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HomeMy WebLinkAboutElectric Board - Minutes - 04/20/1994Minutes to be Approved by the Board at the May 18, 1994 Meeting. FORT COLLINS ELECTRIC BOARD MEETING MINUTES April 20, 1994, 5:00 - 7:30 P.M. BOARD MEMBERS PRESENT: John Allum, Jeff Eighmy, Mark Fidrych, Barbara Rutstein, Richard Smart, and Jim Welch. BOARD MEMBERS ABSENT: Larry Walsh STAFF PRESENT: Ellen Alward, Don Botteron, Allen Boushee, Lori Clements -Grote, Delynn Coldiron, John DeHaes, Bob Kost, Jon McHugh, Bob Nastan, Rich Shannon, Dennis Sumner and Doug Swartz. OTHERS PRESENT: John Bleem and Jay Hopper BOARD LIAISONS: Council Liaison -- Alan Apt Staff Liaison -- Don Botteron APPROVAL OF MINUTES: Board Member Allum mentioned that a name was misspelled. Duane Bruneggle should be Duane Braunagel. This correction was noted. A Motion was made by Board Member Welch to approve the Minutes as corrected. Board Member Allum seconded the Motion. The Motion passed unanimously and the Minutes from the February 16, 1994 meeting were approved as corrected. 2. PRPA DISCUSSION ON RESOURCE INTEGRATION STUDY: Jay Hopper from Platte River Power Authority provided Board Members with an update on the Platte River Resource Integration Study. He reviewed Platte River's current power generation sources and showed comparisons between the four member cities and other utilities on rates and showed comparisons of power plants on SOZ and NO. emissions. Platte River currently meets load by using thermal energy from the coal fired plants for base load and hydro energy for peak load. Jay mentioned that running the Glen Canyon Dam at a level flow would have an impact on Platte River's capacity and he explained what might have to be done with remaining energy resources to meet base load and part of the daily peaking load if this happens. It is anticipated, worst case -1- scenario, that Platte River will need to find an additional 70MW of energy for pealing load. DSM will provide only part of the 70MW that is needed for peak load. Pros and cons of cutting back the sale to Public Service Company, using interruptible rates, purchasing additional peaking energy, and building a peaking unit, were discussed as options that would make up the required additional peak load capacity. Use of renewable energy sources was also discussed. Jay added that DSM makes sense and as much as possible should be done in this area, but the fact still remains that additional peak load capacity is needed and Platte River wants public input on what option should be used to meet this need. This input is necessary to determine if the public feels keeping low rates is more or less important than building a new peaking unit. Board Members discussed the issues that were presented. Real time pricing, pool arrangements, current environmental legislation, fiberoptic "super highways" and environmental externalities were also discussed. Platte River is developing a question/answer sheet that will soon be available and will address the questions and concerns they are receiving as a result of the public process. There was a clarification made that the Resource Integration Study is not a draft. The purpose of this Study is to solicit comments from the public that will be used to develop the draft IRP in July. The IRP will include a section on the public input that was received and the process that was used to obtain it. Acceptable and/or expected methods of responding to the Study were discussed by the Board. Dennis explained the many options available to Fort Collins' public to give input on this issue. Board Members are welcome to use any of these available options to provide additional input to Platte River on this issue. Platte River is not looking for approval, but merely comments, discussion and input so no formal response from the Board, through Council, is necessary at this time. 3. COMMERCIAL LOAN INCENTIVE PROGRAM: Don Botteron provided an update on the Commercial Loan Incentive Program. After finding out that this item could not be scheduled for a work session within a satisfactory time frame, Don spoke with Council Member Apt to see if there was a more timely way to proceed. Council Member Apt thought it would be appropriate for Don to prepare a report for Council that explained the program and offer a work session if Council felt one was necessary. Don mentioned that a few changes were made to the program due to conversations held with financial and legal personnel. A main concern is the risk involved in the commercial loan market. The way to minimize the City's risk in this area is to let the bankers do the banking. The industries that are in a strong financial position are the ones that will be interested in the energy improvements and have credit availability that would allow them to move forward with improvements. The role of the Utility would be to advise the lending institution as to the economic impact of the project and the resulting cash flow improvement of a given technology. This would influence the customer's ability to pay back the loan and the lending institution would consider this when they are determining whether or not to make the loan. The Utility would also be contributing to -2- the buy down of the interest rate as an incentive to the customer to make the investment, or to enhance the payback of a customer using their own money to