HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 01/13/2009 - ELECTRIC SERVICE CODE CHANGES DATE: January 13, Zoos WORK SESSION ITEM
STAFF: Brian Janonis FORT COLLINS CITY COUNCIL
Steve Catanach
SUBJECT FOR DISCUSSION
Electric Service Code Changes.
EXECUTIVE SUMMARY
Proposed changes to Chapter 26 of the City Municipal Code clarify that the City's Utility is the sole
provider of retail electric service within the City. The revised Code has been drafted with the goal
of addressing three key issues. The first is the establishment of service territory protections similar
to those afforded investor owned utilities, rural electric associations and other municipal utilities
throughout the State. The second goal is to align service area definitions with bond holder
expectations. The third goal is to support the development of renewable generation projects,
including those owned by third-party entrepreneurs selling electricity at retail within City limits.
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
1. Should the language below remain in the Code?
The proposed Code states "........provides for the recovery of all direct and indirect
costs of the City and Platte River Power Authority and such additional amount as
may be determined by the City."
2. Should the buy/sell agreement be cost neutral?
a. How should Payments in Lieu of Taxes(PILOTS)be applied to power generated by
third parties and net metered customers?
b. Should systems that could impact or damage neighboring customer operations be
required to carry insurance?
C. Who is responsible for the cost of system improvements necessary to allow third
party generators and net metering customers to safely generate on site?
BACKGROUND
I. Goal One
Staff had three specific goals in the development of the proposed code change. The first was to
provide the same level of service area protection as that provided to regulated utilities by the
January 13, 2009 Page 2
Colorado Public Utilities Commission. The following details the reasons considered in the
development of the first goal.
In 2007,a customer in the City of Longmont started to evaluate a potential arrangement with a third
party solar developer. Under the proposed business model,the developer would install and own the
solar generation plant and would sell the energy to the customer at a negotiated rate. Upon review,
it was revealed that the City of Longmont's service territory code did not clearly prohibit this type
of arrangement, although Colorado statutes would have prohibited this arrangement if it had been
proposed in the service territory of an investor-owned utility or rural electric association.
Subsequently, the City of Longmont City Code was amended to provide protections identical to
those in Colorado statute.
Rather than oppose the solar development, Platte River and the City of Longmont offered to enter
into a buy-sell agreement with the developer in order to support the customer. The development did
not advance for unrelated economic reasons.
After becoming aware of the situation in Longmont, the City of Fort Collins examined its existing
service area ordinances. It was discovered that the existing City Code did not expressly prohibit
"behind the fence" competitors. The potential loss of large customers could adversely affect both
Platte River and the City. The knowledge that this risk exists required that the risk be reported to
bond holders.
The current City code states:
"Sec. 26-441. Franchise required.
Except as otherwise provided herein, it shall be unlawful to furnish or offer to
furnish to any property in the City any electrical service transmitted through wires
installed or maintained in,on,under or over any street,alley, sidewalk,easement or
other public place in the City unless the City Council has, by ordinance, granted a
franchise allowing such service.Any such franchise shall comply with all provisions
of the Charter and shall specify the area of the City in which such service is
permitted."
The current Code makes it unlawful to provide electrical service to any property in the City through
wires or equipment in any public right-of-way without a franchise agreement with the City. The
Code does not specifically address service from another entity;only that service cannot be provided
by facilities on public property. There are currently two identified examples in the City where
customers could be served by a neighboring utility because no public right-of-way must be crossed
to provide electrical service to these customers' sites. One of the customers is a large industrial
customer. Loss of this customer would have a significant impact to both the City and Platte River
if a neighboring electric utility were to negotiate a service agreement with them.
The existing Code would also allow third parry generation developers to install on-site generation
without interaction or coordination with the City,unless they wished to interconnect with the City's
system.
January 13, 2009 Page 3
The proposed Code clearly states that no other entity can provide electric service to customers
within City limits except under specific conditions that are designed to advance the installation and
development of renewable resources and to ensure continued reliability of the Fort Collins electric
system.
H. Goal Two
The second stated goal was to bring the Fort Collins Code into line with Platte River bond holder
expectations. Previous bond purchasers had the expectation that no retail competition existed in the
areas served by the Platte River member cities. The discovery of the potential for retail competition
under the current Code requires disclosure of this information to the bond holders if not remedied.
Dave Smalley, Platte River's Chief Financial Officer, provided the text below from Moody's US
Public Finance Report from April 2008, to clarify what the rating agencies are looking at. Platte
River currently meets the criteria for the Aaa/Aa rating. The sole provider component in the Energy
Supply Contract has insured that competition is unlikely. If third party generators or the City of Fort
Collins were to establish a significant level of generation,it would be viewed as retail competition.
This could adversely affect Platte River's bond ratings, which would ultimately result in higher
wholesale costs to the Cities.
