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HomeMy WebLinkAboutEnergy Board - Minutes - 06/23/20161 Energy Board Minutes June 23, 2016 Fort Collins Utilities Special Session Energy Board Minutes Thursday, June 23, 2016 Energy Board Chairperson City Council Liaison Pete O’Neill, 970-288-4562 Ross Cunniff, 970-420-7398 Energy Board Vice Chairperson Staff Liaison Nick Michell, 970-215-9235 Tim McCollough, 970-305-1069 Roll Call Board Present: Vice Chairperson Nick Michell, Board Members Stacey Baumgarn, Greg Behm, Alan Braslau, and Margaret Moore. Staff Present: Lisa Rosintoski (substituting for Tim McCollough), Lindsay Ex, and John Phelan PRPA: Paul Davis Members of the Public: Dale Gustafson Mark Houdashelt, Chair, Air Quality Advisory Board Meeting Convened Vice Chairperson Nick Michell called the meeting to order at 5:30 p.m. Announcements and Agenda Changes June 2 meeting minute approval has been moved to the July 7 meeting. All three open Energy Board member positons have been filled by Lori Nitzel, Mohit Chhabra, and Alan Braslau. Welcome new Energy Board Member Alan Braslau. Mr. Braslau is a physicist who moved to Fort Collins after spending 28 years in Paris, France. He attended CityWorks 101 eight-week program and is excited about contributing to the Energy Board. The Agenda order was changed while waiting for a fifth (5 th ) board member to be present before voting on any action items. Lindsay Ex and John Phelan will present Climate Action Plan (CAP) Deep Dive into the Initiatives, the Model, and the Associated Investments and Savings prior to Off-cycle CAP Appropriation Ordinance #2 (Climate Action Plan) – Discussion/ Decision. DocuSign Envelope ID: 79E6055B-6B38-4E5E-A828-FEDEB2029425 2 Energy Board Minutes June 23, 2016 Public Comment None Climate Action Plan (CAP) Deep Dive into the Initiatives, the Model, and the Associated Investments and Savings Lindsay Ex, Environmental Program Manager and John Phelan, Resource Conservation Manager What is it? Ms. Ex stated that the “model” was basically a spreadsheet that does calculations for data analysis by various teams and team members. For example, Transportation + Energy Usage = Model to Measure The goal for the City is to be carbon neutral by 2050. This model will provide the means to consistently measure usage and provide documentation going forward. The results will show both cost to the community and cost to the City. What does it need to do? Mr. Phelan stated that the model needed to do the following:  Track historical inventory  Forecast future inventory  Calculate reduction  Calculate benefits and costs  Compare transportation and land use  Incorporate interactions between all initiatives Mr. Phelan also stated that this model was being designed to be used from this time forward. CAP models have been done in the past – 1999, 2008 and the Stepping Up Report – however, each one had a different format and end goals. Mr. Baumgarn asked, “Is this tool being used to report progress on all initiatives at this time?” Mr. Phelan responded, “Not yet. We are working towards that goal; however, the current tool and work are dictated by immediate needs.” Ms. Ex stated that the City was working on a CAP Dashboard. Mr. Braslau said, “As a physicist, feedback is needed for the model to prove theories and establish forecasts and compare to what is actually achieved.” Ms. Ex acknowledged Mr. Braslau’s input and took note to discuss this with Team Members. DocuSign Envelope ID: 79E6055B-6B38-4E5E-A828-FEDEB2029425 3 Energy Board Minutes June 23, 2016 What should the model do? Mr. Phelan presented a slide outlining “Core Variables” and “Initiative Specific Variables” that are identified and developed by individual Teams. Mr. Phelan stated that one of the main goals of this model is to have “transparent calculations”. They should be sequential in line and anyone who can read a spreadsheet should be able to understand the report and ask questions. Parameters of measurement should also be easily changed (from a drop down menu) – e.g. 2016-2020, change discount rate, etc. How it Works Mr. Phelan said that the model used in March was a single file. There were 11 Initiative Teams working on this model. The challenge has been “how to design architecture to serve all Teams without getting bogged down in unnecessary data”. He said that they were currently working towards that end. How Key Variables Work Mr. Phelan stated that the benefit-cost tests being used are ones that have been used in the utility space for a long time. Most commonly used benefit cost tests are:  Total Resource Test – What’s the marginal cost despite who pays for it? This test is incentive neutral.  Societal Discount Cost Test – this is the same as Total Resource Test (TRC) with various discount rates applied.  Program Administrator Test – this test incorporates what rebates or discounts the administrator of the program (in this case, the City) would apply. Mr. Phelan believes that all three (3) should be used together for richer results. The Results Ms. Ex stated the following:  There is value in looking at all 30 initiatives together.  