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HomeMy WebLinkAboutElectric Board - Minutes - 10/06/2010Fort Collins Utilities Electric Board Minutes Wednesday, October 6, 2010 Electric Board Chairperson City Council Liaison John Morris, 377-8221 Lisa Poppaw, 223-4136 Electric Board Vice Chairperson Staff Liaison Steve Yurash, 226-4248 Brian Janonis, 221-6702 Roll Call Board Present Chairperson John Morris, Vice Chairperson Steve Yurash, Board Members Tom Barnish, Dan Bihn, John Harris, and John Graham Board Absent Board Member Steve Wolley Staff Present Brian Janonis, Steve Catanach, Ginger Purvis, Robin Pierce, Ellen Switzer, Bill Switzer, Jenny Lopez-Filkins, Patty Bigner, and John Phelan Guests Rick Coen Meeting Convened Chairperson Morris called the meeting to order at 5:00 p.m. Public Comment None Approval of August 4, 2010, Minutes It passed unanimously. 2011-2012 Budget, Rates and Cost of Service Study (Presentation available upon request) Utilities Executive Director Brian Janonis introduced this topic by referring to the ,nnfgarnl,çir 1 isl ant rnnntin a Fnr l,nnrrl c ‘nrl ,-‘nm m cc nn C flC mall oc I-ha ct-on- nc t1,c. Council work sessions on the budget. 2011-2012 Budget Utilities Financial Operations Manager Ellen Switzer presented the details of the 2011- 2012 Light and Power Budget. Board discussion: • A concern was expressed about placing all renewables in a discretionary fund, as discretionary items can be a target. This is an undesirable term. (Staff replied that the renewable offers were made to the Environmental Health Outcome because it met that team’s request for results. This did not indicate that the renewable offers were considered discretionary.) Electric Board Meeting Minutes October 6, 2010 • In response to Council’s question related to our rate increases and how they compare with the other Platte River Power Authority (Platte River) partner cities, Platte River analyzed retail rates back to 2005. Longmont increased 11.6 percent, Loveland increased 10.5 percent, Fort Collins increased 12.4 percent, and Estes Park increased 16.1 percent. • A board member expressed concern with remarks that Fort Collins’ rate is lower than Xcel Energy’s rate. If the rate minus the wholesale rate is compared, Fort Collins and Xcel Energy rates are about the same. The gap has been closed on the distribution rates. Can we cut our distribution costs if costs out of our control, (such as the wholesale rate from Platte River) go up? Separation of these costs helps the board’s understanding. • Will the same solar rebate be continued, even if the price of solar cells decreases 50 percent? • Last year, part of the Energy Services increase was funded from reserves. The Automated Metering Infrastructure (AMI) program begins to have an impact in 2013 when fully installed. A board member expressed concern that the City is cutting costs everywhere they can, and it seems to be counter to that effort to increase an area, such as Energy Services, which may be considered discretionary. • A board member shared his sense that Council is supportive of rate and sales tax increases. Cost of Service and Rates Bill Switzer presented details of the electric cost of service study upon which rate recommendations were based. The last Cost of Service study was completed in 2002 and is normally completed every five years, typically in conjunction with a rate increase. A new study was completed now to provide a foundation, as the Electric Utility will he asked to look at many types of rate structures in the coming years. • The scale of our goals is such that energy savings in all classes must be considered, not just those classes, such as commercial, where it’s easier to realize more benefit. • If all classes were moved to full cost of service this year, and again next year, it may cause a lack of stability. The true cost of service is a target that changes as our customers change. • When presented on September 20, Council Finance Committee agreed with limiting the percent rate change to 10 percent. • The distribution slice of the rate structure absorbs the differential when not adjusting to full cost of service. • Council has asked us to present rate structure alternatives in the I Q 2011 Electric Board Meeting Minutes 2 October 6, 2010 Development Fees • How does Fort Collins fare against neighboring communities on fees? Mr. Janonis responded that our development fees overall are a little higher. However, the portion being driven by Utilities is normally lower than our neighboring communities. Our raw water fees are very low comparatively. • A board member recommended that terminology, “on average”, be added to the monthly electric rate increases as it’s defined for the community. • Board members were very pleased with the level of analysis done by Utilities Finance and Budget staff. It provides the necessary logic for recommending the changes, and they appreciated seeing the allocation data. Board members discussed some of their concerns with portions of the proposed budget and potential basis for voting against recommending the budget. Motion: Board Member Graham moved the Electric Board recommends to the City Council that the Council approve the City Manager’s recommended 2011- 2012 budget for the Light and Power Fund, the proposed cost of service-based 2011 electric rate increases, and 2011 electric development fee reductions. Board Member Bihn seconded the motion. Vote on the motion: 2 for, 3 against. The motion fails. Board Member Barnish stated his reason for voting against the motion. In this time of tight budgets in the City, there should also be budget cuts in discretionary areas of the budget, namely Energy Services. He would be inclined to vote for the budget and any necessary, modest increase if Energy Services spending was restored to 2009 levels during this two-year