HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 05/06/1999 - SECOND READING OF ORDINANCE NO. 59, 1999, AMENDING AGENDA ITEM SUMMARY ITEM NUMBER: 18
DATE: May 4, 1999
FORT COLLINS CITY COUNCIL STAFF: Mike Smith
SUBJECT:
Second Reading of Ordinance No. 59, 1999, Amending Chapter 26, Article VI, Division 4 of the
City Code Regarding Sale of Energy Generated from a Renewable Resource.
P.ECOMMENDATION:
Staff recommends adoption of the Ordinance on Second Reading.
EXECUTIVE SUMMARY:
Each electric rate schedule contains a"Renewable resource" clause which permits the Utility to sell
wind energy at a premium price in accordance with a special services agreement between the Utility
and the customer. The clause, adopted in November 1996, sets the premium at an additional two
cents per kilowatt-hour. Ordinance No. 59, 1999, which was unanimously adopted on April 20,
1999, revises each "Renewable resource" clause to eliminate the specific premium amount.
AGENDA ITEM SUMMARY ITEM NUMBER: 23
DATE: April20, 1999
FORT COLLINS CITY COUNCIL STAFF:
Mike Smith
SUBJECT :
First Reading of Ordinance No. 59, 1999,Amending Chapter 26,Article VI, Division 4 of the City
Code Regarding Sale of Energy Generated from a Renewable Resource.
RECOMMENDATION: . - '"
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Staff recommends adoption ofithe Ordinance othirst Re
EXECUTIVE SUMMARY:
Each electric rate schedule contains a"Renewable resource" clause which permits the Utility to sell
wind energy at a premium price in accordance with a special services agreement between the Utility
and the customer. The clause, d pted in3°3�oveml?6f`l9 , is tfie"premium at an additional two
cents per kilowatt-hour. This dinance-r,evisesa�1,1ch :)Zhewa�le iesource" clause to eliminate the
specific premium amount. If roved,the premium amount will be based on the Utility's cost of
providing wind energy and will be°tpecified°i Ae sp"ecial servrc s'agreement.The cost of providing
wind energy is now estimated at a premium of 2.5 cents per kilowatt-hour. The Ordinance also
contains a housekeeping change to the"Special services" clause of each rate schedule to clarify that
rates, fees and charges set through special services agreements must satisfy the applicable cost-of-
service criteria required to be followed by the Charter for setting such rates, fees and charges.
BACKGROUND:
The Wind Power Pilot Progr a e in' 9 b taijitng customer commitments to
purchase wind energy at a premium of ' o cen pe a oir. This was the best estimate of
costs at that time. The particip ing cusers, nd power p* needs" signed a three-year special
services agreement for the win gy ba on the planned ation of the pilot program. After
obtaining the commitments,the City contracted with Platte River Power Authority to build two 600-
kilowatt wind turbines. The turbines went on line in April, 1998 and participating customers were
billed for the wind premium beginning May 1. Since the implementation of the pilot program, the
cost of providing wind power to customers has proven to be somewhat greater than two cents per
kilowatt-hour. The utility, however, is committed to honoring the existing special services
agreements at the two-cent premium for the three-year pilot period.
The Utility is now contracting with Platte River Power Authority for two and a half additional wind
turbines. Existing wind power subscribers are using more energy than the original two turbines can
produce, so the half turbine will be dedicated to needs of these existing wind customers. The wind
energy from another of the new turbines has been contracted for by New Belgium Brewery. The
Utility will seek new customer commitments for the remaining new turbine. The new renewable
DATE: April20, 1999 2 ITEM NUMBER: 23
resource special services agreements will be for approximately 2.5 cents per kWh,which will also
be the price for the"pioneer"subscribers after the original three-year pilot special services agreement
term is up. This price may change based on actual costs of the wind energy.
The Ordinance will change the 'Renewable resource" clause to provide that the wind power
premium be specified in the special services agreement between the Utility and wind power
customers instead of being specified in the Code. This will allow the "pioneer" wind customers to
continue paying the 2 cent premium during the remainder of the three-year pilot while allowing new
customers to subscribe for wind at the "going" rate.
In addition, the Ordinance revises'the "Speeial services"-clause-in-each electric rate schedule to
clarify that the rates, fees and�dharges �ablishild in s cial�serv'ices agreement must satisfy the
applicable cost-of-service criteria that at set foith ih SectiondArticle XII of the City Charter.