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HomeMy WebLinkAboutEnergy Board - Minutes - 07/14/2022 ENERGY BOARD July 14, 2022 – 5:30 pm 222 Laporte Ave – Colorado Room ROLL CALL Board Members Present: Alan Braslau (remote), Steve Tenbrink, Dan Gould, Marge Moore (remote), Emilio Ramirez (remote), Jeremy Giovando (remote), John Fassler Board Members Absent: Bill Becker, Sidra Aghababian OTHERS PRESENT Staff Members Present: Christie Fredrickson, Adam Bromley, Rhonda Gatzke (remote), Cyril Vidergar (remote), Matt Scheppers (PRPA), Daren Buck (PRPA), Glenn Pease (remote), Poorva Bedge (remote) Members of the Public: Tom Loran MEETING CALLED TO ORDER Chairperson Tenbrink called the meeting to order at 5:30 pm. ANNOUNCEMENTS & AGENDA CHANGES None. PUBLIC COMMENT None. APPROVAL OF MINUTES In preparation for the meeting, board members submitted amendments via email for the June 9, 2022, minutes. The minutes were approved as amended. STAFF REPORTS Bloomberg Mayor’s Challenge Project Summary Glenn Pease, Energy Services Engineer The Bloomberg Mayor’s challenge is a success story for the Utility and the City. Over 320 American cities competed in the challenge for a chance to be one of nine winners. Each winner, including the City of Fort Collins, was awarded $1 million to implement their winning idea. The Utility’s idea was centered around a few core components: improving energy efficiency, creating scalability through private sector partnerships, offering attractive financing options, fostering real benefits for low-to-moderate income renters, and to study the health and wellbeing impacts of upgrades. "It's not about the houses, it's about the people living in the houses." Out of that came a rebranding and restructuring of the Home Efficiency Program, now known as Epic Homes. Staff is looking forward to their final wrap up and anticipating reporting final numbers and participation to Bloomberg at the end of the month. The desire to improve the quality of housing has always been present; however, providing incentives was often only reaching higher income. There were also barriers with financing and a slow uptake in participation. ENERGY BOARD REGULAR MEETING The funding from the Challenge allowed the Utility to rebrand the home efficiency program with a fresh look, a streamlined customer journey, expand the program offerings to rentals, reboot and improve the On Bill Financing program (which had run out of capital due to success of high participation), and designed a certificate to help promote the value of efficiency measures in a home in the real estate market. On Bill Financing continues to be a very successful part of the program. Customers like it for its convenience and ease of application, and landlords like it because they can take out a loan and it won't count against their debt to income ratio. Participants can borrow up to $50,000 and their payments will be included on their utility bill. Participants can finance efficiency upgrades as well as solar projects with competitive fixed interest rates: 3 or 5 years at 3.45%,7 or 10 years at 3.65%, or 15 years at 3.95%. Staff’s work with Bloomberg also funded an IEQ (indoor environmental quality) study to help draw correlations between Efficiency measures and benefits on IEQ. The report is being finalized and staff is eager to read the findings and see how we can continue this work moving forward. The report could be a valuable resource to Epic Homes and other programs in promoting health benefits. Staff expects to continue working with a team at CSU and bring additional innovations to the health aspects of the program. Some program highlights from 2018 through 2021: 2000 homes upgraded with efficiency measures since the start of the Mayor’s Challenge, $5,502,455 loan funds issued, 0 defaults, $86 median principal payment, 790 MTCo2 emissions reductions, 1,251,477 kWh reductions in electricity usage, and over 5,000 residents benefiting from Epic Homes upgrades. Chairperson Tenbrink wondered who can qualify for the financing program wondered what the median loan amount is. Mr. Pease said the median loan is around $20,000 and right now borrowers must have at least a 680 FICO score; however, the program may move away from credit scores as a qualifying criterion. There have been no loan defaults to date, being tied to the utility bill means if the loan doesn’t get paid neither does the utility bill, which would trigger a service shut off. Mr. Tholl added that the max loan was increased from $25,000 to $50,000 to accommodate solar & battery installations and rebates. Board member Moore asked if the loan needs to be paid off if the home is sold? Mr. Pease said yes it does and the maximum loan term is 15 years. Ms. Moore also wondered if homes under early iterations of the program can still get an Epic certificate. Staff said yes, as long as the upgrades were completed within the last five years. If it has been longer than five years a new assessment is needed. Board member Gould wondered if it was a challenge to recruit households for the environmental assessments; he also wondered how many were completed. Mr. Pease said it was somewhat of a challenge, especially during the height of the COVID-19 pandemic. Staff has been able to monitor around 40 homes and continue to monitor about 20 for additional data. There was an incentive that was implemented to try and draw more participants which created a waitlist for the program. FUTURE DRAKE TRANSMISSION LINE Matt Scheppers, Platte River Power Authority The location for the future transmission line makes the project high impact to the community, both from a visibility perspective as well as a planning and construction perspective. The line will be overhead along a three-mile stretch of East Drake Road to the Timberline Park Substation. One mile will be double circuit, two miles will be single circuit. ENERGY BOARD REGULAR MEETING The existing line was built by the City of Fort Collins in 1968 (prior to the existence of Platte River); Platte River began leasing and maintaining the line as