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Energy Board Minutes
April 7, 2016
Fort Collins Utilities Energy Board Minutes
Thursday, April 7, 2016
Energy Board Chairperson City Council Liaison
Pete O’Neill, 970-288-4562 Ross Cunniff, 970-420-7398
Energy Board Vice Chairperson Staff Liaison
Nick Mitchell, 970-215-9235 Tim McCollough, 970-305-1069
Roll Call
Board Present: Chairperson Pete O’Neill, Vice Chairperson Nick Michell, Board Members Greg
Behm, Bob McDonald, Phil Friedman, and Stacey Baumgarn (2 vacancies)
Staff Present: Tim McCollough, Cyril Vidergar, Lance Smith, John Phelan, Lindsey Ex
PRPA: Paul Davis, Pete Hoelscher, Chris Wood
RAP (Regulatory Assistance Project): John Shenot, RAP Senior Associate
Members of the Public: Ruth Lutes, Rick Coen
Meeting Convened
Chairperson Pete O’Neill called the meeting to order at 5:30 p.m.
Public Comment
None
Approval of March 3, 2016 Board Meeting Minutes
Minor amendments to the March 3, 2016 minutes were made by the Board Members.
Chairperson Pete O’Neill moved to approve March 3, 2016 minutes as amended.
Board Member Greg Behm seconded the motion.
Vote on the motion: It passed unanimously, 6-0.
Energy Policy 2015 Annual Report
John Phelan, Energy Service Manager
(Attachments available upon request)
Mr. Phelan shared with members of the board that the Energy Policy 2015 Annual Update
Report is a draft and is close to being finalized. There’s a number of staff that will read through
the report before it will be finalized. Its current state is close to what was presented last month.
Mr. Phelan requested that the board motion a favor to accept the draft. The Board concluded that
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no motion or action was needed to accept Mr. Phelan’s draft. It was requested that Mr. Phelan
submit the final copy electronically to the board.
Clean Power Plan - Platte River Power Authority (PRPA)
John Shenot, Senior Associate RAP
(Attachments available upon request)
Mr. Shenot introduced the Regulatory Assistance Project (RAP), which is a global, non-profit
team of energy experts, mostly veteran regulators, advising current regulators on the long-term
economic and environmental sustainability of the power and natural gas sectors. Mr. Shenot
explained the clean power plan. In August 2015, US Environmental Protection Agency (EPA)
issued final rules limiting greenhouse gas (GHG) emissions from certain types of new and
existing power plants. The EPA dubbed the rule for existing power plants the “Clean Power Plan
(CPP).” The Act I started from 1999 with groups petitioning the EPA to regulate vehicle GHG
emissions and in 2010 the EPA issued the final rule regulating GHG emissions. In 2012 the
Court of Appeals denied challenges to the GHG rules and won all the appeals by 2013. GHG
emission limits for vehicles automatically triggered Clean Air Act (CAA) §§111(b) requirement
for EPA to develop New Source Performance Standards (NSPS), CAA §§111 (d) requires state
to implement and enforce standards of performance for existing sources when a pollutant
covered by NSPS is not regulated in CAA §§110 or 112. Clean power reflects the degree of
emission limitation achievable through the application of the best system of emission reduction,
taking into account the cost of achieving such reduction and non-air quality health and
environmental impact and energy requirements. Pros: 1. Heat rate improvements at coal-fired
units, 2. Re-dispatch from coal units to natural gas combined cycle units, 3. Increase renewable
and nuclear generation. EPA published “emission guidelines” establishing national, categorical
performance standards for Carbon Dioxide (CO2) emissions from existing electrical generating
units. EPA translated the categories standards into equivalent state wide standards. States must
submit plans for achieving emissions guidelines. Without a submitted approved plan, the EPA
will impose a federal plan. The State of Colorado has to submit a compliance plan by September
6, 2016 or an initial submittal with two year extension on the final plan and within compliance
by September 6, 2018. Interim emission limits begin January 1, 2022 and final emission limits
begin January1, 2030. Supreme Court intervened and put a “stay” on the rule and CPP cannot be
enforced pending the outcome of litigation. Should the EPA prevail, it is unknown whether
any/all key dates will be delayed.
Discussion
Key concerns were brought up by Mr. Michell to board:
What will Colorado decide, a rate or mass-based compliances plan? Mr. Wood replied that
the final path won't be known until the courts decide on the stay.
Would the plan allow Colorado sources to trade with other states? Mr. Wood responded
that Fort Collins climate action plan (CAP) is more ambitious than the Clean Power Plan
(CPP). A decision will need to be made if the CAP achieves additional emission reduction
above the CPP requirements. Will Fort Collins extra efforts help Colorado and perhaps
other states comply with CPP?
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Clean Power Plan - Platte River Power Authority (PRPA)
Chris Wood, PRPA Environmental Services Manager
(Attachments available upon request)
Mr. Wood reviewed what Platte River is doing through rulemaking process participation,
modeling, and planning for carbon reductions. The rulemaking process included State
Stakeholder meetings, comments and feedback on Federal Rules, and Trade groups, such as the
Large Public Power Council and American Public Power Association. Modeling, included
support from Pace Global, and participation in state/regional modeling efforts. Emission
reductions included a path towards GHG emission reductions via unanimous Board direction.
