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HomeMy WebLinkAboutEnergy Board - Minutes - 11/13/2014Energy Board Meeting Minutes November 13, 2014 1 Fort Collins Utilities Energy Board Minutes Thursday, November 13, 2014 Energy Board Chairperson City Council Liaison Greg Behm, 226-6161 Ross Cunniff, 420-7398 Energy Board Vice Chairperson Staff Liaison Peter O’Neill, 288-4562 Steve Catanach, 416-2622 Roll Call Board Present Chairperson Greg Behm, Vice Chairperson Peter O’Neill, Board Members Michael Doss, Nick Michell, Stacey Baumgarn, and Margaret Moore Board Absent Board Members Phil Friedman, John Graham, and Peggy Plate Staff Present Steve Catanach, Lucinda Smith, John Phelan, Paul Sizemore, Dan Weinheimer, Cyril Vidergar, and Katherine Martinez Guests John Bleem/Platte River Power Authority Meeting Convened Chairperson Greg Behm called the meeting to order at 5:31 p.m. Public Comment None Board Member Marge Moore joined the meeting at 5:35 pm during October minutes discussion. Approval of October 2, 2014 Minutes Board Member Mike Doss moved to approve the minutes of the October 2, 2014 meeting as written. Board Member Pete O’Neill seconded the motion. *Board Members Behm and Moore abstained due to their absence at the October meeting. Vote on the motion: It passed with 4 yeas and 2 abstentions. Staff Reports  Light and Power Operations Manager Steve Catanach gave an update on Rocky Mountain Institute’s Electricity Innovation Lab (RMI’s elab). He summarized a six-hour role- playing exercise facilitated by colleagues from Denmark that was meant to help players understanding how quick the business world can change and how companies must adapt. Mr. Catanach represented a company called Boogle and all participants represented other company with customers, etc. His character partnered with another company to build a smart-grid and circumvented the utility. He said it was fascinating how quickly it happened; utilities in a state of flux and had to borrow money. Participants played for four cycles; each cycle represented one year. Mr. Catanach reported one character defected from a utility and joined his company. The exercise emphasized a collaborative approach and participants learned how quickly change and instability can affect the energy industry.  Policy and Project Manager Dan Weinheimer of the City Manager’s Office gave an overview of the City of Fort Collins Legislative Policy Agenda, which is used to frame the Energy Board Meeting Minutes November 13, 2014 2 City’s advocacy. It includes priorities and general statements about long-term issues and topics at the state and federal level. The agenda is reviewed every year and revised if necessary. Council Members Wade Troxell, Lisa Poppaw, and Ross Cunniff make up the Legislative Review Committee, and review operations areas and upcoming topics. The Utilities service area’s items are categorized under Environmental Health.  Among the 10 or so general priorities are the urban renewal authority (maintaining it and making sure it works well for all parties involved); local control of oil and gas; and exploring whether to offer municipal broadband for economic and innovation opportunities; and making the City more resilient, safer, and able to withstand flood, fire, etc. The committee and staff monitor activities of the governor’s task force.  Mr. Weinheimer advocates legislation that helps the City meet climate action goals, water/waste stream management, social sustainability, homelessness, poverty, and supporting an innovation economy to ensure ideas benefiting the community. The latest Legislative Policy Agenda will be finalized soon. Highlights from the discussion  A board member inquired whether these are general principles in the Legislative Policy Agenda. Mr. Weinheimer replied that they are, and they’re also a way to state what the City is advocating for in the following year.  A board member inquired if the City is required to offer broadband. Mr. Weinheimer stated Senate Bill 152 (SB 152) from the 2005 legislative session prevents cities from offering DSL or hot spots in city facilities; the law’s intent is to prevent a monopoly. The City is interested in investigating innovation and being able to offer a competitive rate.  A board member inquired who receives the policy agenda at the federal and state levels. Mr. Weinheimer stated a legislative breakfast event introduces legislators to the policy agenda.  A board member inquired if the City gets involved in writing legislation. Mr. Weinheimer stated it does sometimes. One example is legislation to re-introduce the black-footed ferret to public lands. The City mostly states its position and asks legislators to support or oppose bills. He drafts bills or works in a coalition to assist in passage of a bill.  A board member commented that the Policy Agenda is a good comprehensive list. He inquired whether citizens ask to include topics on the agenda. Mr. Weinheimer stated they do, and that requests are sent to City Council, specifically the Legislative Review Committee.  Steve Catanach mentioned cities in the last election – Boulder, Cherry Hills Village, Red Cliff, Wray, and Yuma – that passed resolutions bypassing SB 152. They join Centennial, Longmont and Montrose, cities that have already done this. A board member inquired how the City would bypass SB 152. Mr. Catanach stated it would go to an election since Fort Collins is a home-rule city; it needs the voters’ permission. Energy Policy Presentation to Climate Action Plan (CAP) Citizens Advisory Committee Environmental Services Director Lucinda Smith suggested the board presented the Energy Policy to one of the upcoming meetings, either November 20 or December 15, in the 215 N. Mason Community Room. She suggested 15 minutes to summarize the policy and its objectives, and explain how it fits into the CAP, and 15 minutes for discussion and questions, then determine next steps. Highlights from the discussion  A board member inquired whether the Board Member Moore who is also on the CAC should present the policy. After discussion, board members agreed that Chairperson Behm Energy Board Meeting Minutes November 13, 2014 3 or Vice Chairperson O’Neill would present the policy. Board Member Moore will be absent at next CAC meeting; Board Member Baumgarn will attend in her place.  