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HomeMy WebLinkAboutEnergy Board - Minutes - 05/01/2014Energy Board Meeting Minutes May 1, 2014 1 Fort Collins Utilities Energy Board Minutes Thursday, May 1, 2014 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 Nick Michell, Margaret Moore, John Graham, Stacey Baumgarn, Phil Friedman, and Peggy Plate Board Absent Board Members Michael Doss Staff Present Steve Catanach, Lisa Rosintoski, Lucinda Smith, Bill Switzer, Norm Weaver, Kraig Bader, John Phelan, Lance Smith, Kevin Gertig, Cyril Vidergar, Rene Evenson, and Harriet Davis Guests Fred Kirsch, Rick Coen, and Paul Davis (Platte River Power Authority) Meeting Convened Chairperson Behm called the meeting to order at 5:40 p.m. Public Comment Fred Kirsch, Director of the Community for Sustainable Energy, expressed his concerns about the rate structure, specifically, tiered rates and the opportunity cost of “energy hogging.” He wonders if this will cause rate increases for other individuals. Mr. Kirsch also thanked Utilities staff for their work on the On-Bill Financing Program. Approval of April 3, 2014 Minutes Board Member Moore moved to approve the minutes of the April 3, 2014 meeting. Board Member Baumgarn seconded the motion. Vote on the motion: Yeas: Baumgarn, Friedman, Graham, Michell, Moore, and O’Neill. Nays: None. Vote on the motion: It passed unanimously. * Chairperson Behm and Board Member Plate abstained due to their absence at the April 3 meeting. Staff Reports Light and Power Operations Manager Steve Catanach gave an update on the Advanced Meter Fort Collins Web Portal. Utilities would like to extend the “Friends and Family” invitation to the Energy Board members. The mass launch is scheduled for mid-June. Energy Board Meeting Minutes May 1, 2014 2 Environmental Services Director Lucinda Smith stated staff met with the Brendle Group regarding Climate Action Planning. An additional City Council Work Session has been scheduled for August 12, 2014. There is another Work Session scheduled for October 28, 2014. Senior Energy Services Engineer Norm Weaver presented an update on the Fort Collins Solar Program. Mr. Weaver provided a handout to the board members, Fort Collins Utilities 2014 Renewable Energy Programs Update. There are 18 projects in the program, including a Community Solar Garden. On-Bill Financing (Attachment available upon request). Energy Services Manager John Phelan presented information on this item. Highlights from the presentation:  How do we best utilize a community wide payment and credit financial tool to support community goals?  Past and Present o Current program (Home Efficiency Loan Program) meets original intent o Now also looking at tariff approach o Planning Fall 2014 City Council update to present recommendations for current program, as well as present the requirements for developing the tariff program Mr. Phelan presented a table describing the financial attributes for the loan and tariff models, along with notes and next steps. The goal is to utilize both programs. Highlights from the discussion:  A board member inquired about the start date for the program. Mr. Phelan stated the start date is tentatively planned for January 1, 2015.  A board member inquired as to who makes the initial application. Mr. Phelan stated both the owner and the renter need to initiate the project.  A board member suggested adding a column to list the types of projects that would most likely qualify for the program, as well as a list of projects that would be better suited for a home equity line of credit.  A board member suggested adding electric car chargers to the list of projects that would qualify for the program.  A board member inquired about adding solar thermal to the list of projects. Mr. Phelan stated this can be added to the discussion. Utilities Strategic Plan (Attachment available upon request). Standards Engineering Manager Kraig Bader presented information on this item. Highlights from the presentation:  Fort Collins Utilities has been operating under the Utilities for the 21st Century Strategic Plan since 2008.  Mr. Bader presented a graph showing the plan development overview process.  Mr. Bader presented the survey results from 2007, 2010, 2011, and 2013. An online methodology was used for the survey. This included the following: o Overall Utilities Grade Energy Board Meeting Minutes May 1, 2014 3 o Residential Ratings for Electric, Water, Wastewater, and Stormwater o Price Satisfaction o Willingness to Pay Reduce Greenhouse Gas Emissions – Residential (Mr. Bader noted that 36 percent responded they were not willing to pay more.)  Staff conducted interviews with major stakeholders.  Mr. Bader shared information regarding External Stakeholder Perspectives.  Utilities Purpose in Alignment with City Direction: o City Vision: To provide world-class municipal services through operational excellence and a culture of innovation. o City Mission: Exceptional service for an exceptional community  The Utilities Plan should align with the City Strategic Plan.  The Final Issues Statement includes Workforce Culture, Customer Expectations, Innovation and Collaboration, Resource Optimization, and Business Climate. Mr. Bader also shared information on the Final Goals and Metrics as they relate to the Final Issues Statement.  