Looked at a model from Minnesota for guidance.  500 metric tons of carbon needs to be reduced in Fort Collins by 2020.  It doesn’t seem like the community is ready to adopt all initiatives at this time; so Council is being presented with alternate solutions.  As a community, we know that it is more than reducing greenhouse emissions. Otherwise, we’d be focusing on that. Ms. Ex presented options to fund 30 current initiatives: 1. Voluntary 2. Incentive 3. Mandatory Ms. Moore asked, “What have you found in funding – in the private/ public space?” DocuSign Envelope ID: 79E6055B-6B38-4E5E-A828-FEDEB2029425 4 Energy Board Minutes June 23, 2016 Ms. Ex replied, “Until March, we were just building the model. We are currently meeting with financial advisors and analysts for options to be vetted.” Mr. Phelan responded that this model doesn’t tell us “how” to implement initiatives. How you get to resource is “next”. Right now, this model shows us that “this can be achieved”. “How” we get there are the next steps. Ms. Ex stated that resources were gone for 2016 because so many businesses have taken advantage of utilizing the incentives. (This was presented to the Energy Board at the last meeting, 6/2/16.) Mr. Mitchell asked, “Who pays for it? Who benefits? For example, if only homeowners pay for it, there will be a whole class of people left out. Is there a “Fairness Model”? Mr. Phelan responded, “Rate classes can be examined to see if we are serving different groups. We would ignore the rest of our customers if we just went to the “big dogs” for funding. Ms. Ex stated that affordable housing was one of our community’s biggest issues. However, the issue is not just “affordable”, but also “comfortable”. All concerned parties are currently at the table – housing, social, environmental, etc. Road Map Ms. Ex said users of solar panels reap savings benefits for 20-25 years. Currently, the cost of solar is $37.00/ ton as reported by the EPA. In the draft of the Road Map, 26 of 30 initiatives are voluntary. Mr. Braslau asked, “What the cost of the ‘Do Nothing Pathway’?” Neither Ms. Ex nor Mr. Phelan had a direct response to Mr. Braslau’s inquiry. Mr. Michell said that “he gets a sense of how all this works – but not quite understanding”. He gave an example of the purchase of an LED light bulb for $6. City pays $2 and consumer pays $4? Or is there something else? How is the City modeling? Mr. Phelan responded with the following:  Consumer would save $0.09/ kWh.  City would save $0.05/ kWh by not buying inventory from PRPA.  PRPA would save $0.03/ kWh by not buying inventory from their source. Mr. Phelan also said the efficiency programs will not pass the rate payer impact test. Mr. Baumgarn asked for clarity around the LED light bulb example. DocuSign Envelope ID: 79E6055B-6B38-4E5E-A828-FEDEB2029425 5 Energy Board Minutes June 23, 2016 Mr. Phelan responded that it will still cost the City $2.00. Mr. Baumgarn asked, “Are these costs all completely new costs?” Ms. Ex responded that this is a core offer. The City has always offered this. And, she went on to explain the “Accelerated Model", stating that the City has been invited to apply for a $50,000 City Energy Project Grant. This grant would enable the hiring of a City Energy Advisor to help get to the 2050 goal. Mr. Phelan then responded to Mr. Baumgarn’s question by saying, “Are all of these costs ‘new’ costs? The answer is no.” Ms. Ex stated that Fort Collins was being approached by many private entities offering to assist with funding. She said at a recent meeting with City Manager, Darin Atteberry, he said that the Climate Action Plan (CAP) was a $10 problem. The City has $2 to invest; so private industry will help fund ultimate costs. Mark Houdashelt (public visitor) asked if the chart shows gross costs. Both Ms. Ex and Mr. Phelan responded to Mr. Houdashelt that the chart does show gross costs. Mr. Michell requested that Mr. Phelan presented the spreadsheet and walked the Energy Board through it. Mr. Behm questioned the logics of the Roadmap chart to 2020 column. He suggested that the last column figures be through 2050. Ms. Ex thanked Mr. Behm for communicating that message up front, and Mr. Phelan fixed chart during the meeting. Mr. Behm then added that the 2050 Cost Effectiveness might be a stand-alone column, next to the 2020 column. Mark Houdashelt questioned how the impact of postponement of programs (e.g. Community Recycling Program) will impact other initiatives. Ms. Ex responded to Mr. Houdashelt saying that other initiatives would be impacted and are being factored in. Mr. Phelan then presented the CAP Charter Lite EE Enhancement Revised 6-20-16 spreadsheet. This spreadsheet is still being developed. Everyone is currently agreeing on the format. However, it is designed to be a one (1) page narrative to explain the project in tandem with the “numbers” charts. Mr. Michell asked if CO2 reduction is in concert with Platt River Power Authority’s goals. DocuSign Envelope ID: 