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HomeMy WebLinkAboutEnergy Board - Minutes - 05/13/2021 ENERGY BOARD REGULAR MEETING May 13, 2021 – 5:30 pm Remote – Zoom Meeting ROLL CALL Board Members Present: Jeremy Giovando, Bill Becker, Alan Braslau, Marge Moore, Steve Tenbrink, Sue McFaddin, Dan Gould, John Fassler Board Members Absent: OTHERS PRESENT Staff Members Present: Adam Bromley, Christie Fredrickson, Cyril Vidergar, John Phelan, Brad Smith, Jamie Gaskill, Brian Tholl, Tim McCollough, Kraig Bader, Theresa Connor Platte River Power Authority: Trista Fugate, Paul Davis Members of the Public: Nick Michell MEETING CALLED TO ORDER Chairperson Becker called the meeting to order at 5:30 pm PUBLIC COMMENT Mr. Michell believes the Platte River Board of Director Appointment is within the Energy Board’s purview and that is appropriate for the Board to weigh in on this matter. He does not believe that the City Manager or any member from City Staff, should be sitting on the Platte River Board influencing policy—it is a conflict of interest. Mr. Michell speculated that this Board seat may have previously been an operational position, but as Platte River and the four member communities have evolved, so has their board and there are many policy decisions to be made. Mr. Michell said this is not a matter of personnel, but a question if anyone from City Staff be occupying this seat. APPROVAL OF MINUTES In preparation for the meeting, board members submitted amendments via email for the April 8, 2021 minutes. The minutes were approved as amended. ANNOUNCEMENTS & AGENDA CHANGES The Energy Board will continue to meet remotely, pursuant to Ordinance No. 79, 2020. STAFF REPORTS (attachments available upon request) APPA Smart Energy Provider Program Application (Packet Item Only) Every two years, the Utility applies for the Smart Energy Provider (SEP) designation. It is analogous to APPA’s (American Public Power Association) Reliable Public Power Program (RP3). The Smart Energy Provider Program is designed to recognize utilities leading the space in smart energy programs, from efficiency to conservation. The Utility was awarded the SEP designation two years ago, its inaugural year, ENERGY BOARD REGULAR MEETING and just submitted their application for the 2021 year. 2021 SEP designations will be awarded later this fall. Board member Tenbrink asked what the motivation is to receive the designation, outside of recognition. Mr. Phelan said the designation helps lead the way and grow the industry. He noted the Cities of Loveland, Longmont, and Colorado Springs also all joined after Fort Collins. The program is also great for sharing best practices from and with other nationwide utilities. Platte River Power Authority Black Hollow Solar Project Trista Fugate, Platte River Power Authority The Black Hollow Solar Project will be the first utility-scale facility capable of generating up to 250 megawatts (MW) in Weld County, Colorado. The Project will be located on private land near Black Hollow Reservoir, supporting and working alongside the region’s economic, farming, oil and gas, water and wildlife while advancing the state’s commitment to a low carbon future. Platte River is partnering with developer 174 Power Global (174PG) on this project for a Purchase Power Agreement of 150MW. The 150MW facility will be the largest solar field in Northern Colorado, with five times the capacity of Platte River’s largest solar project. Platte River’s 2020 Integrated Resource Plan (IRP) represents the evolution of the utility sector and the desires of its owner communities and customers, and directly supports its core pillars of system reliability, environmental responsibility, and financial sustainability. The Project was selected as part of a rigorous solicitation process; evaluated against bids from 22 companies. Ultimately, 174PG was awarded the contract with Platte River for the Project in 2020. Board member Tenbrink asked if this project is meant to replace the coal units at Craig Station, and if so, what will Platte River do if there is a lack of sunshine. Ms. Fugate confirmed this project will help replace the power supply from Platte River’s share in Craig Unit 1. The Black Hollow Project is set to come online in 2023, and Craig Unit 1 will come offline in 2025. Mr. Tenbrink also wondered if there is a battery planned in conjunction with this project. Ms. Fugate said no, not at this time. Chairperson Becker asked if the original RFP included any storage options? Mr. McCollough said no because the project was originally solicited at 50-150MW size. Mr. Becker also wondered if the cost per MWh public yet? Ms. Fugate said pricing information is not currently public. 