaison -- Don Botteron
1. APPROVAL OF MINUTES:
A Motion was made by Board Member Eighmy to approve the Minutes as submitted.
Board Member Welch seconded the Motion. The Motion passed unanimously and the
Minutes from the April 20, 1994 meeting were approved.
2. BUDGET:
Don Botteron handed out information packets and gave a presentation on the proposed
1995 budget. He shared information on:
A. Comparative Statement of Income -- Proposed '95 figures are based on most
current estimates of the Y/E '94 expenditures. Three to four months of actual data
is obtained and used to project forward. This Statement shows that the Utility
• maintains a positive net income through '99. The '93 net income reflects the
change in revenues resulting from the rate increase that went into effect January 1,
1993 and the stable weather experienced throughout the year.
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B. Comparative Statement of Changes in Financial Position -- Capital and reserves.
'93 was a record year for contributions in aid to construction due to increased
residential construction activity. Light and Power is experiencing some decline in
this activity and is projecting that contributions in aid will drop from the estimated
$2.2 million in '94 to $1.7 million in '95, and remain fairly stable at that figure
through '99. Don pointed out that our reserve policy allows a Purchase Power
Reserve target of up to 25% of operating revenue (a little over $10 million) but
currently targets a more practical level of 10%. The Utility will draw on reserves
in '95, '96 and '97 until reserves stabilize in '98 at about $4.7 million (10%
target). At that time the Utility will consider implementing an approximate 1.1 %
rate increase in '98 and '99 to levelize the draw on reserves and to maintain
positive net income. Don reminded Board Members that this is still a projection.
C. Net Income and Reserve Levels Graph -- This graph visually depicts the main
information contained in the Income Statement and Statement of Changes in
Financial Position. Capital reserves remain stable through '99. Since net income
and contributions in aid do not quite equal the projected cost of capital
improvements to the system, the draw down and levelization of reserves are
reflected.
D. Budget Assumptions -- Don provided a list of the most significant assumptions used
to prepare the budget:
Growth: new housing units and MWH sales
Costs: inflation, per unit labor cost, purchase power rates
Revenues: retail rates
Per unit labor costs include pay plan, pay plan adjustments, level changes,
employee reclassifications, etc. No purchase power increase can be projected until
the outcome of the Glen Canyon Dam action is known; therefore, per current
PRPA projections the budget assumption is 0.00% through '99. Don mentioned
that retail rates would reflect any increase in the purchase power rates at an
approximate 65% ratio.
E. Operations and Maintenance Summary -- 4-6% change is within normal expected
range based on growth and inflation. Items noted:
1. Power Plant Maintenance: Down 40.52% because CSU is assuming
maintenance responsibilities that were provided by the Utility.
2. Distribution Maintenance: Up 13.31 % due to implementation of a
preventive maintenance program to replace aging system components,
especially load break elbows, which will reduce power outage losses and
inconveniences for our customers.
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3. Admin. & General Operations: Up 13.53 % due to charges assessed for the
administration of the City's investments, including Utility Reserves, and
Light & Power's contribution to the Utilities' newly implemented pilot
wellness program.
4. Material Control & Mail Service: Up 10.28% in Material Control; down
14.14 % in Mail Service. These changes are due to a shift in resources.
The shift to Material Control reflects increased construction activity.
5. Payments in Lieu of Taxes: Down 1.83 % due to an accounting correction
in the method used to calculate the 6% PILOTS. The City will no longer
collect an additional 6% on the 6% PILOTS portion of each customers'
electric billing.
6. Meter Reading: Up 11.06% due to customer growth and the increasing
number of water meters.
7. Energy Services: Down 45.26% because Demand Side Management
dollars have been shifted out of the Energy Services budget and into new
O&M and capital DSM budgets.
Don explained the appropriations, funds, equipment, labor, etc., that are
• included in the new DSM capital budget and the anticipated accounting
methods that will be used to track future appropriations, loan paybacks, etc.
Overall Operations & Maintenance budget increased by 4.25 %.
F. System Additions: This budget is extremely volatile. Don noted that subdivision
construction increased 81.29%. This reflects the increase in contributions in aid
to construction. The overhead rebuild and conversion program remains stable and
on schedule. Temporary personnel will be used to meet the resource demands of
these two labor intensive projects. Demand Side Management, automated
distribution and load control and computer applications were also noted. Overall
System Additions budget increased by 5.56%.
G. Revenues: Don shared that '95 residential sales are projected to increase by
approximately 7%, commercial at just over 3%, industrial at 1.5% and the City's
traffic system at 5.74% over the projections used in the '94 budget.
H. Rate Comparison: Don shared the CAMU rate comparison graph. Ft. Collins is
7th from the lowest of the 63 reporting Colorado utilities. Don also showed a
comparison between rates for L&P and Public Service Co. (+19.89%), Longmont
(-2.06% -- they reduced their PILOT's), Poudre Valley REA (+21.40%) and
Loveland (+16.62%).