79E6055B-6B38-4E5E-A828-FEDEB2029425 6 Energy Board Minutes June 23, 2016 Mr. Phelan said that the goals of L&P are in concert with PRPA goals and showed reduction forecast costs on the chart he was presenting. Ms. Phelan added that the model was real time and will change any time any of the 31 initiatives change. The intent of this tool is to assist in the BFO (Budgeting for Outcomes) process. Ms. Moore asked if the model came from RNI or Brindle Group. Mr. Phelan responded that this current model is a combination of both Brindle Group and RNI models. Ms. Moore asked for more information about the City Energy Project. Ms. Ex explained that the City Energy Project picked 10 Cities to apply for grants. Fort Collins was invited to apply even though we fall below the population requirement. However, the City Energy Project felt that Fort Collins would be a good example of a mid-size city. Ms. Moore said that she had advocated for Fort Collins with people she knows and works with at the City Energy Project. Ms. Ex said that the City had been invited to a convening in California of how energy will be funded with private and public sector monies. (Attachments available upon request) Off-cycle CAP Appropriation Ordinance #2 (Climate Action Plan) Lindsay Ex, Environmental Program Manager and John Phelan, Resource Conservation Manager Ms. Ex stated that Council approved four of seven CAP related initiatives in April. She stated that the three additional initiatives would be discussed during this meeting. The 3 initiatives up for discussion and approval or recommendations are: 1. Energy Efficiency – fully committed 2016 funds already used (PRPA & City)  $1.46 million is needed to fund the remainder of 2016.  Council action voted to fully fund the rest of 2016 through General Fund dollars. 2. Solar Initiatives and Rebates – no new appropriation needed.  Almost funded on solar rebates from Solar Power Purchase and Community Solar Program.  Rooftop solar is being proposed to businesses and community. 3. Municipal Green Waste (Composting) Site - $85,000 one-time funding request  It restores former City Operation.  It saves the City money because compost can be used for future fertilizer (instead of purchasing fertilizer as it is currently). DocuSign Envelope ID: 79E6055B-6B38-4E5E-A828-FEDEB2029425 7 Energy Board Minutes June 23, 2016  State regulation stopped composting, but has now made an exception for municipalities. Summary of 3 Initiatives: Energy Efficiency $1,460,000 General Fund Solar Initiatives No new appropriation needed in 2016 Municipal Green Waste (Compost) Site $ 85,000 (Waste Innovation Fund Reserves*) Total Request _________ $1,545,000 *Current balance of Waste Innovation Fund $180,000 The second reading for these initiatives is July 5, 2016. SAVE THE DATE: August 24, 2016, 6-8 p.m. at The Lincoln Center Mayor Wade Troxell and City Manager, Darin Atteberry will be sharing the stage with former governor Bill Ritter to discuss his new book titled “Powering Forward: What Every American Should Know about the Energy Revolution.” Ms. Ex tasked the Energy Board to give input on the three remaining initiatives. Specifically saying: Do you think Council should move forward with the three initiatives and fund the gap? If so, how should it be funded? (Attachments available upon request) Discussion/Decision Ms. Ex stated that there is $6.7 million available in the General Fund. Mr. Behm asked, “If we do take the money out of the General Fund, is it because taking money from L&P would not be prudent?” Both Mr. Michell and Mr. Phelan responded, “Yes.” Mr. Baumgarn asked, “If Council funds Efficiency out of the General Fund – is there a precedent or is this the first time?” Mr. Phelan responded that “this would be the first time General Funds would be used for Energy Efficiency. We have co-funded other initiatives in the past.” After lengthy discussion and clarification of Energy Efficiency proposal, the following motion was posed: Board Member Behm moved that the Energy Board recommends approval on the second reading of the three (3) CAP initiatives, Energy Efficiency, Solar Initiatives, and Municipal DocuSign Envelope ID: 79E6055B-6B38-4E5E-A828-FEDEB2029425 8 Energy Board Minutes June 23, 2016 Green Waste (Compost Site) as approved by City Council on the first reading, June 21, 2016. Board Member Moore seconded the motion. Vote on the Motion: It passed unanimously, 5-0. Mr. Michell will also write a memo to accompany the Motion before it goes back to Council on July 5, 2016. Board Member Reports None New Business None Future Agenda Review  Demand Response (Peak Partners) Update (Discussion)  Time of Use (TOU) Pilot Update (Discussion)  Dark Sky Initiative: Scope, Tasks, Timelines Adjournment The meeting adjourned at 7:50 p.m. Submitted by Tamara O’Dell, Temporary Administrative Clerk, Fort Collins Utilities Approved by the Board on July 7, 2016. ________________________________ ______________ Angel Anderson for Tamara O’Dell Date DocuSign Envelope ID: 79E6055B-6B38-4E5E-A828-FEDEB2029425 7/8/2016