Mr. Bader presented a graph showing the Plan Governance: Organizational Model, as well as the original 2008 “Umbrella Graphic.”  Mr. Bader presented the Utilities for the 21st Century timeline. Implementation will start in June 2014. Highlights from the discussion:  A board member inquired if the numbers are normalized for the number of respondents. Are the same number of respondents responding to electric and stormwater questions? Mr. Bader stated yes, this is normalized.  A board member inquired about the response rate. Mr. Bader stated 1,943 responses were received out of 20,000.  A board member inquired about the hierarchy of the various plans (Utilities Strategic Plan, City Plan, etc.). Mr. Bader stated the plans need to be aligned. This also must be aligned with the Budgeting for Outcomes (BFO) process. Low Income Assistance Program Update (Attachment available upon request). Customer Connections Manager Lisa Rosintoski presented information on this item. Project Manager Rene Evenson was also available to answer questions. The program was evaluated because the Payment Assistance Program is 10 years old. The Medical Assistance Program began in 2011. Ms. Rosintoski noted this program has low enrollment. Staff also wanted to evaluate the program with tiered electric rates and the time of use rate pilot. Key Deliverables include:  Addresses community needs  Provide education that empowers  Create measurable performance metrics  Avoid shut-offs and reduce write-offs  Funding opportunities with local non-profits and other City departments Ms. Rosintoski shared a list of the project team members. She also shared the Project Timeline. The project was launched on February 7, 2014. A focus group with local nonprofits and residents was held on April 4, 2014. Final recommendations and wrap-up are scheduled for June 27, 2014. This project will be presented to various boards as well as City Council. Energy Board Meeting Minutes May 1, 2014 4 Ms. Rosintoski presented a graph showing the monthly final notices and shutoffs from August 2010 through April 2014. Ms. Rosintoski shared information on the Payment Assistance Fund. The criterion includes the following:  Utility service has to be scheduled for interruption  Maximum amount awarded: $150/year  Assistance covers both electric and water bills  Utilities and Catholic Charities determine the amount needed The 5 year average is 360 families for $37,000/year. The first and fourth quarters (winter) have the highest number assisted. The average donation amount is $110. There is a fundraising campaign every October. Ms. Rosintoski shared information on the Medical Assistance Rate. The program objectives include enhancing the quality of life for our citizens, removing the economic impact of tiered rates due to medical need portion of kwh use, and maintaining the community conservation values. Customer Qualifications include the following:  Credit for Durable Medical Equipment (DME)  Credit for necessary use of air conditioning (AC)  Limited Incomes Ms. Rosintoski shared a graph showing participation in the Medical Assistance Program from 2012 through 2014. Participation is application driven. She also shared a graph showing the customer use for Tier 1, 2, and 3. Ms. Rosintoski shared information on the Low-Income Rebate Programs. This includes sales tax on food, property tax and rent, and utilities. The Utility Rebate was established in 1975 and is a rebate for senior and disabled low income citizens. The focus group yielded interesting results. The need for assistance is a big issue for many families, and there are many challenges including transportation, language, and awareness. Utilities’ role should be working with other organizations, education, and funding. A successful low income utility payment assistance program should have easy accessibility with education, languages, and locations; address different types of populations and diversity; awareness; and participation. Ms. Rosintoski noted that some of the focus group participants were nervous about energy efficiency projects because the building they’re living in may be condemned because it is uninhabitable. They did not want to draw attention to this issue and be forced out with no place to live. Highlights from the discussion:  A board member inquired about the availability of funds. Ms. Evenson stated available funds drop off in March; therefore, there is less money available in the summer for water utility bills. Ms. Evenson noted that Energy Outreach Colorado also contributes to the funds.  A board member is concerned about raising Tier 1 rates and the impact of this on low- income families. Energy Board Meeting Minutes May 1, 2014 5  A board member inquired about the fundraising period. Ms. Evenson stated this starts in October. Fundraising information is included on utility bill inserts.  A board member inquired about pre-paid programs. Mr. Catanach stated the new Automated Metering Infrastructure (AMI) has the capability for this.  A board member feels Utilities should not shut off power to those customers without an income as long as the customer is attempting to work with Utilities to pay a portion of their bill.  A board member would like the information published regarding the monetary need. The board member would like to contribute to the program.  