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HomeMy WebLinkAboutElectric Board - Minutes - 06/17/1992Minutes to be approved by the Board at the July 15, 1992 meeting. FORT COLLINS ELECTRIC BOARD MEETING MINUTES June 17, 1992, 5:00 - 6:30 P.M. BOARD MEMBERS PRESENT: Mark Fidrych, William Orendorff, Barbara Rutstein, Richard Smart and Larry Walsh. BOARD MEMBERS ABSENT: John Allum and Dane Brandt. STAFF PRESENT: Ellen Alward, Don Botteron, Allen Boushee, Delynn Coldiron, John DeHaes, Ron King, Bob Kost, and Dennis Sumner. BOARD LIAISONS: Council Liaison -- Gerry Horak Staff Liaison -- Don Botteron CALL TO ORDER: Barbara Rutstein called the meeting to order. AGENDA: 1) Approval of Minutes 2) Report on Colorado Utility Renewable Energy Forum 3) Budget Overview 4) Appeal Procedure 5) Other Business 6) Critique Meeting/Next Meeting's Agenda DISCUSSION TOPICS: 1. APPROVAL OF MINUTES: A Motion was made by Board Member Fidrych to approve the Minutes. Board Member Orendorff seconded the Motion. The Motion carried unanimously and the Minutes from the May 20, 1992 meeting were approved. 2. REPORT ON COLORADO UTILITY RENEWABLE ENERGY FORUM: Board Member Orendorff reported to the Board on the Colorado Utility Renewable Energy Forum. He mentioned that there was a meeting last December in Tucson, Arizona on renewable energies, specifically photovoltaics. There are a number of state cooperatives -- the group he is involved in is the Colorado Utility Renewable Energy Forum. This group is made up of utility scientific people from around Colorado, some federal agency people and some regulatory people. This group meets to discuss the state-of-the-art in photovoltaics and the focus of the group is how to get photovoltaics from where we are now with today's technology (small specific site uses), to projects which get photovoltaics into the mainstream of energy usage. This group is specifically trying to find ways to get photovoltaics into utility companies' usage. At the last meeting of this group, there was a DOE representative present; who mentioned that there is $700,000 in the budget for photovoltaics application funding. The group is looking for projects that will produce "the biggest bang for the buck!" Board Member Orendorff will keep the Board informed of what is happening with this group if Board Members are interested. K .11DI0:1tiITLU lx"A Don Botteron presented to the Board the preliminary 1993 budget. Included in his presentation were: 1) 1993 Budget Imaact Statement Summary: Staff will be discussing these issues with Council on June 23, 1992. Staff will be sharing with Council that these issues have been discussed with the Board and the recommendations of the Board; i.e., for Electric Rates/ Revenues, Purchase Power Reserve Levels, implementation of Option 5. Chairperson Rutstein questioned the total proposed increase being 7.4% instead of 6.4%. Don explained that the 6.4% was based on the 1992 - 1996 budget. We are now talking about the 1993 - 1997 budget so the numbers vary. Staff did share with Council in the April 9, 1992 report that the proposed increase was 6.4% ± 1%. Don also mentioned that preserving of the purchase power reserves at 25% vs. the recommended 10% would require a total rate increase of 11.7%, rather than 7.4%. 2) 1993 Budget Assumptions: The budget process is a rolling 5 year process. This requires that we shoot at a target 5 years away with annual corrections. New housing is up slightly (all indications are that there will be some turn around in the housing industry and we are budgeting for increased residential construction.) The retail rate increase of 7.4% would be effective January 1, if approved by Council. 3) Expenses: Two areas of significance: A. 8.8% increase in purchase power -- due to growth and the 5.9% rate increase. 1992 budget did not show any of the rate increase. B. Transfers -- 10.6% increase in payment in lieu of taxes (rate increase and growth) transfer; increase in the administrative transfer to General Fund. -2- rA 5 Year Operations & Maintenance Projection by Project: Energy Services figures have increased. This is funding for Energy Services programs. 5 Year Capital Projection by Project: Subdivision construction is up 8.1% -- reflects the number of housing units being anticipated. Power equipment and vehicles -- the Utility plans to purchase three big pieces of equipment for undergrounding purposes. Substation capacitors are a one time expense. Automated distribution and load control is the Utility SCADA system (used to dispatch and switch the system). Hot Shot installations are also included in these figures. Streetlighting -- Chairperson Rutstein mentioned that the minutes from Natural Resources reflected that the City may be spending more than necessary on streetlighting. Al Boushee offered that the Utility operates under streetlight standards which have been adopted by Council. Light and Power is working with Natural Resources on two projects (East Harmony Road and East Prospect Street). Natural Resources would like to see Prospect Street (near the Poudre