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HomeMy WebLinkAboutElectric Board - Minutes - 05/06/2009Fort Collins Utilities Electric Board Minutes Wednesday, May 6, 2009 Electric Board Chairperson City Council Liaison John Morris, 377-8221 Wade Troxell, 219-8940 Electric Board Vice Chairperson Staff Liaison Steve Yurash, 226-4248 Robin Pierce, 221-6702 Roll Call Board Present Vice Chairperson Steve Yurash, Board Members John Graham, Tom Barnish, Dan Bihn, John Harris and Steve Wolley Board Absent Chairperson John Moms Staff Present Brian Janonis, Eric Dahlgren, Bob Singleton, John Phelan, Lucinda Smith, Tom Rock, Steve Catanach, Terri Bryant, Meagan Peil, Ellen Switzer, Patty Bigner and Robin Pierce Guests Rick Coen, Mimi Souders, Wayne Cook and Brad Heckendom Meeting Convened Vice Chairperson Steve Yurash called the meeting to order at 5:35 p.m. Public Comment Citizen Brad Heckendom attended the meeting to contribute to the discussion on rate increases. Citizen Mimi Souders encouraged the City of Fort Collins and the Board to examine the case with Durango's decision to raise rates and some related issues after doing so, before the decision is made to raise rates here to fund green programs. Citizen Wayne Cook taught Geo Space at the high school level and informed the Electric Board about the history of global climate change, the start of and history behind Earth Day, and global cooling trends. Mr. Cook distributed two articles for the Board's information. Approval of April 1, 2009, Minutes Vice Chairperson Yurash recommended the following changes to the April 1, 2009, minutes: On page 3 under: • Routine Updates, wording should be added to clarify the statement about "20% renewable resources" that states "of that project". • Other Business, wording should be changed from "looking at electric cars" to "planning for electric cars". Electric Board Meeting Minutes May 6, 2009 Other Business, the reference to "Glade Reservoir" should be changed to "any reservoir". Other Business, "limits wind power for the future" should be changed to "limits wind power generation for the future". Board Member Bamish motioned to approve the minutes from the April 1, 2009, meeting with the recommended changes. Board Member Bihn seconded the motion, and it passed unanimously. Climate Action Plan Addendum Lucinda Smith, Senior Environmental Planner for Natural Resources updated the Board on the Climate Action Plan Addendum going to Council sometime this summer. When Council adopted this plan, Council asked staff to fill in the gap for 2012 with 40 percent of the needed reduction in 2020. Interdepartmental staff and the Energy Management Team, which includes Natural Resources, Utilities, Building and Zoning, Purchasing and Operations, developed a revised addendum that would not rely on renewable energy credits or carbon offsets to close the gap. The ideas contained in the addendum provide alternatives for Council's consideration. Waste Reduction: The Construction and Demolition Debris Deposit strategy relates to creation of a deposit and recycling system for construction waste. A refundable deposit system would be created, possibly based on square footage of a project, type of building and type of work being done, such as new construction versus remodeling. The deposit would be refunded after a certification was presented verifying appropriate level of debris recycling. The Integrated Waste Optimization/Recovery Goal is a strategy for the City to examine solid waste management and policies to ensure the maximum amount is recovered for recycling and reuse, and the remainder of the waste is harvested for non -combustion conversion technology. Colorado State University is looking into the conversion technologies to convert the waste stream into useable energy. Energy There is additional benefit to be gained from the 2009 Energy Policy related to energy efficiency in the original prediction and working with the Climate Action Plan. The parameters are more stringent but match the Climate Action Plan with the 1.5 percent annual reduction in electric energy use. Even though FortZED is not in the Climate Action Plan, if 25 percent of the FortZED district is implemented by 2012, an estimated 7000 tons of carbon reduction benefit would be realized above the Energy Policy benefits. However, the likelihood of receiving full funding and achieving the implementation by 2012 is not promising. Is there an approved portion for FortZED? This includes the River District, Colorado State University (CSU), and Downtown area. If 25 percent is mitigated in just this area, the whole area would use only 45-50 MW. Electric Board Meeting Minutes May 6, 2009 Transportation: The strategy for the Incentives for Low Emissions Vehicles was not adopted by Council due to the high fuel prices at the time. This is being added back into the addendum for two reasons. The Climate Task Force believes this to be among the most cost effective strategies, and fuel prices have fallen once again. Another strategy being considered is the Anticipated Changes in Vehicle Fuel Economy for the fleet in Fort Collins. Council has asked staff to consider the anticipated changes to average fleet fuel economy while looking into developing a plan to reduce emissions. The two approaches being looked into are software to forecast future emissions and energy information administration. Currently, staff is working with The Brendle Group to evaluate the approach to forecasting fleet changes. This is a national figure (not specific to Fort Collins) from the Federal Highway Administration who predicts changes every five years in transportation models for better fuel economy. Green -Building Practices: The Green Building strategy would update the residential building code, land use code and change objectives under commercial construction codes. The benefits of green - building include energy efficiency, water conservation, waste minimization and conservation of natural resources. The Green -Building Code/New Measures strategy relates to regularly updating the commercial and residential energy codes due to their association with the national code