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HomeMy WebLinkAboutEnergy Board - Minutes - 09/09/2021 ENERGY BOARD REGULAR MEETING September 9, 2021 – 5:30 pm 222 Laporte Ave. – Colorado Room ROLL CALL Board Members Present: Jeremy Giovando (remote), Alan Braslau (remote), Steve Tenbrink, Dan Gould, Bill Becker Board Members Absent: Marge Moore, John Fassler, Sue McFaddin OTHERS PRESENT Staff Members Present: Christie Fredrickson, John Phelan, Cyril Vidergar (remote), Tim McCollough, Brad Smith (remote), Randy Reuscher, Lance Smith (remote) Members of the Public: Rich Stave (remote) MEETING CALLED TO ORDER Chairperson Becker called the meeting to order at 5:30 pm PUBLIC COMMENT None APPROVAL OF MINUTES In preparation for the meeting, board members submitted amendments via email for the August 12, 2021, minutes. The minutes were approved as amended. ANNOUNCEMENTS & AGENDA CHANGES None STAFF REPORTS (attachments available upon request) Energy Board Vacancy Update Tim McCollough, Deputy Director, Utilities Light & Power Mr. McCollough said staff received a communication from the Clerk’s Office regarding the current vacancy on the Energy Board. Due to many influencing factors the three applications received for the Energy Board will be moved to the Fall Annual Recruitment interview cycle. The Fall recruitment cycle begins September 13, 2021, and closes on October 10, 2021, with interviews to take place shortly after closing. It is anticipated that the one vacancy on the Energy Board will be filled, as well as the four seats coming up for reappointment at the end of December 2021. ENERGY CODE ADOPTION UPDATE Brad Smith, Plans Examiner ENERGY BOARD REGULAR MEETING (attachments available upon request) The 2021 Joint Code Review Committee is composed of 15 members: two architects, seven builder representatives, one engineer, two energy consultants, one mechanical contractor, one City of Wellington fire official, one Larimer County Chief Building Official, and four City of Fort Collins staff members (one City of Fort Collins Deputy Fire Official, two City of Fort Collins Building Services staff (-1 Chief Building Official, and one Utilities Energy Services staff member). Significant changes to commercial and residential codes include an added Clarification for electric building and mixed fuel building; a definition for electric heat as a ground-source electric heat pump or a cold climate heat pump; additional efficiency package options by code path for residential and required additional points (10) for commercial as designated in a table by climate zone and occupancy. Commercial-only updates include the addition of several Operations & Maintenance, mechanical provisions and commissioning requirements, additional occupant sensor provisions for space type, interior and exterior lighting improvements (lighting power density improved). There were also updates to electric vehicle charging, which is defined as EV installed, EV Ready, and EV Capable. New Buildings will need 5% EV installed, 20% EV ready, and 25% EV capable. R1 or R2 Building, such as multifamily buildings, will need 5% EV installed, 15% EV ready, and 85% EV capable. Additionally, the Appendix CB Solar Ready Zone-Commercial is planned to be adopted in its entirety. Board member Braslau asked what EV capable entails. Mr. Smith said there needs to be conduit and a junction box at a parking space. EV Ready means there is a live circuit, and EV Installed means the charging station is present and functioning. Residential-only changes include a requirement that all ducts be tested regardless of whether ducts are entirely within a conditioned space or not (Fort Collins will likely stick with four CFM per 100 square feet of floor area served by duct system). There are also new provisions for lighting equipment: all permanently installed lighting fixtures shall be high efficiency, exterior lighting for R2, R3 and R4 buildings are required to meet lighting provisions in C405.4, and interior lighting controls should be controlled with dimmers, occupant sensors or other controls. There are also new provisions for space heating, water heating, cooking, and clothes drying. These updates reflect a 14% jump in efficiency, as opposed to the 2% increases in previous two code cycles. The building community and Code Review Committee do have some reservations about the updates, and they have asked staff to provide cost increase to construction, as well as an ROI and a simple payback. Based on these findings, the Code Review Committee could decide to not recommend an update to the 2021 body of code. Mr. Smith said regardless of what the Code Review’s recommendation is (or is not), staff will likely bring their recommendations to the November 9 City Council work session. Board member Tenbrink asked when the 2021 codes would be effective. Mr. Smith said staff hopes they would be in place in early 2022. Board member Braslau wondered if a future committee could include a member who doesn’t have a professional vested interest in codes (ex. not a builder, architect, etc.), but could express community interests. Mr. Smith hopes that will be something that can happen in the future. Board member Giovando asked if the Committee’s concerns are related only to the City of Fort Collins additions or to all of 2021 code updates. Mr. Smith said the committee had concerns around the energy ENERGY BOARD REGULAR MEETING code specifically, but their requested ROI and payback are for every item in this code cycle. 