make these energy improvements. It is imperative that staff can confirm to Council that the improvement passes the Total Resource Cost test and that making the loan is in the best interest of the rate payers of the City of Fort Collins. One change being proposed is to pilot test CLIP I on City owned facilities only. This affords the Utility a reasonable degree of protection on the principal investment during initial program debugging. There was Board discussion on the proposed $25,000 limit for projects under the CLIP I program. It was suggested that as long as it is a City. facility, there should be no $25,000 limit. Board Members were comfortable with making a CLIP I loan for a City facility project with no limit placed on the amount of the loan as a way to get the program moving and to provide a means to collect energy improvement data. The "buying down" philosophy of the CLIP II and CLIP II1/2 programs was also discussed. It was suggested that staff consider giving a CLIP H or CLIP II'h customer a monthly credit on the utility bill for a specified period of time instead of providing the entire investment incentive up front. However, customer input on energy improvements to date have implied that front end costs are a problem. Considering the customer's concern, plus the ongoing administrative cost of monthly credits and the fact that the customer was still committed to at least 75% of the up -front cost, the Board concluded that the up front incentive was appropriate. Bob Nastan cautioned Board Members that concern should be taken to find a way to assure that real and measurable savings are being bought with these loans. He mentioned that in order to do this, part of the DSM funding should be spent on measurement. There was discussion on this. Don recapped the changes: The CLIP I program will be restricted to City -owned facilities during the pilot testing; the minimum/maximum amount that will be loaned for a CLIP I project will be based on the merit of the project and not artificially limited to $25,000; and the credit for environmental externalities was eliminated from the Total Resource Cost test. Board Members agreed with the changes that were suggested and were in favor of Don forwarding this program concept to Council. Board Members anticipate having further discussion on the environmental externalities figure and other loose -end items to get closure on these as the program becomes finalized. Don will incorporate proposed changes and will prepare a resolution and agenda item summary for Council consideration at their June 7 meeting. Don's draft memo and attachments will also be changed accordingly and these items will be forwarded to the City Manager's office in time to be included in the April 28 Council mailing. This will give Council a month to respond prior to acting on the resolution. -3- 4. BUDGET FEEDBACK: Don mentioned that the Mayor and City Council are looking for budget feedback from City Boards and Commissions. If Board Members have any suggestions or comments on issues for Council to consider, let Don know by May 4 and he will forward them appropriately. The draft budget will be provided at next month's meeting. 5. STAFF REPORTS: DSM Timeline: Dennis provided Board with an update on the status of IRP/DSM efforts. He mentioned that staff has taken the liberty to pursue good opportunities as they have arisen which have impacted staff's focus and timing in addressing the DSM program priorities identified by the Board. However, staff feels this is consistent with the Board's goal to get moving on these issues. Some items listed on the timetable are moving faster than anticipated; some slower. Board Members were in agreement with this approach. 2. Value Plastics: Dennis mentioned that staff has been working with Value Plastics on their new facility. Staff is viewing this as a "lost opportunity" type concept and are working with Value Plastics on natural lighting uses, together with many other things that will improve the efficiency of the facility. DSM Fliers/Brochures: Dennis mentioned that Delynn spent a lot of time at the Xerox machine copying the numerous brochures included in this month's meeting packet and asked if Board Members were interested in receiving this much information. Board Members discussed this issue and decided that they only wanted copies of brochures for conferences being held in Colorado with specific emphasis on DSM programs similar to those currently being explored by staff. 4. "Government Business" Ballot Initiative Bob Nastan provided a brief overview of this initiative. This initiative basically says that any government business that has an equivalent in the private sector shall be operated under the same rules and regulations as the private sector business. The Utility would fall under such an initiative. This initiative would force the Utility to pay property and state income taxes and the Utility would be regulated by the Public Utilities Commission. The Colorado Municipal League has filed suit against this initiative. Staff will keep Board informed on this issue. INFORMATIONAL REQUESTS: Board Member Welch requested staff to run out the energy growth rates to see when we hit zero. -4- E 7. OTHER BUSINESS: None. CRITIQUE MEETING/NEXT MEETING'S AGENDA: - CLIP Report - Budget ADJOURNMENT: Meeting adjourned at 7:38 p.m. Delynn R. Coldiron, Board Secretary -5-