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HomeMy WebLinkAboutEnergy Board - Minutes - 10/02/2014Energy Board October 2, 2014 Minutes 1 Fort Collins Utilities Energy Board Minutes Thursday, October 2, 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 Vice Chairperson Peter O’Neill, Board Members John Graham, Stacey Baumgarn, Phil Friedman, Nick Michell, Michael Doss Board Absent Chairperson Greg Behm, Board Members Margaret Moore and Peggy Plate Staff Present Steve Catanach, John Phelan, Lucinda Smith, Lance Smith, Cyril Vidergar, and Katherine Martinez Guests Adam Perry (Platte River Power Authority) Meeting Convened Vice Chairperson O’Neill called the meeting to order at 5:30 p.m. Public Comment None Approval of August 25 Special Meeting Minutes Board Member Friedman moved to approve the minutes as submitted. Board Member Baumgarn seconded the motion. Vote on the motion: It passed unanimously with three abstentions. *Board Members Doss, Graham, and Michell abstained due to being absent at the August 25 special meeting. Approval of September 4 Meeting Minutes Board member Doss moved to approve the minutes as submitted. Board Member Michell seconded the motion. Vote on the motion: It passed unanimously with one abstention. * Board Member Graham abstained due to being absent at the September 4 meeting Staff Reports  Steve Catanach reported the Climate Action Plan (CAP) is moving forward. City staff is coordinating schedules with Poudre River Power Authority (PRPA) staff to deliver data to them by October 13, which they’ll incorporate into the integrated resource planning model. PRPA is running two scenarios. One is achieving energy use of 60% below the 2005 model by 2030 and the second is 80% below. PRPA is using input from seven different resources. Work continues with The Brendle Group and their modeling of transportation, then Energy Board October 2, 2014 Minutes 2 combined with PRPA data. City Council will discuss the CAP at its October 28 Work Session.  Energy Services Manager John Phelan reported the CAP will be discussed at City Council through December and January, and then Council will take action in February.  Mr. Catanach reported that PRPA board will meet October 30 to discuss the 20% reduction by 2030, and also the EPA 35% reduction by 2030 from 2012 levels. At the December 9 Council Work Session, PRPA will discuss its data and modeling. Highlights of the Discussion  A board member inquired about the results: cost and decisions on resources to use? Mr. Catanach replied yes, and also stated PRPA will present wholesale rates, and City staff will present retail rates. The CAP is making good progress. The extremely tight schedule will assure that it meets the goal of being discussed and approved by City Council in 2017. City staff in the Social Sustainability Department will present information on how the City’s achievement of energy reduction goals will impact low-income residents.  Board Member Baumgarn reported that the Citizen Advisory Committee continues to meet on the CAP, providing guidance as The Brendle Group and City staff do the bulk of the work required. He stated the CAC is doing a good job of focusing efforts on what’s going to have the biggest impact. The funding of strategies could be a package of line items in Building on Basics (BOB) 2.0 and try to identify areas that will, for example, reduce greenhouse gas emissions specific to CAP implementation.  A board member inquired when the Energy Board should share the Energy Policy with the CAC to assure alignment of goals. Mr. Catanach replied he will ask Environmental Services Director Lucinda Smith about the best timing.  Mr. Phelan mentioned the section of the draft Energy Policy that details quantifiable goals.  A board member commented on the CAC and inquired about a scenario in which the CAC recommended against continuing to use a coal fire plant. He stated it’s an interesting question; would the CAC advocate selling coal fire power to another community? Electric Capacity Fee Code Revisions (Attachments available upon request) Strategic Financial Planning Manager Lance Smith gave a brief presentation on proposed changes and clarification of City Code regarding the Electric Capacity Fee, to be presented to City Council for first reading on October 21. No changes to the fee are proposed; only the ordinance’s verbiage. There are two fees, the electric capacity fee (to provide service to the development site) based on the average cost of what it costs us to build out our system, and the building site charge (for installation of onsite electric service facilities) specific to a project. How the City collects that charge requires clarification because