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HomeMy WebLinkAboutEnergy Board - Minutes - 10/04/2012Energy Board Meeting Minutes October 4, 2012 1 Fort Collins Utilities Energy Board Minutes Thursday, October 4, 2012 Energy Board Chairperson City Council Liaison Ross Cunniff, 420-7398 Lisa Poppaw, 223-4136 Energy Board Vice Chairperson Staff Liaison Barrett Rothe, 303-881-9683 Brian Janonis, 221-6702 Roll Call Board Present Chairperson Ross Cunniff, Vice Chairperson Barrett Rothe, Board Members Peggy Plate, Greg Behm, Britt Kronkosky, Peter O’Neill, Margaret Moore, and Steve Wolley Board Absent Board Member Stacey Baumgarn Staff Present Steve Catanach, Claire Thomas, Ellen Switzer, Lance Smith, Bill Switzer, and Harriet Davis Guests Rick Coen, Robert Brooks, and John Graham Meeting Convened Chairperson Cunniff called the meeting to order at 5:32 p.m. Public Comment Citizen Robert Brooks feels the City should consider opening the compressed natural gas fueling station to the public. He feels this would result in better usage of energy resources. Approval of September 6, 2012 Minutes Vice Chairperson Rothe moved to approve the minutes of the September 6, 2012 meeting. Board Member Behm seconded the motion. Vote on the motion: Yeas: Behm, Cunniff, Kronkosky, O’Neill, Plate, and Rothe. Nays: None. The motion carried. * Board Members Moore and Wolley were not present during the voting. Mason Corridor/MAX Update (Attachments available upon request). Light and Power Operations Manager Steve Catanach introduced the item and introduced Public Relations Coordinator Claire Thomas. Ms. Thomas presented the following information on the project: • The Mason Corridor MAX Bus Rapid Transit project is the largest infrastructure project in the City. • MAX Route Map: the bus will provide a faster route than auto traffic from the Harmony Station to the Downtown Transit Center. Energy Board Meeting Minutes October 4, 2012 2 • Mason Two-Way Conversion Update (Maple to Laurel opened on September 10, Maple to Cherry opened on September 21) • BNSF final ballast placement is scheduled for October and November • Station construction in Downtown Fort Collins is scheduled for early 2013 Ms. Thomas presented information on the current construction: • Storm Sewer Installations • Clearing and tree removals • Bridge construction south of Harmony Road • South Transit Center (ground was broken in early September) • Troutman Underpass (tunnel installed, working on trail connection) • Maintenance Facility Expansion (bids received September 14 are under review) Ms. Thomas presented information on the upcoming major roadway impacts and Colorado State University (CSU) Campus Construction: • Major Storm Sewer Installations (Harmony Road crossing in October, Prospect Road crossing in early 2013) • McClelland Drive (Horsetooth Road to Drake Road, closed for bridge replacement in Spring 2013) • CSU Winter Break through Fall 2013 • New guide-way and University Avenue station; Lake, Pitkin, and University Avenue will be closed at different times Highlights from the discussion: • A board member asked if information has been published on the fact that trains are running at a higher speed through town. Ms. Thomas stated there has been some information in The Coloradoan. Also, the City is working on train safety education, especially for new CSU students. • Ms. Thomas stated part of the plans will include a pedestrian signal at Mason Street and Prospect Road. • A board member asked about bike racks. Ms. Thomas stated there will be on-board bike parking for up to five bicycles. • A board member stated the Energy Board may be interested in carbon reduction data after the busses are online. 2013 Light and Power Budget and Rate Recommendations (Attachments available upon request). Mr. Catanach introduced the item and introduced Utilities Financial Operations Manager Ellen Switzer. Ms. Switzer presented background information on the City’s Budgeting for Outcomes (BFO) process. City Council identifies key outcomes. These include Transportation, Safe Community, Economic Health, Environmental Health, Culture, Parks, and Recreation, Neighborhood Livability, and High Performing Government. The budget is developed around these themes. The BFO process includes the following steps: • Sellers develop Budget Offers • Results Teams review the offers and meet with sellers • Drilling Platforms developed by Results Team Energy Board Meeting Minutes October 4, 2012 3 • Budget Lead Team reviews, tweaks, and develops the City Manager’s Recommended Budget. The team consists of the City Manager, his direct reports, and members of the City’s budget staff. • Council adopts final budget with their changes. Ms. Switzer presented information on the budget assumptions: • Inflation estimated at 2 percent per year • 2.5 percent salary increases in 2013 and 2 percent salary increases in 2014 • Growth projections at approximately 0.7 percent per year (either through new customers or increased usage) Ms. Switzer presented information on revenues for the 2012, 2013, and 2014 budget and presented a graph showing revenue comparison. She also presented a graph showing the breakdown between industrial, commercial, and residential customers. A board member asked what happens to the interest earnings from reserves. Ms. Switzer stated the earnings are available to be appropriated based on projected revenues. Ms. Switzer presented information on electric rates and fees. 2013 electric rates are increasing 4.33 percent. This includes a Platte River Power Authority (PRPA) pass through of approximately 3.83 percent. 