Moody's US Public Finance Report states that the rating assessment of a public power electric utility
begins with the recognition of the following characteristics:
• Near monopoly position in providing an essential service
• Unregulated and independent local rate-setting
• Lower cost structure due to the ability to issue tax-exempt debt
• Lack of profit motive and need to generate a return on equity
• A strong link between the utility and sponsoring local government.
While there are many factors in determine the rating,Market Position carries the highest importance
among the rating criteria. Moody's Rating criteria published in April 2008 establishes the following
criteria related to retail competition:
• Monopoly in service area and retail competition unlikely—Aaa/Aa
• Monopoly in service area and possible retail competition—A
• Retail competition in service area—Baa
The following is an excerpt from the Moody's report:
"The degree of competition in a utility's operating environment represents an
important credit factor. While the US wholesale electricity market is deregulated,
retail service areas for public power electric utilities remain closed to competition
in most states. In a few states, such as Texas and Massachusetts and a few
jurisdictions such as Cleveland,Ohio and Lubbock,Texas,there are retail electricity
choice programs. However, municipal electric utilities in Texas (except Lubbock)
and Massachusetts, have thus far not entered into competitive retail markets.
Therefore, even in states where retail competition is permitted, most municipal
January 13, 2009 Page 4
electric utilities have maintained a near monopoly in their service area limiting
competitive threats, positioning the sector well for continued strong ratings.
In some states, legislative discussions continue about opening retail markets to
competition. A more open retail market would pose greater risks for public power
electric utilities particularly during periods of weak market prices for power. The
market could determine the rate a utility could charge and it might be insufficient to
recover the utilities costs especially if its costs are above market. Also,there would
be more competitive pressure on a utility's revenues and debt service coverage,if its
rates are above market."
The criterion above is not the only criteria used for establishing an entities bond rating, but it does
represent a significant factor. The question has been raised about the importance of limiting retail
competition when the demand for electrical energy is growing nationally and regionally. At present,
there is a market for any excess energy generated by Platte River, but there is no guarantee that
market conditions will remain constant. The intent of a bond rating is to establish risk levels. The
contracts with the Cities provide a guaranteed revenue stream which will be applied towards the
bond payments. Sales on the open market are not considered as guaranteed long term revenues.
Future sales are unpredictable. Potential carbon legislation, material costs, fuel costs and other
factors will impact future decisions on whether or not to generate excess energy.
It is important to preserve the Platte River bond rating. Platte River is currently pursuing
$120,000,000 in bonds for system improvements. A 1% increase in the bond rate will result in an
additional $17,740,000 in interest payments over the 30 year life of the loan. The City of Fort
Collins' portion of this would be approximately$8.3 million dollars,which would be passed on to
the City's customers.
III. Goal Three
The third goal in developing the proposed Code change is to provide support for the development
of renewable generation within the City, including renewable generation owned by a third party
selling energy through a retail agreement with a City customer.
Under the proposed Code there is no restriction on the ability of a customer to develop any level of
generation for their own use off grid.
Customers may also install generation for their use and tenants' use on their own property. This
scenario may fall under the Public Utilities Commission rules on master metering. The master
metering rules provide protection to consumers that are sub-metered. The rules insure that the
landlord (or master meter operator) does not add additional charges or increase the cost of energy
to the tenant.
With the proposed Code change,customers may also install generation for their own use or tenants'
use and cross city right-of-way if approved by City Council through a revocable permit. PUC
master metering requirements may also apply in this situation. An example of a potential situation
where this applies is at CSU. CSU is currently developing a new parking structure on Prospect
Avenue. The structure is separated from campus by Lake Street., a public right-of-way. CSU
intends to install a solar array on the roof of this structure. The current Code would either require
January 13, 2009 Page 5
CSU to apply for a franchise in order to cross the right-of-way or require the City to abandon the
street and turn it over to CSU. The proposed Code will allow Council to grant a permit to CSU to
allow the interconnection of their array with the campus electrical system.
The intent of the proposed Code change is also to support the development of third-party qualified
renewable resources, including those that will sell energy within the City at a retail level.
Discussions with bond counsel have indicated that because of the threshold levels established by the
Colorado net metering legislation of 10 kilowatts for residential and 25 kilowatts for
commercial/industrial applications,installations below these levels should be of no concern to bond
holders. Hence, Platte River has no need to be involved in the transaction. Above the 10/25 levels
established in the net metering statute, Platte River has agreed to enter into a buy-sell arrangement
with the third-party generator, the customer and the City. The buy-sell agreement will pass the
negotiated retail price between the third-parry generator and the customer straight through Platte
River. A preliminary outline of the general substance expected to be included in such a buy-sell
agreement is attached. To insure that the covenants established between bond holders and Platte
River are honored, the buy-sell agreement will serve as a wholesale agreement between the third-
party and Platte River. Platte River frequently enters into wholesale purchase agreements with other
generators.
Platte River has agreed to pass the negotiated retail price straight through without additional cost.
Please note, as with net metering, generation above one megawatt may require additional stand-by
requirements and other ancillary services as detailed in Platte River Tariffs.