the current process calls for rates in effect at the time of final payment to apply to the entire development, which means the rate paid at the time of the 50% deposit could be different than the rate paid upon completion of the project. Mr. Catanach gave an example. If the City approves a project in 2013 that costs $200,000, the developer pays the 50% deposit: $100,000. In 2014, the remaining balance is $100,000 plus the Energy Board October 2, 2014 Minutes 3 amount owed because of the 10% rate increase that applies to the total amount; the developer would owe the City $120,000. Developers have pointed out this ambiguity. Highlights of the Discussion  A board member inquired whether the City is charging a rate or charging for work done.  Mr. Catanach replied they’re charging a rate, and explained calculations cover the cost of the entire system over a four square-mile area; a development pays less if it’s closer to the substation than other developments.  A board member inquired what problem needs to be solved. Mr. Smith replied that it’s specifically the scenario Mr. Catanach described, and that Option A removes any ambiguity.  A board member inquired if developers have asked about the proposed change. Mr. Catanach stated the proposed changes happened so quickly they haven’t been able to discuss it with developers, but past open houses on related topics had low attendance.  Mr. Smith stated staff recommends Option A, which requires 100% of the Electric Capacity Fee to be payable prior to construction of a development’s electric distribution system. It should not pose a financial burden on developers because they already have to pay an accelerated payment due to Xcel Energy’s policy.  A board member inquired about approximate fee costs. Mr. Catanach replied that a multi- million subdivision would pay $200,000 to $300,000.  A board member inquired if there is a perception that the City is losing revenue the way the process is set up now. Mr. Catanach replied no, the City doesn’t see a loss of revenue due to levelized cost of materials. The goal is to remove the ambiguity from the City Code.  A board member inquired about giving developers a choice of Option A or B. Mr. Smith replied staff would prefer not to deal with that complexity. Option A avoids any confusion and is more efficient for staff to administer.  A board member commented Option A ensures a streamlined process. Board Member Graham moved that the Energy Board recommends City Council adopt Option A of the Ordinance being presented for first reading on October 7, 2014 making changes to the City Code regarding the electric capacity fee. Board Member Michell seconded the motion. Vote on the motion: It passed unanimously. Draft 2015 Work Plan (Attachments available upon request) Mr. Catanach and board members discussed drafting the Energy Board’s 2015 Work Plan to align with strategic objectives in accordance with board bylaws, Energy Policy goals, City of Fort Collins Strategic Plan Objectives, and Utilities for the 21st Century Strategic Plan issues. The recent “super issue” meeting of all City boards and commissions touched on environmental health topics. Highlights of the Discussion  A board member suggested what to include in the Work Plan: listing streamlined Energy Policy goals and mentioning working with the Citizen Advisory Committee. He stated it’s not necessary to include language of the 2011 ordinance that created the Energy Board.  A board member suggested consolidating and simplifying 2015 goals, such as listing goals and how each ties to the City’s Strategic Plan Objectives. Energy Board October 2, 2014 Minutes 4  Mr. Catanach reported he had staff audit the Energy Board’s past year of activity and how it related to the Work Plan; the board’s work touched every element of the plan.  A board member inquired whether it is still the board’s responsibility to implement CAP. Mr. Catanach stated there are elements of the CAP, such as the built environment and transportation, which are the board’s responsibility. A board member commented he’s concerned about Utilities’ economic vitality, and it’s best to start the conversation early and come to an agreement.  A board member commented that we’ll have new Climate Action Plan in first part of the calendar year, recommendations from Rocky Mountain Institute (RMI), FortZED, etc. There are still a lot of moving parts and it’s important to identify and assure alignment between these plans and initiatives.  Mr. Phelan pointed out that although the recommended budget for the next two years will be approved by Council soon, the budget was developed under the old Energy Policy and without the Climate Action Plan in place, and therefore the board could ask for mid-cycle adjustments.  