budgeting cycle. Board Member Harris voted against the motion for the following reason. He is concerned about the across-the-board salary freezes, which impact Light and Power employees. He sees this as impacting the Electric Utility’s ability to recruit and retain quality, experienced Light and Power employees, causing a significant and prolonged unfavorable effect on our system, e.g. reliability. Vice Chairperson Yurash voted against the motion, because he feels the size of the rate increase for Energy Services should have been reduced. Plan Fort Collins (PFC): Feedback on the Draft Plan Light and Power Operations Manager Steve Catanach led the Board through discussion and feedback on the Energy section of the Draft Plan. Policies, intended as broad sweeping statements to the direction desired, have been added to the Plan. The PFC project team will develop strategy (action items). Discussion highlights: • The Board does not support adopting any part of the Plan which would pertain to mandating certain actions to ratepayers. Council also does not support this tactic. Electric Board Meeting Minutes 3 October 6, 2010 • The conveners group has distinguished between new versus existing construction. This is the filter for new and redevelopment projects going forward to be used by Engineering and Development when meeting with developers. • Create the environment and community. • The Board is sensitive to the cost of implications within the Plan, as long as it works within the confines of the existing Energy Policy. Mr. Catanach noted the Plan does not drive funding, so there are many non-monetary incentives involved in supporting aspects of the Plan. Customer and Employee Relations Manager Patty Bigner noted Utilities is participating in the City Plan update for the first time to avoid conflicts between programs. Utilities will advance/promote those programs being implemented by the Planning department and other groups. Green Building Program staff is doing their best to align their code proposals with this Plan. 2009 Energy Policy Annual Report (Presentation available upon request) Ms. Bigner introduced this topic. As part of our 2010 goals, staff evaluates the effectiveness of our programs. There is a new addition to the report, as a result of this evaluation, to make the data more meaningful (refer to the red/yellow/green light indicators on Page 3 of the summary handout). In 2009, for the first time, staff reported on carbon via ownership allocation (by our percentage of load at Platte River Power Authority [Platte River], or 48 percent). However, this measurement doesn’t necessarily reflect how electricity is being used in the community, so an operational approach was also developed — an average emissions factor (from coal, natural gas, hydro, etc.). In doing so, much of the information is buried, so a table reflecting energy from all sources was developed to see the breakout. Related to efficiency megawatt hour goals, reductions based on electricity and natural gas savings from our programs, our refrigerator recycling program, metered renewable energy (bundled electricity and Renewable Energy Credit [REC] portions), electric vehicle energy, on-site renewable energy and RECs are reported. RECs are in different territories, and the REC number is different, because it crosses over multiple regions. Factors are used for reductions, bLit not with reporting. R. W. Beck, Inc. was hired to help with this. They have experience with the climate registry. Platte River is a member of the registry and will report every year. Factors and counted items continue to change each year. Reporting for energy efficiency program results changed in 2009. The net-to-gross discount factor is used to represent a discount on energy savings for those things, such as Compact Fluorescent Light (CFL) bulbs and energy efficient appliances, that would have occurred due to consumer decisions anyway and not necessarily as a direct result of the program. Both gross and net savings are reflected, as we have both gross and net goals. Customer net savings are related to clothes washers, dishwashers. and CFLs (those items pertaining to rebate offers). Households were also surveyed to determine number of sockets where CFLs were being used. Electric Board Meeting Minutes 4 October 6, 2010 There was interest in tracking bill affordability. R. W. Beck helped develop a summary tool, and this data will be tracked each year going forward. Ms. Bigner noted a lot of work is being done nationally on affordability and the effects of carbon reductions on low income populations. This conversation is being sponsored by agencies who work with these populations. We’re also looking seriously at creating a program for a low income population that will align with some of these goals, including some incentives to improve their efficiency. Draft 2011 Annual Work Plan The Annual Work Plan is due November 30. Board members were asked to review and revise this year’s Work Plan for 2011. Routine Updates PRPA (Vice Chairperson Yurash): Capitol News (Board Member Wolley): Green Building Program (Board Member Graham): Staff Reports Mr. Catanach updated the Board on a recent develops in the Feed-In Tariff discussion, including upcoming meetings on financial analysis of the plan. Other Business The November meeting will be rescheduled since it conflicts with the annual boards and commissions appreciation event. Happy 75111 Anniversary to the Light and Power Utility this year! Future Agenda Items None Adjournment The meeting was adjourned at 8:29 p.m. following a motion to adjourn by Board Member Wolley. Submitted by Robin Pierce, Utilities Administrative Services Supervisor (Board Secretary), Fort Collins Utilities Approved by the Board on 7o4Li’LJyi /5 2010 Signed Board Secretary Date Electric, Board Meeting Minutes 5 October 6, 2010