2021 Energy Code Brad Smith, Energy Code Specialist Mr. Smith explained this discussion is an opportunity for the Energy Board to provide input on the amendments to the 2021 International Energy Conservation Code for the City’s 2021 code adoption, specifically related to electrification efforts. The feedback will be brought to the Code Review meeting in June. Board member McFaddin wondered if the idea is to encourage a move toward heat pump technology. Mr. Smith said ultimately yes, but it is unclear at this point if the industry is ready. Board member Braslau asked what else would be needed for a switch to heat pump technology other than electrical service (for example, installation space and plumbing). Mr. Smith said wiring for a new thermostat would be necessary as the current code language doesn’t support that. ENERGY BOARD REGULAR MEETING Chairperson Becker noted that these devices will be grid interactive with demand response programs and wondered if the code language supports connectivity provisions. Mr. Smith said staff is looking at that, there is consideration in code langue for that right now, but the concern is around product availability. Board member Giovando wondered how much of the code will impact renovations as opposed to new construction. Mr. Smith said that is a good point, there is a provision in code for additions; if there is an addition that is 30% or larger than the existing home, they will need to ensure the entire building is at least 3% more efficient than the building was prior to the addition. This provision will also require an air- tightness test and energy modeling. Mr. Smith said the discussion has been very helpful and encouraged the Board to submit any additional feedback to him via email ahead of the Code Review Committee. PLATTE RIVER BOARD OF DIRECTORS APPOINTMENTS Board member Braslau reminded the Board that Platte River Power Authority is a partnership between the four communities of Fort Collins, Loveland, Longmont, and Estes Park. Their Board of Directors consists of the four mayors (one from each community), and an additional representative traditionally held by the Utility directors from each community. The Mayor’s seat can be delegated, as currently demonstrated by Fort Collins’ newly elected mayor, Jeni Arndt, who would like Council Member Julie Pignataro to serve on her behalf. There was a proposal from City Staff to appoint the City Manager, Darin Atteberry, to the Platte River Board of Directors, while the recruitment for the Utilities Executive Director is ongoing. Mr. Braslau said it is critical to have a Board that pushes local utilities, as well as the distribution utility, to adopt both realistic and ambitious policies to help Platte River and the partnering communities achieve their respective climate goals. Mr. Vidergar said the Board’s role with this recommendation is not really within their purview; however, the Energy Board does have the authority to advise City Council and Staff in developing City policies that encourage the incorporation of energy conservation, efficiency, and community values. The City’s representation on Platte River’s Board furthers those initiatives, so the Board may be able to work under that assumption. He noted the Board should also consider another set of authority in the Organic Contract, which is the agreement through which the partner municipalities formed Platte River Power Authority. That agreement was recently updated and reaffirmed by all joining parties. The Organic Contract states the composition of the Board of Directors for Platte River; each municipality shall be represented by two members: The Mayor, and an appointed director, who may be identified by the municipality. They are to be selected based on their judgment, experience, and expertise which makes them particularly qualified. Mr. Vidergar said the Energy Board’s authority is likely within a very narrow band and the appointment of Mr. Atteberry does comply within the contract. Chairperson Becker wondered if it was okay to frame their opinion about the appointment in the context of the Energy Board’s charter. Mr. Vidergar advised if the Board would like to express an opinion, it would be best to relate them back to one or more of the seven authorities of the Energy Board outlined in City Code (Sec 2-106): 1. To advise the City Council and staff regarding the development and implementation of the City's energy policy. 2. To advise the City Council and staff in developing City policies that encourage the incorporation of energy conservation and efficiency, carbon emissions reduction and renewable energy into the development and provision of City utility services, the design and construction of City transportation projects, and the way in which the City impacts the overall built environment within the City. ENERGY BOARD REGULAR MEETING 3. To advise the City Council and staff regarding the alignment of energy programs and policies with City, ratepayer and community values and service delivery expectations. 4. To advise the City Council and staff regarding the recommendations for improvements to City energy systems. 5. To coordinate with other City boards and commissions regarding energy issues. 6. To advise the City Council and staff regarding budgetary, rate-making, and operational matters related to the electric utility. 