Staff is seeking direction from Council on how the City should handle the costs incurred or lost by
the City through this type of arrangement. The Electric Board and staff have discussed this issue
and have looked at potential losses to both Utilities and the City's general fund and believe that it
is consistent with the recommendations made in support of the net metering rate to provide as strong
an incentive towards the installation and development of renewable generation as possible. The
recommendation is to accept the revenue losses and loss of payment in lieu of taxes to the general
fund in support of renewable development. It may be desirable to cap the size of generation facility
for which the payment in lieu of taxes or revenue losses would be absorbed.
Staff is also seeking direction from Council on whether or not customers installing generation
resources should be required to carry liability insurance if it is determined that their systems could
impact neighboring customer operations or equipment. Personal injury insurance should also be
considered for larger systems. Staff and the Electric Board recommend the addition of language to
the Interconnection Standards addressing the need for insurance under specific operating conditions.
Examples of those conditions would be when the resource contributes to fault conditions, requires
voltage support or could affect system voltage,could introduce significant harmonic distortion into
the system or in any way could adversely affect the system of neighboring customers.
Staff would also like guidance on the question: "If the existing infrastructure installed, owned and
operated by the City has to be upgraded to support the customers' generation who would be
responsible for the costs?" Staff and the Electric Board both recommend the customer causing the
upgrade will be responsible for the cost, should upgrades to existing infrastructure be required.
Staff believes that the above recommendations provide a strong incentive for the installation and
development of renewable resources within the City. As with the net metering rate, staff is seeking
January 13, 2009 Page 6
guidance on whether or not the Code should have a sunset provision or a requirement that it is re-
evaluated in the next three to five years. If renewable resources installations are widespread
throughout the system,then it is prudent to evaluate both the financial and operational impact these
systems are having on the City. Additionally, changes in the equipment and technology available
and the incentives provided by federal,state and local entities could change significantly in the next
three to five years, making review prudent.
ATTACHMENTS
1. Current Code.
2. Proposed Code changes.
3. Electric Board Minutes.
4. Natural Resources Advisory Board minutes.
5. Draft outline of buy-sell agreement.
6. Power Point presentation.
ATTACHMENT
DIVISION 2. TRANSMISSION FACILITIES
See.26-411. Compliance.
It shall be unlawful to maintain or install any wires, cables or other equipment for the transmission of
electric current impulses in, on, under or over any street, alley, sidewalk, public utility easement or other
public right-of-way, or to maintain or install any pole or mast to support or hold such wires or equipment in
any such place,without having fully complied with the provisions of this Division.
(Code 1972, § 48-1; Ord.No. 133,2003, § 1, 10-7-03)
Sec. 26-412. Franchise or other authorization required.
No such wire, cable, pole or other equipment shall be installed or maintained over, on or under any such
place unless a franchise has been granted for such installation or maintenance, except that:
(1) Transmission facilities that are in place in a public right-of-way at the time the underlying property is
annexed into the City may remain in place without a franchise;
(2) Transmission facilities that are in place over, on or under property other than a public right-of-way at
the time the underlying property is annexed into the City may, subsequent to annexation, be relocated
into a City street, alley, sidewalk, public utility easement, or other public right-of-way and maintained
therein without a franchise, subject to all of the same requirements that are applicable to the placement
and maintenance of other public utilities in said locations;and
(Code 1972, §48-2; Ord.No. 133,2003 §§ 2,3, 10-7-03)
Charter reference—Franchises and public utilities,Art.X1.
Editor's note—Pursuant to Ord. No. 133,2003 §3, transmission facilities that have been relocated and maintained over, on or under a City
street,alley,sidewalk public utility easement or other public right-of-way pursuant to a revocable permit granted by the City prior to October 17,
2003 are deemed to have been properly authorized in accordance with City Code§26-412.
Sec.26-413. Franchise specifications.
Any franchise granted pursuant to this Division shall comply with all requirements of the Charter and shall
specify the fee to be paid for the franchise, the purpose of the facilities to be maintained or constructed under
the franchise and the manner in which any such facilities shall be installed or maintained. The franchise shall
also specify the location in which any facilities may be installed or maintained and may provide for areas
annexed to the City after the date of the franchise.
(Code 1972, §48-3)
Sec. 26-414. Effect of franchise.
Any franchise granted under this Division shall only permit the installation and maintenance of lines and
other facilities under the public ways designated in the franchise and such franchise shall not be constructed to
permit the furnishing of electric service to properties within the City, but the furnishing of any such service
must be the subject of a separate franchise granted in accordance with the Code and the Charter.
(Code 1972, § 48-4)
Sec.26-415. Supervision of work.
It shall be the duty of the City Engineer to supervise all construction or installation work performed subject
to any franchise granted under this Division and to make such inspections as may be necessary to ensure
compliance with the provisions of the franchise,this Division and the Code.
(Code 1972, §48-5; Ord.No. 222, 1998, § 3, 12-15-98)
Sec.26-416. City electric utility not affected.
