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HomeMy WebLinkAboutEnergy Board - Minutes - 08/08/2013Energy Board Meeting Minutes August 8, 2013 1 Fort Collins Utilities Energy Board Minutes Thursday, August 8, 2013 Energy Board Chairperson City Council Liaison Greg Behm, 226-6161 Ross Cunniff, 420-7398 Energy Board Vice Chairperson Staff Liaison Peter O’Neill, 288-4562 Steve Catanach, 416-2622 Roll Call Board Present Chairperson Greg Behm, Vice Chairperson Peter O’Neill, Board Members Stacey Baumgarn, Peggy Plate, Nick Michell, John Graham, Barrett Rothe, and Margaret Moore* *Board Member Moore joined the meeting at 7:30pm Board Absent Board Member Britt Kronkosky Staff Present Steve Catanach, Lisa Rosintoski, Terri Runyan, John Phelan, Emily Wilmsen, Robin Pierce, Lance Smith, and Lucinda Smith Guests Tom Moore, Air Quality Advisory Board; John Bleem, Platte River Power Authority Meeting Convened Chairperson Behm called the meeting to order at 5:31 p.m. Public Comment None Approval of July 11, 2013 Minutes Due to the Board Secretary’s vacation, the draft July 11 minutes will be presented for approval at the September meeting. Strategic Plan (Attachments available upon request). Terri Runyan, the City’s Performance Excellence Program Manager, provided an update on the City’s strategic planning efforts related to the Rocky Mountain Performance Excellence program. During an executive retreat last year, a graphic designer captured a graphic representation of our “strategy story”. It depicts the various inputs that are part of strategy planning, including the voice of the citizens, our Budgeting For Outcomes (BFO) outcome areas, our values, our mission, and key initiatives.  The City’s Vision was modified to adopt an internal focus to depict how we can be the best to help our community be its best.  The Electric Utility’s objectives typically come under the Safe Community BFO outcome area. The Energy Board’s work relates to the Environmental Health BFO outcome area.  The City’s leadership system is based on Plan-Do-Check-Act (PDCA). We are currently working to improve processes. Utilities already employ some best practices, such as the Triple Bottom Line Analysis Model (TBLAM) and the ISO certification process. Energy Board Meeting Minutes August 8, 2013 2  City leaders are working to bring strategy to life for City staff. As one part of this effort, staff have received individual goal cards bearing the City’s Vision, Mission, Values (VMV), and strategic priorities of Culture of Innovation and Operational Excellence with space to write in a few of their annual goals. How will the City know when we have arrived at our Vision of providing world class municipal services? We will “arrive” when we identify (and meet) the measures for these objectives. We are evolving in this process – where are we now, who do we benchmark against, and who is the best? The biennial customer survey benchmarks us against eleven other Front Range cities and 350+ other communities nationwide. Where does budget come into the plan? The initiatives come in during the BFO process. BFO “sellers” write offers that relate to one of the BFO key outcomes. Those who do the best job of documenting and validating connection to a BFO outcome are most likely to see their offers approved. What kind of training does staff receive? City leaders are still discussing various models, such as Lean Six Sigma. The organizational priorities are only listed on the VMV individual goal card. It’s easy for board members to become confused in all the terminology as they try to talk to citizens (vision, mission, values, organizational priorities, values, etc.). It’s even a challenge for board members who have participated in the BFO process. On-Bill Financing Update (Attachment available upon request). Energy Services Manager John Phelan provided an update on the On-Bill Financing Program, which was approved by Council last year. Staff returns to Council on August 27th to provide an update. In the first seven months, three loans have closed; three are approved and pending; and three have been denied, based on qualification criteria. Staff is currently analyzing why more customers are not taking advantage of the program and why more contractors are not influencing homeowners to consider the program. We will work on more obvious marketing of the program to customers and will also rely on contractors to promote it. Contractors who have had success with timely payments from the program can help encourage other contractors to try the program. Staff is also looking at terms of the loan; right now, interest rates range from 5.25-7.25 percent, depending on amount being borrowed and credit score, and 5, 7, or 10-year terms, depending on the total amount borrowed, with a $15,000 maximum loan. The interest rate is set each year by the City’s Chief Financial Officer. Some customers consider this a high interest rate. Qualification requires a minimum 640 FICO score and a favorable debt-to-income ratio. Staff is also working on an idea to lower the FICO score qualification by investing funds from our reserves to secure against loan loss. The loan appears as a lien against the mortgage. Often, homeowners’ focus is elsewhere when they are doing improvements than on efficiency projects. Have we considered targeting a certain group, based on customers who would realize the most benefit on their bills? Staff has not considered specific targeting. We should be more aggressive than relying on bill inserts and newspaper articles. Energy Board Meeting Minutes August 8, 2013 3 Aside from contractors being hesitant about the program, do they receive any incentives for referring customers to the program? Yes, contractors receive incentives and can qualify customers when meeting with them in the home. Are our qualification standards more stringent than other creditor standards? What have other utilities experienced with their on-bill financing programs? They see some access when combining all the