7. To annually review and provide advice to City Council and staff on the City's Legislative Policy Agenda regarding energy and energy-related carbon issues. Board member Tenbrink wondered what type of person within the community (not a specific individual) would best support this role and the principles the Energy Board is driving toward? Board member McFaddin said a person experienced in energy policy, any community member with similar experience would better serve the Board of Directors so that they can influence policy, not operations. Board member Braslau said he doesn’t think it is a question of who or what, but rather is it a conflict of interest to appoint someone who oversees the setting and execution of policy. He noted that in both public and private sectors, boards do not have employees involved in setting policy. Ms. Connor said the City Manager will begin to actively recruit a new Utility Director starting in June. She noted that the City pays them $95 to $100 million per year, they are an extension of our system. The marriage of operation and policy is critical and unique to our municipal government, like the Poudre Fire Authority board, in which the City Manager also serves. Poudre Fire Authority (PFA) is an extension of the City’s services and having Mr. Atteberry serve on the board creates continuity and strengthens the relationship between PFA and the City. Ms. Connor also sits on the Boxelder Basin Regional Stormwater Authority Board along with an elected official. The lines are blurring, and the management of these relationships is nuanced. Board member Gould is sympathetic to the separation of policy and operation, but he is unsure how the selection would work to find someone who is experienced in energy policy who also knows the depth and detail of the City’s Our Climate Future plan. Board member McFaddin said she is aware of several community members, herself included, are willing to fill the role. Some Board members agreed that the Board of Director’s seat should be policy based, however nuanced the role and relationships might be. Some felt they hadn’t given this topic enough consideration ahead of tonight’s discussion, and some felt that a balance of both policy and operation would be beneficial. Board member Tenbrink said when he served on the utility board in his previous municipality, the Utility Director served on the Board as a non-voting member. Board member Braslau agreed it would be beneficial to have the directors be non-voting members, but that would require a change to the Organic Contract. Board member McFaddin said it would be great to offer that suggestion to Mayor Arndt and City Council. Board members Braslau and McFaddin said they would be glad to draft a memo on behalf of the Energy Board, with Chairperson Becker’s final approval, to communicate the Board’s concerns and summarizing their discussion from this evening. UTILITIES INCOME-QUALIFIED ASSISTANCE PROGRAM UPDATE & PROPOSED CHANGES Jamie Gaskill, Senior Supervisor, Community Engagement Brian Tholl, Senior Supervisor, Energy Services (attachments available upon request) ENERGY BOARD REGULAR MEETING The Utilities Affordability Portfolio of programs is structured in a way that helps customers reduce their utility burdens, or the percentage of their incomes spent on utilities. Utilities takes a three-pronged approach to serving income-qualified customers and helping to reduce their utility burdens: Payment Assistance (through reduced rates or emergency payment assistance), home efficiency (retrofit programs to make the home more efficient so it uses less energy and/or water), and efficiency practices (teaching customers behaviors to help reduce their use so they can save resources and money). Utilities’ Affordability Programs are structured to support the three-pronged model. Income-Qualified Assistance Program (IQAP), Medical Assistance Program (MAP), and Payment Assistance Fund (PAF) all support the Payment Assistance prong. Larimer County Conservation Corps (LCCC) Water and Energy Program and Colorado Affordable Residential Energy (CARE) both support the efficient home prong. The IQAP is an opt-in Program that offers a 23% discount on Utilities services. The statewide LEAP program acts as the City’s eligibility criteria, so when a customer is LEAP-qualified they are automatically eligible for IQAP. At this time, the customer is required to apply through an application process through the Utility to be enrolled in IQAP. This program was approved by City Council and launched in October 2018, in conjunction with the City’s new Time of Day rate structure. The IQAP rate will expire on July 31, 2021 if no action is taken. When the program was approved, the projected number of participants was 2,000 and the annual benefit to customers was estimated at $435,000. The actual participation and benefits in 2019-2020 were 717 customers, $141,000. From a revenue perspective, there is a per- customer savings of about $200. Interestingly, program participants are using about 5% more energy than they were prior to receiving the discount. The increased energy use is consistent with changing a thermostat setting 2-3 degrees or running an additional load of laundry each week. Ms. Gaskill said staff is looking for feedback on two issues related to IQAP with City Council: Should the IQAP rate pilot be extended for another 3 years (a total of five years), aligning with Utilities annual rate ordinance, and should IQAP be an auto-enroll/opt-out program, as opposed to an application-based/opt- in program? Staff had a lot of engagement in the first two years of the IQAP pilot, but COVID impacted their ability to analyze the effects of the programs. Staff hopes Council will consider an extension so that Utilities will be able to seek to enroll more customers and utilize the findings from the program to tailor engagement and behavior-change education. Currently IQAP is an application-based program where LEAP-enrolled Fort Collins Utilities Customers are sent an invitation to apply for the program on an annual basis. This method has resulted in Utilities enrolling approximately 50% of possible program participants. If the program is switched