standards. These updates will happen every 2 to 3 years through 2020 and will include providing increased efficiency for new buildings. Also, the Green-Building/Voluntary High Performance Measures are being looked at because the standards are above code and voluntary. Programs like the Northern Colorado ENERGY STAR® Homes Program push standards of construction and performance above the minimum requirements and above code standards. Has there been any cost analysis in conjunction with this? Staff has studied Seattle for the cost for existing and new building. Cost benefit has not been included, because these measures are in their beginning stages. Would these be required when updating a building? This is a model green -building code, and it would be up to the building department to determine how to apply it. Green-Building/Architecture 2030 is another strategy under consideration. This strategy looks at the global architecture and building community to adopt innovative design strategies and opportunities to generate on -site renewable power, or purchasing renewable energy or credits. Board Member Bihn commented that the people who live in those buildings would be spending less on energy, representing a great benefit. A side -by -side comparison listing the benefits would be helpful. Electric Board Meeting Minutes 3 May 6, 2009 Vice Chairperson Yurash believes it would be more useful to have cost benefit analysis, not just the reductions of energy. Ms. Smith noted this is at the conceptual level and not at the point of a full cost benefit analysis. Staff is gathering input on these ideas, as well as the way community wide greenhouse gases are measured. The Brendle Group is working with staff on the Climate Action Plan and carbon related plans. Along with these efforts, staff continues to look at the 2020 forecast and economic forecast. Also, Xcel Energy expected a 2 percent increase in natural gas consumption, which changed due to the economic state in Fort Collins. Discussion: On your first chart, Construction and Demolition, 20, 000 in CO2, how much of this is the construction waste? Ms. Smith does not have that information currently. As far as the Construction and Demolition, what are the options for getting around this? Do they take debris to Ault or someplace else? What is the economic impact? Ms. Smith did not know the impact on building in Fort Collins, but staff is working with a company that works all over the United States to look at our options. Most likely it would involve paying a fee and having the resources to recycle. Vice Chairperson Yurash would like to see the numbers and the impact on building. The builders will not build here but would end up building in Timnath. The development of these strategies and some level of cost have been assessed. This will be further developed for Council. When this was looked at last year, it took us to 2020. Is Council asking to change this? Several members of Council are asking to look at the objectives as of 2012. Is growth factored in with these reductions? The plan will be affected whether population grows or declines. Ms. Smith will return to provide additional details to the Board at a later time. Board members were encouraged to let her know of any other ideas. Budgeting For Outcomes (BFO) 2010-2011 Update Terri Bryant, Utilities Finance and Budget Manager, invited the Board members to an open house for the public at the Drake Centre on May 13, 2009, from 6-8 p.m. This is an opportunity for all City boards to provide feedback on the budget maps. Discussion: The Board recommended the addition of another category at a previous meeting. What was the result of the recommendation? Chairperson Morris drafted a memo, and the recommendation was given to Council. Electric Board Meeting Minutes 4 May 6, 2009 Strategies remained the same, but some of the results statements changed. Utilities remained under Safe Community and Environmental Health. Drilling teams will make their offers next. When the City Manager has a recommended budget, the Board will receive their next update. Energy Policy Implementation Patty Bigner, Employee and Customer Relations Manager, and John Phelan, Energy Services Manager, updated the Board on the Energy Policy Implementation. The 2008 Energy Policy was adopted in January 2009 by City Council and represented a five year update to the 2003 version of the Policy. The 2008 Energy Policy has new language and goals developed after a number of work sessions and meetings with Council. There will be BFO offers related to the Policy. Will the Board see these offers? The Board will see the overall budget, but the level of detail containing every offer will not be shared. However, the information will be broken down and shared with the Board at a later time. Vice Chairperson Yurash is disappointed that the Board should not give input to Council for the budget. Board Member Graham stated the Board will have the opportunity to see the Light and Power budget eventually. This is merely the beginning of their budgeting process. It is neither our place as the Electric Board to receive this information nor give feedback in the specific details of the budget. The goals of the Energy Policy are to: • Provide highly reliable electric service; • Support the community's carbon emissions goal of reducing the City's carbon footprint 20 percent below 2005 levels by 2020 and 80 percent by 2050; • Enhance local economic health; and • Maintain a leadership role for Fort Collins Utilities with Platte River Power Authority (PRPA). The Energy Policy Implementation Planning goals are: • Energy efficiency; • Load management; • Advanced Metering Infrastructure (AMI); • Renewable energy; and • Community outreach. The goals of efficiency and load management are to achieve annual energy efficiency and conservation program savings of at least 1.5 percent of annual energy use. The target for 2010-2011 is 22,000 MW, equivalent to making approximately 2,500 homes net zero. There is another goal to increase the power managed by load management, smart grid and distributed generation to at least 5 percent of 2005 system peak demand by 2015, and