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HomeMy WebLinkAboutElectric Board - Minutes - 04/15/1998A regular meeting of the Fort Collins Electric Board was held at 5:15 p.m. on Wednesday, April 15, 1998 in the Light and Power 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: Dave Agee, Ellen Alward, Eric Dahlgren, Bob Hover, Suzanne Jarboe -Simpson, Bob Kost, Sandy McMillen, Tom Rock, Tim Sagen, Mike Smith, Gwyn Strand, Dennis Sumner, Bill Switzer, Shannon Turner, Steve VanderMeer and Wendy Williams OTHERS PRESENT: City Manager John Fischbach and Council Liaison Scott Mason AGENDA: 1. GENERAL MANAGER HIRING: The Board met in Executive Session with City Manager John Fischbach and Council Liaison Scott Mason. The Board reconvened at 6:30 p.m. 2. WIND PROGRAM — UPDATE: Steve VanderMeer presented Board Members with an update on the wind power program. Two wind turbines were constructed during the first full week of April and commissioned on Sunday, April 12, 1998. Steve presented slides of the construction of the turbines in Medicine Bow, Wyoming. Fort Collins Utilities was the first Colorado utility to commission a wind turbine and the first to deliver wind energy. Public Service Company was the first to erect a wind turbine but it has not yet been commissioned. The turbines at the Medicine Bow site are Vestas 600 kW turbines. Staff went to Medicine Bow to witness their installation on April 12, 1998 and April 13, 1998. Vestas did an excellent job constructing the turbines and had them operational within a few days. Staff took video footage of the construction and will put together a short video. A press release went to the media on April 15, 1998. Wind supporters received an invitation to attend a reception in the Council Information Center on May 5, 1998 (before the City Council meeting) to celebrate the commissioning of the turbines. The celebration will include cake, punch, video and photographs. Additional interest from residential and a few commercial customers could potentially warrant a third wind turbine. Future turbines will be slightly more expensive, but the price should be less than Public Service Company's wind rate. Financing for the first two turbines will have to be worked out prior to purchasing a third turbine. Board members discussed the construction video and recommended it be aired on Channel 27. There was a brief discussion about other cities' interest in wind power. Board member Welch suggested Alan Apt be honored as the first wind pioneer at the May 5 reception. Alan lead the charge with Council to get the wind power program approved. Steve read an e-mail from the National Wind Coordinating Committee of RESOLVE. They would like to hold a Rocky Mountain Wind Issues Forum in Fort Collins on October 27 - 28, 1998. Steve will be the contact for this group but has not heard from them. 3. APPROVE MINUTES: Changes to the December 17, 1998 minutes were suggested. Chairperson Eighmy made a motion to approve the minutes as amended. The motion passed unanimously, and the minutes from the December 17, 1997 meeting and January 28, 1998 and February 4, 1998 special meetings were approved. 4. TELECOMMUNICATIONS UPDATE: Eric Dahlgren provided the Board with a telecommunications update. The four areas covered were: 1) Platte River Power's role 2) the City Manager's and City Council's roles 3) negotiations with telecom services providers 4) status of the fiber loop construction. Eric discussed the regional approach to telecom with Platte River as lead agency. Bob Kost met with Ralph Mullinix from the Loveland Electric Utility and they co-authored a letter to Thaine Michie requesting Platte River take the lead in forming a regional telecommunications group. Ten key fundamental points of agreement were outlined in the letter. On March 26, 1998 the Platte River Power Board endorsed the concept of a regional telecom approach. The regional approach concept was also endorsed at the Utilities and Technology Committee on March 30, 1998. The intent is to allow Platte River to negotiate on behalf of the four cities and to sign contracts, but they cannot commit the cities to any expenditure. The legal -2- staffs are working on questions regarding use of rights -of -ways and infrastructure. The April Platte River Board meeting will address changing Platte River's organic contract, the founding document made with the four cities. At present the contract states Platte River can only engage in activities relating to wholesale energy. The proposed change would allow Platte River to engage in other activities. The Platte River Board and four City Councils must approve the change to the organic contract before Platte River may enter into the telecommunications business. So far all the mayors have indicated they are in agreement. A goal for the cities is to receive income from the telecom services. Platte River is building the fiber system at an estimated cost of $6.5 million. They see this as a dividend to the cities, and they are not expecting a payback on the investment. The goal is to cover their costs, and then funnel any revenues to the cities. Platte River expects to negotiate low cost/no cost telecom services for public agencies. These public agencies would include city and county agencies, Poudre R-1 School District, Poudre Valley Hospital and Colorado State University. Having Platte River take the lead will prevent individual city agendas from stalling the process. The cities may contract with Platte River's vendor to provide various services such as construction, locates, maintenance and administrative support. There are three viable service vendors at this time. The firm of Resource Management International has been hired to help choose a vendor. The vendors vary in the services they provide, offering both wire and wireless systems. The cities' staffs will participate in the selection and hope to have the vendor selected by the first part of July. Eric presented a diagram of what the overall telecom system could look like. There are two options being proposed to get services to the homes: (1) hybrid fiber coax (HFC) and (2) radio frequency wireless. On April 1, 1998 Utility staff will be installing the next phase of the fiber in Fort Collins. All the fiber is underground except the fiber on the transmission towers that head south of Fort Collins to Loveland and Longmont. The schedule calls for the construction of the Fort Collins telecom loop to be finished by the end of the year. Fibers will be reserved for City and Platte River Power use. The Board requested an update on the negotiated purchasing arrangement with Nortel. If the City of Fort Collins buys equipment for our own use we will buy it from Nortel. At the present time, Platte River is going to build the majority of the system. Platte River has gotten excellent prices on electronics gear and is considering overbuilding the system to the point where the City may not have to buy any