Loading...
HomeMy WebLinkAboutElectric Board - Minutes - 03/04/2009Fort Collins Utilities Electric Board Minutes Wednesday, March 4, 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 Chairperson John Morris, Vice Chairperson Steven Yurash, Board Members Steve Wolley *, Dan Bihn, John Harris, Tom Barnish and John Graham (*Note: Board Member Steve Wolley departed from the meeting at 6: 48 p.m.) Board Absent None Staff Present Robin Pierce, Steve Catanach, Scott Dahlgren, Terri Bryant, Ellen Switzer, Tom Rock, Kraig Bader, Jenny Lopez-Filkins and Bob Singleton Guests Joe Wilson and Mike Dahl, PRPA; Jessyka Platt, R.W. Beck; Eric Sutherland and Rick Coen Meeting Convened Chairperson Morris called the meeting to order at 5:34 p.m. Public Comment Eric Sutherland, Fort Collins resident, addressed the Board on issues of decision -making for economic health, projects and resource depletion and requested clarification on the format and use of the public comment time. Approval of February 4, 2009, Minutes Board Member Wolley motioned to approve the minutes from the February 4, 2009, meeting. Board Member Bihn seconded the motion, and it passed with one abstention from Board Member Graham. Chairperson Morris moved to strike two sentences at the end of public comment from the February 4, 2009, meeting minutes due to confusion of the way they are stated in the minutes. Chairperson Morris moved to change the question in the Safety Manual discussion regarding safety toe versus steel toe boots to reflect his question related to the rating, rather than type, of the boot. Electric Board Meeting Minutes March 4, 2009 Budgeting for Outcomes (BFO) 2010-2011 Utilities Finance, and Budget Manager Terri Bryant facilitated a discussion of the Board's input on Budgeting for Outcomes criteria, specifically outcomes and results statements. In the February meeting, the Board was asked to consider questions posed by City Council and provide feedback. The outcome statements for the BFO process are determined by Council. All City boards have been asked to take a more active part in the 2010-2011 budgeting process than in previous cycles. After the outcomes are finalized, the results teams are determined, and the teams set the purchasing strategies to achieve the stated goals. After the strategies are set, departments then decide to make offers based on cost. The offers are presented to the results teams, who work to prioritize the offers and rank them based on achievement of goals. After the offers are prioritized, the final drilling platform goes to the City Manager and the Budget Lead Team. The finalized platform for budget period 2010-2011 goes to Council in September. The drilling platform has a predetermined amount of money and limited resources for the outcomes and projects. Utilities revenue is not included in the process. Most of the 2008-2009 funds were available in the Safe Community outcome, so our offers were developed for that outcome. The feedback requested from the Board relates to whether the seven outcome areas still make sense for the new budget, and whether or not the results statements adequately quantify the outcomes. Discussion: Do you recommend any changes to the outcomes and/or results statements? The Economic Health outcome should accurately reflect the economic state and needs of our community at this time. The results statements should mention sustainability and growth. Some cities throughout the United States are failing, and Board members would like to see sustainability as a stated community priority. The results statements should encompass values. The Board requested more concrete terminology, such as "efficient" and "cost-effective" to reflect stability in Utilities. Ms. Bryant noted the statements are meant to be general at the outset, and the teams who work on them will make them more specific by the end of the process. The Board requested an additional outcome regarding infrastructure to recognize Utilities cannot sustain the city without it. The Transportation outcome could be replaced with an Infrastructure outcome to include water, wastewater, stormwater, electric and transportation. The Board would like it recognized that the City owns and operates our own Utility. In some cities, local governments currently using the BFO process have removed utilities from the picture entirely. The Board feels this is a distinction of our City. Is there confidence in this budget? Is there a conflict between the self -funded Utilities and other departments? In the first round of Budgeting for Outcomes (2006-2007), there were some issues, but staff became better acquainted and more confident in the process by the second round (2008- Electric Board Meeting Minutes 2 March 4, 2009 2009). There is a delicate balance with the General Fund offers, because most of the City is not self -funded like Utilities. What if there is a proposal from Light and Power, and then there is a rate increase? There is a rate increase planned, and it would be separate from Utilities. For example, Utilities can make an offer for the Climate Action Plan through the BFO process. The Climate Action Plan may fall under the Environmental Health outcome, which is not where Utilities has funding, but money for rebates may be obtained as a result. There can be two approaches to accomplish an outcome; 1) place individual components under the various outcomes where they most naturally belongs; or 2) centralize all into one single outcome. For example, technology services may be best centralized under MIS. The goal is to get the best value for the dollar through the outcomes and offers in the budgeting process. Is this a cross -departmental effort? There is some flexibility to collaborate with other departments. For example, Stormwater is working with the Streets department on some offers. This facilitates some departments to work together for the goals, services and responsibility for determining funding What if the Police Department wanted to purchase a patrol car for $30, 000 or a hybrid for $33 000? How do they make an offer for that? The Police Department is in the Safe Community outcome, and their budgeting focus would be for staffing, not specific items like the patrol car. Traditional budgeting would be preparing a budget for specific items such as vehicles, whereas Budgeting for Outcomes is the cross-pollination of departments and includes different aspects from each City department. Motion: Board Member Wolley made a motion that the Electric Board recommends City Council consider changing the Transportation outcome to a new Infrastructure outcome including power, water, sewer and transportation with the results to include transportation with a highly reliable and cost-efficient Utility. Board Member Yurash seconded the motion. Friendly Amendment: It should be changed to highly reliable and cost-effective utility. Friendly Amendment: It should be changed to a high performing infrastructure outcome, with transportation as one result, but include high reliability and cost-effective Utility. Friendly Amendment: Water supply should be removed from the Environmental Health outcome and end the statement at "environment". The revised motion by Board Member Wolley read: The Electric Board recommends City Council consider changing the Transportation outcome to a High -Performing Infrastructure outcome including power, water, sewer and Electric Board Meeting Minutes 3 March 4, 2009 transportation and requests the result statement be changed to read "Fort Collins provides a highly reliable, integrated, cost-effective, environmentally responsible utility infrastructure; and also improves the safety and ease of traveling to, from and throughout the city". The Electric Board further recommends "water supply" is removed from the Environmental Health outcome. Discussion and Vote: There was no further. discussion on the motion. It passed with a unanimous vote. Adoption of Electric Utilities Employee Safety Manual Standards Engineering Manager Kraig Bader requested formal recognition from the Electric Board of the Light and Power Employee Safety Manual. The Light and Power Utility has applied for RP3 (Reliable Public Power Provider) recognition through the American Public Power Association for best practices in training, safety, system improvement and reliability. This is an amended version of the request from the last meeting. Light and Power staff place the highest level of priority on safety and would like it documented. Discussion: In the manual, there is a reference to specific OSHA rules (Occupational Safety and Health Administration). Is there a need for more reference to OSHA in this manual, or will these guidelines reflect OSHA standards at a future date? A letter from OSHA is not required for the RP3 designation, and the Safety Manual is in the spirit of OSHA guidelines. Where feasible, the OSHA manual is recognized by Light and Power staff as the best document to explain some safety requirements. In most cases, our manual is more specific to our practices. The Safety Committee will also review the manual to insure the very best safety practices are being defined. The manual will be updated on an ongoing basis as necessary and is not meant to serve as a day-to-day guide for procedures, but rather a training device for safety. Separate field procedures are documented which provide instruction for day-to-day operations. If an accident occurs, OSHA may become involved. If our manual references OSHA, what is the liabilityfor those types of situations? The Safety Manual is based on the best practices in the industry, and OSHA is not specific to electric industry standards. In one case, the OSHA manual was better in spelling out rubber boots specifications, also recognized by the boot manufacturers. Risk management staff from the City have reviewed the manual and taken any liability into account. The motion was made by Board Member Tom Barnish and seconded by Board Member Steve Wolley that the Electric Board adopt and recognize the Light and Power Employee Safety Manual. Discussion and Vote: There was no further discussion on the motion. It passed with a unanimous vote. Richards Lake Substation Mike Dahl with Platte River Power Authority (Platte River) presented a request by Platte River for additions to the Richards Lake Substation from the City of Fort Collins in order to supply additional services to Tri-State Generation. Electric Board Meeting Minutes 4 March 4, 2009 Tri-State would like to augment their service to northern Larimer County, and currently, their system has experienced issues with weather and outages. They have gone through the County and City process for this and will be asking for a utility easement from the City soon. Tri- State would like the City to add two circuit breakers and a transmission line. Platte River has permission to be in the substation, but because we would be putting a new service in for someone else, Platte River is asking the City for the equipment in order to extend service to Tri-State. Currently, Tri-State distributes to customers in Red Feather Lakes, and this would be the first step to distribute to household voltage. Platte River will be using their funds for this and will be reimbursed by Tri-State. The benefit is to increase reliability and provide lines. What is the