Loading...
HomeMy WebLinkAboutEnergy Board - Minutes - 04/03/2014Energy Board Meeting Minutes April 3, 2014 1 Fort Collins Utilities Energy Board Minutes Thursday, April 3, 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 Nick Michell, Phil Friedman, John Graham, Margaret Moore, Stacey Baumgarn, and Michael Doss (late arrival noted below) Board Absent Chairperson Greg Behm and Board Member Peggy Plate Staff Present Steve Catanach, Angel Anderson, Dennis Sumner, Robin Pierce, Paul Sizemore, Bill Switzer, Cyril Vidergar, Lisa Gardner, John Phelan, Lucinda Smith, Randy Reuscher, and Lisa Rosintoski Guests Fred Kirsch, Michael Pruznick, Paul Davis, and Rick Coen Meeting Convened Vice Chairperson O’Neill called the meeting to order at 5:37 p.m. Public Comment Michael Pruznick distributed information on various types of rates that questions whether they are effective in influencing the consumer to change their energy use habits. He encourages the board and the City to take a “systems” approach to this matter. Fred Kirsch provided his comments in writing from the Public Comment section at the March 6, 2014 meeting for the record. Approval of March 6, 2014 Minutes Board Member Moore moved to approve the minutes of the March 6, 2014 meeting. Board Member Friedman seconded the motion. Corrections:  Board Member Graham requested a correction to Page 5, item 7, “A board member inquired if there is adequate funding to achieve the goals. How does it fit within the BFO process? Mr. Jackson stated he has encouraged the Transfort staff to be aggressive with potential BFO offers.” Board Member Graham requested to add an additional sentence, “Mr. Jackson said, ‘No, there is not enough money to fund the efforts, so I have encouraged Transfort staff to be aggressive in submitting Budgeting For Outcome (BFO) offers’.” Roll call vote: Baumgarn – Yes Friedman – Yes Energy Board Meeting Minutes April 3, 2014 2 Graham – Yes Michell – Yes Moore - Yes O’Neill – Yes Nays: There were none. Vote on the motion: It passed unanimously. Staff Reports Light and Power Operations Manager Steve Catanach announced that the Light and Power Utility has been awarded the RP3 Award once again by the American Public Power Association (APPA). The award comes as a result of peer reviews and recognizes utilities that demonstrate high proficiency in reliability, safety, workforce development, and system improvement. Light and Power’s first submission for the award was in 2010, and we achieved a score of 90.5% (platinum level). In 2012, we again achieved platinum level with a score of 98%, and this cycle, we scored 100% (diamond level). This is an impressive accomplishment! Paul Sizemore, FC Moves program manager, reported on two major planning projects going to Council work session next week, the Bicycle Master Plan and the College Avenue Midtown in Motion Transportation Study. The City has an existing bicycle master plan, but this version is much more significant than a routine update and serves as a new modal plan for bicycle use in the city. The Midtown in Motion study follows the Midtown Plan adopted by Council in October 2013 as the second phase of transforming College Avenue between Prospect and Harmony Roads. The project will focus, among other priorities, on transportation solutions that align with land use plans. In two weeks, the Lincoln Corridor Plan will go to Council. This has been an ongoing effort for the past year and calls for significant multi-modal improvements and enhanced transit service, including accommodations for bicycles and pedestrians. Additionally, Transfort is gearing up for MAX bus rapid transit service opening next month. Board questions: How many MAX buses will there be? The answer by staff was not definitive, but a reference was made to six buses. What are the operating hours? MAX buses will operate initially from 5 a.m. to midnight Monday through Saturday. Mr. Sizemore noted that Transfort requested funding for system enhancements by Council, such as extending the hours of certain routes. Sunday service was not funded in the last BFO cycle. Since this service is part of the Climate Action Plan, a board member recommended requesting Sunday service again. Mr. Sizemore noted that funding for Sunday service will be submitted again for the 2015-16 BFO cycle. Environmental Services Director Lucinda Smith reported that Council will review a proposed merchant regulation to limit distribution of “single-use” disposable shopping bags at a May 13th work session. The ordinance proposes steps to prohibit grocery stores (only) from giving away free disposable bags at checkout (does not limit plastic produce bags). The integrated recycling facility goes to Council on April 22nd. Terminology is now shifting from “integrated recycling facility” to “community recycling center”. The 2014 Lawn and Garden Equipment Rebate Program begins April 5th and extends through June 29th. On April 30th, there will be an Air Quality Forum for the public, hosted by the Air Quality Advisory Board from 6:30-8:30 p.m. Energy Board Meeting Minutes April 3, 2014 3 Energy Services Manager John Phelan noted that Utilities is seeking volunteers for a summer thermostat pilot study as described last month by Energy Services Engineer Pablo Bauleo. If board members are interested in the free digital thermostat and smartphone application, they may refer to the email circulated recently to board members. Advanced Meter Fort Collins (AMFC) Web Portal Demo (Attachment available upon request). Senior Electrical Engineer Dennis Sumner and Web Portal and Demand Response Project Manager Angel Anderson provided an update on the AMFC project and introduced the board to the new customer web portal and demand response program. Advanced meter installations will be completed this year. Mr. Sumner provided some information on the current status of the project: - $36 million total cost with an 11-year payback - 65,000 electric meters; 33,000 water meters; 55+ square miles service territory area - Meters and communications system functioning successfully - Meter-to-billing is operational. - Electric meters form a “mesh” that links to a Tropos wireless network. - 1.4 billion bits of data will be collected by the system. After much consideration at the start of the project, the decision was made to choose a core product with options that evolve over time. In the short term, staff will continue to seek the board’s feedback on communications and will remain open to any ideas from the board for long-term plans. Ms. Anderson provided a functionality demo of the new customer web portal. The portal provides cost overview, as well as information on kilowatt hours by “spike” in usage, and data on the customer’s environmental impact by a variety of measures (propane tank, cars, trees, and pounds in trash). - The City Utilities page will change as the demand response options are implemented. - The dashboard page provides easy access to rebate offers and program information. - Different colors are used to depict usage by rate tier. - The water cost details provide a linkage to weather information (rain, temperature, etc.). - It’s possible to detect leaks with the 24-hour water usage data. - The “Alert Me When….” feature allows the customer to register for email or text alerts to manage budgeted electric and water costs and will alert the customer to the projected next cycle’s bill. - Many educational features and usage tips are provided on the site. Ms. Anderson emphasized that the cost details available on the web portal are metered costs only. Stormwater and wastewater charges, various fees, bill adjustments, rebates, credits, taxes, and commercial water are not represented. Demand Response Program Utilities is working with Peak Partners to roll out a “Reduce Our Peak” demand response program. A small test network has been created, and enrollment emails are underway. Currently, 106 customers have enrolled with a desired target of 240 participants for the test. Staff intends to deploy hot water heater devices, new programmable thermostats for air conditioning, and a new ZigBee HD Library feature. A program called Energy Navigator is under development for commercial and industrial customers with anticipated launch in Q4 2014. Mobile applications will launch Q4 2014 for customers to access eBill, Control My Use (web portal), and the Peak Partners “Reduce Our Peak” demand response program. Customers will be able to adjust their thermostat and access many more features from their smartphone. Energy Board Meeting Minutes April 3, 2014 4 Single sign-on will be implemented, so customers do not have to go through different authentication steps to access these options. As more programs are added, there will be multiple vendor applications at work behind the scenes, but the customer will sign in one time to access all options. The services are web app-based. Board discussion: A board member asked if it’s possible to measure instantaneous power at a residence. It will not be available on the web portal. Utilities will purchase plug-in load devices (kilowatt meters) for checkout at the public library that allow the customer to monitor usage patterns and data. The limitation through automated metering infrastructure (AMI) is due to bandwidth (not adequate for closer to real-time information). Rather, it measures in 15 minute intervals. The system can be structured to prioritize certain types of signals to get through such as loss of power. Utilities is working to implement open communication protocol to be installed in a wide range of heating, ventilation, and air conditioning (HVAC) controllers. Capability is also beginning to appear in other electronic devices. Utilities is planning a similar approach for the in-home display (iHD) devices by the end of the year. A board member noted potential confusion to customers by having only the metered part of the bill displayed. Mr. Catanach noted it would not be possible to include everything, such as charges for annexations, stormwater, etc. and nearly 150 different rate charges. *** Board Member Doss arrived at the meeting at 6:45p.m. Rooftop Solar Net Metering Rate Ordinance (Attachment available upon request) Strategic Financial Planning Manager Lance Smith provided information on a proposed change to City Code related to the management of net metering. With the deployment of advanced metering infrastructure (AMI) to all residential customers, it is now possible to implement an automated monthly settlement process for customer-generators. In order to ensure that no additional financial burden is placed on existing net-metering customers, it is necessary to make the credit for distribution facilities charges explicit in the City Code. This change will also reduce the administrative burden of manual reviews involved with net metering and provide a more timely credit to the customer- generator. The customer-generator will see a financial credit on the monthly bill which will be applied to other Utility charges. Mr. Smith provided a “right sized” example, i.e. the customer has installed the appropriate amount of photovoltaic production to meet their annual energy consumption (generally). In any given month, the customer may produce excess energy or consume additional energy from the distribution system. With AMI, Utilities can now monitor both excess energy and additional consumption on the distribution system. On a monthly basis, excess energy is “banked” in a spreadsheet. Board discussion: A board member asked for clarification: The buyer of the electricity is paying for the distribution facilities charge. Mr. Smith confirmed that it could not be separated before in the system. If rates change, does staff have to go back to