right aspects, i.e. easy application and approval process, attractive loan terms, etc. HVAC contractors have been the most challenging group to win over. We’ve identified a group of customers who could benefit if they realized it was available to them. Is the program in overall jeopardy as it stands now if we don’t see more cooperation or better marketing to the public if we don’t improve? Staff would like to set targets for what we would consider success for the program. How does it compare to the Zero Interest Loan (ZILCH) Program? The ZILCH program saw a lot of iterations over time with maximum loans of about $2,000. The process is relatively similar. Light and Power Operations Manager Steve Catanach noted that we’ve been working with Rocky Mountain Institute’s e-Lab to pilot this with FortZED. We hope to bring some ideas to the board later this year on how to increase the uptake of a program like this as part of a portfolio. Mr. Phelan encouraged board members to email him with feedback (jphelan@fcgov.com). Fort Collins Solar Power Purchase Program and Community Solar Garden (Attachment available upon request). Mr. Phelan distributed a fact sheet on the program; the application period opened the week of July 29th and extends through September 22nd. If we are oversubscribed, we will use a lottery to choose the projects. Through working with Platte River Power Authority (Platte River), legally, Fort Collins is acting as an agent of Platte River in buying solar from independent generators or third parties. This is for commercial customers for solar energy generation. We’re looking at portfolios (solar rebates for homes, solar power programs for commercials). When are we going to pursue the community solar garden? The solar garden has been deemed a lesser priority in order to get the solar power purchase program on board first. Utilities will work with other groups to identify potential sites for the garden. We did not budget for the required cost of development that comes along with some sites being considered, for example, the old pickle plant site on Mulberry Street. The City will purchase the rebates and environmental attributes of the garden. Individual subscribers would own a share. Billing aspects still have to be considered (dollar credit versus energy credit). The time frame for applications is fairly short. We’ve been talking about this with developers and customers for a long time. We’ve heard a range of feedback, and no concerns were expressed about the application time frame being too short. We anticipate a 6-8 percent return on investment. Proposed Electric Rate Changes (Attachments available upon request). Strategic Financial Planning Manager Lance Smith presented the proposed 2014 electric rate increase. For 2014, the only two contributing factors are an increase for the wholesale rate increase Energy Board Meeting Minutes August 8, 2013 4 from Platte River and 0.5 percent for the Fort Collins Solar Program. Platte River’s portion of the increase is partially due to adding 30 MW of wind energy. Why do we include the 0.5 percent increase for Fort Collins Solar Program? It reinforces to citizens that renewables are expensive. Also, it was approved in the BFO process. We must account for the revenue side of the program; Council approved the expense of the program. It may not be the least expensive way we can achieve a certain objective, but we’ve decided as a community that local is best. It’s more meaningful to share that these objectives are part of our strategic alignment. What’s the counterpoint argument? Is it social engineering designed to foster behavior changes in the use of energy? We can point out that we’re locking in this rate for 20 years.  Residential customers will see a 1.6 percent increase, with industrial and substation rates seeing the largest increases at 2.6 percent.  We are proposing a pilot program for residential Time of Use (TOU) rates in 2014 after deployment of the Advanced Metering Infrastructure (AMI) web portal to at least cover the summer months. Care will be taken to neither overprice nor underprice the rate. Analysis of data would occur, and findings would be taken to Council in Fall 2014 for implementation in 2015.  The rate will be an on-peak, daytime hours rate. Chairperson Behm noted that a board memo supporting the rate increase will have to be done by the September meeting. 2009 Energy Policy Revisions (Attachment available upon request). Mr. Catanach noted that we should have the results of the RMI e-Lab study and be able to incorporate some actual numbers into the Energy Policy revisions soon. He anticipates having it to the board a week before the September meeting. Vice Chairperson O’Neill has collected comments from board members. Some of those will be developed into a list of topics for board discussion. When we have substantive agreement on much of the policy, the board leadership would like to see us share the content with other City boards that have crossover interest in specific parts of the policy. Various methods of engaging these boards in two-way dialogue were discussed. It will have to be structured and managed very carefully in order not to derail the timing of the policy revision. The purpose of the dialogue would be to gather confirmation on what we are doing, but also to find out if they want to provide feedback on specific parts. We should have our specific section more finalized before we engage other boards. The City’s Environmental Sustainability Director Lucinda Smith noted that the work of Sustainability Services should be incorporated. Their work on the greenhouse gas goal (GHG) is nearly indistinguishable from the Energy Policy. When the Climate Action Plan goes to Council on August 13th, staff will ask Council whether they would like board input. She will work with Mr. Catanach and Customer Connections Manager Lisa Rosintoski in the next week on a plan going forward. Vice Chairperson O’Neill will provide weekly updates to board members by email.