A board member inquired about the second paragraph of the Work Plan handout, which mentions advising Council on the Energy Policy 2050 Vision. What is the Energy Policy 2050 vision? Mr. Phelan stated it’s in the current Energy Policy. The board member commented the Energy Policy is a five-year policy, which is short-term, and the 2050 Vision is a long-term goal and speaks of aspirational goals as a community; he stated it’s a good reminder for the board to keep the distant future in mind when planning.  A board member commented the board is taking early steps to aim for its goals, and the necessity of looking both near and long-range.  A board member inquired about what staff is examining. RMI’s eLab (Electricity Innovation Lab), which is focused on collaborative innovation to address barriers to economic deployment of distributed resources. A board member requested an eLab update. Mr. Catanach stated he was heading to eLab next week, and would be glad to provide an update at the next meeting.  A board member inquired whether adding this topic to the Work Plan would create an unreasonable amount of work for staff. Mr. Catanach stated it would not.  Board members discuss implementation-oriented topics, such as land use and the fact that the CAP is separate, has a finite life, and is an effort the Energy Board certainly wants to support, as there is an overlaps of energy-related issues. The CAC ends in January/February 2015; implementation will fall to City staff.  Board members agreed to consider specific issues to address in the 2015 Work Plan, and email their ideas to Chairperson Behm and Vice Chairperson O’Neill so everyone has time to review them for discussion at the next meeting.  Environmental Services Director Lucinda Smith and Mr. Catanach, per the board, will discuss when the board can present the Energy Policy to the CAC. Energy Board October 2, 2014 Minutes 5 Energy Policy Discussion (Attachments available upon request) Board members discussed new additions to the Energy Policy draft, such as the section on transportation, the important principles of the City’s Transportation Master Plan pertaining to energy, and issues that support the Energy Policy, as well as refining specific language in the draft policy.  Ms. Smith commented that the City formed an interdepartmental staff effort called the Greenbuilt Environment Program, which was funded in the recommended budget. If the City hires a greenbuilt staff person, this will encourage a more integrated approach to planning, such as integrating land use and transportation. City leaders have a renewed focus on various departments combining efforts before revising City Code.  Board members discussed the definition of “enhanced travel corridors,” which they agreed can be interpreting broadly to encompass everything such as multi-modal streets that incorporate bike lanes. One example is Mountain Avenue, which was reduced to one lane to accommodate a bicycle lane.  Board members discussed setting aspirational goals to encourage transit-oriented development. A possibility is more fixed-transit corridors like MAX on Harmony, Drake, or Horsetooth.  A board member inquired what topics members would like to add to the policy. Mr. Catanach suggested examples such as planning for transition to electric vehicles and planning for the associated energy load.  Board members discussed the definitions of strategy (partnerships) and principle (higher level: reduce greenhouse gases), and agreed analysis from the CAP will help choose the correct numbers and dates for goals.  A board member inquired about MAX ridership. Staff estimated 1,200 people per day, and the board member pointed out that College Avenue sees 60,000 vehicles per day, which makes MAX ridership about 3% of total travelers on that street.  Board members discussed the concept of allowing Utilities to operate a district heating and cooling in combination with or separate from electrical generation, the possibility of an energy district, and how to remove barriers to general energy efficiency. They also discussed content in the Community Economics section, and language in the Privacy & Security section. Board Member Reports None Other Business  Board Member Friedman commented on a public utilities commission hearing yesterday, in which Colorado solar energy industry representatives and Xcel disagreed on the benefits of renewable energy. Industry representative estimated the benefits at 18 cents per kilowatt hour (kWh) to the grid, in contrast with Xcel’s estimate of 10.5 cents kWh. He stated that this is a common dispute and will continue for a while; it’s happening in other states.