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The proposed budget is to be submitted June 3, with the first Council work session scheduled for
June 14. High profile items for Council will be Demand Side Management and the
undergrounding program. Board Members had no concerns with this preliminary budget. Board
Members can review the handouts prior to the next Board meeting and will have an opportunity
for additional budget comments and questions.
3. STAFF REPORTS:
1. CLIP:
Don mentioned that the finalized memo and attachments were forwarded to Council and
will be considered on June 7. Environmental externality computations were briefly
discussed. Because environmental externalities do not materially affect the CLIP
programs, these were temporarily eliminated but can be readdressed in the future. Board
Members will receive a copy of the Resolution provided to Council and a report on
whether or not Council approved this item at the June meeting. Board Members were
invited to attend the June 7 Council meeting if they wished.
2. Energy Efficiency Report:
Dennis provided Board Members with multiple handouts.
A. Electrical Energy Sales Growth: Dennis presented data showing percentage
changes in energy consumption and declining rates of increase. Annual
percentage rate of growth has decreased since 1970. Energy consumption
during the same time period has increased by a relatively fixed amount of
energy per year. As the total amount of energy used increases, even
though the increase is the same, the percentage drops. Possible reasons for
this trend include changes in customer values, economics and technology.
B. IRP: Dennis reviewed the brochure that staff developed to explain to
customers what is happening with respect to IRP. Staff has not received a
lot of customer response to date. Staff is currently working on ads and
other outreach activities to promote the open house scheduled for June 13th
at Boltz Junior High.
The 20 Questions/Answers list from Platte River was provided to the
Board.
C. DSM: Dennis explained the changes that have been made to the DSM
timeline. He mentioned that items on the timeline have generally either
stayed the same, or have been advanced. One notable exception is the
work with Building Inspection on Energy Code. This work is proceeding
slower than anticipated.
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Per Board's request, staff obtained copies of the Office of Technology
. Assessment report. This report is intended to be an energy efficiency
report on electrical utilities. Dennis was a participant in this workshop.
Dennis highlighted an article from Public Power Weekly, April 25, 1994
issue, entitled "DSM has made huge strides in last decade." According to
the article, the average utility spent less than 0.7% of '91 retail revenue on
DSM programs. Light & Power's '95 budget for DSM is 1.73 % -- we are
definitely in the ball park with other responsible utilities on our DSM
efforts. Dennis highlighted a comment in the article from Barry Moline of
APPA. Barry noted utility DSM efforts are moving to a long-term
sustainable approach where utilities provide information and financing as
the key forms of customer assistance.
Dennis provided Board Members with a copy of a report that was written
by Jon McHugh as an example of the type of customer outreach being
done. This was an industrial customer concerned with high electricity costs.
The report identified lighting retrofits as the best alternative for addressing
the customer's concerns and offered two options for getting this
accomplished. Dennis asked the Board to respect the customer's privacy
in their review of the report.
• Customer Updates:
1. Anheuser-Busch (AB) is very interested in looking at options to
reduce their energy use, peak, etc. Jon McHugh has done walk-
throughs of the facility and has reviewed some internal audits. He
has identified a maximum potential of 1 MW of peak load
reduction. Jon will be working with AB staff to put together a
management report.
2. Progress is being made on the Value Plastics project. Doug Swartz
is taking the lead on this and will be working with consultants on
day lighting and energy efficient construction issues. Computer
modeling will also be utilized. To date, we have been able to
influence the level of electric lighting that will be used and the use
of day lighting.
3. We are working to try and stimulate some interest with the folks
working on the NCR project. This project has some definite
challenges-- conventional mentality (value engineering approach),
quick timeline, building schematics are already finished, lack of
flexibility due to nature of business and size of organization. One
• positive aspect is that one of the design engineers working on this
project is the same engineer we are working with on the Value
Plastics project.
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D. Energy Services: Dennis provided Board Members with the Energy
Services monthly report to give them an overview of some of the other
things that staff has been involved in.
4. INFORMATIONAL REQUESTS:
None.
5. OTHER BUSINESS:
Board member Eighmy mentioned that the Natural Resources Board is very interested in
the IRP process. There was some discussion on the best way to get them involved. There
was consensus that the Natural Resources Board should be encouraged to attend the IRP
open house schedule for June 13. Board Member Eighmy will forward IRP brochures to
the Natural Resources Board.
6. CRITIQUE MEETING/NEXT MEETING'S AGENDA:
- Budget
- IRP
- Open House update
- Board's role in the IRP process
- Report from Board Member Eighmy on Natural Resources Board involvement
ADJOURNMENT:
Meeting adjourned at 7:40 p.m.
Delyn R. Coldiron, Board Secretary
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