configuration? The configuration is a donut. Is this a radial system, and is there any generation? This is a radial system. They will have the ability for some switching and use of the substation. Tri-State needs this to be a back up for their current system. Board Member Barnish would like to clarify that there are no conflicts of interest with his affiliation with PRPA, because this arrangement does not benefit PRPA. The motion was recommended to read: The Electric Board recommends approval by the City Council of a resolution authorizing the City Manager to execute the license agreement between Platte River Power Authority and the City for the installation of facilities necessary to provide transmission interconnection to Tri- State Generation. Discussion and Vote: There was no further discussion on the motion. It passed with a unanimous vote. Eneru Policy Implementation Plan Energy Service Manager John Phelan provided a brief update to the Board on the draft Energy Policy Implementation Plan. At the next board meeting, there will be a presentation about the implementation plans and workforce standards. The plan will address four areas: efficiency, automated metering infrastructure, renewable energy and community engagement. Discussion: What is the economic impact of this plan? The impact on rates is a concern, but positive impact will be realized through additional jobs and reduced bills. Advanced Meterin1l Infrastructure (AMI) Cost Benefit Analysis Light and Power Operations Manager Steve Catanach and R.W. Beck Consultant, Jessyka Platt, presented the business case and cost benefits for the Advanced Metering Infrastructure system. The goal is to examine the costs and justify the cost benefits of this type of system in Fort Collins. Electric Board Meeting Minutes 5 March 4, 2009 The project will be a part of the Budgeting for Outcomes process, and Council will be briefed in writing. The initiative focuses on culture, stakeholders, triple bottom line and the Utilities workforce. Optimization Goals: • Green House Gases (GHG)- Reduction of 250,000 tons by 2020 ( equal to 20% of 2005 load); • Renewable Portfolio Standard (RPS) 10% by 2020; • Peak Reduction - 5% by 2015, 10% by 2020 (14MW and 29MW); • Energy Use Reduction - 1.5%/Year - 155,000 MWhs by 2020; and • Water Consumption - 140 gpcd; part of the Water Conservation Plan. In order to reach our goals, several different components have been studied. AMI is an aggressive strategy along with wind energy, energy efficient lighting and hydro energy. Advanced Metering Infrastructure is made up of several components including Automated Meter Reading (AMR - one way communication through media, download and mobile readers), Advanced Metering Infrastructure (AMI - two way, reprogrammable meter device), and Demand Response (customer premises, including thermostats and load control devices). This creates a partnership with the Utility and the customer to manage load. The megatrends in the industry currently include • Carbon capacity conflict; • Smart grid; • Demographics — digital; • Customer engagement; and • Business Model Evolution. AMI Technology: The function of AMI places an emphasis on going green with renewable energies and raising consumer awareness through the use of in -home displays, direct load control with the Smart Thermostat, price response and home control. Functions also include aligning with conservation, energy management from home and eventually plug-in cars. AMI is at the core of smart grid technologies, because the communication has data points such as outage management, load management and distribution automation among other points. The vision statement for AMI was shared: "AMI technology will enable Fort Collins to support operational goals of controlling costs, improving customer service, expanding customer choices and supporting conservation of our energy and water resources. AMI technology will also support our strategic goals of building a smarter grid and working in partnership with our customers to build an environmentally and economically sustainable community for the future." Team members include executive sponsors, project managers, core team members and subject matter experts ranging from meter shop personnel to cashiers and customer service representatives. The R.W. Beck consultants also participate on the team. Electric Board Meeting Minutes 6 March 4, 2009 The AMI Project Team objective is to create a meaningful business case that fulfills the AMI vision with: • AMI solutions consistent with business strategies; • AMI solutions that meet business requirements; • Identify high level AMI system requirements; • Discuss process changes that improve utility operations and customer service; • Measure the value AMI provides; and • Identify the cost of AMI. Quantified functional benefits of AMI: • Meter reading labor and expenses; • Electric connects and disconnects; • Unbilled energy and water loss; • Outage troubleshooting and restoration; • Theft detection; • Improved cash flow; • Avoided future capital expenditures; • Billing issues such as complaints and questions; and • Improved customer service efficiency. Intangible benefits of AMI are: • Electric engineering operations; -Voltage data -Phase balancing -System planning -Outage management and system restoration • Resource Planning; -Time-based rates -Direct load control • Water conservation; • Water distribution system monitoring; • Improved customer services (less intrusive, selectable bill dates); and • Reduced emissions. Future customer benefits of AMI are to have a home area network where the meter can talk to the thermostats and eventually appliances inside