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HomeMy WebLinkAboutEnergy Board - Minutes - 07/09/2020 ENERGY BOARD REGULAR MEETING July 9, 2020 – 5:30 pm 222 Laporte Ave.; Colorado Room ENERGY BOARD MEETING |07/09/2020 ROLL CALL Board Members Present: Amanda Shores, Jeremy Giovando, Bill Becker, Dan Gould, Alan Braslau, John Fassler, Marge Moore, Sue McFaddin, Steve Tenbrink Board Members Absent: OTHERS PRESENT Staff Members Present: John Phelan, Christie Fredrickson, Cyril Vidergar, Molly Saylor, Rhonda Gatzke Platte River Power Authority: Trista Fugate, Andy Butcher Members of the Public: Rick Coen, Alexander Warne, Nick Michell, Scott Brechmacher MEETING CALLED TO ORDER Chairperson Shores called the meeting to order at 5:30 pm PUBLIC COMMENT Rick Coen said he hopes the Solar discussion tonight will cover repowering planning and costs for the Riverside Community Solar Farm acquisition. APPROVAL OF MINUTES In preparation for the meeting, board members submitted amendments via email for the March 12, 2020 minutes. The minutes were approved as amended. ANNOUNCEMENTS & AGENDA CHANGES Chairperson Shores briefly reviewed some virtual meeting etiquette. STAFF REPORTS Interim Utilities Executive Director Introduction Theresa Connor, Interim Utilities Executive Director The previous Utilities Executive Director, Kevin Gertig, left the City on May 1 and Ms. Connor has been serving as interim Director in the meantime. Ms. Connor has been the staff liaison for the Water Board and was a Deputy Director in Utilities prior to accepting the interim position. Ms. Connor said she is honored to be serving in this temporary role, and she’s very proud of Utilities staff and the way they have upheld service and standards amidst the pandemic. Board member McFaddin asked if the Energy Board will have a voice in hiring the new Executive Director. Ms. Connor said she could pose that question to the hiring team, and that it’s not uncommon to have a few different stakeholder panels. Utilities COVID-19 Dashboard John Phelan, Energy Services Senior Manager ENERGY BOARD REGULAR MEETING ENERGY BOARD MEETING | 07/09/2020 Mr. Phelan reviewed the COVID-19 Dashboard, which contains metrics indicating impacts to resource use and customer service due to COVID-19. Weekly reports are available on the Utilities website at: https://www.fcgov.com/utilities/covid-19 The key takeaways from March 26 through June 20 are the total electricity use and peak demand are trending toward expected values, lower by 3%-8%, and community treated water is up about 6% and wastewater is down about 7%. Board member Becker asked if these changes have a meaningful effect on revenues. Mr. Phelan said it does, though it is complex because it is a mixture of electricity use and demand. Residential has modestly increased with everyone working from home, but commercial use has dropped dramatically (though it is on its way back up). Riverside Community Solar Project Acquisition Leland Keller, Energy Services Engineer The Utility’s acquisition of the Riverside Community Solar project was approved by City Council on June 16, 2020. The community array is fully subscribed with 205 customer-owners, and the median share size is 10 panels, 3.05 kilowatts, which provides approximately $270.00 in annual utility bill credits. Clean Energy Collective (CEC) has provided construction, recruitment, operations, maintenance and customer support for the project since 2015. The proposed acquisition, totaling $1.00, will transfer all assets previously owned by CEC to Fort Collins Utilities, including all program management, operations, and maintenance. Solar and PV models owned by participating customers, existing contracts for array operations and maintenance, communications and site maintenance, development agreement, and liabilities incurred or initiated prior to closing are not included in the ownership transfer. Current bill credits will continue under the new Council adopted rates, though participants will be required to sign a new Continuing Customer Agreement. Several email and USPS notifications will be sent to participants, but if someone is unresponsive after 90 days their bill credit benefit will be donated to the Payment Assistance Fund until they sign the Agreement to join the Community Solar Program. Board member Tenbrink asked if the participants are more residential or commercial customers. Mr. Keller said nearly all participants are residential, as the program was intended for the residential population; however, some participants have donated their benefits to some non-residential accounts, such as local non-profits or churches. Mr. Tenbrink wondered if the participation option is full. Mr. Keller confirmed it is fully subscribed at this time, but he recently opened a waitlist (without advertising) and has already added several customers to the list. Chairperson Shores wondered what spurred the decision to acquire the solar garden, and what the maintenance and repowering costs are. Mr. Keller said the negotiations with CEC began when the Time of Day structure was implemented