HomeMy WebLinkAboutEnergy Board - Minutes - 07/05/2012Energy Board Meeting Minutes
July 5, 2012
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Fort Collins Utilities Energy Board Minutes
Thursday, July 5, 2012
Energy Board Chairperson City Council Liaison
Ross Cunniff, 420-7398 Lisa Poppaw, 223-4136
Energy Board Vice Chairperson Staff Liaison
Barrett Rothe, 303-881-9683 Brian Janonis, 221-6702
Roll Call
Board Present Chairperson Ross Cunniff, Vice Chairperson Barrett Rothe, Board Members Steve
Wolley, Greg Behm, Britt Kronkosky, Stacey Baumgarn, Peggy Plate, Margaret Moore, and Peter
O’Neill
Staff Present Steve Catanach, Brian Janonis, Norm Weaver, John Phelan, SeonAh Kendall, and
Harriet Davis
Meeting Convened
Chairperson Cunniff called the meeting to order at 5:34 p.m.
Public Comment
None
Approval of June 7, 2012 Minutes
Board Member Wolley moved to approve the minutes of the June 7, 2012 meeting. Vice
Chairperson Rothe seconded the motion. The board members discussed a minor change under
Board Member Reports.
Vote on the motion:
Yeas: Baumgarn, Behm, Kronkosky, Moore, O’Neill, Plate, Rothe, and Wolley. Nays: none.
The motion carried. The minutes will be revised to reflect the change discussed.
* Chairperson Cunniff abstained from voting due to his absence at the June meeting.
Continued Discussion - Utilizing Renewable Energy Credits (REC) to Meet the Colorado
Renewable Energy Standard (RES)
(Attachments available upon request).
Light and Power Operations Manager Steve Catanach introduced the item. The goal is to meet the
RES; however, staff would also like to bring value to the community through local solar programs.
A business portfolio approach is needed to meet the requirement. The gap can be filled with RECs.
Staff would like the Energy Board to send a strong clarifying memo to Council in support of the
program.
Mr. Catanach introduced Energy Services Engineer Norm Weaver. Mr. Weaver presented
information on the Renewable Energy Portfolio (local versus regional RECs).
Energy Board Meeting Minutes
July 5, 2012
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Key factors include:
Meet Colorado RES requirements (6 percent in 2015, 10 percent in 2020);
Use of multipliers by 2015 (solar, biomass);
New REC source guidelines from Platte River Power Authority (PRPA) (includes carbon
benefits);
Voluntary program subscriptions do not count towards RES; and
Existing solar rebate program does count towards RES.
Highlights from the discussion:
Purchased RECs cannot be counted twice. This is separate activity within the community.
Voluntary program subscriptions do not count towards a minimum regulatory requirement.
Mr. Weaver presented a graph on Local Renewable Energy (RE) vs. Regional RECs Portfolios. The
graph outlined bundled RECS, unbundled RECs, rooftop solar gardens, solar garden programs,
solar Feed-In Tariff (FIT), biomass projects, and utility-scale photovoltaic (PV) system projects.
Highlights from the discussion:
Staff is working on a wide range of scenarios, including bundled and unbundled RECs;
Energy, cost, and carbon impacts of the two different approaches;
This takes projected population growth into account;
Solar FIT would be in addition to the rooftop solar program; and
3X multipliers apply to anything built before 2015.
Mr. Weaver presented a graph on RES compliance cost trends and annual RES costs for the
different projects. He noted these costs are conceptual in nature. This takes into account annualizing
the capital investment. He also presented a graph on Carbon Impacts from the different projects. He
also presented a graph on Portfolio Cost Trends showing the annual RES cost trends. This includes
a 3 percent per year REC escalation (one REC = one megawatt hour).
Highlights from the discussion:
In response to a question about the Climate Action Plan’s goals, staff stated renewable
energy is not the most cost effective way to reduce carbon. Efficiency and conservation
programs are a more cost effective way to reduce carbon.
The carbon graph presented is annualized. A board member suggested this should be shown
as tons per year.
Staff noted the Climate Action Plan is an inventory goal, not a reduction goal.
In response to a question concerning if there is a scenario where Utilities is not dependent on
REC purchases, Mr. Catanach stated the intent is not to renew REC contracts when they
lapse. The next lapse of a REC contract is after 2020.
The board discussed multipliers and the adoption of renewables.
The board discussed if staff should recommend a 1 percent rate increase towards the Feed-In
Tariff.
Energy Board Meeting Minutes
July 5, 2012
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Feed-In Tariff (FIT) Program
(Attachments available upon request).
Mr. Catanach introduced Economic Health Analyst SeonAh Kendall. Ms. Kendall presented
information on a study conducted to look at the comparisons betweens RECs and FITs. This study
was conducted by Dr. Martin Shields with the Regional Economic Institute at Colorado State
University (CSU). Ms. Kendall noted that the study was not a cost-benefit analysis; therefore,
quality of life, human health, and impact on the environment were not quantified.
Renewable Energy Credits (REC)
Traded and sold on the open market
Cost savings
The credibility of a REC is a concern often expressed
Why Feed-In Tariffs (FIT)?
