HomeMy WebLinkAboutElectric Board - Minutes - 06/01/2011Electric Board Meeting Minutes
June 1, 2011
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Fort Collins Utilities Electric Board Minutes
Wednesday, June 1, 2011
Electric Board Chairperson City Council Liaison
Steve Wolley, 288-0317 Lisa Poppaw, 223-4136
Electric Board Vice Chairperson Staff Liaison
Edward DeCourcey, 206-9996 Brian Janonis, 221-6702
Roll Call
Board Present Chairperson Steve Wolley, Vice Chairperson Ed DeCourcey, Board
Members Peggy Plate, John Graham, John Harris, Tom Barnish, and Steve Yurash
Staff Present Brian Janonis, Patty Bigner, Steve Catanach, Tom Rock, Jenny Lopez-
Filkins, Ellen Switzer, and Harriet Davis
Guests Robert Overbeck, Eric Sutherland, Rick Coen, Mike Dahl (Platte River Power
Authority), John Bleem (Platte River Power Authority)
Meeting Convened
Chairperson Wolley called the meeting to order at 5:30 p.m.
Public Comment
Eric Sutherland expressed concerns about the O Power Program and its impact on the
ratepayers, and expressed concerns about the Smart Meter Program and the media’s
reports on Radio Frequency (RF) as a carcinogen. He also feels that the use of radio
antennas to collect the data is unnecessary, and stated that the use of the internet would
be more beneficial for the collection of data.
Robert Overbeck expressed concerns about the Rate Philosophy Presentation. He feels
that the presentation was a lot of information for the average consumer to take in, and
suggested that the City offer a class on how to utilize the technology to manage their
electric usage. He also suggested that the City give rebates or discounts to customers
upon completion of the class.
Approval of May 4, 2011, Minutes
Board Member Graham questioned two items on the Rate Forms Presentation. On page
three, “Monthly CP” should read “Monthly Coincident Peak (CP) Demand.” Under
“Monthly CP Demand—Residential,” the first sentence should read as follows, “The
shape of the monthly peak demand curve for residents is similar to the shape of the entire
system.”
Board Member Plate questioned a statement under Routine Updates. On page eight, the
third and fourth paragraph should be clarified to state that recent legislation has changed
how Utilities can administer the Zero Interest Loan Program (ZILCH) program.
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June 1, 2011
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Board Member Yurash moved to approve the minutes of the May 4, 2011, meeting as
amended. Board Member DeCourcey seconded the motion, and it passed unanimously.
Intergovernmental Agreement Between the City of Fort Collins, City of Longmont
and Platte River Power Authority for the Operations of the Cities’ Customer
Information System
(Attachments available upon request).
Customer and Employee Relations Manager Patty Bigner introduced the topic. In January
1998, the cities of Longmont and Fort Collins (the “Cities”) entered into a 10-year
intergovernmental agreement with Platte River Power Authority (Platte River) to
purchase and operate a joint customer information system (CIS) for customer account
management and billing on behalf of the two cities (hereafter referred to as the “CIS
Agreement”). On Aug. 26, 2008, the term of the agreement was extended for two years.
On Aug. 17, 2010, City Council adopted Resolution 2010-049 extending the term of the
CIS Agreement to Aug. 26, 2011 to allow additional time for staff discussion. The staffs
of the Cities and Platte River have discussed and agreed on the terms of a draft updated
CIS Agreement (hereafter referred to as the Updated CIS Agreement”) and are bringing
forward the draft updated CIS Agreement for Council approval.
The two cities desired to offset the cost of purchasing a Customer Information System,
the system that manages all the data that runs the billing system. In 1998, the two cities
and Platte River joined efforts in an attempt to share costs and efficiencies. All work on
the agreement has been completed. Since Council is interested in seeing what has
changed, the packet contains both the original document and the marked-up version. The
marked-up version shows changes made by all parties involved. The new document
provides more accountability for the operation of the system. Staff recommends approval
of the new agreement.
Board discussion:
A board member stated that the revised agreement provides more clarity in the contract
and provides for more accountability for the parties involved.
Does the percentage of customers stay the same? The number is not based on the number
of customers, but also on the number of licenses.
Was the number carried over or was it looked at again? The number of customers was
reviewed.
What is the number of customers on the system? The number of residential customers in
the City of Fort Collins is 66,000. The number of commercial customers in the City of
Fort Collins is 4,500. The City of Longmont has approximately 35,000 customers on the
system. The original split 12 years ago was 63/37; however, since that time, both cities
have grown at the same rate.