A board member inquired about the process of shutting off power to those customers who do not pay their bill, especially if individuals are living in the structure. Ms. Rosintoski stated Utilities is aware if individuals are living in a structure where the power has been shut off and is sensitive to the situation, especially if children and elderly are involved.  A board member expressed concern about the lack of information received since he does not receive a utility bill. A board member suggested mailing a separate flyer; however, another board member expressed concern about the City sending out multiple flyers. Time of Use (TOU) Rates (Attachments available upon request). Utility Rate Analyst Randy Reuscher presented information on this item. Strategic Financial Planning Manager Lance Smith was also available to answer questions. Mr. Catanach stated Utilities does not have the resources to implement multiple rate structures; therefore, he asked the board to rescind the motion passed at the April 3 Energy Board meeting: “that the Energy Board support a program in which multiple rate structures are tested using multiple pilot programs starting in the fall of 2014. Leading goals for the pilots will include conservation, peak use reduction, social equity, and opportunities to reduce electric bills.” Review of Potential Rate Structures Mr. Reuscher presented a graph showing the potential rate structures. Staff recommends implementing a time of use rate structure because this is considered a more equitable rate structure. He also provided a review of the slides presented at the April Energy Board meeting comparing tiered rates to time of use rates. Energy Conservation versus Demand Reduction  Do TOU rates help with Energy Conservation? o Household use examples that may reduce overall consumption and reduce the peak include air conditioning, heating, lighting, and electronics.  Do TOU rates help with Demand Reduction? o Household use examples that may shift demand from on-peak to off-peak, reducing peak but not overall energy include washer and dryer use, electric vehicles, and cooking. Mr. Reuscher presented a graph showing the conservation signal of tiered rates versus TOU rates. Approximately 1/3 of the electric utilities in Colorado offer a residential TOU rate. Many large utilities such as Pacific Gas and Electric, San Diego Gas and Electric, Oklahoma Gas and Electric, and Idaho Power also offer a TOU rate. Energy Board Meeting Minutes May 1, 2014 6 Why a Pilot First?  Helps ensure revenue requirements will be met if a default rate were implemented  Provides feedback on customer acceptance  Provides feedback on customer behavior changes, if any  Relieves potential transitional issues by impacting fewer customers Mr. Reuscher presented a graph showing the move from tiered rates to time of use rates and the average monthly gain or loss to the customer. Comparisons are based on impacts before any potential conservation effects or load shifting occurs, which is likely to happen on a TOU rate structure. Income Considerations  Tiered rates are believed to help low-income (low consumption) and penalize high-income (high consumption); however, the intended purpose is conservation, not to benefit low- income customers.  Assistance for low-income customers should be provided through a separate low-income rate or program, based on verification of the individual customer’s income. Mr. Reuscher presented a graph from the December 2013 City Council Work Session. This shows only a 0.1 percent reduction in usage on tiered rates. Highlights from the discussion:  A board member inquired about the potential load curve change. Mr. Reuscher stated he does not have this information.  A board member inquired if the time of use rate structure would be revenue neutral for the Utility. Mr. Reuscher stated yes, it is revenue neutral.  A board member inquired about the customer demographics of those paying more for time of use rates. Mr. Reuscher stated he does not have that level of detail.  A board member reminded the board that Utilities is presenting a more accurate way to transfer their costs to the users. The board member feels time of use rates directly connect the bill to consumption.  A board member inquired why the dinner hour is included in the peak period. Mr. Reuscher stated this is based on Platte River peaks.  A board member feels conservation should not be driven only by rates. The board member is interested in seeing other studies on how major changes influence behavior.  A board member feels that pilot studies are perceived as short time ideas by customers. Follow-up studies after the pilot ends typically show that individuals return to their previous behavior. Discussion on the motion: A board member asked for clarification on why Utilities cannot conduct more than one pilot study. Mr. Catanach stated there are simply not enough resources to conduct more than one study. Board Member Graham moved to rescind the motion adopted by the Energy Board at the April 3, 2014 regular meeting in which this board supported a program in which multiple rate structures are tested using multiple pilot programs, starting in the fall of 2014; in order to specifically consider recommending a rate structure based on time of use rates, as presented by City staff. Board Member Moore seconded the