to auto-enrolling it will help remove barriers to entry for low-income customers. It would also reduce the amount of staff time spent enrolling customers, which may allow Utilities to spend more time engaging with customers and increase their reach. Additionally, more program participants will increase the accuracy of evaluation for the program, because while the data for prior evaluations was statistically significant, a bigger sample size will strengthen the validity of the data. Staff is proposing starting the auto-enroll approach with the 2021-2022 season, which will begin October 1, 2021, to align with LEAP program year. Staff is projecting that the auto-enroll approach would result in just under 1,400 program participants, bringing the program much closer to its planned participation of 2,000 customers. Board member Tenbrink said he supports the auto-enroll option and hopes it will be approved by Council. Board member Braslau agreed, he said he was surprised the program didn’t launch with an auto- enrollment option. He added that even with auto-enroll, the program’s reach falls short of the estimated ENERGY BOARD REGULAR MEETING 8,000 people who need help and are excluded by LEAP for one reason or another. Ms. Gaskill noted that the 8,000 people are estimated under the Utilities Affordability Programs Portfolio as a whole, and many of the programs within the portfolio have different income qualifications. Chairperson Becker noted that the dead-period outside of the LEAP enrollment period is still a problem since that is the only way to qualify for the program. He wondered if someone falls into a bad situation, like if they lost their job, what short term options are available to help fill the gap. Ms. Gaskill said the PAF can help for situations like that, it is a one-time assistance option with an income-qualification of 80% of the area median income. Board member Braslau said the increased energy use from customers participating in IQAP is to be expected, many were likely underheating or underutilizing their utility services to save money and are likely now just meeting their needs at a regular standard of comfort. He cautioned to make sure to not shame customers for not conserving when they are simply meeting a need that was previously stymied. Board member Braslau moved the Energy Board recommends City Council support the extension of the IQAP rate pilot an additional three years and aligning it with the Utilities’ fall rate ordinance. Board member Moore seconded the motion. Discussion: No additional discussion. Vote on the motion: It passed unanimously 8-0 Board member Tenbrink moved the Energy Board recommends City Council support changing IQAP from an application-based/opt-in program to an auto-enroll/opt-out program. Board member Giovando seconded the motion. Discussion: No additional discussion. Vote on the motion: It passed unanimously 8-0 PRELIMINARY 2022 BUDGET PLANNING Adam Bromley, Director, Operations & Technology, Utilities Light & Power (attachments available upon request) Mr. Bromley explained how the budget process evolved in the face of the COVID-19 pandemic. Typically, the City plans a two-year budget, and that process occurs every two years (ex: plan the 2019-2020 budget in 2018). The Budgeting for Outcomes (BFO) process alternates with updates to the ten-year Capital Improvement Plan (CIP). The CIP helps to inform the budget offers staff will right for the next BFO process. The pandemic disrupted this process and condensed both BFO and CIP work into a single year; in 2020 staff created a one-year budget for 2021, and then in 2021 staff worked to update the CIP for 2023-2032 while concurrently working on another one-year budget for 2022. Staff submitted their first round of draft offers on April 26, and then City BFO teams worked to review those offers and ask clarifying questions between April 29 and May 26. Offer narratives were published on May 10, and staff has begun community outreach, which will last through mid-summer. Staff will submit a second round of offers with the BFO teams’ and community’s input between May 27 and June 4, ENERGY BOARD REGULAR MEETING and then the BFO teams will begin ranking those offers in June. The City’s Budget Lead Team (BLT) will deliberate the offers throughout late summer, and the City Manager’s Recommended Budget will be published by September 1. Board members and members of the public can submit feedback on the budget offers to staff directly, or online through the Our City website. Chairperson Becker said he would be interested in specifically discussing the offers that support the Energy Board’s goals and charter. Board member Tenbrink agreed, it would be good to see what offers the Board can influence. Mr. Bromley said the Board may be interested in the offer for the Attrition-Based LED Streetlight Conversion Program. This program has been in the works for several years; L&P staff convert high pressure sodium and mercury vapor streetlights to more energy efficient LED fixtures. The Board may also be interested in the offer for Distribution Automation, which will fund the addition of two automated switches in the electric distribution system per year, allowing remote communication. Mr. Phelan noted the pandemic did not allow for much extra room in this budget cycle, but he is still excited and happy with the package the Energy Services team has put together. Though the