2022 RATES & FEES Randy Reuscher, Lead Analyst, Utility Rates (attachments available upon request) In years past there have been several rate changes, but the changes for 2022 are quite minimal. Proposed changes for 2022 include a 2% increase in monthly electric charges, a 3.5% increase in electric capacity fees (ECFs), and a code language change to allow choice for all-electric Time of Day (TOD) customers. Staff is not proposing any changes to water, wastewater, or stormwater monthly utility rates. The 2% increase for electric does not include a distribution increase, it is entirely related to a proposed wholesale increase from Platte River Power Authority. PRPA is proposing an overall 3.2% increase and Fort Collins is expected to realize a lower impact with a 2.8% increase (which is less than the other owner communities because of our load profile). Mr. Reuscher explained that the average electric bill currently runs at $78.14 per month, and the 2% increase will increase the average bill by $1.56 per month. He also noted that Fort Collins remains one of the lowest-cost Utilities in the state. The 3.5% ECF increase applies to both residential and commercial developments, the cost per kW charge increases from $177.17/kW to $183.37/kW. These charges are allocated based on estimated demands from any particular development. Board member Braslau wondered if there is a need to consider a policy change as the City moves toward encouraging electrification. Mr. Phelan said yes, there will need to be alignment in the future between changing definitions in the building code with the capacity we are installing and forecasted usage. Chairperson Becker wondered if ECF fees apply to remodeling projects. Mr. Reuscher confirmed the fees would be assessed if the customer is upgrading their electric panel, but they would typically be offered a credit based on what they currently have and what they are moving toward. The third proposed change would modify code for all-electric TOD customers, allowing them a choice between the two available TOD structures. This change primarily benefits all-electric customers in smaller dwelling units (low consumptions) who might pay less under the standard TOD rate. The change would be effective January 1, 2022, averaging about $2 per month difference on average. Board member Braslau said it would be less confusing to have a single TOD rate but for all-electric customers having an energy tier that kicks in at a higher threshold, for example 1,000 kWh (or whatever the threshold should be). Mr. Reuscher said staff is happy to do a rate comparison with any inquiring customer. Board member Tenbrink wondered why the City of Longmont’s rates are less expensive than City of Fort Collins. Mr. Reuscher said there are many things affecting their rate; they are currently going through an Advanced Metering Infrastructure deployment (which Fort Collins completed several years ago) and Longmont is also not at 100% underground infrastructure yet. Board member Becker said the objective shouldn’t been the lowest rates, but rather the greenest, and equity issues should be dealt with separately. Mr. Phelan said we have a robust set of energy services, extraordinary reliability, and very affordable rates, which is an amazing combination. The Utility’s level of service at the cost structure the Utility offers is excellent. ENERGY BOARD REGULAR MEETING Board member Braslau moved the Energy Board support the proposed changes to 2022 electric utility rates and fees. Board member Tenbrink seconded the motion. Discussion: Mr. McCollough added these rates and fees presented here are also supportive of the City Manager’s recommended budget. Vote on the motion: It passed unanimously, 5 to 0, with three absent. LIGHT & POWER UTILITY OVERVIEW Tim McCollough, Deputy Director, Utilities Light & Power John Phelan, Energy Services Senior Manager Theresa Connor, Interim Utilities Executive Director Lance Smith, Director, Financial Planning & Assets (attachments available upon request) The Electric Utility is aligned through the Economic Health, Environmental Health, and the High Performing Government outcome areas within the City’s Strategic Plan. In the fall of 2019, the Energy Policy was absorbed into the planning efforts of what is now known as Our Climate Future. The plan includes equitable solutions to reducing greenhouse gas emissions, improving renewable electricity, and increasing our efforts on energy efficiency. Light and Power’s community goals are to reduce 2030 greenhouse gas emissions by 80% below 2005 baseline levels, provide 100% renewable electricity by 2030 with grid and local sources, as well as additional targets for local renewables, electricity and natural gas efficiency, grid flexibility, electric reliability, and energy codes. Light and Power serves more than 74,500 homes and businesses 365/24/7. Each year, staff responds to 140,000 calls and sees more than 1 million visits to the Utilities webpage. Light & Power reaches 12,000 people on social media and engages with over 23,000 participants with over 370 programs per year. Residential customers are a combination of single-family homes and a high rental community, including several multifamily properties. Commercial and industrial customers make up two-thirds of the Utility’s energy demand. Commercial customers encompass property managers, restaurants, hotel/motel, office, retail, downtown and new