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HomeMy WebLinkAboutEnergy Board - Minutes - 09/08/2022 ENERGY BOARD September 8, 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, Bill Becker, Sidra Aghababian Board Members Absent: OTHERS PRESENT Staff Members Present: Christie Fredrickson, Adam Bromley, Brian Tholl, John Phelan, Leland Keller (remote), Honore Depew (remote), Cyril Vidergar (remote), Heather Young, Shannon Ash, Lance Smith (remote), Kendall Minor Members of the Public: Tom Loran, Rich Stave 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 July 14, 2022, minutes. The minutes were approved as amended. SOLAR 120% RULE CODE REVISIONS John Phelan, Energy Services Manager & Energy Policy Advisor Leland Keller, Energy Services Engineer (attachments available upon request) Staff is proposing to replace the 120% rule in code because it will encourage solar systems that serve increased use from electrification (e.g., electric vehicles, heat pumps), accelerate contribution to reaching the community’s renewable electricity goals, as well as simplify application process for customers, solar trade allies, and staff. Our Climate Future targets 5% local solar and Platte River Power Authority’s resource planning includes 100 to 150 megawatts of distributed solar by 2030. Along with this change, staff anticipates 60-75 megawatts of solar (and increase of 2.5) inclusive of 5,000-7,000 solar systems (roughly 20% of single- family homes). In order to sustainably scale solar in the community, staff will have to evaluate the City’s rate mechanisms after the change, as well as on an annual basis. If the utility maintains the current solar credit rate as retail rates increase over time, there will be no reduction in benefit (the self-consumed benefit continues to increase). Staff will also annually review all the rate components (base charges, solar credit, distribution facilities, and Time-of-Day charges) to ensure it remains sustainable. ENERGY BOARD REGULAR MEETING The new proposed ordinance reads as follows: “The qualifying facility is sized according to policies set by the Utilities Executive Director under Subsection (h) of this Section, relative to an allowable reference size or the customer generator's average annual electricity consumption at that site, including all contiguous property owned or leased by the customer-generator, without regard to interruptions in contiguity caused by easements, public thoroughfares, transportation rights-of-way or utility rights-of-way.” The recommended ordinance will replace 120% language in all rate codes with reference to the Utilities Director Administrative Rules. The proposed rules for customer-owned systems will have sizing approval for up to 200% of historical annual use, up to a maximum of 12 kW DC. Third party-owned systems (Purchase Power Agreements or leases) will have sizing approval for up to 120% of historical annual use, limited by the Platte River power supply agreement. The rules include details on how percentages are calculated, options for homes without history, and a process for exceptions. If Council adopts these rules, and they can be subsequently adapted administratively. If these changes are approved, it is expected to reduce staff review of calculations from roughly 600 to less than 40 annually. Board member Braslau said the sizing limits don’t read clearly to him and suggested clarifying it by noting that the system is limited to 12 kW DC. Mr. Phelan underscored that a caveat exists for third party-owned systems (PPA or lease), the 120% rule will remain due to the Power Supply Agreement with Platte River Power Authority. Board member Braslau noted there is no mention of the rate in the ordinance or in text of the administrative rules, which he believes is fundamental to increase in solar capacity beyond 120%. He said it is important to encourage self-consumption and not to encourage individual residential customers to get into the business of selling energy. Mr. Phelan said there will be info in the Council Agenda Item Summary that will discuss the rate goals, but the action staff is requesting is not related to rates. Board member Braslau also asked if it would be simpler to add a cap on how much residential customers are paid annually beyond their self-consumption. Vice Chairperson Becker said if the rate is appropriate, then having private investment capital in our climate future is a good thing. Additionally, Mr. Braslau wondered if staff could compare residential solar subsidies to what the City is spending in the Income Qualified Assistance Plan. Mr. Phelan said staff calculated that the payments to solar customers for surplus energy under the current rate structure represents about 0.5% of residential revenue, or about 40 cents per month on non-solar customers’ bills (about $300,000). If we don’t make any of the rate structure adjustments, it could go up to approximately $1 per month, which is why staff is proposing the differentials in credit rates. Vice Chairperson Becker moved the Energy Board recommends that Council adopt the Ordinance that replaces the current solar sizing requirements in code with revised language referencing Utility Executive Director’s administrative rules and that approves the October 2022 solar sizing rules, inclusive of the minor language clarifications suggested by the Energy Board. Board member Moore seconded the motion. Discussion: Board member Braslau noted that nothing in this recommendation goes against his previous comments, he thinks simplifying the code will allow for flexibility. He clarified that he does support this motion. ENERGY BOARD REGULAR MEETING The motion passed unanimously, 9-0. OUR CLIMATE FUTURE CITY COUNCIL PREVIEW John Phelan, Energy Services Manager & Energy Policy Advisor Honore Depew, Senior Manager, Environmental Sustainability (attachments available upon request) Implementing Our Climate Future (OCF) intensifies our community efforts to achieve these primary