The provisions of this Division shall not apply to the electrical utility of the City including Platte River
Power Authority and the City utility, and Platte River Power Authority shall be authorized to install and
maintain lines and facilities in accordance with the Code and the rules and regulations of the electric utility.
(Code 1972, §48-6)
1
Sec.26-417. Violations and penalties.
Any violation of any provision of this Division shall be a violation of the Code, punishable as provided in
§ 1-15. Each day upon which any violation shall continue shall constitute a separate offense, punishable as
such.
(Code 1972, § 48-7)
Sees.26-418--26-440. Reserved.
DIVISION 3. ELECTRIC SERVICE
Sec.26-441. Franchise required.
Except as otherwise provided herein, it shall be unlawful to furnish or offer to furnish to any property in the
City any electrical service transmitted through wires installed or maintained in, on, under or over any street,
alley, sidewalk, easement or other public place in the City unless the City Council has, by ordinance,granted a
franchise allowing such service. Any such franchise shall comply with all provisions of the Charter and shall
specify the area of the City in which such service is permitted.
(Code 1972, §48-8)
Charter reference—Franchises and public utilities,Art.XI.
Sec.26-442. Obtaining service.
Except as otherwise provided herein, it shall be unlawful for any person to obtain electrical service from
any person who is not franchised pursuant to § 26-441 to provide such electrical service.
(Code 1972, § 48-9)
Sec.26-443. City electric utility not affected.
The provisions of this Division shall not apply to the electrical utility and that utility shall be authorized to
furnish electric service to any property within the City.
(Code 1972, §48-10)
Sec.26-444. Annexations.
Properties within any annexation to the City may continue to receive electrical service from any utility
previously furnishing such service without complying with the provisions of this Division until the receipt of
written notice from the City of the City's readiness to provide such service. As of the date upon which the City
has declared itself to be responsible for providing such service, all electrical service within any annexed area
shall be provided in accordance with the provisions of this Division. If the City is unable to provide electrical
service to annexed property prior to the expiration of the second year after annexation of that property,then the
utility previously furnishing service may continue to do so if said continued service is authorized by the City
Council through the grant of a revocable permit for that purpose.Any such revocable permit shall authorize the
continued provision of electric service by the non-City utility to the annexed property until such time as the
City either determines that the City is ready to provide electric service, or notifies said non-City utility that a
franchise shall be required for the continuation of such service.
(Code 1972, § 48-11;Ord.No. 133,2003, § 4, 10-7-03)
Sec.26-445. Violations and penalties.
Any violation of any provision of this Division shall be a violation of the Code, punishable as provided in
§ 1-15. Each day upon which any violation shall continue shall constitute a separate offense, punishable as
such.
(Code 1972, §48-12)
Sees.26-446-26-461. Reserved
4�
ATTACHMENT
PROPOSED ORDINANCE
ORDINANCE NO. , 2009
OF THE COUNCIL OF THE CITY OF FORT COLLINS
AMENDING ARTICLE VI
OF THE CODE OF THE CITY OF FORT COLLINS,
PERTAINING TO ELECTRIC SERVICE
WHEREAS, the City is party to an all-requirements power supply agreement(the "Power
Supply Agreement")with the Platte River Power Authority,a Colorado political subdivision formed
by the City in cooperation with the Town of Estes Park and the cities of Longmont and Loveland;
and
WHEREAS, new forms of renewable resource distributed energy generation are appearing
in the market; and
WHEREAS, the City wishes to allow the integration of renewable resource distributed
generation technologies when possible to do so within the terms of the Power Supply Agreement;
and
WHEREAS,the City Council has determined that certain provisions in Article VI of the City
Code regarding electric service should be amended to provide more clarity as to providing and
obtaining electric service within City limits; and
WHEREAS, in view of the fact that the Council recognizes and places high value upon the
viability of the.City's electric utility and upon allowing City property owners to provide electric
service to their own property under certain conditions, the Council has determined that the
amendments accomplished by this Ordinance are in the best interests of the City.
NOW,THEREFORE,BE IT ORDINAINED BY THE COUNCIL OF THE CITY OF FORT
COLLINS as follows:
Section 1. That the definition of"Parallel generation" contained in Section 26-391 of the
Code of the City of Fort Collins is hereby amended to read as follows:
Parallel generation shall mean the operation of qualifying facilities when
interconnected with the utility system in accordance with the provisions of these
rmlesthis Chapter,the electric utility rules and regulations and the Fort Collins Utility
interconnection standards.
Section 2. That the definition "Small power production" contained in Section 26-391
of the Code of the City of Fort Collins is hereby deleted in its entirety as follows:
ATTACHMENT
PROPOSED ORDINANCE
p,ir=ily engaged in tire genet ation ot sale of electric errel gy.
Section 3. That a definition ofthe terms"sale"or"sell"shall be added to Section 26-391
of the Code of the City of Fort Collins and read as follows:
Sale or sell shall mean to offer in exchange for money or any service or thing of
value, or other compensation of any kind.