businesses. The Utility’s largest customers, including industrial, consist of healthcare, education, government, malls, breweries, manufacturing, and technology companies. Customer feedback informs the work the Utility does, and beginning in 2020, Utilities contracted with J.D. Power, a global independent market research company, to conduct residential electric and water customer satisfaction surveys. The survey was sent out to approximately 45,000 residential customers, and over 1800 responses were received (a 4.1% return rate) There were several themes throughout the JD Power survey results that are worth mentioning. Light & Power customers recognize that the Utility provides reliable service (including the aesthetic benefits of underground lines), care for the environment with a robust portfolio of programs, and world class customer service that includes very knowledgeable staff. It is important to note that JD Power acknowledges that Fort Collins Utilities has one of the lowest average bills when compared to utilities of similar size in the west. The average west midsize utility bill is $125 and the Fort Collins’ average bill per ENERGY BOARD REGULAR MEETING JD Power’s evaluation is $91. In JD Power’s survey, there were three themes that emerged that the Utility could improve on: Some comments received were around understanding why there are time of day rates in place, as well as understanding rates in general—what does electricity cost and what does the revenue go toward, as well as understanding any anticipated pricing changes in the future. Customers would also like to receive more communication on outages by text message, conservation tips, rebates, and how to avoid utility scams. Customers want to do more on their own as well, they would like to be able to compare their usage from previous years, spread out billing evenly throughout the year so there is less emphasis on seasonal impacts, and compare solar rates to time of day rates if they choose to get solar panels. Fort Collins Utilities is a customer-focused organization and in general, customers are more empowered than ever before. Staff is excited to explore ways to transform this feedback into growth for our organization. The Utility’s power starts with Platte River Power Authority, the Utility’s generation and transmission entity. Platte River has multiple sources of generation, including hydro, solar, natural gas, coal, and wind. Platte River is an all-requirements provider, meaning they do all functions of generation and transmission for the Utility. The City is an owner of Platte River, with a 47% ownership share (partnered with the Cities of Loveland, Longmont, and Estes Park). The transmission system is the visible part of the infrastructure, with high-voltage overhead transmission towers. These are overhead primarily due to cost and reliability. Fort Collins has a history of innovation and adaptation; 50 years ago, much of the Utility’s infrastructure was overhead and visible (both power lines and substations). Through years of adaptation and commitment, the Utility has been able to make significant advances to the infrastructure. Today the Utility’s infrastructure is 99.8% underground, which is more secure, safe, aesthetically pleasing, and adaptable for future innovations. The Utility’s current distribution system is composed of seven substations, 2,000 miles of cable, 8,600 transformers (including 385 Art in Public Places Transformer Installations), 12,000 streetlights (40% Light Emitting Diode/LED Lights), with an all-time system peak load of 318.6 MW (in July 2021). The system is valued at over $300 million, and the Utility uses a data-based approach to maintain the Utility’s assets. Information is collected from infrastructure age, environmental conditions, failure data, and use a risk- based assessment to see where to focus investments to maintain a high level of reliability. Fort Collins Utilities’ reliability is largely unmatched in the North American markets because of investments in and maintenance of the underground infrastructure. Fort Collins Utility is an American Public Power (APPA) Award Diamond award winner for high proficiency in reliability, safety, workforce development and system improvement in 2014-2017 as well as 2017-2020. Utilities offers a comprehensive set of services to help all customer segments manage their use and bills. These efforts leverage programs, pricing, and education to support overall outcomes of efficiency, conservation, grid flexibility, carbon savings and affordability. Overall community electricity use would be 15% higher without the programs in place over the last 15 years, and this reduction in use is saving our community over $20 million in lower utility bills this year, with associated lower wholesale costs. Fort Collins helped to establish APPA's Smart Energy Provider program and continues to be designated as such. Efficiency offerings are one of the performance areas scored in this program. Distributed Energy Resources, or DERs, are increasingly important aspects of the electric system. From an old-fashioned thermostat to a rooftop solar system, or an electric car, these devices and systems will be essential to optimizing and operating a clean renewably powered grid. DERs are physical or virtual devices or systems that can be deployed on the electric distribution system or on customer premises that ENERGY BOARD REGULAR MEETING can be used to provide value to all customers through