HomeMy WebLinkAboutElectric Board - Minutes - 03/17/1999A regular meeting of the Fort Collins Electric Board was held at 5 p.m. on Wednesday, March
17, 1999 in the Utilities Training Room at 700 Wood Street, Fort Collins, Colorado.
BOARD PRESENT.
Bill Brayden, Jeff Eighmy, Mark Fidrych, Len Loomans, Barbara Rutstein, Richard Smart and
Jim Welch
STAFF PRESENT:
Dennis Sumner, Eric Dahlgren, Tom Rock, Mike Smith, Bill Switzer, Wendy Williams and
Shannon Turner
COUNCIL LIAISON:
Scott Mason
GUEST:
John Allum of Platte River Power Authority
OBSERVER:
Lu Fisk of the League of Women Voters
AGENDA:
1. APPROVAL OF MINUTES:
Changes to the February 17, 1999 minutes were proposed. Board Member Fidrych made a
motion to approve the minutes as amended. Board Member Loomans seconded the motion. The
motion passed unanimously, and the minutes from the February 17, 1999 meeting were
approved.
2. ELECTRIC INDUSTRY RESTRUCTURING PANEL:
John Allum gave Board Members a presentation on the Electric Industry Restructuring Panel.
In Colorado independently owned utilities (IOU's), which include Public Service Company and
West Plains, control 64 percent of Colorado's customers. Rural Electric Associations (REA's)
account for 19 percent of the customer base. Twenty-nine municipal electric systems have 17
percent of the load in Colorado.
Colorado is part of an interconnected electrical system located along the border of Colorado,
Kansas, Wyoming and the Dakotas. There are few ties between the eastern and western
electrical systems. Colorado faces severpl transmission problems. The transmission line TOT 3
has limited transmission capacity. Ninety percent of the electric load is in the Front Range area,
between Fort Collins and Pueblo.
A question was raised as to whether the panel is looking into installing new transmission lines.
John stated that they haven't gotten to that point yet, but they have asked WAPA to investigate
some transmission issues. The debate is whether to bring transmission from Laramie River
Station versus Craig Colorado. The panel recognizes that transmission will have to be
enhanced.
The panel is considering which areas are most likely to be deregulated. John stated that
generation will likely be the first to be deregulated. In most situations, transmission is regulated
by the Federal Energy Regulatory Commission and distribution is regulated by the Public
Utilities Commission or local city councils. Services such as metering, billing and audits are
regulated in some states.
The advocates of competition consist primarily of large industries and independent power
producers. Large industries feel that competition will lower costs, give them a choice of
suppliers and provide them with multiple services. Independent power producers feel they
may profit from deregulation. Opponents of deregulation are residential, small commercial,
and low and fixed income customers. These customers believe that rates will increase, services
will decrease and they may not be able to participate because of their size. Small customers will
not have the advantages that large customers will have in negotiating power prices.
John provided a background of how the panel was created. Last year, Study Bill 152 was
passed, creating a study committee to investigate electric restructuring in Colorado. The panel,
consisting of 30 members began meeting in July, 1998. Members include representatives from
municipals, IOU's, coop's, utilities, agriculture, residential, and industrial. Several consultants
and a report writer were hired to prioritize the issues. The legislation requires two-thirds
majority for any recommendation.
A seminar and dialogue series is currently underway to educate panel members on various
aspects of the electric industry. Since many of the panel members were unfamiliar with the
electric industry the seminars included information on basic electrical issues. Other issues
discussed during the series included western power system operations, wholesale power
issues, national perspectives, consumer issues, resource and delivery systems, market power,
and stranded cost and tax issues.
The legislation, listed sixteen items to study.
• Rate Comparison
• Short/Long Term Impacts
• Stranded Costs
s Market Power
• Consumer Safeguards
• Universal Service
• Reliability/Affordability
• Renewables
• Energy Efficiency
• Tax/Fee Issues
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• Low Income Impacts
• Rural Impacts
• Local Choice
• Competitive Advantage
• Utility Employees
• Licensing Requirements
• Preference Issues
Consultants have been hired to research these issues. Stone & Webster, in conjunction with
DRI, is investigating energy and economic modeling. CH2M Hill and Econergy are studying
socio-economic & legal issues. Low income issues will be investigated by Colton. Public
Utilities Commission staff will research rate comparisons, licensing, regulatory history, and
transition issues.
Stone & Webster and DRI are using a production costing model, a generation expansion model
and a power flow model. The generation expansion model includes the use of alternate power
sources such as nuclear, renewable, gas and coal in 250 MW increments. The power flow model
was used to study the transmission system to discover TOT limitations in Colorado.
A question was raised regarding the model used by Stone & Webster. The concern was with the
figure of 250 MW as an increment. John noted the technical advisory committee chose to use
publicly available information. The panel is looking at relative relationship. Therefore, the
results of the modeling will be reasonable, but not precise. John explained that once the base of
the model is completed sensitivity runs will be conducted to see how the model responds.
Stone and Webster is investigating the economic impacts of deregulation on seven metro areas
and five rural areas. Sensitivity runs will be conducted taking into account high/low load
forecasts, high/low fuel prices, environmental sensitivity and reliability. The task force
decided reliability should be constant in all of these scenarios.
Stone and Webster's report is due in April. John provided Board Members with the preliminary
results of the model for the study period of 2003 to 2017. These included:
• 4,000 MW will need to be added (or about 250MW/yr)
• A recommendation for combine cycle and combustion turbines along the Front Range
• Reliability stays at 1 day in 10 years (15%)
• Colorado production costs are mid range
• Colorado market clearing price is low
• Municipal retail rates are the lowest of the state
Combining Stone & Webster's data with their own research, CH2MHILL has provided three
scenarios for Socio-Economic & legal issues. The first scenario is status quo with a little fine
tuning, followed by retail competition, and lastly a transition to the competitive market. Low
income issues CH2MHILL are investigating include consumer education, disclosure,
jurisdiction, enforcement and aggregation.
The Public Utilities Commission tasks include performing a rate comparison of Colorado
versus other states, investigating supplier licensing, reviewing regulatory history and looking
at transition issues.
John noted that the panel may find that restructuring is not good for Colorado, that it is good
for Colorado or that only limited restructuring is needed.
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The consultants report is expected to be finalized in April. A draft report is scheduled to be
completed in July. The panel will conduct five public hearings throughout Colorado, to be
completed by September. A final report is to be out by November 1999.
FUTURE AGENDA ITEMS:
• Cities For Climate Protection Campaign update
• Wind Power update
• Use of fuel cells at DWRF update
• R.W. Beck second phase update
Adjourned 6 p.m.
Shannon L. Turner, Board Liaison
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