equipment. The City would pay Platte River an incremental cost for the use of the equipment. The Board discussed some of the potential conflicts among the cities regarding ownership and management. Staff related that Longmont has decided they want to have a separate telecommunications utility. Longmont Utility Manager Jeff Gould has hired staff to provide (hook up) some telecommunications services. Longmont wants a telecommunications vendor to deliver wholesale services to the city gate with the option of either having the vendor or the Utility deliver services to the end user. Fort Collins would prefer to find a vendor partner with -3- the core competencies the City does not possess. Fort Collins wants the vendor to come in with financing, expertise and infrastructure to provide the last mile to the homes. Eric requested a motion to recommend supporting the efforts of Board of Directors of Platte River Power Authority (PRPA) to change PRPA's contract with the member cities to allow PRPA to engage in telecommunications activities. Board Member Fidrych made a motion to support the change. Board Member Smart seconded the motion. The motion passed unanimously. 5. STAFF REPORTS: LEGISLATION UPDATE Steve VanderMeer informed the Board of the two recent memos from John Allum, of Platte River, regarding legislation that was included in the Board's information packets. Bill Switzer provided the Board with an update on legislation. The Study Bill has passed all the Senate steps in the third reading. It is in the House now and will probably be assigned to Rep. Schauer's committee (House Business Affairs & Labor). Thus far, the bill has been amended two times. The first amendment reduced the number of issues to be studied to simplify the bill and reduce its costs, and the second amendment changed the size and membership of the study panel. The panel was reduced from 21 to 16 seats. The IOU's and COOP's seats have each declined from three to two. The municipal electric utilities retain their two seats, and there is also a seat for a municipal government. The bill will probably make it out of Schauer's committee and into the House Appropriations Committee, where it died last year. The chair of that committee is Rep. Owens who opposed the bill last year, but may have moved to a position of neutrality this year. There is reasonable hope that the bill will pass. The gas deregulation bill (HB 1400) was killed, but before that happened an amendment proposed by CML was passed and an amendment proposed by Colorado Springs was defeated, suggesting the CML may have more clout than CAMU. A study by Al Sweetser on the effects of deregulation on the State of Colorado was presented to the Division of Economics and Business (Operations Research) of the Colorado School of Mines. The study concluded that unless Public Service Company divests much of their generation resources, they will have a monopoly presence in Colorado. The Board requested copies of the Sweetser study from Bill Switzer. CIS UPDATE Gwyn Strand provided the Board with a CIS update. SCT was selected as the CIS vendor finalist at the end of 1997. The next step in the selection process is the completion of a conference room pilot (test drive) using Fort Collins' data and utility rates. Preparation for the conference room pilot is almost complete and is scheduled for the last week of April. The City of Longmont is interested in a joint CIS project with Platte River and the City of Fort Collins. Loveland and Estes Park have decided not to participate in the joint project. The hardware and software technical personnel will be housed at Platte River. Customer service personnel will remain at the Fort Collins Utility Billing office. We will be connected to the system via fiber optics. This approach will provide some cost savings for the City. 152 There was some discussion about the potential savings from merging the CIS system with Longmont. Longmont will share in the costs of purchasing the system with Fort Collins. Since Longmont and Fort Collins are sharing jointly in the costs, there will be a savings from eliminating duplication of hardware and staff. The CIS software was quoted at $300,000. Fiber optics makes this shared option more viable. We are changing from 10 mega bits to 100 mega bits so communications will be excellent. Partnering with the City of Longmont and Platte River means reduced cost to our customers. Platte River has given us cost estimates for both capital and ongoing costs. The system will be amortized over five years. Gwyn did not have exact figures to give to Board Members but he will get this information to be included in the next Board information packet. Any concerns regarding the merger will be addressed in an agreement with Platte River. The agreement will state that if we separate from Platte River, Fort Collins has the right to take the CIS software and operate it by paying the software license fee. ELECTRIC BOARD SUPPORT Mike Smith is the new Fort Collins Utilities General Manager and will be active with the Board. Board Members extended their support to Mike Smith as the new general manager. Delynn Coldiron has accepted a position with the City's Building Inspection Department. Shannon Turner will assume her duties as Board Liaison. OTHER BUSINESS: POWER OUTAGE There was some discussion regarding the power outage that occurred on April 11, 1998. Four substations were compromised, at 2 a.m. beginning that morning with the Western Area Power Administration substation on Conifer. All the equipment compromised belonged to Platte River and Western Area Power Administration. Several switches were flipped by the suspect, but there was no damage done to any of the equipment. The impact on the City of Fort Collins occurred at our Drake Substation at 2:53 p.m. Approximately 17,970 Fort Collins customers experienced a power outage. The outage lasted approximately one hour and forty-five minutes. Platte River responded quickly and easily identified the problem. Bob Hover was present when the suspect was apprehended at the Timberline Substation. Poudre Valley REA also experienced an unexplained outage that may have been a result of this tampering. The suspect was observed in the substation and was going from breaker to breaker opening cabinets. Platte River's and Western Area Power Administration's cabinets are kept unlocked because multiple entities need to have access to the substations. Locked cabinets slow restoration time (this policy will be reviewed). Light and Power cabinets are locked because we are the only utility that needs access to them. Light and Power's equipment was not tampered with because the cabinets are kept locked. -5- UTILITY MERGER Mike Smith informed the Board that Light and Power and the Water Utilities have merged to form the Fort Collins Utilities which provides electric, water, wastewater and stormwater services. Adjourned: 7:45 p.m. Shannon L. Turner, Board Liaison la