environmental goals: reduce greenhouse gas emissions 80% below 2005 baseline levels by 2030, be carbon neutral by 2050, provide 100% renewable electricity by 2030 with grid and local sources, and achieve zero waste, or 100% landfill diversion, by 2030. Here is the framework of thirteen Big Moves that describe inspiring, transformational outcomes for Fort Collins. During 18 months of OCF plan development, we asked the community, “What do you want a sustainable future to look like in Fort Collins,” not “how can we reduce GHGs?” The plan’s Big Moves are the result of that question. OCF’s Big Moves connect the City’s specific goals for climate, energy, and waste with the community’s definition of a sustainable Fort Collins. Additionally, there are dozens and dozens of tactical Next Moves that roll up into these outcomes, all of which will have costs and hurdles to overcome. Mr. Depew noted that doesn’t mean that targets for GHG reductions or zero waste are deemphasized, but we heard from the community that in order for behaviors to stick they need to be easy, affordable, and align with their values. At the City Council Work Session, staff is hoping to refresh the foundation for Council action with Next Moves as strategic driver, to clarify the relationships between Council actions, community leadership and regional/state/federal levels, seeking council input on priorities to include in the 2023/2024 Next Moves plan, and finally seeking direction for the Interim GHG Goal Resolution. OCF is a framework for a community vision for the future, and City Council has a key leadership role to play, especially around policy, funding, and infrastructure. Transformational progress requires leadership at every level, in every sector. 2021 GHG inventory will be higher than 2020 inventory, but lower than 2019. Staff is focused on key messaging, to include that there has been progress in most areas, transportation returned to pre-COVID normal, inventory is continuously evolving with year-round updates, and linking back to the 2030 Pathways and Council actions. Mr. Phelan noted that budget is part of the ongoing refinement of the work, but it is not the sole-driver. Staff has bundled some the Next Moves into groups, known as 2030 Pathways. Each Pathway is quantifiable with significant reductions and includes defined roles. The objective of the Council Work Session is to identify gaps and needed pathways. Council actions will be identified as requirement of specific pathways with examples showing detail of pathways, next moves, necessary actions. Some of the gaps can be opportunities for places for community action (behavior or leadership). Staff also acknowledges Council’s many roles and will propose areas where they will have the greatest impact with a roadmap of key policy conversations through 2030. Board member Moore asked what barriers currently exist, and what can Council help staff with? Mr. Phelan said that rental housing is a huge part of the community, but it is very difficult to take actions in that space. If Council were to pursue rental registration or licensing, that would help greatly in that space. ENERGY BOARD REGULAR MEETING Mr. Depew added that it’s important to shine a light on the work that is already underway both at the City and community level. Decisions around land use code, housing, transportation, all those things often have a direct relationship and influence on the community goals. Connecting all the pieces together is what accelerates the progress toward the goals. Board member Gould asked if Council has a sense of what they can do to augment building code, if they want to be assertive, and do they have that power? Mr. Phelan said some things like energy listing requirements and building performance are challenging conversations to have within the community. Board member Braslau said he attended a webinar recently where they discussed the Marshall fire with respects to building code. Some push back against building code energy performance standards illustrates that often homeowners are under-insured so it costs them more to rebuild; however, some of the buildings that were recently completed did not burn down because of proper air sealing and embers could not enter the home. This is a saving for the homeowners but also ultimately affects long term insurance costs. Board members wondered if any of these pathways would require a ballot vote? Mr. Phelan said pathways would not, but new the discussions around revenues would require a vote (things such as transit, affordable housing, parks maintenance, etc.). Board member Giovando noted that we are not only talking about goals that will help prevent future catastrophic climate change, but also much of what we are dealing with right now (such as extreme heat or weather) could potentially be addressed by working toward the goals in OCF. The climate emergency is not a future problem, it’s a now problem. Board member Ramirez said with regards to carbon neutrality by 2050, there are new technologies emerging for carbon capture. Perhaps it would be worth looking into some of the startups. UTILITIES AFFORDABILITY PROGRAM PROPOSED CHANGES Shannon Ash, Affordability Programs Manager Heather Young, Senior Manager, Public Engagement (attachments available upon request) Staff is wrapping up the pilot year for the Utilities Affordability Portfolio (UAP) and plans to go to City Council in November seeking program adoption. The goal of the UAP is to provide assistance to low-income customers through reduced rates, one time/emergency payment assistance, and conservation practices. The Income Qualified Assistance Program (IQAP) is roughly a 23% rate reduction. Fort Collins Utilities customers are qualified and approved through the state’s Low-income Energy Assistance Program (LEAP), and automatically enrolled in the City’s IQAP based on their LEAP approval. Board member Aghababian asked how customers know to enroll in LEAP? Ms. Ash said it is part of both the state’s and