Section 4. That the definition of"Qualifying renewable technology" shall be added to
Section 26-391 of the Code of the City of Fort Collins and read as follows:
Qualifying renewable technology shall mean a qualifying facility that generates
electricity using renewable resources such as solar, fuel cell, wind, geothermal, combined heat and
power or biomass technology.
Section 5. That the definition of"Customer-generator"shall be added to Section 26-391 of
the Code of the City of Fort Collins and read as follows:
Customer-generator shall mean an electricity customer of the Utility that generates
electricity on the customer's side of the meter using a qualifying renewable technology.
Section 6. That the definition of"High voltage" shall be added to Section 26-391 of the
Code of the City of Fort Collins and read as follows:
High voltage transmission shall mean the transmission of electrical impulses at
voltages greater than 35,000 volts.
Section 7. That the title of Division 2 of Article VI of Chapter 26 of the Code of the City
of Fort Collins shall be amended to read as follows:
DIVISION 2. HIGH VOLTAGE TRANSMISSION FACILITIES
Section 8. That Section 26-411 of the Code of the City of Fort Collins is hereby amended
to read as follows:
It shall be unlawful to maintain or install any wires, cables or other equipment for the high
voltage transmission of electric current impulses in, on, under or over any street, alley, sidewalk,
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ATTACHMENT
PROPOSED ORDINANCE
public utility easement or other public right-of-way, or to maintain or install any pole or mast to
support or hold such wires or equipment in any such place,without having fully complied with the
provisions of this Division. Any installation of other types of electric facilities in, on,under or over
any street, alley, sidewalk, public utility easement or other public right-of-way is subject to City
review and approval as an encroachment.
Section 9. That Section 26-412 of the Code of the City of Fort Collins is hereby amended
to read as follows:
No wire, cable, pole or other equipment necessary for high voltage transmission facilities
shall be installed or maintained over,on or under any such place unless a franchise has been granted
for such installation or maintenance, except that:
(1) High voltage transmission facilities that are in place in a public right-of-way at the time
the underlying property is annexed into the City may remain in place without a franchise;
(2)High voltage transmission facilities that are in place over,on or under property other than
a public right-of-way at the time the underlying property is annexed into the City may,
subsequent to annexation, be relocated into a City street, alley, sidewalk, public utility
easement, or other public right-of-way and maintained therein without a franchise, subject
to all the same requirements that are applicable to the placement and maintenance of other
public utilities in said locations; and
Section 10. That Section 26-441 of the Code of the City of Fort Collins is hereby amended
to read as follows:
DIVISION 3. ELECTRIC SERVICE
Sec. 26-441. F.anchise veclahedProviding electric service.
fimichise alloMng stich set vim.Arty such fimichise shall col"PlY vvithall provisions
'id.
Except as otherwise specified in this Article, a customer-generator may furnish but
not sell electric service to the customer-generator's property for use by the customer-
generator;provided,however,that if such service is provided through wires or other
facilities installed or maintained in, on,under or over a public place,the installation
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ATTACHMENT
PROPOSED ORDINANCE
of any such facilities is subject to authorization by revocable pennit approved by the
City Council after a determination by resolution that the provision of such service
will not materially alter the viability of the electric utility system and will benefit the
citizens of Fort Collins as well as the customer-generator.
Sec. 26-442. Retail sale of electric service.
No person or entity other than the Utility may engage in the sale of electric service
to any property in the City except that:
(a) If the City Council determines that the Utility cannot sufficiently and cost
effectively provide electric service requested by a customer,the City Council
may authorize the sale of such service by a non-City provider pursuant to the
franchise requirements of the City Charter; or
(b) If the electricity is generated solely using a qualifying renewable technology,
a non-City provider may offer the electricity for sale so long as either:
i. the service arrangement is authorized by an
interconnection agreement with the City and by a purchase
agreement with the City and Platte River Power Authority that
provides for the recovery of all direct and indirect costs of the
City and Platte River Power Authority, together with a payment
in lieu of taxes on all amounts due: or
ii. the electric generation system has a maximum generation
capacity equal to or less than 10 kilowatts for a residential
customer or equal to or less than 25 kilowatts for a commercial
or industrial customer and the service arrangement is authorized
by an interconnection agreement with the City and meets the
definition of parallel generation contained in this Article; or
(c) A certified master meter operator who purchases electric service in
accordance with this Division may sell that electric service so long as it does
so in full compliance with the Fort Collins Utilities electric service rules and
regulations and Colorado Revised Statute §40-1-103.5 and its implementing
regulations found in the Colorado Code of Regulations at §4 CCR 723-3; or
(d) Electric service may be provided pursuant to Section 26-444 below.
(e) Any parallel generation must be done through a qualifying facility as defined
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ATTACHMENT
PROPOSED ORDINANCE
in this Article, and the initiation and operation of any qualifying facility is subject
to the requirements and conditions described in the electric utility rules and
regulations, interconnection standards and this Chapter.