Why didn’t other Platte River member cities join in the agreement? Other cities have
their own systems they were satisfied with at the time. Only Fort Collins and Longmont
decided to join forces. The City of Fort Collins desired a more sophisticated system with
more adaptability.
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June 1, 2011
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Does the national vendor take care of upgrade needs? Does the system require a
separate programmer? Platte River employs a programmer who manages the database.
Platte River and the Cities also have an agreement with the vendor to provide additional
support and emergency back-up as necessary. There is also a Utilities database manager
who assists with interfaces between the CIS system.
Will you have a separate program for Advanced Metering Infrastructure (AMI) data?
The CIS system will not run the metering system; however, there is interfacing between
the two systems.
Will you see an increase in costs to operate the system as new data comes in? No,
Utilities does not foresee an increase in costs.
Have the consultants looked at compatibility issues between the two systems? Light and
Power Operations Manager Steve Catanach stated that typically there is a link that is
established for passing the billing data into the CIS system. The City of Burbank is
currently installing the same system and Utilities is gaining experience from working
with them.
Did Utilities validate that the data is compatible? Yes, this was part of the criteria in
choosing the system.
Chairperson Wolley stated that changing systems is complex. Systems have changed so
much within the past few years and costs are much less due to “free-ware” database
management applications. Did Utilities research other systems? Ms. Bigner stated that
several years ago, Utilities Executive Director Brian Janonis led an effort to create a
roadmap for Information Technology (IT). At that time, the roadmap included an
evaluation of the billing system during 2011. Because of the AMI deployment, the
evaluation of current system will be delayed until after the AMI system is up and
running. Utilities may need to upgrade the system at some point, and the revisions
provide a way to exit the agreement if necessary. Ms. Bigner feels that the process has
raised the bar on the partnership with The City of Longmont and Platte River, and
Utilities is continuing to work on how the data is managed.
Is $430,000 the total cost of the system? No, that is just the portion for The City of Fort
Collins. Ms. Bigner stated that the Agenda Item Summary will be revised to clarify this
point.
Vote on the motion: It passed unanimously.
Vice Chairperson Plate moved that the Water Board recommend adoption of the
Intergovernmental Agreement between the cities of Fort Collins and Longmont and
Platte River Power Authority for the operation of a customer information system
required for the maintenance and billing of customer accounts. Board Member
Graham seconded the motion.
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June 1, 2011
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Meeting the State Renewable Energy Standard
(Presentation available upon request).
Light and Power Operations Manager Steve Catanach presented information on this
topic. Mr. Catanach referred to a presentation from the Clean Coalition presented to the
Electric Board in March concerning the Fort Collins Clean Solar Program (FCSP). This
presentation is a continuation of that discussion. Utilities has taken a look at the program
and how it could benefit Fort Collins in reaching some of the state renewable energy
standard goals.
The two goals are as follows:
1. Reduce carbon emissions 20 percent below 2005 levels by 2020. This includes
reducing energy usage by 1.5 percent per year.
2. Meet the State Renewable Energy Standard (RES). This standard applies to
municipal utilities with more than 40,000 customers. The standard states that
renewable energy should be 3 percent of total energy sold by 2011, 6 percent of
total energy sold by 2015, and 10 percent of total energy sold by 2020.
The question has been raised if Utilities is mandated to meet these standards. Mr.
Catanach stated that Utilities could argue “home rule” status. The City of Fort Collins has
adopted energy policies that support pursuing this and agreeing with what the state has
directed. The two goals are not complementary economically. Average costs for ton of
carbon saved for wind and solar power is considerably higher.
Council has communicated two things to meet the Renewable Energy Standard:
1. There shall be no additional unbundled Renewable Energy Certificates (RECs)
2. Local projects are desirable
Utilities is looking at two new local programs that would help meet our RES, including
the Fort Collins Solar Program and a spent grain biomass plant.
Fort Collins Solar Program Features (Two Year Pilot)
• Guaranteed contract between the utility and solar facility owners
• Fixed rate for 20 years, typically rates are established where they provide a rate of
return to the developer
• Rate increases limited to 1 percent over two year pilot program (each year a pilot
rate increase of no more than 0.5 percent for a total of 1 percent)
• Local projects – City of Fort Collins service territory only
Board discussion:
The tariff is what Utilities is paying the developer for power and the feed is what they are
feeding into the system? Yes.
Is there a tariff in place now? No, we do not currently have a feed-in tariff. Utilities is
going to a Council Work Session on June 28, 2011 to discuss the options.
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June 1, 2011
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Will there be any other incentives besides the tariff? No, only guaranteed purchase for
twenty years.