Energy Services budget has gone down slightly, Platte River’s Energy Services budget has increased slightly, which allowed the Utility to put a little more money into their Demand Response programs and resources. Mr. Phelan said the Board might be interested in learning more about the offer for Renewable Customer Programs, which sustains and expands funding for community renewable programs in support of Fort Collins’ energy and climate goals and customer choice for self-generation, including residential and nonresidential solar rebates and battery systems. Mr. Phelan noted that the 2022 Budget includes a new offer type called Restore, which is meant for programs and offers that were reduced or eliminated because of the pandemic. Energy Services has a Restore offer to reestablish funding for community wide energy services programs that were reduced in 2020 and 2021, including resources that deliver annual efficiency and conservation results, such as consultant services for onsite business efficiency as well as customer incentives. Chairperson Becker wondered if there were any programs or funding that the Energy Services team was unable to budget for throughout this process. Mr. Phelan said not really, there are some next-level pieces to work on in the demand flexibility space (for example, working with Itron on communications protocols), but staff is not quite ready for that in 2022. He reiterated that he is satisfied with what they were able to put forth in the first round of offers. Mr. McCollough added that there is not enough funding for the entire list of Offers Mr. Bromley has presented to the Board without dipping into reserves. Staff feels good about bringing forward a budget that will maintain the Utility’s service levels, but it won’t be possible to accomplish everything that has been brought forward without dipping into reserves or making a change to rates. These budget offers represent about $2.5 million above and beyond projected revenues. Board member McFaddin noted that Council had a priority to focus on Community Solar and wondered if there were any specific offers to support that. Mr. Phelan said no specific offers, but staff continues to look at possible scenarios to be apart of larger projects in the future. Mr. McCollough said this budget also includes development-related offers to meet anticipated growth within the Utility’s distribution territory. There are some voluntary annexations on the East Mulberry corridor, to include about 1.5 square miles of new development coming near Mulberry and Timberline. L&P anticipates needing two new feeder circuits to serve infill density in this area. He said they are also anticipating the need to bring a circuit from the Timberline Substation to Vine and Timberline to support four new developments that are currently adding pressure to the existing feeders in that area. These are ENERGY BOARD REGULAR MEETING funded by the developers through public improvement and electric capacity fees, but it’s often necessary to build ahead of when the revenues are available. Chairperson Becker wondered if that situation would be a practical time to dip into reserves, knowing those funds will be paid back. Mr. McCollough said yes, that is one of many strategies being considered. Board member Gould said he was glad to see language in the budget for alternative energy vehicles as there is a need to turn older vehicles over. Mr. McCollough agreed and said staff is very excited about battery electric vehicles as well. Currently the primary strategy is to focus on Compressed Natural Gas vehicles because it is commercially available and there is already fueling infrastructure, but they have had some negative early experiences with battery hybrid heavy chassis, so they are looking to the future of improved technologies. BOARD MEMBER REPORTS Board member Tenbrink chatted with someone who was selling solar door to door in his neighborhood, insinuating that their sales program is part of or associated with the City. Mr. Phelan said the City is unable to regulate the door-to-door sales tactics, but they do have a preferred network of vendors who can extend rebates to City of Fort Collins Utilities customers. Board member McFaddin wondered if Platte River would be willing to come discuss the Windy Gap Water Project. Board member Braslau said his daughter was able to recently sign up for Connexion service, and her installation and technical support experience was very positive. FUTURE AGENDA REVIEW June will have a packet item for the quarterly financial report, as well as an Executive Director update from Ms. Connor. Platte River will be presenting an update to their Wholesale Rates. Chairperson Becker asked to increase the urgency of addressing an agenda item about the streamlining the permitting process for rooftop solar to make it more affordable in the City. He noted that Denver and other communities have much simpler processes. Board member McFaddin would also like that presentation to include information about battery storage permitting. The Board wondered if Community Solar would be a good topic for their June work session meeting. Mr. Phelan said he’s not sure his staff can support that topic in June and wondered if that discussion could be moved to later this fall. The Board considered cancelling their June work session due to a lack of discussion items. ADJOURNMENT The Energy Board adjourned at 8:22 pm.