for residential rates, which ultimately led to considering this acquisition option later in 2019. Chairperson Shores asked if someone could speak on the maintenance costs. Mr. Keller said the O&M fund is replenished on a regular basis with approximately 9.4% withholding of benefits from generation of the array. Using those O&M funds, Fort Collins Utilities will pay for site maintenance as well as O&M and replacement of the array and modules. Distributed Energy Resources Strategic Planning ENERGY BOARD REGULAR MEETING ENERGY BOARD MEETING | 07/09/2020 John Phelan, Energy Services Senior Manager Tim McCollough, Deputy Director, Utilities Light & Power Mr. Phelan said staff plans to bring more content and time to this topic at a future meeting but wanted to give the Board a brief update. The four cities (Fort Collins, Loveland, Longmont, and Estes Park) and Platte River partnered together to create a Strategic Plan for Distributed Energy Resources (DER). Smart Electric Power Association (SEPA) was selected as the consultant for the project, but when the shutdowns began in March everything was placed on hold. Things have since restarted and there was project kickoff meeting, and SEPA has collected data from the partners and they have scheduled workshops over the next few months. The goal of the project is to develop a framework for which DER programs can be screened and evaluated for each distribution utility, their customers, and Platte River. OUR CLIMATE FUTURE UPDATE John Phelan, Energy Services Senior Manager Molly Saylor, Environmental Services Senior Specialist Our Climate Future (OCF) is a joint process to equitably update the City’s Energy Policy, Road to Zero Waste plan, and Climate Action Goals. Equity is a guiding theme of the OCF process and outcome, meaning the process should ensure opportunities for all to co-create policies, tools, and programs, and in the end everyone benefits from a carbon neutral Fort Collins. Ms. Saylor noted that in the past, staff has viewed social benefits as co-benefits, and while there is still a strong role for those technical aspects, staff is putting the community in the center of this work and looking at the community’s needs and priorities. The OCF Project scope remains the same in that it will cover three existing plans, it is community- centered, led with equity and racial and cultural equality, and will be delivered to City Council no later than the first quarter in 2021. It has changed recently to include virtual engagement and now has a reduced consultant scope and overall budget. Originally, the budget was $150,000 split over two years, but in the post-pandemic revision there is $60,000 in 2020, all coming from Light & Power (which is partially balanced by 2019/20 general fund contributions). Community, Staff, and Consultants all still have roles in this process. The Community role is the same as previously envisioned, with the caveat of pandemic engagement impacts, and includes community subject matter experts and stakeholders. The Staff role is increased, picking up work previously envisioned to have support from consultants. The Consultants role has decreased, putting a strong focus on their strengths. Phase one is officially complete, and staff is making steps into Phase two, strategic planning. The community identified several priorities and barriers earlier this Spring. Staff is currently working on scheduling eight (virtual) brainstorming workshops, which are designed to facilitate a collaborative space for community members and experts from the City and other organizations to think of big moves, or strategies and goals, to help the City address the community’s priorities, while also considering those big barriers that could keep us from getting there. Community members can also submit ideas on the City’s virtual idea board at fcgov.com/ourclimatefuture. The objective of phase two engagement is to develop this list of potential big and next moves for further screening, evaluation, and analysis. Staff wants to reach various groups of people, including residents, ENERGY BOARD REGULAR MEETING ENERGY BOARD MEETING | 07/09/2020 historically underrepresented groups, businesses, industry experts, stakeholder groups, and other City staff. Energy Board members may fall into several of these categories, and they have a role in promoting participation and community engagement. Staff has developed some templates that the Board can send throughout their own personal networks. The Board also has a work session scheduled for August 27 which Mr. Phelan would like to dedicate to OCF as an idea workshop. Board members wondered if the OCF Community Advisory Committee has been able to meet remotely during the shutdown. Mr. Phelan said they briefly met, and hope to meet again soon. Chairperson Shores asked for clarification on the budget cuts to the program and what it means. Mr. Phelan confirmed the budget was cut in half for 2020, but nothing was cut from the project scope. The timeline was extended, and the workload was shifted from the consultant to City staff. Chairperson