motion. Energy Board Meeting Minutes May 1, 2014 7 A board member inquired if staff is considering comparing data to the flat rate since this data is already available. Mr. Reuscher stated staff can look at this and evaluate the impacts. A board member inquired about balancing resources. The board member will support the motion; however, he is not convinced that staff will know the best option if only the time of use study is piloted. The board member would support a pilot for time of use and time of use plus tiered. Mr. Catanach stated that both these options cannot be combined with the AMI Web Portal. A board member inquired about deploying base rate renewables that will affect the rates. The board member feels these will have an impact on rates eventually. A board member feels there does not need to be a discussion surrounding time of use rates because time of use rates will be implemented eventually. In addition, the board member is hesitant about rescinding the April 3rd motion. A board member stated he is willing to revise his opinion based on the new data presented at tonight’s meeting. The board member would support rescinding the motion. A board member feels the rate structure should be simple. A board member inquired about the reason for the pilot program. Mr. Reuscher stated staff does not know the impact of rates; therefore, the pilot program is utilized to manage the potential risk. Vote on the motion: Yeas: Baumgarn, Behm, Friedman, Graham, Michell, Moore, O’Neill, and Plate. Nays: None. Vote on the motion: It passed unanimously. Discussion on the motion: Board Member Plate asked for clarification on which time of use pilot study the board is supporting. Mr. Reuscher stated the pilot study would be for the time of use rate only, not the tiered time of use rate or the time of use with tiered surcharge rate. Board Member Friedman proposed a friendly amendment to the motion specifying the flat time of use rate pilot study. Vice Chairperson O’Neill accepted the friendly amendment. Board Member Moore seconded the motion as amended. After further discussion, the board members agreed that Vice Chairperson O’Neill’s motion captured what the board is supporting. Board Member Friedman withdrew the amendment. Vote on the motion: Yeas: Baumgarn, Behm, Friedman, Graham, Michell, Moore, O’Neill, and Plate. Nays: None. Vote on the motion: It passed unanimously. Vice Chairperson O’Neill moved that the Energy Board recommend that City Council approve conducting a pilot rate structure study based on Time of Use Rates, as presented by Utilities staff. Board Member Moore seconded the motion. Energy Board Meeting Minutes May 1, 2014 8 Board Recommendation Regarding Proposed Amendments to the Foothills Mall Agreement (Attachment available upon request). Vice Chairperson O’Neill attended the April 24 meeting regarding the amendment to the Foothills Mall agreement. The City’s Chief Financial Officer Mike Beckstead encouraged board members to attend this meeting and share their opinions. Vice Chairperson O’Neill believes the development will affect the geographic layout of the City. He believes the development will contribute to the City’s compact design and will help advance the goals related to energy and carbon reduction. Vice Chairperson O’Neill read a draft memo to the board. The draft included a recommendation on both the environmental impacts and the financial agreement. Discussion on the motion: A board member feels the City needs a more compact core; however, the board member does not feel qualified to weigh in on the financial issues. The board member does not feel comfortable supporting the memo as drafted by Vice Chairperson O’Neill. A board member inquired about the amendments. Vice Chairperson O’Neill stated the most significant amendment concerns bonding proceeds. The bonding proceeds would be released depending on the amount of square footage rented out. A board member feels the mall development contributes to a number of community goals, including carbon reduction and local sales tax staying in the area; however, the board member feels he does not have enough information to make a recommendation on the issue. A board member feels the financial aspect is not within the purview of the Energy Board. A board member feels that losing the mall development will have an impact on the City’s carbon reduction goals. The board member feels it would be unfortunate if the development did not happen. A board member stated he would support sending a memo, but suggested Vice Chairperson O’Neill modify it to remove the recommendation regarding the financial aspects. Vice Chairperson O’Neill modified the memo to remove a recommendation on the financial agreement. He read the new version to the board. Vote on the motion: Yeas: Baumgarn, Behm, Friedman, Graham, Michell, Moore, O’Neill, and Plate. Nays: None. Vote on the motion: It passed unanimously. Board Member Reports Board Member Moore attended the Energy Lab opening. Board Member Friedman shared an article from the Wall Street Journal. Tesla Motors is planning to build a battery factory and increase production of their electric vehicles from 25,000 per year to 500,000 per year. Vice Chairperson O’Neill moved that the Energy Board send a memo to City Council concerning this issue. Board Member Moore seconded the motion.