River) kept as an environmental area. The question Natural Resources and the Utility are addressing is what level and type of lighting is appropriate. Bob Kost mentioned to the Board that the Utility has converted almost all of the streetlights to high pressure sodium lights for energy efficiency purposes. Also, the Utility is exploring ways to reduce glare. As a test, the Utility plans to install sharp cut-off fixtures to the east of the Fairway Estates area. Revenues: The 1993 projection figures, by rate class, will all change when we get the Cost of Service Report back (late September, 1992). Investment earnings have decreased due to the reduced principal (reserves being reduced) and a decrease in Y earned on that principal. Projections show positive net income of approximately $1 million/ year throughout the 5 year plan. Purchase Power Reserves are projected at about $5 million in accordance with the proposed target of 10% of operating revenue. 8. Historical Year to Date Net Income Chart: Chart showed the 1991 rate decrease of 3% which stabilized net income to about 1 million dollars. -3- May, 1992 showed a decrease due to the April 1st purchase power increase. The amount of the decrease was compounded because we normally see a small decrease at this time of year. According to current projected figures, this chart will show an approximate $430,000 negative balance for year end 1992. 9. Rate Comparison Chart: Fort Collins gained a spot on the chart and has now moved ahead of Colorado Springs. However, once the 7.4% increase is implemented, it will put us about even with Longmont. Don mentioned that we are still early in the budget process. Council has not seen any part of this yet. Information is still being developed. Board Members will be provided with the same level of information that was provided for the 1992 budget. 4. APPEALS PROCEDURE: Board Members felt that the time spent working on the appeal procedure documents during last month's meeting was time well spent. Board Members did not have any changes. Chairperson Rutstein asked staff if any changes or suggestions had been received from the City Attorney's office or City Council. Staff reported that no changes or suggestions had been received. Board Member Smart moved that the appeal procedure documents be approved. Board Member Fidrych seconded the motion. The motion carried unanimously and the appeal procedure documents were approved. If changes or suggestions are received from the City Attorney's office or City Council, the Board will address these and make appropriate changes to the appeal documents. 5. OTHER BUSINESS: 1. CML Conference: Chairperson Rutstein wanted to know where at CSU the meetings were going to be held. Staff did not know, but will find out. 2. Cost of Development Study: Chairperson Rutstein asked about this. Bob Kost mentioned that he expects that the Utility will be asked to apply our charges to some case studies. Charges will be checked against legal guidelines to assure that charges methodology is equitable. The City Attorney is developing criteria for fair charges. Light and Power's charges appear to be consistent with this criteria. 3. NEOS Report: Chairperson Rutstein asked if we were going to talk about this. She was having some trouble understanding this report. Bob Kost mentioned that the NEOS report has shown everyone how little we know about Demand Side planning and how complicated it really is. There is much more that needs to be done. The report mentioned that the Utility needs to develop a master plan -- this has not been done. Platte River has to look at their cost structure. Until they do this, the Utility is unable to cost out any of the Demand Side programs. It will probably be about six months before we are able to do this. Supply Side programs are also being looked at by Platte River. A sensitivity analysis needs to be :! done and we have to know and understand DS Manager (computer program). We have to look at the details relative to load curve for every hour of the year, retail rates, wholesale rates, implementation costs, staffing costs, administration costs, and participation in order to be able to determine program viability. There is a pilot IRP program that puts Supply Side activities and Demand Side activities together. The problem with this is that Supply Side activities are long-term (50 years). Demand Side activities are short-term (5 years), but are projected out to approximately 20 years. Bob mentioned that we don't know how much emphasis will be placed on Demand Side IR planning by the federal energy policy if the Energy Act passes. These things have to be resolved before the Utility can determine its Demand Side Manage- ment plans. It is important that we think about and understand the program impacts. 6. CRITIQUE MEETING/NEXT MEETING'S AGENDA: Team Members thought we made improvement time -wise. It was a good meeting. Board discussed items to be included on next month's Agenda: Energy Policy - Budget Questions ADJOURNMENT: The meeting adjourned at 6:45 p.m. Coldiron, Board Secretary -5-