Discussion
Mr. Michell asked how population growth is handled by the rate-based verses the mass-based
limits. Mr. Phelan responded it’s not that simple. The EPA has growth assumptions included in
the rates. Mass is based on the number of tons and is limited by population and as it grows or
shrinks. Rate based is established on the number of Mega Watts (MW) and the number of tons.
Both go up in sync.
Discussions continued around the difference of rate-based versus mass-based. Although details
are not defined, the team is preparing to meet the deadline. A completed study is set for approval
by PRPA in April. The Board requested PRPA to come back once they have the results of their
study of how to provide renewable generation to meet Fort Collins’ Climate Action Plan goals.
Off-cycle CAP Appropriation Ordinance (Climate Action Plan)
Lindsay Ex, Environmental Program Manager
(Attachments available upon request)
June’s Final report: Vetting Initiatives
2015 inventory dropped 9% below 2005
Building energy
$51,388 ($89,066 ongoing)
2020 Impact: 2000 CO2 tons (.4%)
Energy efficiency and post of decision making process
Significant reduction by 2030
City Energy Project
CAP Program Support
2020 Impact: Enabling Initiative
$184,605 ($333,153 ongoing)
CAP Manager, Sustainable Services Area - oversee, coordinate and manage CAP
implementations
Sustainability Services Area (SSA) Financial Analyst-Enable SSA to develop business
plans and financial analysis around CAP and SSA strategies
Smart grid and systems operation manager-integrate renewable and distributed supply
resources into electric delivery system in a way that is both safe and reliable.
CAP Pilot/Innovation Fund
$190,000 (ongoing funding vetting thru BFO)
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2020 Impact: Varies
Foster innovative approaches to CAP goals
Test and learn from scalable concepts
Prioritize initiatives:
HEAL $60k
Carbon sequestration analysis $75k
CAP Innovation Summit 25k
Electrify commercial lawn and garden equip $30k
Incentives that are offered to residential and commercial:
Biomass Burner Feasible Study (Ash trees)
$50,000 One-time funding
2020 impact: 2000 CO2 tons .4%
Discussion/Decision
Mr. Michell questioned the Heal loan-Advantage of loans through the employer? Ms. Ex
revealed that the pilot program is being tested by two employers. The concept is to educate more
people on the energy efficiency programs available to the public.
Board Member Behm moved that the Energy Board endorse adoption of Ordinance No,
046, 2016 appropriating prior year reserves in the General and the Light and Power fund
and transferring appropriations from the Light and Power fund to the General Fund for
2016 projects associated with the 2020 Climate Action Plan (CAP) Strategic Plan.
Board Member Pete O’Neill seconded the motion.
Vote on the Motion: It passed unanimously, 6-0.
Staff Report
Utilities Strategic Financial Plan
Lance Smith, Strategic Financial Planning Manager
(Attachments available upon request)
The quarterly report included January through February 2016.
Revenue is up over the previous year with revenues on-budget, based on each rate class.
Expenses have increased due to revenue, prices, and expansions. The ten year Strategic Financial
Plan includes anticipated capital improvements, rate adjustments, debt issuances, Operation and
Maintenance cost, financial ratios, reserve balances, and review of current finance positions of
each utility. The Capacity study from Leidos determined 2016-2026 additions to include two
new substations and twenty-nine new circuits, annexations estimated at $15 million, technology
improvements, work prioritized by anticipated system needs and resources available. Capital
funding shortfall is estimated at $4 million over 10 year Capital Improvement Plan (CIP)
average, which can be made up with a 1x rate increase. Rate increases have modestly exceeded
inflation over the past decade however our rates remain among the lowest in Colorado.
Revenues were less than anticipated during the 2015-2016 Budgeting For Outcomes process,
actual expenses were also less than budgeted so the Net Income for the Light and Power Fund is
expected to be more than anticipated. The development of a comprehensive CIP in 2016 will
refine the 10 year Strategic Financial Plan for this Fund. Increased investment in infrastructure
and technology is expected to draw down cash reserves over the next decade while rates will
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continue to increase in response to the Clean Power Plan and the City’s Climate Action Plan. A
combination of debt being issued and modest rate adjustments will allow the Fund to remain
financially sound going forward.
Board Member Reports
Mr. O’Neill, Board Chairperson shared information on the recent PRPA Board Meeting
supporting Fort Collins goals. Loveland Board, suggested a joint committee with Fort
Collins and Loveland. Mr. O’Neill suggested a Work Session to discuss the two cities
opportunities to collaborate.
Mr. O’Neill encourages others to apply for the two open Board positions. The process
and timeline was review.
The Board reviewed going paperless. Wi-Fi is now available for all Board Members for
all last minute meeting updates.
Mr. McDonald commends the city for handling the snow storm with minimal outage
compared to surrounding areas.
Board Member Greg Behm moved that the Energy Board go paperless.
Board Member Phil Friedman seconded the motion.
Vote on the Motion: It passed unanimously, 6-0.
New Business
None
Future Agenda Review
Mr. McCollough reviewed the draft 2016 Energy Board Agenda Planning Calendar. The next
Work Session is scheduled for April 28,
2016.
Adjournment
The meeting adjourned at 8:07 p.m.
Submitted by Robin Curtis, Temporary Administrative Clerk, Fort Collins Utilities
Approved by the Board on_____________.
________________________________ ______________
Angel Anderson for Robin Curtis Date
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5/6/2016
05/05/2016