A board member suggested comparing the Energy Policy to RMI’s Stepping Up report, and would like to know the CAC’s use of RMI report.  Ms. Smith stated the next step is for the board to bring the Energy Policy to City Council. Solar Rebate Program Energy Services Manager John Phelan gave an update on the small-scale Solar Rebate program. Staff met in mid-October with representatives from three companies and reviewed written comments from two other companies to gain feedback on rebate amounts. The discussion issue was the City has a fixed budget amount that renews every year and is unable to meet demand for rebates year-round. The rebate is offered in January or February and the money is fully allocated after two months. The energy company representatives supported lower rebates to allow the money to be stretched out over a larger number of projects. Staff must determine the rebate cost, which now stands at $1.50 per watt; it had been at $2.50 per watt). The rebate is generally 25% of total cost. Mr. Phelan stated that if staff follows the formula, the rebate will drop to $1.25; staff was surprised that the company representatives would support a rebate as low as $0.50. In the end, after internal discussion, staff determined it would be seen as too dramatic of a decrease, and might discourage someone who is thinking of installing solar panels on their home or business. The plan is to drop the rebate to $1.00 in 2015, and tell industry representatives that the rebate will decrease from $0.75 to $0.50 in 2017, to serve more customers, with the understanding that the price of solar could change dramatically. Highlights from the discussion  A board member inquired the reason for the decreased rebate if demand is increasing. Mr. Phelan stated the budget did increase for 2015 because city leaders want to meet customer demand; the increased money and decreased rebate will serve more customers. He mentioned the challenges of trying to act in a rapidly changing marketplace.  A board member inquired if solar energy simply being “on sale” would generate more interest.  Mr. Phelan mentioned the issue of offering a pay-for-production incentive approach versus a rebate. If the City goes that way, then it would need to determine whether you grandfather in residents who had already joined the system in a different way.  A board member inquired about the budget increase amount. Mr. Phelan stated it the budget was $250,000 per year for residential and commercial solar projects combined, and the increase was $125,000 for small-scale solar.  A board member inquired how quickly the City ran out of rebate money last year. Mr. Phelan stated the money was fully allocated in about two months. Energy Board Meeting Minutes November 13, 2014 4 Platte River Power Authority (PRPA) Update on Integrated Resource Plan (IRP) (Attachments available upon request) John Bleem of PRPA summarized the presentation he gave to the PRPA board a couple of weeks ago on the Platte River System IRP. Highlights included: System Level Portfolio Planning Guidelines, the Minimum Reserve Margin (15%), reliability and competitive rates, CO2 reduction and renewables (20% by 2020, 35% by 2030 (roughly what the EPA is asking Colorado to do), and 80% by 2050). Tax on CO2 emissions is forecasted to cost $11 to $76 per ton in 2050. Under the reference scenario, no new resources are needed from 2015-2030, but eventually, the coal plants will retire (Craig to retire in 2042; Rawhide to retire in 2046) due to normal end of life, so PRPA’s focus is on planning for the next 20 years from 2030 to 2050. Peak loads are expected to grow by approximately 450 megawatts (MW) through 2050. PRPA staff predicts the energy mix in 2050 will see natural gas replacing coal, and energy purchases and hydro power replacing wind energy and other renewables. Highlights from the discussion  A board member inquired why PRPA wouldn’t have wind energy in the future. Mr. Bleem stated that in the reference scenario, they’re not adding renewable energy, simply keeping what they have as of the end of 2014: 78 megawatts (MW) of wind, up from 18 MW. Long term wind contracts begin to expire in 2028.  Rate projections and resource planning is done in-house at PRPA now, and it uses consultants to help guide staff. The U.S. Environmental Protection Agency (EPA) final rule may be implemented in June 2015, but probably later that year.  The cost of diversification using recommended guidelines roughly equals CO2 costs, but it reduces CO2, so there is an inherent value beyond cost. Next steps include evaluate more aggressive CO2 reduction scenarios and establishing an intergovernmental agreement with the City in 2015 for the Climate Action Plan.  A board member inquired about the Rawhide and Craig power plants. Mr. Bleem stated PRPA owns 18% of two of the three Craig units. They purchase in advance and must sell the coal it doesn’t burn. The plant is completely paid off.  A board member inquired about whether they City would take credits for carbon reduction if it stops burning coal for the City and sells it to someone else. Mr. Bleem stated the Craig plant comes out of the resource mix; if PRPA sells or decommissions it, the plant is then off the books and no longer a resource after it’s sold. He mentioned somebody could buy the plant and burn the coal.  Mr. Bleem mentioned PRPA has been running wind for almost 20 years, but it usually makes up only 15% of energy production, and over nine years, it’s at zero production half the time. Solar provides more capacity and prices have come down a lot; PRPA can add solar at Rawhide and wouldn’t have to pay for transmission, as is the case for wind. PRPA recently issued a request for proposals for 30 MW of solar. Draft 2015 Work Plan (Attachments available upon request) Chairperson Behm shared a draft list of nine Work Plan objects and the corresponding City of Fort Collins Strategic Plan objectives. Highlights from the discussion  Board members discussed revisions to the draft Work Plan. Chairperson Behm will make the final revisions: strike the parenthetical references to specific Strategic Plan objectives,