Guaranteed purchase obligation by the utility (reduced business risk on the capital
expenditure);
Reduced cost of market entry;
Increase revenue potential; and
Renewable energy generation (large upfront costs and low ongoing operation costs).
Fort Collins Solar Program (FCSP)
The goal is to increase the amount of solar-based electricity generated in Fort Collins and put onto
the local grid. This includes a two phase approach:
Start-up Phase
Purchase and installation will cost approximately $7.4 million
The program will directly or indirectly support 36 jobs
City Revenue: increase use and sales tax
Operational Phase
Ongoing maintenance and upkeep will cost approximately $51,000 annually
Jobs will reduce slightly (by approximately 4-13 positions). These jobs would be primarily
retail and restaurant positions.
City Revenue: increased sales tax revenue
The Economics of the Fort Collins Solar Program (FCSP)
Fossil fuel combustion in the electricity sector accounts for approximately 40% of
greenhouse gas emissions in the U.S.
There is a market failure due to an overuse of fossil fuels.
Conclusion
Both RECs and FCSP have pros and cons; however, spending money locally makes an impact
locally. Mr. Catanach stated there is also a rate of return for the businesses that invest in the
program.
Highlights from the discussion:
There will be a rate increase with any program that is selected.
The board members discussed the acceptable level of expenditure.
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July 5, 2012
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The board members discussed unbundled RECs, fossil fuel increases, and long term
contracts.
The board members discussed reducing demand for fossil fuels.
The board members discussed the history of past Council decisions on avoiding the use of
unbundled RECs.
Board Member Behm presented his draft memo to the board. This memo to Council offers
recommendations in support of meeting the RES.
Highlights from the draft memo:
The memo recommends Council approve all funding for the Community Renewable
Portfolio programs and other utility-scale renewable projects that staff may recommend to
meet the requirements of the Colorado RES.
The memo recommends Council approve Utilities purchase of RECs to bridge any supply
shortfall in order to remain compliant with the RES.
The memo recommends the continued purchase of RECs as the lowest-cost alternative if
Council is unwilling to fund all recommended programs to meet the RES.
The Energy Board strongly recommends fully funding all renewable energy programs
recommended by staff to meet the increasing 2015 RES requirements. Barring this preferred
choice, the board supports the use of unbundled RECs as the alternative means for
compliance with the standard.
Discussion on the motion:
A board member suggested the memo should be concise. It should outline the issues and the board’s
recommended suggestions.
Chairperson Cunniff suggested a friendly amendment to the motion.
Vote on the motion:
Yeas: Baumgarn, Behm, Cunniff, Kronkosky, Moore, O’Neill, Plate, Rothe, and Wolley. Nays:
none.
Chairperson Cunniff gave the board members an opportunity to add their comments to the memo.
Highlights from the discussion:
A board member suggested a funding limit for the program.
A board member questioned what funding Utilities is competing against.
A board member feels it is important to capture the attention of each Councilmember and
appeal to their individual backgrounds.
Board Member Wolley moved that the Energy Board write a memo to City Council
suggesting action to comply with the Renewable Energy Standard (RES). Board Member
Moore seconded the motion.
Amended Motion: Chairperson Cunniff moved that a subcommittee edit the memo. The
subcommittee will consist of Board Members Behm and Kronkosky.
• A board member questioned the budget offers, and asked for clarification if Utilities is
asking for general fund dollars.
• A board member stated the memo should be concise and state the rational behind the
recommendations. The board member also suggested the memo should connect to other City
plans (Plan Fort Collins, Climate Action Plan. sustainability plans. etc).
• A board member suggested the memo should start with the board’s recommendations.
• A board member suggested the memo should not be written as a resolution.
• A board member suggested the memo should emphasize the benefits for local businesses.
• A board member likes the use of percentages in the memo.
• A board member suggested adding a matrix to the memo. The matrix would include project
start dates and an analysis of the different options.
Staff Reports
Mr. Catanach gave an update on the Electricity Innovation Lab at Rocky Mountain Institute (RMI).
Board Member Reports
Land Conservation and Siewardshi Board (Board Member Baumgarn,): Board Member Baumgarn
attended the June meeting. The board discussed potential oil and gas development at Meadow
Springs and Soapstone Natural Areas.
Air Quality Board (Board Member Baumgarn): Board Member Baumgarn attended the June
meeting. This board also discussed potential oil and gas development. The board drafted a white
paper with recommendations on protecting the City’s air quality.
Natural Resources Adi’isoiy Board (‘Board Member Baumgarn): Board Member Baumgarn
attended the June meeting. The board also discussed oil and gas development and listened to a
presentation from Dr. Bryan Wilson. Engines and Energy Conversion Laboratory at CSU.
Platte River Power Authority (PRPA) Board Meeting: Chairperson Cunniff attended the June
meeting. The board voted 7 to I in favor of selling water for fracking.
Other Business
Chairperson Cunniff encouraged the board members to support the boards and commissions
collaboration effort sponsored by the Women’s Commission. The board secretary will forward an e
mail from the Staff Liaison.
Adlournment
The meeting was adjourned at 7:50 p.m.
Submitted by Harriet Davis, Administrative Assistant. Fort Collins Utilities
Approved by the Board on 1 , 2012
Signed
Board Secretary Date
Energy Board Meeting Minutes 5
July 5,2012