Mr. Catanach stated one of goals of the pilot program is that it would not drive a rate
increase greater than 1 percent. Utilities is anticipating funding the project at $500,000
worth of purchases during the first year and an additional $500,000 during the second
year for a total annual expenditure after the second year of $1 million per year. They
must be local projects within the service territory.
Do the projects have to be owned locally? Yes; however, a third party could be involved
if they operate and maintain on the premises.
Spent Grain Biomass Features
• Early stages of project. The project would utilize spent grain from tree-trimming
and other sources to create a synthetic gas to run a generator.
• Waste heat from the generator could be returned to the brewery to boil water.
• Kevin Gertig, Water Resources and Treatment Operations Manager, is currently
conducting experiments utilizing this process. The process reduces nitrogen and
phosphorus in the wastewater as per new regulations.
• Private developer. The City will purchase bundled energy and RECs through
Platte River to meet RES from the plant.
• Local project in the FortZED (Zero Energy District) area.
Board discussion:
A board member stated three advantages to this program: energy, combined heat and
power, and a product that helps the wastewater treatment process.
Does New Belgium Brewery use this process? No, they use methane from the treatment
of wastewater. They are not using spent grain in the process.
Would Anheuser Busch be interested in this process? All the breweries sell spent grain to
ranchers for land applications.
What is the cost of the project? $90 per megawatt-hour (MWh)
What is the peak usage in the City? Approximately 292 megawatts (MW).
Mr. Catanach stated the state allows multipliers towards the RES. Regional solar projects
can multiply the RECs produced by 3 times towards the RES.
Who came up with the calculation? It is part of the statute.
What is the difference between a regional solar project and a community solar project?
A community project is sponsored by a local community municipality. A regional project
would be Colorado, for example. Ms. Bigner stated that at the time they were developing
the Renewable Energy Standard, the state did a resource assessment for the state of
Colorado. They wanted both economic benefit and resource diversity.
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How are you prepared to explain to Council the conflict between the 3 times and 2 times
multiplier and actual carbon reduction? Mr. Catanach stated that local projects such as a
non-profit organization can use a 1.5 times multiplier. Colorado-based projects such as a
wind farm can use a 1.25 times multiplier. Projects connecting directly towards a
municipal system such as the biomass plant can use a 2 times multiplier. There is
currently a lawsuit in the district court challenging the use of multipliers with the concern
they give undue advantages locally and they will shut out other developers. This lawsuit
could significantly affect the project. The big question for Council is should Utilities
utilize the multipliers because they introduce a level of risk and could create significant
additional costs.
Four Options to meet RES examined
1. Go back to purchasing RECs
2. Business as usual – continue to add utility scale wind or solar through Platte River
3. Implement the Fort Collins Solar Program and continue to work with biomass
developer and leverage other options. Use State multipliers.
4. Implement the Fort Collins Solar Program and continue to work with biomass
developer and leverage other options. Do not use State multipliers.
Mr. Catanach presented information on the four options. Under the current portfolio,
Utilities is paying approximately $1.5 million per year to meet the renewable energy
standard. As the standard starts to increase, the costs would increase as well. To meet the
2020 standard, Utilities could be paying as much as $18 million per year to meet the
standard.
Board discussion:
Can Utilities meet the 3 percent goal for 2011? Yes.
One of the reasons that people argue against the RECs is because you miss an
opportunity with the community. What is the local economic benefit for pledging the
resources within the community? Utilities is working with Dr. Martin Shields from
Colorado State University (CSU) to provide an economic evaluation of the program.
The change between the two options is very compelling. Dr. Shield’s initial analysis
showed the primary impact relates to capital expenditures and jobs created to build the
facilities.
Do you know what the market is? At this time, there is quite a bit of interest in the solar
program.
A board member stated there may be more interest in the solar program from commercial
users rather than residential users.
For 2020, the cost to purchase RECs only would be $4 million versus $18 million for the
other options. Why would we choose the $18 million? Is the incentive attractive to
developers? Yes, Utilities has worked with Clean Coalition to guarantee the success of
the project. Council has given direction not to buy unbundled RECs.
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Do you know enough about the numbers at this point in time? No, Dr. Shields is still
working the numbers.
A board member stated that the money that goes into the economy by installing
installation locally offsets the unfavorable rate.
Do you have a number for cents per kilowatt hour for wind purchase energy? $75 per
MWh was used in the calculations. Mr. Catanach reminded the board that the goals are
not complementary in trying to achieve a carbon goal in a cost-effective manner and
trying to achieve the RES.
A board member stated he hopes the presentation will be presented to Council and to the
public in a manner that explains this difference. Mr. Catanach stated that the first slide
will address the issue.