Section 11. That Section 26-442 of the Code of the City of Fort Collins is hereby
amended to read as follows:
Sec. 26-442: Obtaining electric service.
E=ept as otherwise provided 'It shall be unlawful for any person to
obtain electrical service front any person Mic is trot fianchised ptnstimit to unless it
is provided in accordance with the terms of this Articl
electrical service.
Section 12. That Section 26-443 of the Code of the City of Fort Collins is hereby
amended to read as follows:
Sec. 26-443. City electric utility not affected.
The provisions of this Division shall not apply to the electticalelectric utility
and that utility shall be authorized to furnish electric service to any property within
the City.
Section 13. That Section 26-444 of the Code of the City of Fort Collins is hereby
amended to read as follows:
Sec. 26-444. Annexations.
Properties within any annexation to the City may continue to receive
eleetriealelectric service from any utility previously furnishing such service without
complying with the provisions of this Division until the receipt of written notice
from the City of the City's readiness to provide such service. As of the date upon
which the City has declared itself to be responsible for providing such service, all
cleetricalelectric service within any annexed area shall be provided in accordance
with the provisions of this Division.If the City is unable to provide clechicalelectric
service to annexed property prior to the expiration of the second year after
annexation of that property, then the utility previously furnishing service may
continue to do so if said continued service is authorized by the City Council through
the grant of a revocable permit for that purpose. Any such revocable permit shall
authorize the continued provision of electric service by the non-City utility to the
annexed property until such time as the City either determines that the City is ready
to provide electric service, or notifies said non-City utility that a franchise shall be
required for the continuation of such service.
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Electric Board minutes ATTACHMENT 3
November 19,2008
Code Chance
The language in the existing City Code pertaining to electric service needs to be updated
in regard to the transmission facilities and generation of electricity by a third party.
Chapter 26 of the City Code requires anyone providing electricity within the City of Fort
Collins to have a license to franchise and sell electricity. The goal of the Code change is
to ensure the City of Fort Collins Utilities is the only service provider in the Fort Collins
service area of and to determine parameters for net metering with renewable
technologies. The proposed Code change is to the Service Area section of the Code.
The approach to the change bore three goals in mind. The first goal was to establish
more clearly defined service area protection. There are currently two customers who can
be identified, one of them an extremely large industrial customer potentially served by a
neighboring utility. This is because our current Code language only requires another
entity to obtain a franchise agreement if they are crossing City Right-Of-Way (ROW).
The second customer could be served by another entity without crossing ROW. The
second goal was to write the ordinance to provide service territory protection,just like
every other electric utility is given under the law, yet providing flexibility in the Code to
support the development of renewables within the service territory including those selling
electricity to our customers under a retail agreement. The third goal in the ordinance was
to write it such that the support of renewable developed third party retail sales did not
jeopardize PRPA's bond rating. Above the 10 kW residential and 25 kW commercial
thresholds, PRPA will enter into a buy-sell agreement with the third party generator. This
is basically establishing a wholesale purchase agreement between PRPA and the
generator, and the City will then reach an agreement with the customer to pass the
wholesale cost through. The discussion with the Electric Board will continue on
December 17, 2008 on how best to handle sales taxes and Payments in Lieu of Taxes
(PILOTS).
Citizen Comment:
With the economic times as they are right now, Steve Yurash could see a large company
putting a large photovoltaic (PV)unit, and then a year later file for bankruptcy with the
large PV unit not generating or no consumption. He would also like to hear more
discussion regarding splitting the difference on the buy/sell agreement with PRPA and
retail rate in regard to wholesale and retail rates. Mr. Yurash feels he rate should be in
absolute dollars because it would not fluctuate with time as costs increase.
Mr. Catanach will return in December with a finalized proposal to take to
Council for approval on the change to Code language.
Enerey Board
Utilities Executive Director Brian Janonis attended the last Council wo ell eons
October 28, 2008, and Councilmember Kelly Ohlson reco o City Manager
Darin Atteber y the City of Fort Collins replace nc Board with an Energy Board.
The intent is to broaden the look at t1wenergy policies with reviews of
transportation policies and ation of planning throughout the City.
Councilmember as concerns about the overall structure of the Electric Board and
the struc tilities as a whole. The intent is to have a Board to oversee all the
pr es and be all encompassing.
4
DRAFT
Fort Collins Utilities Electric Board Minutes
Wednesday,December 17, 2008
Electric Board Chairperson City Council Liaison
John Moms, 377-8221 Wade Troxell, 219-8940
Electric Board Vice Chairperson Staff Liaison
Dan Bihn, 218-1962 Robin Pierce, 221-6702
Roll Call
Board Present
Chairperson John Morris, Vice Chairperson Dan Bihn, Board Members John Graham,
John Harris, Steve Wolley and Jeff Lebesch
Board Absent
Board Member Tom Barnish
Staff Present
Steve Catanach,Norm Weaver, Kraig Bader, Robin Pierce, Jenny Lopez-Filkins, Bill
Switzer, Ellen Switzer, Tom Rock, Scott Dahlgren, Terri Bryant, Brian Janonis, Patty
Bigner and Meagan Peil
Guests
Bevan Noack, Steve Yurash and Rick Coen
Meeting Convened
Chairperson Morris called the meeting to order at 5:32 p.m.