Council? Yes. Going forward, it will be part of the annual rate ordinance update. Energy Board Meeting Minutes April 3, 2014 5 With consideration of time-of-use rates, could this change again? Yes, in terms of how much we credit to the customer-generator and how we credit the funds. Our philosophy that we wouldn’t increase the charge to the customer-generator will remain consistent. Would a customer be selling and buying at a time-of-use rate? This is something to be discussed, but it would seem reasonable. Mr. Catanach noted that, as new systems come on board, we’re not paying customers for our distribution system. The energy is purchased at the retail rate. The intent for implementing the net metering charges was partially as an incentive, recognizing Council’s values, and Utilities wanting to help facilitate adoption. (Scenario: Customer has photovoltaic [solar] on the roof of a single residence). If the City does not reimburse them for that part of the bill, what does it cost? Mr. Smith noted it would cost about $90 annually. Why would the City not stop reimbursing customer for that fee now? We’re not quite ready and don’t think Council would support it at this time. The current system and manual processes were set up based on the meters we had at the time. Now the volume is larger and growing steadily every year; this is an opportunity to fully automate the process. How many systems are right-sized? Is there a particular adverse effect if not right-sized? There are about 15-20 customers who receive nominal checks each year. Yes, there could be an adverse effect, but we have capped the system size. Motion: Board Member Moore moved that the Energy Board vote to support the adoption of the Net Metering Rate Ordinance as presented here and considered by the City Council on May 6, 2014. Roll call vote: Baumgarn – Yes Doss – Yes Friedman – Yes Graham – Yes Michell – Yes Moore - Yes O’Neill – Yes Nays: There were none. The motion passed unanimously. Time of Use (TOU) Pilot Study (Attachment available upon request) In December 2013 when tiered rates were adopted, Council expressed interest in a time-of-use rate option. Mr. Smith noted that Fort Collins Utilities did not have the capability at that time for a TOU rate, but with automated metering infrastructure, Utilities now has the ability to offer it. Staff committed to return to Council with a TOU pilot study proposal, and this is scheduled for the April 22nd work session. Staff will seek direction from Council on whether to pursue any of the possible rate structures as a pilot study in 2015, in advance of adoption on a larger scale in 2016. It is important to pilot a TOU rate prior to roll-out to protect from revenue erosion and to assess customers’ response. A number of factors can be considered in deciding on a rate structure: - Affordability; - Bill stability; Energy Board Meeting Minutes April 3, 2014 6 - Conservation incentive; - Customer agility; - Ease of implementation; - Equity; - Revenue stability; and - Simplicity. The City is charged by Platte River Power Authority (Platte River) on a monthly coincident peak rate. If the City adopts time-of-use rates, we would be more closely aligned with what Platte River charges us. Mr. Smith reviewed potential rate structures and compared the objectives of each: flat rate, tiered rate, time-of-use rate, tiered time-of-use rate, coincident peak rate, or time-of-use plus tier rate. On a tiered rate, customers can be paying less than their real cost of service. With a time-of-use rate structure, their bills would increase, and customers using a lot of energy would see their bills decrease. Mr. Smith compared monthly energy consumption versus household income by neighborhood (data derived from the Census Bureau). On average, there is a correlation between the two. The board suggested that this point be emphasized to Council. There have been a lot of conversations in the community recently about economic fairness and making Fort Collins an affordable place to live. Board discussion: What brought this up for consideration at this time? Council senses that tiered rates may not be equitable and may be economically difficult for some households. We’re still pursuing something that is directly related to the customer’s usage behavior. This would help drive some other objectives in an economically justifiable manner, i.e. attach a real price to solar. It could be scaled for the social costs. Does the coincident peak rate from Platte River reflect their actual costs? Platte River uses a base load of hydro and coal burning. As demand increases, they turn to less efficient generation sources to meet demand. Traditional rate-making includes variable costs (fuel) and fixed costs (debt, infrastructure, transmission for peak capacity that can be loaded into a kilowatt rate, etc.) and are built around demand. Did we consider weighting the categories by equity (3) and simplicity (1), for example? If we test more than one scheme, i.e. two or three pilots, it might provide better information on second and third choices. Mr. Smith did not weight any factors, but there is an opportunity to provide analysis based on weighting. A coincident peak rate does not provide a conservation incentive. It’s simply load-shifting. We need to finesse the definition of conservation. A board member likes the list of rate objectives. It may be interesting to seek Council’s feedback on their priorities. Mr. Smith will provide these factors as Council considers the rate options. Is there access to the income numbers as related to household size and square footage? Those will have a significant impact on the numbers. Energy Board Meeting Minutes April 3, 2014 7 An “opt-in” program would not provide meaningful data. We would oversubscribe on the initial sample of 1,000 customers to allow for customers who choose to opt out. One of this