HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 08/17/2004 - FIRST READING OF ORDINANCE NO. 128, 2004 APPROPRIA ITEM NUMBER: 12
AGENDA ITEM SUMMARY DATE: August 17, 2004
FORT COLLINS CITY COUNCIL STAFF: Michael Smith
Gary Schroeder/Ken Marmon
SUBJECT
First Reading of Ordinance No. 128, 2004, Appropriating Unanticipated Revenue and Prior Year
Reserves in the Light and Power Fund and Authorizing the Transfer of Existing Appropriations
in the Equipment Fund for the Purpose of Purchasing Hydrogen Fueling Equipment and
Infrastructure at the Transfort Alternative Fueling Station.
RECOMMENDATION
Staff recommends adoption of the Ordinance on First Reading.
FINANCIAL IMPACT
The $35,000 requested from prior year reserves in the Light and Power Fund represents 4% cost
share for the total Transfort Alternative Fueling Station. Grants of$286,266 and $210,000 will
cover 58% of the total project cost. Remaining funds needed to complete the project will come
from existing appropriations totaling $207,000 from the City's Equipment Fund.
EXECUTIVE SUMMARY
This Ordinance authorizes a $35,000 appropriation of prior year reserves in the Light and Power
Fund for purchase of hydrogen fueling equipment and infrastructure for the Transfort Alternative
Fueling Station. In addition, this Ordinance authorizes appropriation of$210,000 in equipment
and funds being donated by the Colorado Governor's Office of Energy Management and
Conservation to the Transfort Alternative Fueling Station. This Ordinance also authorizes
transfer of $207,000 from the Equipment Fund operations budget to the Equipment Fund —
Transfort Alternative Fueling Station.
BACKGROUND
In January of 2001, City Manager, John Fischbach created the Hydrogen Task Force ("HTF") to
explore the City's potential use of hydrogen as a power supply. On August 27, 2001, the HTF
submitted a report titled "Report of the City of Fort Collins Hydrogen Task Force" with its
findings and recommendations for hydrogen projects.
The Report led to Council's adoption in March, 2002, of Resolution 2002-027, Establishing a
Policy to Implement Hydrogen-Related Projects Within the City
August 17, 2004 -2- Item No. 12
(http://fcgov.com/utilities/htfphp). After further staff research into potential projects and grant
and partnership opportunities, a hydrogen update report was submitted, dated October 28, 2003,
with more specific findings and recommendations.
Shortly after release of the updated report, the Colorado Governor's Office of Energy
Management and Conservation ("OEMC") agreed to donate to the City $210,000 for the
purchase of an electrolyzer, which generates hydrogen by using electricity to split water into
hydrogen and oxygen, and other fueling equipment. As a result, the City will be able to add a
Hythane®/Hydrogen fueling plant to the previously planned Transfort Alternative Fueling
Station ("TAFS"). Hythane is a mixture of natural gas and hydrogen.
The TAFS gives the City a solid start in hydrogen infrastructure. Hythane can be used directly
in vehicles designed to operate on compressed natural gas ("CNG") which the City already
owns. The use of Hythane in such vehicles typically results in a 40%-50% reduction is
emissions over CNG. The Hythane/Hydrogen fueling plant can also dispense pure hydrogen.
This flexibility presents several opportunities: (1) purchase a transitional pure hydrogen vehicle,
such as the hydrogen hybrid to be offered to fleets by Ford; (2) attract vehicle demonstrations
with the large automakers which are currently testing fuel cell vehicles in various climates; (3)
establishes a"springboard" from which to develop other hydrogen projects.
The Hythane/Hydrogen fueling plant will utilize a relatively small (25 kW) electrolyzer to
produce hydrogen. Utilities will have the opportunity to learn more about the operation of these
devices, which are likely to become widely available to consumers as the hydrogen economy
develops. Several manufacturers currently have prototype electrolyzers designed to be installed
in residential garages and would use Utility power to fuel a hydrogen vehicle overnight. With
these future applications in mind, Utilities staff will assist with implementing electrolyzer
controls to prevent the electrolyzer from operating during peak periods. This will reduce
operating costs as well as impacts on the distribution grid.
Another consideration with the electrolyzer is, when coupled with a fuel cell or engine generator,
the electrolyzer becomes a component of an electrical storage system. This is valuable in
managing peak periods of electrical usage as electricity shaving and storage of renewably-
generated electricity from intermittent sources such as solar electric systems and wind generators
can be accomplished. Data gathered from the electrolyzer used for this project will be valuable
in evaluating these types of future applications.
City policy that supports this project is as follows:
• This is a pilot project in support of Resolution 2002-027 Establishing a
Policy to Implement Hydrogen-related Projects within the City.