Electric Rate Increases
Cumulative rate increases are what would be anticipated over time. Without the
multipliers, there is a 16 percent rate increase over ten years. The rate increase is in line
with what Utilities has done in the past.
Ten Year Program Costs + CO2 avoided
For the RECs only purchase, the ten year program costs would be $26,450,378. For the
FCSP, Biomass, and Wind power with multiplier options, the costs increase to
$94,819,456.
Board discussion:
A board member noted that rates will increase because the cost of coal-generated power
will increase. How much will that increase? The cost of coal-generated power will
increase 6 percent per year for the next two years.
A board member stated that he liked the concept of pilot programs rather than long-term
contracts because pilot programs allow Utilities to feed a program that could assist in
manufacturing breakthroughs in the event that prices collapse. Mr. Catanach stated that
the pilot program would involve commercial facilities in the beginning, and may be
expanded to include residential customers at a later time.
Next Steps:
This information will be taken to City Council on June 28, 2011. Depending on Council
direction, it will be moved forward as part of the budget and rate discussion starting in
the August/September timeframe. At that time, it would be presented to the Electric
Board again for recommendations.
How does this fit with the amount of money set aside for renewables? Is it within the
budget? No, the budget would have to be adjusted. Mr. Janonis stated that renewables are
set aside for the commitment with Platte River and this program is in addition to that.
Community renewables was not included in the Budgeting for Outcomes (BFO) process
for the 2012 budget. The 2012 budget included a 6 percent rate increase. If the pilot
program is adopted, there would be a 6.5 percent rate increase.
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June 1, 2011
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Chairperson Wolley asked if Council should take a recommendation from the board
concerning acceptance of the multipliers. The information is being presented at the
Council Work Session in June and Council cannot make decisions at the Work Session.
Should the Council move forward on the item, the board can make a recommendation on
the item at that time. Mr. Catanach stated that the board’s position on multipliers can be
presented in the minutes.
Partnerships with Other Entities/Progress of Energy Policy Initiatives (Use of Web,
Dashboarding Tools)
Ms. Bigner requested information from the board concerning what would be meaningful
in terms of a report to address these two items.
Board discussion:
Concerning the Progress of Energy Policy Initiatives, a board member stated it may be
useful to see how each of the programs is progressing. Which programs are popular?
What are the participation levels? Is there a gap that needs to be filled? Ms. Bigner
stated a final draft of the Energy Policy Report is in the review process. The information
from this report can be included with other information to address the item, including
what is budgeted, what programs are available (such as home energy audits and appliance
programs), and what is the outcome/savings.
Vice Chairperson DeCourcey emphasized three points should be included in the report:
what is the budget, what is the expected outcome, and what is the real outcome? Ms.
Bigner stated that these questions will be addressed in the report, along with information
about public outreach. Information concerning “Partnerships with Other Entities” will
also be included in the report.
Do you cover demand reduction in the report? The report covers demand reduction, peak
reduction, Platte River partnerships with other cities, rate reliability, and affordability.
Routine Updates
Platte River Power Authority (Utilities Executive Director Brian Janonis): Mr. Janonis
gave an update on the Integrated Resources Plan, which was adopted at the Platte River
Board meeting on May 26, 2011. As per Mr. Catanach’s presentation, Utilities is looking
at a 2015 goal for more renewable resources. The discussion also included the
Transmission Policy because Council wants transmission lines located underground. One
particular item of concern is the Dixon Creek Substation at the corner of Overland Trail
Road and Drake Road. Platte River is adding another circuit and the poles are being
upgraded to single metal poles. Council is concerned about the views in that location.
Capitol News (Vice Chairperson DeCourcey): No update.
Staff Reports
Utilities Financial Operations Manager Ellen Switzer presented information on this topic.
Ms. Switzer stated that year-to-date revenues and expenditures have been in line with the
projected budget. She also stated that development fees are lagging for 2011.
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June 1, 2011
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Board discussion:
Can you summarize anything you see as variances? Operating revenue has increased 3.4
percent this year. Ms. Switzer stated this is surprising considering the rate increase. Mr.
Janonis stated that approximately 65 percent of the annual operating budget is in
Purchase Power. If the amount of Purchase Power is reduced, then the Utilities budget is
reduced. The electric market is fluid and things are always moving. Utilities needs to
have the ability to be flexible for success in the electric market.
Can you explain the System Losses column? Utilities overstated the kilowatt hours (kWh)
sales for 2010. Some of the difference relates to timing of when the power is purchased
versus when Utilities sends the bills to customers.