the house. The societal benefits of AMI are green programs and a cleaner environment. The need for meter reading vehicles would be eliminated. Demand response that includes individual control of energy use and less peak generation would be a key component. The high level AMI requirements are two-way communication to the electric meter for more frequent/hourly readings, daily water reading and leak detection. Other requirements would be power status inquiries, outage reporting and event monitoring. The technology in modeling was made based on the inclusion of ZigBee chips in the pricing. Electric Board Meeting Minutes 7 March 4, 2009 The AMI system assumptions include: • Meters and LAN (Local Area Networks): Service Switch meters with radio tower, • ZigBee Chip — Future HAN (Home Area Network); • Wide Area Network (WAN) Communications: Public WAN from the collector or tower; • Master Station: Collects meter reads, hourly data, events, etc.; • Meter Data Management System (MDMS): Future demand response applications; and • Integrated Systems: Customer Service, Outage Management, and IVR. Candidate AMI technologies are the meter to tower technology where the meter can talk to the tower on an RF pole radio and subsequently talks back to the master. The capital investment is $21 to $29 million, and the project would deploy over a two year span beginning in 2010. Annual savings of this system would be $3 million in operations alone. This is a positive investment and has a net value of approximately $19 million over a 15 year period. The internal rate of return is projected for 16.5% over 15 years for the RF towers. In this business case, the break-even point would be reached in 7 to 11 years. The business case model adds up the cost of the AMI technology and can change according to the needs of Utilities. The AMI business case model takes basic utility input and estimates the benefits, identifies the configurations, tallies the AMI benefits and costs, and follows the results. The capital impacts of AMI would be roughly $7.5 million for the meters and installation. . Service switches would be single phase meters and would cost approximately $3.9 million, and the ZigBee chips would be an additional $780,000. The total cost for electric meters would be roughly $12.2 million. The water meters would be $7.2 million. There is also a cost for the infrastructure, project management and retraining, and the total cost for the AMI system would be approximately $21 million. This is approximately $217 per meter with installation. The meter accuracy and registration benefit is immense. The AMI system captures unbilled water and energy losses and has an annual savings of $1.1 million. The meter reading benefits provide remote metering reading which has a one time savings of $2.2 million due to the elimination of replacement of ERT modules. The annual savings of almost $1 million is due to the reduction in manual meter reading, field investigations, ERT module failures, data collection and failures, and eliminating meter logger installations. The full time employee reductions would be 12 full time employees in the meter reading positions, two full time employees in the electric and water meter shops, and a reduction of one full time employee in the credit and collections group. Employees would be retrained to assume new roles for the system. One new full time IT person would be required to run, monitor, and support the AMI system. The service switch field labor benefit would realize an annual savings of $218,000 due to the electric meter's internal service switch, and these will be purchased for all single phase Electric Board Meeting Minutes 8 March 4, 2009 meters. The service switches are not available for three phase meters at this time. This will reduce the need for field visits to disconnect or reconnect service. The service switch will impact two full time employees. The theft benefit of AMI is an annual savings of $270,000 due to the tamper detection. Fort Collins has an estimated .5% in annual theft and approximately 50% will be recovered with AMI. The engineering benefit of AMI accounts for an annual savings of $265,000, because AMI provides direct load control. There is avoidable transformer overload, and load research data is readily available. The customer service benefit is an annual savings of $162,000 due to reduction in workload associated with estimated bills, bill processing, complaints, work orders and a reduction in outage calls. This will impact three full time employees in the customer service area. The cash flow advance benefit will be a one time savings of over $2 million due to the reduction in the read to bill time, reduced from eight days to one day thus saving annually in the cost of borrowing. In conclusion, the AMI is oriented toward the electric infrastructure with load management and future time -based rate design. However, the water utility will also benefit from this system. Customers will benefit from this by gaining additional information and control of energy usage. Routine Updates PRPA- Board Member Steven Yurash: No report Capital News -Board Member Steve Wolley: No report Other Business None Future Agenda Items Energy Policy Implementation Plan Cost Analysis of Automated Metering Infrastructure Safety Record Rate Structure Review Partnership Opportunities Adjournment The meeting was adjourned at 8:48 p.m. following a motion by Board Member Bihn. Submitted by Meagan Peil, Electric Board Secretary Fort Collins Utilities Approved by the Board on 2009 Signed Electric Board Meeting Minutes March 4, 2009 0 u cl Meagan Pei Date Electric Board Meeting Minutes 10 March 4, 2009