• This project is supported by the 2003-2005 Council Policy Agenda,
Adopted September 2, 2003, Theme 6: Environment, Target 1: Develop a
comprehensive Energy Policy for City operations and the community,
Objective d. Study and implement additional ways to reduce
environmental impact of City operations. It is also supported by Target 4:
Enhance air quality policies, Objective c. Continue to evaluate sources of
clean energy, especially hydrogen.
August 17, 2004 -3- Item No. 12
• This project is consistent with Fort Collins Local Action Plan to Reduce
Greenhouse Gas Emissions, adopted by Resolution 99-137 and has the
potential to substantially reduce local emissions of City buses and fleet
vehicles and educate local safety officials regarding hydrogen.
• In 1997, Fort Collins City Council adopted Resolution 97-051, outlining
the City's role as energy provider, user, and educator. This resolution
states: "That as a user of energy, ... The City shall also regularly evaluate
the latest technologies utilizing alternative fuels for transportation and, to
the greatest extent practicable, apply such technologies to the operation of
City vehicles in order to provide energy efficient transportation."
ATTACHMENTS
Resolution 2002-027
ORDINANCE NO. 128, 2004
OF THE COUNCIL OF THE CITY OF FORT COLLINS
APPROPRIATING UNANTICIPATED REVENUE AND PRIOR YEAR RESERVES IN THE
LIGHT AND POWER FUND AND AUTHORIZING THE TRANSFER OF EXISTING
APPROPRIATIONS IN THE EQUIPMENT FUND FOR THE PURPOSE OF PURCHASING
HYDROGEN FUELING EQUIPMENT AND INFRASTRUCTURE AT THE TRANSFORT
ALTERNATIVE FUELING STATION
WHEREAS,on March 19,2002,the City Council adopted Resolution 2002-027,establishing
a policy to implement hydrogen-related projects within the City; and
WHEREAS, the Colorado Governor's Office of Energy Management and Conservation
agreed to donate$210,000 worth of fueling equipment and funds,to be used with other City funds,
to add a Hythane®/Hydrogen fueling appliance to the fueling facility at the City's Transfort site on
Trilby Road(Transfort Alternative Fueling Station); and
WHEREAS,Hythane(a mixture of natural gas and hydrogen),an alternative vehicle fueling
source, can be used directly in the City vehicles designed to operate on compressed natural gas
("CNG"); and
WHEREAS, the use of Hythane typically results in a 40-50% reduction in emissions over
the use of CNG; and
WHEREAS, pure hydrogen can also be dispensed from the proposed Hythane®/Hydrogen
appliances allowing the City to purchase hydrogen vehicles in the future; and
WHEREAS, the estimated cost of the Hythane®/Hydrogen appliances and related
infrastructure improvements is $452,000, with available funding identified as follows:
Colorado Governor's Office of Energy Management and
Conservation- Equipment Donation $ 210,000
City's Light &Power Fund- Prior Year Reserves $ 35,000
City's Equipment Fund - Existing Appropriations $ 207,000
Total $ 452,000
WHEREAS, Article V, Section 9, of the Charter of the City of Fort Collins ("Charter")
permits the City Council to make supplemental appropriations by ordinance at any time during the
fiscal year,provided that the total amount of such supplemental appropriations,in combination with
all previous appropriations for that fiscal year, does not exceed the current estimate of actual and
anticipated revenues to be received during the fiscal year; and
WHEREAS, City staff has determined that the appropriation of the donated equipment and
funds, as described herein, will not cause the total amount appropriated in the relevant funds to
exceed the current estimate of actual and anticipated revenues to be received during the fiscal year;
and
WHEREAS,Article V,Section 9,of the Charter also permits the City Council to appropriate
by ordinance at any time during the fiscal year such funds for expenditure as may be available from
reserves accumulated in prior years, notwithstanding that such reserves were not previously
appropriated; and
WHEREAS,Article V,Section 10,of the Charter authorizes the City Council to transfer by
ordinance any unexpended and unencumbered amount or portion thereof from one fund or capital
project to another fund or capital project,provided that the purpose for which the transferred funds
are to be expended remains unchanged; and
WHEREAS,it is the desire of the Council to authorize the acceptance of the donation of the
hydrogen fueling equipment and funds for a total value of$210,000 from the Colorado Governor's
Office of Energy Management and Conservation, appropriate the sum of$35,000 from prior year
reserves in the Light&Power Fund for transfer to the City's Equipment Fund-Hythane®/Hydrogen
Appliance project, for appropriation therein, and authorize the transfer of existing appropriations,
totaling $207,000, from the City's Equipment Fund to a Hythane®/Hydrogen Appliances project,
within the Equipment Fund, to be used to install Hythane® /Hydrogen fueling appliances at the
Transfort Alternative Fueling Station; and
NOW, THEREFORE,BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT
COLLINS as follows:
Section 1. That there is hereby appropriated for expenditure from unanticipated revenues
in the Equipment Fund-Hythane®/Hydrogen Appliance project the sum of TWO HUNDRED TEN
THOUSAND DOLLARS ($210,000)to be used to install Hythane®/Hydrogen fueling appliances
at the Transfort Alternative Fueling Station.