board’s drives is to reduce emissions. Will this effectively reduce emissions and if so, how much? Or will it just shift load? Utilities anticipates that some load would disappear, but it’s difficult to quantify without a pilot. Is the TOU rate pilot being done to see how people respond? Then that’s only a test of a few rate objectives. A flat rate is really simple. We can test the objectives by testing a few rate structures to see if one of them generates more conservation if that’s our goal. The purpose in going to Council with the option of a pilot is to solicit their direction. Related to equity, that has to be fleshed out to achieve both equity to the Utility as a provider of energy and how its customer base pays for the energy at the right and the wrong time. Then, there is equity as far as how it affects the customer’s bill. Those two may not go together. If the major goal of a rate structure is to provide the factors in the table, based on the charge of this board and the Council’s goal to reduce emissions, the rate structure we’d want to test would be the one that hopes to reduce emissions by affecting behavior. This should be a guiding principle. A lower-paying customer is also likely a lower-consuming customer. This is a negative price signal, penalizing that customer and rewarding a customer who uses more – this seems at cross purposes. (Several board members supported more than one pilot to see which one achieves a reduction in kilowatt hours used as well as an equitable rate structure for the City and consumer). In best practices around the country, is there a general consensus for best rate structures? There are many papers available, but very little data is available on tiered or time-of-use rates to discern the effects. Why did Utilities leave the flat rate structure before? Council requested adoption of tiered rates for the purpose of conservation incentive. It was expected to drive significant energy reduction. We have seen only marginal reduction. What are we hoping to gain from the pilot(s)? Whether there is a rate structure that will drive conservation more than our current rate. What is the customer response going to be to any of the potential rate structures? We need to understand the customer’s behavior. How can we make the calculation clear to the public? Platte River’s demand charge as it is charged to us was rolled into the on-peak period. There are some restrictions on solar installations. Does our orientation restriction allow west-facing solar panels? We may want to modify the restriction. It allows those, but the rebate could be scaled. This might be a one-time negative signal to customers who use less energy. Does the bill still go down for lower-usage consumers? Our customers are across the board; the load curves vary; there are no absolutes. Some customers could potentially save money. Fifty-five percent of our customers stay in Tier 1, and many of those are not in lower income levels. If we’re going to conduct pilots with 1,000 customers per pilot, how do we insure we sample lower income level customers? It will be a random sample. It can be matched up with the available income data. Energy Board Meeting Minutes April 3, 2014 8 Customer Connections Manager Lisa Rosintoski noted an evaluation is underway for our low income assistance program. We are working with charitable organizations such as Salvation Army and are striving to understand where individuals go for assistance with their utility bill. A focus group is scheduled for April 4th both with individuals receiving the assistance and those agencies who administer assistance. The board requested to hear the results of this at a future board meeting. We’re not capturing the fact that there is a cost to carbon. Tiered rates brings this fact back in somewhat. Mr. Smith referred to equity from a rate design perspective – every customer should pay for their share of the total cost. When are the demand management tools going to be in place? It looks like a tight time frame to expect customers to understand all of the new tools and know how to use them to manage their usage. They will be available at the end of May. The pilot would start in the fall. How complex would the combination of tiered plus time of use rate be? With our current billing system, we can implement it. To the point about best practices, California has five tiers with bills that are too complex for customers to read. What additional tools can we provide to incentivize customers to drop peak usage? We’d like to see things paired. Most of the time, we’re not looking at the load shape of the efficiency curve. It evolves over time. Demand response is one of the tools. Is the Utility willing and does it have the bandwidth to run multiple pilots? We would have to assess whether it would confuse the public. IT bandwidth is a consideration with AMFC implementation underway, and the customer billing system could be coded for more than one pilot. Which of these can we test through survey results? Which can we only test with a field test? Rates always go up, regardless of new rate structures. In 2012, the City went to tiered rates without a pilot (a seasonal rate structure all at once), and then the High Park Fire occurred. It wasn’t possible to understand the impact of one of these factors alone. With a modest rate increase, there won’t be an introduction of seasonality, and we’d simply be changing the rate structure, which allows us to understand the impact of it. We want a pilot to run through a summer cycle. If we don’t start the pilot this fall, it would be fall of 2015 before we could kick it off. Board Member Graham moved 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. Board Member Moore seconded the motion. Roll call vote: Baumgarn – Yes Doss - Yes Friedman – Yes Graham – Yes Michell – Yes Moore - Yes O’Neill – Yes Nays: There were none.