electric system optimization and/or individual customer benefits. The electric utility industry is facing unprecedented change in the coming decades, and the Utility sees it as an urgent responsibility to turn challenges into opportunities with innovation. We know there will be more wind and solar, new technologies, new business models, and evolving risks. Fundamentally, these challenges mean dynamic and changing relationships between customers and Fort Collins Utilities, and between Fort Collins Utilities and Platte River. This future will also require an increased focus on cyber & physical security. All these factors are worthy of a deep dive, from growing climate risks to serving historically underrepresented groups to the complexities of a clean all electric future. Taken together, these challenges provide a map of focus area opportunities to be addressed by the community and by Fort Collins Utilities. Many of these have specific strategies and tactics already identified in the Our Climate Future plan. The revenues needed to operate, maintain, adapt, and grow the Utility’s electric infrastructure come from two types of charges: monthly charges (based on usage) and one-time fees and charges (based on anticipated demands). Monthly charges are established through a cost-of-service model, which balances rate stability along with conservation and affordability. Long-term financial planning keeps the Utility’s reliability excellent through prioritized capital improvements, which are funded by gradual and modest rate adjustments (striving to limit rate increases to no more than 5% a year). Fort Collins is largely a fixed-cost utility, both at the generation and the distribution level. There is a large amount of fixed costs that are recovered through variable charges, which can contribute to rate pressure (because Utilities does not charge $30.00+ fixed charges). Other rate pressures include maintaining excellent reliability, achieving energy goals by 2030, and tension with future load growth of electrification requiring infrastructure to serve while increasing revenues. Staff will be bringing this presentation to City Council in early October and would like to hear any feedback the Board has about the content of the presentation. Board members commented that fire risk is largely mitigated by underground infrastructure, and that would be a good thing to bring attention to. Some board members felt the History Roadmap was confusing due to the span of time it is covering, though the overview of the electric system is useful, especially the points covering transmission vs. distribution. Board members also cautioned staff from speaking in or utilizing too many acronyms. Others noted that some financial slides are too busy with numbers and graphics, and that it would be helpful to see a clearer connection between Energy Services and the financials in terms of future challenges. Board members really liked the metric reliability slide, but it might be more compelling to connect reliability to extreme weather in Fort Collins (for example, the 2021 cold snaps and snowstorms). Finally, some board members encouraged staff to emphasize why the Utility wants to fully electrify our energy use, because it may not be intuitively logical to most people. 2022 CITY MANAGER’S RECOMMENDED BUDGET Tim McCollough, Deputy Director, Utilities Light & Power (attachments available upon request) Traditionally, when the budget is submitted to the Budget Lead Team for review, they would see scalable offers, meaning staff would ask for the full amount to fund their project, program, etc., but the offers included scenarios in which funding could be reduced and how that would affect the situation the offer funds. In this cycle that process was inverted, so the offers were submitted at their minimum possible ENERGY BOARD REGULAR MEETING funding point with scales upward; the entire budget, including all staff-proposed offers, was essentially funded at the minimum proposed level. Mr. McCollough said the Board’s opportunity to provide feedback to City Council really starts now through public comment, memos to Council or the Board’s Council Liaison, or by utilizing the public input tools on the City’s budget website. Public hearings begin in October, there are also three City Council work sessions in September. Mr. Phelan asked what outcome areas are scheduled for which Council work sessions. Mr. McCollough said next week’s work session will cover Economic Health and Environmental Health, Safe Community and High Performing Government will be at the following session. Board member Tenbrink what outcome area Connexion falls into. Mr. McCollough said Connexion is primarily budgeted within Economic Health. IN-PERSON FUTURE MEETINGS Board member Braslau noted that the pandemic is not over, and that the hybrid structure has worked okay for him so far. Board member Giovando agreed. Chairperson Becker said the Board should continue to meet in person as long as the City remains open but is supportive of utilizing a hybrid meeting structure. Board member Gould said having both options for in person and remote meetings is helpful as things continue to shift and change. BOARD MEMBER REPORTS None. FUTURE AGENDA REVIEW October’s meeting will include drafting the Board’s 2022 Work Plan (possibly to include their Top 10). The November meeting falls on a Veteran’s Day and will need to be rescheduled. ADJOURNMENT The Energy Board adjourned at 7:48 pm.