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HomeMy WebLinkAboutElectric Board - Minutes - 11/30/2011Electric Board Meeting Minutes November 30, 2011 1 Fort Collins Utilities Electric Board Minutes Wednesday, November 30, 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 Steve Yurash, John Harris, and John Graham Board Absent Board Member Peggy Plate Staff Present Steve Catanach, Brian Janonis, John Phelan, Bill Switzer, Ellen Switzer, Lance Smith, Jenny Lopez Filkins, Robin Pierce, and Harriet Davis Guests Rick Coen Meeting Convened Chairperson Wolley called the meeting to order at 5:14 p.m. Public Comment None Approval of October 6, 2011, Minutes Board Member Yurash moved to approve the minutes of the October 6, 2011, meeting. Board Member Harris seconded the motion, and it passed unanimously. Finalize 2011 Annual Report The board members discussed changes to the draft Electric Board 2011 Annual Report. Vice Chairperson DeCourcey will revise the draft and send to the other board members for review. Suggestions from the October meeting minutes will also be included in the next revision. Organic Contract Light and Power Operations Manager Steve Catanach presented information on this item. The Organic Contract is an agreement between the Cities of Fort Collins, Loveland, Longmont, and Estes Park and outlines the structure of how Platte River Power Authority (PRPA) is operated, including bylaws and functions of the board. The Organic Contract is a 40 year contract that has historically been renewed on a ten year basis. A 40 year contract ensures a stable financial structure for the lifetime of thirty year bonds. The contract was revised in 2007 and the changes were presented to City Council in 2008. Council had concerns about the contract language and suggested changes to the contract. These changes were presented to the other cities. The City of Loveland objected to the changes. This resulted in Electric Board Meeting Minutes November 30, 2011 2 negotiations between the cities to establish acceptable language. The contract was approved in 2010. As part of the approval process, Council requested the Electric Board review the contract on an annual basis to make recommendations. Mr. Catanach stated the contract could be presented to the Energy Board for review as well. Board discussion: A board member asked if there are any recommendations to communications between the City of Fort Collins and PRPA in regards to the transmission lines at Pineridge Natural Area. Mr. Catanach stated the City of Fort Collins and PRPA are currently developing a letter of understanding on the processes the City would like to see occur. Assistant City Manager Wendy Williams is developing more stringent easement requirements. This would not necessarily be a part of the Organic Contract. This could be part of an operational type of agreement with PRPA. Assistant City Attorney Jenny Lopez Filkins stated a resolution would be required for the Energy Board to review the Organic Contract since this was the responsibility of the Electric Board. This is not a part of the Energy Board Ordinance. A board member suggested it should be reviewed by the Energy Board if possible. Ms. Lopez Filkins stated a new resolution can be presented to Council stating the Energy Board review the document in the future. There was interest from specific Councilmembers asking the Electric Board to review the Organic Contract on an annual basis; however, staff needs to discuss this recommendation internally. A board member questioned if there is enough leeway to handle all the projects going forward (for example, renewable energy) or if there are some other facilities to consider instead of PRPA? Some of the changes to the Organic Contract define the cooperation. Utilities Executive Director Brian Janonis stated PRPA is willing to work with the City on renewable energy projects. A board member stated the Letter of Agreement between the City and PRPA should be brought before the Energy Board as an agenda item. Board Member Yurash made the following motion: Vote on the motion: It passed unanimously. Formulate Recommendations to the Energy Board Chairperson Wolley introduced this topic and asked the board members for their recommendations. Board discussion: The board members made the following recommendations for the Energy Board:  The Energy Board should review the Letter of Agreement for the Organic Contract.  The Energy Board should address funding issues concerning renewable energy.  The Energy Board should review the Energy Policy to ensure it is more project-specific.  There should be interaction between the Energy Board and other boards. The Electric Board in its review of the Organic Contract feels it is sufficient for the City’s needs and that Utilities management regarding closer cooperation with Platte River Power Authority regarding renewable energy standards and future projects is sufficient at this time. Vice Chairperson DeCourcey seconded the motion. Electric Board Meeting Minutes November 30, 2011 3 A board member questioned how projects are funded (for example, the Mason Corridor Project). Mr. Janonis stated primarily he brings projects forward to Council. Mr. Catanach stated an offer is presented to Council during the budget process. A results group is formed to review the offer. The results group makes a recommendation to the Budget Executive Lead Team. Energy Services Manager John Phelan stated the first version of the Energy Policy did not include energy efficiency budget information; however, the 2009 Energy Policy did include this information for energy efficiency and load management. A board member stated there should more than one path to achieving the energy goals, perhaps there should be specific ranges. The Energy Policy should include tangible actions. The board members suggested the Energy Board should review the Energy Policy to ensure it is more project- specific. Chairperson Wolley suggested there should be a portfolio of energy generation options. There should be diversity of choices in ways to generate power and options should be thought of as an investment portfolio. A board member stated the Energy Board should have energy options to review. A board member stated the Energy Board should not operate the same as the Electric Board. He feels the scope of the Energy Board should be at a higher level and they should focus on bigger projects. A board member suggested there should be an audit of the Utility programs so the Energy Board can look at the microeconomics of the projects. He feels there were inefficiencies in how the programs moved forward. A board member stated there should be interaction between the Energy Board and other boards, for example, the Natural Resources Advisory Board. The board members feel there should be representatives of the Energy Board at other board meetings. Routine Updates Platte River Power Authority: Mr. Janonis gave an update on this item and stated there is a lot of concern with the rate increases. This was discussed at the last PRPA board meeting. PRPA is forecasting a 10 percent rate increase across the board for 2013. The globalization of commodities is affecting the market. For example, coal will be exported overseas. This has been identified as a strategic issue for many businesses. Board discussion: A board member stated his concern with communicating the rate increases to the public. He feels it would be beneficial to be specific when giving the reasons for rate increases. Mr. Janonis stated the City’s rates are one of the lowest in the state compared with other utilities. A board member stated this should also be communicated to the public. A board member stated the rate increase is not related to a revenue problem, it is a cost problem. He feels this should be communicated to the public as well. The board members stated it is very important to communicate the background behind rate increases to the public. Capitol News (Vice Chairperson DeCourcey): No report. Electric Board Meeting Minutes November 30, 2011 4 Staff Reports Monthly Financial Report Utilities Financial Operations Manager Ellen Switzer provided a monthly Financial Report included in the packet. Ms. Switzer stated both purchase power and revenues are over budget. Since there is the ability to make budget transfers, staff does not need Council approval for additional appropriations. Board discussion: What is the reason behind this? Ms. Switzer stated the budget is based on 2009 energy sales increases. Utilities sold more kilowatt hours than were projected. A board member questioned a statement on Attachment 1 of the report concerning total expenditures. The total expenditures should be less than the total revenues year to date. Ms. Switzer stated this will be revised on the report. Are there capital projects that will not be completed in 2011? Yes; however, the budgets for capital projects do not lapse from year to year. Ms. Switzer stated the Southwest Annex project has taken longer than expected due to the excessive amount of shale in the area. This project is located south of Harmony Road and west of College Avenue. Other Business None Future Agenda Items None Open Items Tracking None Adjournment The meeting was adjourned at 6:35 p.m. Submitted by Harriet Davis, Administrative Assistant, Fort Collins Utilities Approved by the Board on ________________________, 2011 Signed _______________________________ ______________ Board Secretary Date (Please note: These are the unofficial meeting minutes since this was the last meeting of the Electric Board.)