Shores also noted that engaging with underrepresented groups is going to be a huge challenge, and she wondered what staff’s plan is. Mr. Phelan said she is correct, online engagement will be an enormous challenge, but staff is committed to the community members. Staff will be working with plan ambassadors and community partners who network and workshop within their communities and neighborhoods. Mr. Phelan said staff was notified earlier today that they were awarded a grant from the Urban Sustainability Directors Network for a unique project to engage specific neighborhoods that are historically underrepresented through two partner organizations, MiVoz and La Familia, using art as an integral piece of the engagement program. Mr. Phelan said he would like the Board to consider how they want to engage as the Energy Board. RAWHIDE UNIT 1 Trista Fugate, Platte River Power Authority Andy Butcher, Platte River Power Authority The 2019 session of the Colorado General Assembly passed several significant pieces of legislation that addressed greenhouse gas emissions from Colorado’s electric utilities. HB 1261, or The Climate Action Plan to Reduce Pollution, established statewide goals to reduce 2025 greenhouse gas emissions by at least 26%, 2030 emissions by at least 50%, and 2050 emissions by at least 90% (compared to 2005 baseline). SB 236, the sunset Public Utilities Commission bill, reauthorized the PUC and requires a qualifying retail utility to submit a Clean Energy Plan (CEP), and allows any other utility to voluntarily submit a CEP to the commission. A CEP is one that reduces a utility’s carbon dioxide emissions associated with electricity sales by 80% from 2005 levels by 2030. It also seeks to provide its customers with energy generated from 100% clean energy resources by 2050. The format for the CEP is currently undetermined, but Platte River staff members are participating in weekly stakeholder meetings with the Colorado Department of Public Health and Environment (CDPHE) to discuss the details of the guidance document, so the CEP can be determined by this fall and filed in early 2021. If Platte River doesn’t voluntarily submit a CEP, they could be subject to additional regulation and/or fees on greenhouse gas emissions that may be implemented by Air Quality Control Commission. The announced decision to close Rawhide Unit 1 coal generation by 2030 as part of a CEP derives from these considerations. AQCC Regulation 22 implements a statewide greenhouse gas reporting and reduction policy that aligns with different legislative directives, including HB 1261 and SB 236. The Federal Regional Haze Program aims to reduce visibility impairment in protected lands, such as national parks and forests. Rawhide Energy Station is subject to this program due its proximity to Rocky Mountain National Park. CDPHE is using a four-factor analysis to determine whether any additional controls are needed for Rawhide. These factors include the cost of additional controls, the time frame to install the controls, energy and air quality impacts, as well as emission source remaining useful life. CDPHE will hold its initial hearing with the ENERGY BOARD REGULAR MEETING ENERGY BOARD MEETING | 07/09/2020 AQCC on August 20, and a second hearing on November 20, where the AQCC will provide a regional haze recommendation. The state’s regional haze plan is also due to the EPA in July of 2021. Leading up to today, Platte River has developed several plans and studies around the impacts to generation resources: Customized Resource Plans (2016), Zero Net Carbon Study (2017), Resource Diversification Policy (2018), and the Integrated Resource Plan (2018-2020). The IRP is an ongoing process, even though it is presently on hold, it was due to be submitted to the Western Area Power Administration (WAPA) in July. Due to COVID-19, Platte River was unable to meet that deadline because it is important to them to be able to get public input. WAPA granted Platte River an extension until July of 2021. Platte River has publicly presented four portfolio options: Continuity, Zero Coal, Zero Carbon, and Integrated Utilities, but with the closure of Rawhide, Portfolios 2 (Zero Coal) and 3 (Zero Carbon) are the only remaining viable options in the IRP. Mr. Butcher said they plan to present these options to the Platte River Board once again and Platte River staff will make a recommendation on a portfolio that will bring closure to the IRP. Mr. Butcher explained it would be virtually impossible to meet the state’s requirement of 80% carbon reduction goal by 2030 with Rawhide still online, it would have to be used only as a peaking-unit and the costs of doing that are too prohibitive for that scenario to make sense. Board member McFaddin asked if there is a portfolio option that the community is leaning toward and if there will be additional transparency as the IRP process continues. Mr. Butcher said Platte River will be moving forward with Portfolios 2 and 3, and transparency will come with the publishing of the IRP Report (over 100 pages). He noted that in any scenario, there is not an action plan that takes place within the next five years, so there are no dollars to commit in the next five years. 