Public Comment
None
Approval of November 19,2008,Minutes
Vice Chairperson Bihn motioned to approve the minutes from the November 19, 2008,
meeting. Board Member Harris seconded the motion, and it passed unanimously.
Net Metering and Code Changes
Light and Power Operations Manager Steve Catanach would like to continue the
discussion from the previous meetings on proposed changes to the City Code related to
net metering. During those previous discussions,the Board desired to see a provision in
the Code for a net metering limit of 1 MW(megawatt)per system and a requirement that
each system be reviewed either within a specific time frame or when the system has
issues which become a concern. A draft of the new code language will be provided at the
next meeting for t the Board to review and recommend changes.
Question: Should the City of Fort Collins Code language remain as"provides for the
recovery of all direct and indirect costs of the City and Platte River Power Authority
1
DRAFT
(PRPA) and such additional amount as may be determined by the City"? This would
include costs such as PILOTs (Payments In Lieu of Taxes), taxes, insurance costs and the
impact on the system.
The example of this impact would be if we were to implement PILOTS with a 5 kW
system. The loss to the City with PILOTs would be roughly $27and the loss in sales tax
would be $14. We would still collect sales tax on this, because the customer was still
purchasing energy from us.
Another example would be a customer with a 7 kW system. The loss of PILOTS would
be roughly $32 and sales tax of$15, and we would be purchasing approximately 1700
kWh at the retail rate. Total impact on the General Fund would be $46.
With the larger customer like the GS-50 rate customer with a 750 kW system, this would
be fairly large and has a peak demand of 158 kW. This in turn is energy consumption
close to zero. Looking at the demand of this type of system with no infrastructure and no
installation of transformer to handle this, who is going to be responsible for the cost?
Electric Utilities looks at the size of the transformer, the wiring needed and service
section going to the customer, and applies certain factors like looking at the building with
practical knowledge and knowing not everything will be on at the same time. The
National Electric Code dictates how the building is designed and requires each area have
their own standards. We do not size our equipment to those standards, but we size the
equipment to their equipment with our practical knowledge over time. On occasion, we
do need to upgrade a transformer for a customer, but with the net metering system and
the interconnection, who is responsible for the additional cost?
Another example is with a 1 MW system. Only 10 to12 of our current customers would
be capable of having a large system like this. With the 1 MW systems, we would be
looking at the loss of PILOTS around $8,000. However, they would be paying taxes and
that would add approximately three percent.
The recommendation is we do not see PILOTs values as a significant cost to the General
Fund and are not worried about PILOTS. Another recommendation is to review the
language in the interconnection agreement to ensure an appropriate level of insurance for
the system. In addition, if we should have to upgrade our facilities to support the
generation, then the customer would be responsible for those costs.
Discussion:
If I purchased a system and installed that in 2009, is the language of the agreement going
to cover that?
There is a way to write in a clause and be grandfathered in to cover the interconnection
agreement for the smaller systems.
Can we change it in a couple ofyears? The agreement can be written as a long term
agreement with periodic reviews.
Mr. Catanach will be bringing the proposed language to the Electric Board at the January
meeting before taking it to Council for approval.
(End of discussion)
2
ATTACHMENT 4
Natural Resources Advisory Board
Meeting Minutes Excerpt
17 December 2008
Net Metering and Service Area Code Change
Citizen guest Eric Sutherland addressed the NRAB with his concerns.
• It was Eric's opinion that the regulatory environment for electric utilities in this
country is an artifact from the Roosevelt administration's New Deal.
o The concept of a regulated monopoly emerged as the most efficient way to
insure electric service to the nation. That concept has served us well.
However, it does not fit with the expectations people are placing on the ability
of distributed energy sources to fulfill the promises of a new energy economy.
o The question is what is the proper regulatory framework so technologies and
business models that promise to deliver clean energy can be incentivized.
• Eric stated he is very much opposed to the direction being taken by Fort Collins
Utilities and Platte River Power Authority (PRPA).
o He is specifically opposed to the ordinance being proposed to change city
code to allow distributed energy generation to occur under the conditions
where a willing buyer and seller enter into contracts with PRPA and Fort
Collins Utilities—known as "buy all, sell all" agreements.
o The concept is that a willing buyer might be willing to pay more for electricity
to ensure it comes from a clean energy utility. PRPA and Fort Collins Utilities
would then become regulators.
o Eric is opposed to this type of regulation and stated this model has never been
attempted in the country. This is a unique situation since Fort Collins has a
municipal-owned utility. The overarching question that needs to be answered
is: what is the appropriate regulatory environment for Fort Collins as a leader?