2014 rates are increasing 3.5 percent. This includes a PRPA pass through of approximately 3 percent. She presented a graph showing the percent increase by customer class for 2013 electric rates and a chart showing the impact on a typical residential customer from 2012 to 2013. There is a new substation rate proposed for 2013 for customers served directly from the substation. The rate does not include distribution costs. There is also an increase in the Green Energy Program Premium from 1.9 cents to 2.4 cents per kWh. This is a direct pass through from PRPA. A board member asked what drives the increase from PRPA. Ms. Switzer stated they have been asked to buy more renewable energy credits that include the delivery of the power. Mr. Catanach also stated that some of the contracts have escalation clauses. There will be no changes in rate forms. Average electric development fees will decrease slightly for single family residential and commercial customers. Ms. Switzer presented information on expenditures. The 2012 original budget is $112.8 million. The 2013 recommended budget is $119.6 million. The 2014 recommended budget is $124.9 million. Ms. Switzer presented a graph showing the Light and Power Fund Budget Summary from 2012 to 2014. She noted purchase power will increase the most because of the PRPA rate increases. The increase also includes upgrades to current infrastructure. Light and Power Operations will increase slightly. The Energy Services budget will remain approximately the same. Ms. Switzer presented information on the City Manager’s Recommended Budget Funded Offers: • Purchase Power of $80.3 million (2013) and $80.4 million (2014) with a 5.1 percent PRPA rate increase. • System additions and replacements to continue existing programs. Energy Board Meeting Minutes October 4, 2012 4 • Light and Power Operations funding also includes one full time employee (FTE) for maintenance of the telecommunication systems and radios. • Payment in Lieu of Taxes (PILOT). PILOT is 6 percent of the Operating Revenue. • Energy Services funding includes a .5 FTE staffing increase. • Customer Service and Admin (CSA) funding (this provides services to all Utilities). Light and Power pays 40.4 percent of joint utilities expenses. • Solar Programs include Small Scale Community Renewables (rebates), the Solar Garden, and Fort Collins Solar Program (FIT). • Capital Projects include Computerized Maintenance Management System, Electric Vehicle Charging Stations, and Substations. Unfunded offers include the following: • Utilities Service Center expansion and improvements (this will be addressed outside the BFO process) • Design software for Light and Power Engineering staff Ms. Switzer presented a graph showing Light and Power Revenues and Expenditures. Summary: • Most requested offers funded • Moderate rate increases • Will continue to draw down Light and Power reserves • Reserve policies met • Debt coverage met Staff recommends the Energy Board support the City Manager’s Recommended Budget and proposed rate increase. Highlights from the discussion: • A board member asked for an explanation between the PRPA pass through rate increases of 3.83 percent for 2013, 3 percent for 2014, and the 5.1 percent PRPA rate increase listed under Purchase Power. Ms. Switzer stated purchase power costs are not 100 percent of the budget. Other expenditures have to be recovered as well. • A board member asked if the Utilities-scale solar and biomass projects were funded. Mr. Catanach responded these offers were funded and will be part of a purchase power agreement. This would occur during the next budget cycle. • A board member asked if the offers would meet the City’s Renewable Energy Standard (RES) goal. Mr. Catanach stated these offers would only meet half of the goal. Utilities would work with PRPA during the 2015 budget cycle to meet the remaining part of the goal. • A board member noted there is no mention of the 2014 increase in the suggested board motion. Ms. Switzer stated that typically staff would ask for a recommendation for the 2014 rate increase next year. • A board member asked if the board should make a recommendation on the design software. Mr. Catanach stated this is not necessary at this time. If this became necessary, it would be during the mid-term budget adjustment. Energy Board Meeting Minutes October 4, 2012 5 Vote on the motion: Yeas: Behm, Cunniff, Kronkosky, Moore, O’Neill, Plate, Rothe, and Wolley. Nays: None. The motion carried. Vote on the motion: Yeas: Behm, Cunniff, Kronkosky, Moore, O’Neill, Plate, Rothe, and Wolley. Nays: None. The motion carried. Draft 2013 Work Plan The board members discussed topics and ideas for the 2013 Work Plan. They also discussed what was covered during 2012. Chairperson Cunniff suggested there should be a subcommittee of three to discuss the work plan in more detail. This meeting will be scheduled and posted to the public. A draft version of the work plan will be sent to the full board after this subcommittee meeting. ** Vice Chairperson Rothe departed the meeting at 7:21 p.m. Staff Reports Mr. Catanach reminded the board of the Board and Commissions Collaborative meeting scheduled for Monday, October 29, 2012. The Chairperson and Vice Chairperson are encouraged to attend. Mr. Catanach also gave an update on the Smart Grid Live Event held September 25, 26, and 27. The event included live software demonstrations. Utilities presented the web portal platform at the event. Board Member Reports Platte River Power Authority (PRPA) Board Meeting: Mr. Catanach attended the September meeting. The board voted 7 to 1 in favor of leasing Platte River water to a company that will sell the water to a mining company. Other Business None Future Agenda Review The board discussed the upcoming November agenda and reviewed the Agenda Planning Calendar. Per the board’s request, the board secretary will bring copies of the Council Six-Month Planning Calendar to the meetings. Vice Chairperson Rothe moved that the Energy Board recommend that City Council adopt the proposed 4.33 percent electric rate increase in 2013 and the revisions to the Electric Development Fees. Board Member Moore seconded the motion. Vice Chairperson Rothe moved that the Energy Board recommend that City Council adopt the City’s Manager Recommended 2013-2014 Budget for the Light and Power Fund. Board Member Wolley seconded the motion. The 2012 Annual Report is due January 31. 2013. Chairperson Cunniff will draft a copy for the other board members to review. Adjournment The meeting was adjourned at 7:43 p.m. Submitted by Harriet Davis. Administrative Assistant. Fort Collins Utilities Approved by the Board on 2012 Signed I - Board Secretary Date Energy Board Meeting Minutes 6 October 4, 2012