the Electric Board Meeting Minutes May 6, 2009 target is 15MW. The load management strategy includes devices on electric hot water heaters and air conditioning units. Our efficiency goal is an 80 percent reduction by 2010-2011. Efforts began in 2002 and have grown over the years. Fort Collins electricity use by sector is broken down into what each sector uses the most. Residential sector use is based on appliances, industrial sector use is based on motors, and commercial sector use is based on lighting. A broad set of programs are designed to reach each sector to help reduce usage. This information was obtained by R.W. Beck, our consulting group, and adapted to Fort Collins. A potential study with PRPA may also take place. The savings by program are broken down into those that net the most efficiency gains. For example, a reduction is realized by replacing a motor in a furnace. Adoption rates will impact the achievement of our goal. Higher incentives are being considered for our low income customers. With the motivation to save, combined with environmental components, the programs will help us reach our goal. The savings by sector would be significant, especially in the commercial/industrial sector with an annual savings of 54 percent. The annual MWh savings are found in commercial lighting upgrades, building design, rebates and weatherization. The annual savings is 4500 MWh with the commercial lighting upgrade. There are 27 programs listed, and each one constitutes an annual energy savings. The load management capacity for 2009 is broken down by the equipment that is controlled, the total controlled and months it is controlled. Water heaters are controlled for 12 months with a load controlled for 1.2 MW for 2000 units. Commercial loads have are controlled for 12 months with a load controlled for 2.0 MW for 30 units. Including the load control for air conditioning units, the total overall controlled is 4.2 MW. The Energy Policy goal for 2015 would account for an additional 11 MW, meaning an average of 1.8 MW per year. The sources being looked at have load control on 7,000 air conditioners, which would equal 7 MW per year (1 MW from commercial air conditioning and 2 MW from commercial and industrial loads). Renewable energy planning must be addressed with customers. Customer volunteers are needed. The community outreach strategy is based on having a strong community message and being active in conservation. This will be modeled after Austin, Texas and Seattle, Washington where a neighborhood approach is taken. We would like to reach schools, homeowner associations and coordinate with many aspects of our community to help customers save money, conserve energy and have access to low cost programs. Our priorities with the implementation are efficiency and conservation, modernization with technology upgrades, enhancement of our community outreach and renewable energy additions over time. Electric Board Meeting Minutes May 6, 2009 Discussion: Can you look at the customers that are just changing behaviors compared to the people who are investing? Our goal is to have both, and it would be difficult to separate them from each other. There will be a web component to track this. This will be an educational tool; customers can opt out of mailings and receive the information by email. The outreach component is a very large part of the program's success, because the more customers we reach, the more we can realize use reductions. What if a customer does something outside of the program? The web component will allow reporting based on what the customer is actually doing. How much can be saved with each group? Residential and commercial savings would be approximately 2 cents per kWh blended. Money is being invested now to reduce the cost for the next ten years with a less than 5 year pay back. The return on investment is 18 percent, and requires an investment and the community's involvement as a whole to achieve this. Is the reference to the 4500 MW savings based on a test group or the whole city? It is based on a test group. Are commercial and industrial sectors further along than the residential sector? Larger industries are very in tune with efficiency and have staff dedicated to the effort. The sector containing smaller or medium sized commercial customer represents a gap, because most do not own their buildings. These programs are here to save money for customers and energy use by the community while reducing emissions. Cost increases are not easy for anyone. However, with our most recent rate increase of 3 percent, Fort Collins Utilities went from the fourth to the third lowest rate in the state, meaning 97 percent of customers in the state actually pay more for electricity than we do here in Fort Collins, so by comparison, Fort Collins is still offering customers a very competitive rate. Will this improve the prosperity of the community? Yes. Is the 1.5 percent reduction based on year to year?' It represents the average of the last three years. What is the total cost of the Light and Power budget? Does this increase the budget? The budget is being refined, but will be 4.3 million dollars per year, including the PRPA $1.1 million per year. It is funded through incentives and grants. What kind of rate increase will be considered? Staff is still going over the proposals now to determine if a rate increase will be necessary. Incentives and savings through efficiency will be factored in first. Electric Board Meeting Minutes 7 May 6, 2009 How much of the $4.3 million is for the cost of staff to administer the programs? Staff has already been added for this year; the cost includes the staffing component or the expense to hire third party staff. Routine Updates: PRPA (Vice Chairperson Yurash): No report. Capital News (Board Member Steve Wolley): No report. Other Business None Future Agenda Items None Adiournment The meeting was adjourned at 8:00 p.m. following a motion to adjourn by Board Member Graham. Submitted by Meagan Peil, Electric Board Secretary Fort Collins Utilities Approved by the Board on LJUl , lQ , 2009 Signed 1,17 Melagad Peil Electric Board Meeting Minutes May 6, 2009 Date