of 1980. In 2019 Platte River became aware of discoloration at the base of one the poles. Upon further inspection they found corrosion on the steel structure itself, as well as the anchor bolts supporting the structure. Platte River proactively inspected the poles on the rest of the line and found similar corrosion on many of the remaining structures on the single circuit (running east-west on Drake) portion of the line. Platte River is proposing to rebuild that two mile section, inclusive of 19 structures along East Drake Road from the Drake Substation to the Power Trail. They completed a reconstruction study with Burns and McDonnell with cost estimates of overhead and underground to replace the damaged two-mile section. The project duration is estimated at 16 months, beginning in 2027. To replace the lines with overhead infrastructure is estimated to cost $6 million, while underground is estimated to cost $21 million. From a transmission utility perspective, both overhead and underground infrastructure are safe when constructed, operated, and maintained per industry standards. As far as operation and maintenance, overhead lines allow for effective line reclosing as well as opportunities for thorough line inspection (even while energized). Contrastingly, underground lines do not have line reclosing, and they are much more difficult to perform inspections on. Overhead lines do have inherent risk exposure to extreme weather, vegetation, wildlife, and vehicles; however, fault location and response times are efficient, resulting in shorter outage and repair times. Underground lines have exposure to dig-ins, and because they are underground locating the fault can be difficult and prolonged and require specialized equipment. This results in longer outage and repair times—sometimes months long, reducing the transmission system reliability. Chairperson Tenbrink asked if overhead transmission lines are so much better for reliability, why do any transmission lines ever get installed underground. Mr. Scheppers said at least in Longmont and Loveland, they are put underground because they are near airports. Comparing costs, it is much more expensive to install transmission lines underground, about $10 million per mile, due to requiring more expensive materials and labor (larger conduction sizing). Underground lines have a lifespan of approximately 30 to 40 years. Overhead lines typically cost about $1.5 million per mile (in a rural setting) and steel poles have a lifespan of 80 to 100 years. Mr. Scheppers noted that there is a page on Platte River’s website, detailing planning design and construction policies. prpa.org/transmission/types/ Next, Platte River will begin a detailed design, exploring routing options, as well as easements and right- of-way, go through development review, estimate costs, and scheduling the project. Some anticipated challenges include working through routing and right of way, ensuring minimal impact to the community, as well as maintaining high transmission reliability during construction. Chairperson Tenbrink wondered if there are concerns being so close to homes and people and wondered if underground makes it any safer for those locations. Mr. Scheppers said no, being underground actually brings it closer to the people. Board member Giovando How are the costs being handled. Mr. Scheppers said all four rate paying communities will be contributing to the project (to scale). MID-YEAR FINANCIAL RESULTS ENERGY BOARD REGULAR MEETING Lance Smith, Director, Financial Planning & Assets Mr. Smith explained when he first began with the City, discussions around rate increases were not really driven by objective criteria. Over the last five years, he has shifted that focus to rely on things like operating margins and debt coverage rations. He noted that the Utility should be able to plan well enough to not have to increase rates more than 5% in a year. Revenue is broken down into rate class: residential sales, commercial sales, industrial sales, green energy program sales, and development fees. Realized revenues are ahead of budget in residential, commercial, and development fee sales so far in 2022. The Utility saw a significant increase in residential revenue due to the pandemic, and even though many are returning to offices, those revenues are still outpacing budget. Commercial revenues are slightly over budget. Industrial revenues are just slightly behind. Development fees significantly outpacing budgeted amount which is indicative all the new development happening throughout the community. Light and Power Operation Expenses are categorized as: Light & Power Operations, Administrative Services, PILOTs (Payment In Lieu Of Taxes), Energy Services, Community Renewables, and System Additions/Replacements. Generally, Light and Power is below or on budget in all categories through the month of June. Historically, Light and Power has done a good job of containing expenses. Purchased power expenses are higher in 2022 due to the purchase of more intermittent energy than initially anticipated (as per the 2030 climate goals). In summary, operating revenues are over budget, operating expenses are over budget, operating income is below target, non-operating revenues from new development and earned interest are over budget, and non-operating expenses associated with new development are over budget. The net-effect of these items is that the operating margin is -0.4%, and Mr. Smith said it is preferable to have a 2% operating margin. It is likely that staff will need to council in October to request an appropriation from this year’s revenues to cover some of this year’s expenses. BOARD MEMBER REPORTS None. FUTURE AGENDA REVIEW August looks a little bit light as of right now. Staff will review the agenda items, discuss scheduling, and confirm with the Board. Board member Moore wondered if the SCTOUS ruling on West Virginia vs EPA will affect any of the City’s operational plans. Staff will need to discuss the implications with Mr. Vidergar. ADJOURNMENT The Energy Board adjourned at 7:01 pm.