Section 2. That there is hereby appropriated for expenditure from prior year reserves in the
Light &Power Fund for transfer to the Equipment Fund-Hythane®/Hydrogen Appliance project,
and appropriated therein,the sum of THIRTY-FIVE THOUSAND DOLLARS($35,000)to be used
to install Hythane®/Hydrogen fueling appliances at the Transfort Alternative Fueling Station.
Section 3. That the unexpended appropriated amount of TWO HUNDRED SEVEN
THOUSAND DOLLARS ($207,000) is hereby authorized for transfer from the Equipment Fund
operations budget to the Equipment Fund - Hythane®/Hydrogen Appliance project to be used to
install Hythane® /Hydrogen fueling appliances at the Transfort Alternative Fueling Station.
Introduced, considered favorably on first reading, and ordered published this 17th day of
August, A.D. 2004, and to be presented for final passage on the 7th day of September,A.D. 2004.
Mayor
ATTEST:
City Clerk
Passed and adopted on final reading this 7th day of September, A.D. 2004.
Mayor
ATTEST:
City Clerk
RESOLUTION 2002-027
OF THE COUNCIL OF THE CITY OF FORT COLLINS
ESTABLISHING A POLICY TO IMPLEMENT
HYDROGEN-RELATED PROJECTS WITHIN THE CITY
WHEREAS, on February 18, 1997, the City Council, by Resolution 97-25, adopted the
Community Visions and Goals 2015, City Structure Plan, and City Plan Principles and Policies
as elements of the Comprehensive Plan of the City, also known as "City Plan", which supports
improving air quality, reducing motor vehicle emissions, encouraging and facilitating increased
energy efficiency and use of renewable resources, and to solicit cooperation and participation of
independent community organizations; and
WHEREAS, on A ril the Council adopted Resolution 97-51 providing that as a
user of energy, the lar evaluate the latest technologies utilizing alternative fuels
for transportation t test extent practicable, apply such technologies'to the operation
of City vehicles in o to provide energy efficient transportation; and
WHEREAS, Resolution 97-51 also provides that as community leader, the City should
also regularly evaluate means by which City-wide demand and usa a of fossil fuels can be
reduced and should attempt to develop means by which it c such goals, through the
City's role as educator,promoter and regulator; and
WHEREAS, on November 16, 1999, the Co adopted Resolution 99-137 establishing
a policy to take cost-effective actions that benefit the community to reduce local greenhouse gas
emissions; and
WHEREAS, the increased use of hydrogen can provide benefits to the citizens of Fort
Collins such as improved air quality, reduced greenhouse gas emissions, reduced dependence on
imported oil, and keeping energy dollars in the local and state economy; and
WHEREAS; many organizations and companies in the United States and around the
world are actively engaged in research, development, and demonstration of hydrogen
technologies; and
WHEREAS, the federal government is putting increased resources towards research on
hydrogen-fuel-cell vehicles and infrastructure; and
WHEREAS, in December, 2000, the City Manager appointed a Hydrogen Task Force to
evaluate hydrogen technologies and to make recommendations on what the City could do with
regards to hydrogen; and
WHEREAS, on August 27, 2001, the Hydrogen Task Force submitted a report to the City
Manager recommending the City take certain actions with regards to hydrogen; and
WHEREAS, the City is in a unique position to attract hydrogen-related projects and
funding, due to the potential for region partnerships, development of the Mason Street Corridor,
a favorable testing environment for technologies with high altitude and extreme weather
variation, and access to local sources of hydrogen; and
WHEREAS, at its February 12, 2002, Study Session, the Council directed the Hydrogen
Task Force to draft a resolution outlining the next steps to be taken to develop opportunities for
the City related to hydrogen technologies.
NOW THEREFORE,BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FORT
COLLINS as follows:
Section 1. That the City Manager is hereby directed to seek external grant funding for
the purpose of hiring a grant writer and for implementing demonstration projects for hydrogen-
related technologies.
Section 2. That the City Manager is hereby directed to explore partnerships that would
facilitate the creation of hydrogen projects.
Section 3. That the City Manager is hereby directed to develop a public education plan
intended to provide hydrogen education to the community, and to proceed to implement that
plan.
Section 4. That no later than the end of 2003, the City Manager is hereby directed to
report to the Council his recommendations for hydrogen-related projects for Council review
based upon the feasibility of such projects considering the available grant funds and other non-
City resources and general project costs.
Passed and adopted at a regular meeting of the Council of the ity of Fort Collins held
this 19th day of March, A.D. 2002.
Mayor
ATTEST:
City Clerk