Other Business
Rate Design Philosophy and Electric Rate Options
Ms. Bigner gave an update on Rate Design Philosophy and Electric Rate Options.
Utilities decided to delay the agenda item on Rate Design Philosophy for presentation to
Council. This will be presented at the Council Work Session on Aug. 23, 2011. Council
was interested in the rate design philosophy; however, they do not want to adopt a
philosophy per se and desire to know how to apply the philosophy to the current rate
structure and what it would look like in the future. Utilities is reconvening the discussion
with the consultants from R.W. Beck and they will look at electric rate options along with
a subcommittee. Rate Options will likely be presented at the August Electric Board.
Board discussion:
Chairperson Wolley asked the board members who would be interested in participating
on the subcommittee. Vice Chairperson DeCourcey and Board Member Graham stated
they would both be interested in participating.
Is there any public outreach planned for the rate design options? Ms. Bigner stated there
will be public meetings in September to discuss rate increases.
Board Etiquette
A board member asked that the Chairperson use proper etiquette for board discussion
and staff presentations. He requested that board members ask to be recognized before
asking questions. Chairperson Wolley asked the board for their commitment with making
these changes.
Council Retreat
Mr. Janonis gave an update on the May Council Retreat. Council directed staff to prepare
a resolution forming an Energy Board. The Energy Board will be in lieu of the Electric
Board. Utilities is working on a resolution and it is anticipated that the resolution will go
to Council sometime in July.
Board discussion:
Can you define the difference between the Energy Board and the Electric Board? Council
desires a bigger picture for Utilities, including looking at aspects such as transportation
and the energy ecosystem outlook, i.e., the Biomass project that benefits not only the
Electric Utility, but also Wastewater. The concept also includes objectives from Plan
Fort Collins.
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June 1, 2011
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A board member stated that the concept of the Energy Board is interesting. Things that
are discussed at the Electric Board can also be included within the scope of an Energy
Board. Mr. Janonis stated that when the idea came up at the retreat, Council desired that a
board be created to integrate the Climate Action Plan, the Energy Policy, and Plan Fort
Collins. They desire to look at the bigger picture in regards to integrating transportation
around energy, reducing the carbon footprint, and investigating other projects.
A board member stated that even though the idea of an Energy Board is relevant, the
concept of an Electric Board is critical.
Chairperson Wolley suggested contacting Councilmember Lisa Poppaw, the Board’s
Council Liaison for more information regarding the concept of an Energy Board.
After discussions, the board members felt that the concept of a motion was premature. A
board member stated he would like to see what the proposed charter is for the Energy
Board.
A board member stated that the Board’s role has been to provide oversight for a City
function that has a defined charter. Mr. Janonis stated that the Electric Utility would be
the contact for the new Energy Board because of their technical expertise.
Vice Chairperson DeCourcey stated that this concept is more like that of a “think-tank,”
where ideas concerning energy policy are discussed. Mr. Janonis stated that, in looking at
the broad scope of the Energy Board, the Electric Board has the smallest number of board
members. Most other boards have eleven members. The new board would require its
members to have a broader background.
Do they have a Sustainability Committee within the community? No.
Chairperson Wolley stated he would commit to asking questions of the Council Liaison to
obtain more information.
Future Agenda Items
Smart Meter Fort Collins Update by Vendor (July 6
th
Agenda Item)
A board member stated he would like to see public input on the Smart Meter Fort Collins
Program during the July meeting.
Board discussion:
Does the update include the implementation plan? Mr. Janonis stated the point of the
agenda item is to introduce the vendor to the board. Mr. Catanach stated the goal is for
contract signature in June 2011. Once the vendor is on board, Utilities can update the
roll-out schedule. Ms. Bigner stated Utilities has a very detailed public outreach plan that
will be in line with the project plan. The plan is in the early stages of development. The
first phase is to roll out 4,000 electric meters.
Can we get an outline of the plan presented at the July board meeting? Yes, that will be
included in the meeting packet.
Open Items Tracking
Ms. Bigner will address the first two items on the tracking document. A third item (cost
of paper bills versus online bills) will be added to the tracking document. Ms. Bigner will
answer this item as well.
Note: Vice Chairperson DeCourcey expressed his thanks to staff/or the Portner
Substation tour with Bob Hover and stated that the design work was exceptional. Board
Member Graham also exjwessed his thanks and complimented the engineers.
Adjournment
The meeting was adjourned at 8:16 p.m.
Submitted by Harriet Davis, Administrative Assistant, Fort Collins Utilities
Approved by the Board on (0 , 2011
Signed
\
Board Secretary Date
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June 1, 2011