2021 BUDGET UPDATE John Phelan, Energy Services Senior Manager Tim McCollough, Deputy Director, Utilities Light & Power Lance Smith, Director, Financial Planning & Assets Mr. Phelan explained how the budget process has changed in the wake of COVID-19. Rather than budgeting for two years (as is the City’s typical planning process), this year’s process has been reduced to a one-year budget for 2021. Revenue entry was formed with top-down modeling and reconciled with each revenue stream. Offer development has net spend level targets by each service area, with linkage to the strategic plan and performance measures. BFO (Budgeting for Outcomes) Teams will not be deployed under this modified approach and community engagement will be more limited, with a focus on service level “add backs.” Mr. Smith said through June operating revenues are about 1.3% below budget for the year, and for the month of June they were about 2.3% below budget. Based on this trend information, staff is conservatively assuming a 3-4% decrease in operating revenues in 2021. Electric revenues are a function of variable demand, and fixed revenues are very small in this Utility, increasing the revenue risk. Revenue risk is largely offset with a pass through of wholesale power expense. Given the economic situation we are in, Staff was asked to write a 2021 budget without imposing a rate increase to the community. If Platte River moves forward with a 2% wholesale increase, then the City will need to increase purchased power expenses and subsequently increase operating revenues, to offset that increased cost. ENERGY BOARD REGULAR MEETING ENERGY BOARD MEETING | 07/09/2020 Mr. McCollough said City Staff have been working on 2020 budget revisions since late February (reducing expenditures by 5%), while also working on the 2021 budget process in tandem. Staff used the reduced 2020 budget as a template for 2021’s budget. The City will not be giving salary increases in 2021 and imposed hiring freeze through at least the end of 2020. Due to the reduction in revenues and O&M, there is less money available for enhancement offers in the next budget cycle, though a few offers will be brought forward as priorities. Budget Lead Team deliberations will take place through most of July into early August, and the City Manager will submit his recommended Budget to the City Clerk’s office in early September, and typically the final Council reading of the budget is in late November. Staff would like to bring the City Manager’s Recommended Budget back to the Energy Board at their September meeting. Mr. McCollough reminded the Board they can submit feedback to Council regarding the budget through letters to their Council Liaison, Ross Cunniff, or attend any of the Council meetings and speak during public input. Board members asked for clarification on purchased power. Mr. Smith said purchase power is how the City refers to wholesale charges from Platte River. Mr. McCollough added that Platte River develops a revenue requirement based off their expenses on annual basis, which is represented in several of the Utility’s budget offers. Board member Braslau wondered if staff would be able to share their budget offers prior to when the City Manager releases his recommended budget. Mr. Phelan said given the financial situation we are in, the offers that are being submitted are not dramatically different than what has been submitted in previous years on the program and funding level sides, with most enhancement offers removed. Mr. McCollough said he will take the feedback to the BLT and Theresa Connor to find out what level of detail and engagement can be shared with the Board right now, but he is hesitant because he would not want to set any false expectations about what is economically feasible. Chairperson Shores asked what would happen to the rates if the economic effects of COVID-19 linger. Mr. Smith said the reality is, we don’t know what will happen and there is no way to know, so they are being as conservative as possible with the information we currently have. If people continue to work from home rather than in an office, there will be a shift in usage from commercial to residential and the Utility would need to evaluate the rate structure because the wholesale charges come through with energy and demand components, but for the residential rates these are bundled together. BOARD MEMBER REPORTS Chairperson Shores plans to attend the City Council work session when they discuss reimagining Boards & Commissions. The Board reviewed a letter Ms. Shores drafted regarding this topic and are in support of sending it to Council. FUTURE AGENDA REVIEW 2021 Budget will be discussed in September, along with the Utilities Affordability Programs. Chairperson Shores would like an update on EPIC Homes, and Board member McFaddin would like an update on Metro Districts when it comes back to Council. ADJOURNMENT The Energy Board adjourned at 8:40 pm.