the City’s local outreach. Based on pre-COVID numbers, an estimated 8,000 households could qualify for the Utilities Affordability Programs. In 2020 Utilities staff reached about 2000 households with the programs, leaving an opportunity for up to 6000 households to reduce utility burdens. Staff is planning additional targeted outreach in the community, as well as in-person application sessions. After 2021, the Utility removed their own additional application step and began auto-enrollment with LEAP qualification, and saw enrollment increase 133%. ENERGY BOARD REGULAR MEETING Staff completed an Arrears Analysis and found when a customer is not disconnected, the Utility saves approximately $24.00 in the avoided disconnect through printing, mailing, and staff costs. Staff is exploring whether customers on IQAP are less likely to be disconnected for non-payment because of the reduced rate and because they are more engaged with staff. Vice Chairperson Becker wondered if the City’s U+2 ordinance could be a barrier for those who are eligible, as renters may not want to disclose how many people are living in their household. Ms. Young noted that on the LEAP application, only one person in the family or household must meet the income qualification. Energy use from IQAP participants initially increased by 2.9% on average (220 kWh/year). Staff believes the increase likely reflects that households are no longer as critically concerned about paying their energy bills and initially choosing to keep their homes at a more comfortable temperature. Interestingly, by year three of enrollment both IQAP and non-IQAP participants had similar energy use. In 2021, City Council asked staff to ensure the 23% rate reduction is still sufficient. Staff found that since 2018, average electric bills have increased more than average income, so going forward staff is proposing 25% reduction to keep the benefit whole and retain its value. Staff recognizes the rate reduction is not a static thing and hopes that if the program is adopted, they could perform better rate projections to stay up with the difference annually. While there isn't a separate fund to cover IQAP, it is absorbed by rate payers across all classes (residential and commercial); each Utility fund contributes to the program, except for stormwater. Staff is proposing the portfolio is funded through the Operations & Maintenance budget because it is and should be viewed as a required service for Utility customers. Given current and projected participation numbers and a 25% rate reduction, this program would have minimal impact to future rate increases. Staff hopes future updates on the impact of this program would be included in annual rates and fees updates Board member Braslau noted that staff should be looking for other ways to qualify customers, especially given the large gap in potential participants versus actual, LEAP is not capturing everyone. Ms. Ash said staff agrees, there are customers being missed who do not qualify for LEAP but may qualify for the City’s program. Staff is looking for workarounds that would not violate any federal rules around double-dipping; staff is currently working with Housing Catalyst to obtain a list of people who might also qualify for IQAP. Board member Fassler moved the Energy Board support of the Income-Qualified Assistance Program becoming an adopted Utility program. Board member Braslau seconded the motion. Discussion: None. The motion passed unanimously, 9-0. CITY MANAGER’S RECOMMENDED BUDGET Adam Bromley, Director Operations & Technology, Utilities Light & Power (attachments available upon request) Mr. Bromley reviewed the 2023-2024 City Manager’s Recommended budget. He discussed the offers in Light and Power and Energy Services that are expected to be funded, as well as highlighted the offers that fell below the funding line. ENERGY BOARD REGULAR MEETING Offers 2.10, 2.11, 2.22, 2.20, 2.21, 2.17, and 1.10 fell below the line. Board members expressed concern that offer 1.10 (Manufactured Home Efficiency Acceleration Initiative) was not funded. This initiative would provide free weatherization and beneficial electrification services for 15-25 households annually. Weatherization measures will create a high performance building envelope by air sealing, adding insulation, and replacing windows. Electrification will transition homes off gas and propane-powered heating and cooling sources with high-performance heat pumps. High-efficiency appliances, lighting and water fixtures, along with comprehensive education, round out the package. Mr. Smith advised that though this offer was not included in the City Manager’s recommended budget, City Council will still be discussing all offers as they review the budget and things could shift. Board member Ramirez noted that the four full time employees were not funded in this budget and wondered what the impact of that would be. Mr. Bromley said it is more (future) workload for existing staff. BOARD MEMBER REPORTS Ms. Fredrickson reminded the Board that several members have terms expiring at the end of this year and need to reapply by 9/25/22. Chairperson Tenbrink explained that when he was a member of a utility board in his previous community, they took and reviewed their meeting minutes differently than the Energy Board. He asked the Board if they are happy with the current detailed summary style of minutes, or if they would like to move to action style minutes. The Board agreed the detailed summary-style minutes are more useful for their work preferences as they are easier to understand what took place in their meetings, particularly if a Board member needs to miss a meeting. The Board’s preference is to continue with a detailed summary style of meeting minutes. FUTURE AGENDA REVIEW The October meeting will have several decision items around rates and fees, as well as an item discussion about Public Utility Regulatory Policies Act of 1978 (PURPA). ADJOURNMENT The Energy Board adjourned at 7:55 pm.