City of Fort Collins Light and Power Manager, Steve Catanach, addressed the NRAB to
present two topics: net metering and the proposed service code change.
Net Metering
• In August, 2008, Colorado HB 08-1160 (Net Metering for Customer-Generators of
Electric Utilities) was passed.
o This bill only applies to Colorado municipalities with more than 5000
customers and sets net metering capacity minimum thresholds at 10 kW for
residential and 25 kW for commercial and industrial customers.
o It requires the municipalities to post and adopt small generator interconnection
standards that must be functionally similar to those adopted by the PUC. The
legislative intent was to create a consistent net metering environment
statewide.
• Net metering is only required for eligible energy resources such as solar wind, hydro
and geothermal. It doesn't specifically define combined heat and power.
1
• The net metering law only applies to "customer-generators" and doesn't open the
door to third party generators.
• Compensation for the netted customer generation offsets the customer's consumption
and payment is effectively at the municipality's retail rate.
• The major benefit of net metering is that it offsets the usage at the retail rate. If
generation exceeds customer's consumption, "excess generation" is carried forward
through the calendar year, zeroing out in December.
o Steve stated the PUC has been approached to consider changing the calendar
year from March to March to avoid having 2 winter periods in the year to
allow for a better energy offset.
• In answer to a question from Alan Apt regarding anyone who far exceeds energy
production over consumption, Steve stated Utilities will be recommending to Council
that they purchase that excess energy at the retail rate.
o The Electric Board suggested adding a sunset or trigger in the code that allows
them to re-examine what effect customer energy generation is having on the
operations of our system.
• Steve presented charts and graphs showing energy plant generation and net energy
usage scenarios and compensation cash out amounts.
Discussion:
• In answer to a question by Clint Skutchan regarding carbon offsets, Steve stated they
attach"x" number of pounds of carbon to the mix of generating plants. In a solar
energy production scenario, they would not be producing carbon but are offsetting
what's produced at a fossil fuel plant. The calculation for the offset is currently 1.76
points per kWh, but could change according the power generation mix.
• Steve pointed out Fort Collins Utility rates are low. $0.0122 cents/kWh is the offset
generation rate from PRPA for renewables going back into the system. The current
residential retail rate is $0.06498/kWh.
• Steve pointed out the questions they are carrying forward to Council after
recommendations from Electric Board are:
o Where should the net metering generation threshold be set? We're
recommending one megawatt(MW or 1,000 kW) which provides an incentive
for larger customers to install renewables and receiving the retail rate back
o At what price should annual excess energy be purchased. We recommend the
retail rate.
• Steve presented some additional models for small to large commercial customers
from 50 kW to 750 kW and possible savings
o The rates for commercial customers are made from 3 components: an energy
component, facilities peak component and coincidence peak component.
o The models show potential customer savings and the impact on our payment
in lieu of taxes and the fee the utility collects in lieu of a franchise fee with the
City that goes into the general fund. By implementing this we have an impact
on the general fund. This can be a concern and can be a large dollar amount of
taxes lost. We believe it's not enough of a concern to de-incentify installation
of renewables.
2
• Steve Catanach stated there is a major industrial customer looking into developing a 1
MW plant. In that scenario Utilities would establish a contract with the customer.
They would most likely honor net metering, but would need to evaluate what impact
that would have on the system.
• Glen Colton asked if Utilities is also going to present to Council the tax credits that
Fort Collins may be giving. He felt it might take more than$2,000 for 2 kWh to
incentivize people to install solar on their homes and, instead of giving credits,
perhaps pay more up front.
o Steve explained he read a white paper about the environmental credits that are
associated with renewable power generation and it was his feeling that,just
providing the incentive and purchasing the energy at a retail rate, was not
following the Governor's Energy Office requirements to pay a premium for
environmental assets. The exact credit amounts have been delayed because
we're trying to establish the value and an accounting method to keep track of
them. Utilities will be purchasing solar RECs at probably $1.50/Watt and
then entering into a long term contract. He is hopeful that will add additional
incentive dollars.
Proposed service code change
Steve Catanach also presented the proposed service code change that Utilities took to
Council in August, 2008. At that time Council asked him to address some of their
concerns and bring it back to their January 13, work session.
• As background, Steve informed the NRAB that Fort Collins Utilities became aware
that the current code might allow"behind the fence" competitors and needed to be
changed to prevent that.
o In Longmont, a P party solar generator company wanted a contract to own
the generation equipment and just sell energy to customer. The issue went to
Longmont's city council and was dismissed. However, PRPA looked at other
cities' codes and discovered the Fort Collins' code allowed anyone to enter
into retail sales for electric production if they obtained a franchise agreement
to cross public rights of way.
o As a result, Utilities and PRPA became concerned because the loss of large
customers could adversely affect the City and PRPA bonds.
• Fort Collins Utilities re-examined this code with the following goals:
o To generally conform with"regulated monopoly".
o To bring Fort Collins code in line with bond holder expectations.
o To recognize and support installation of renewable generation including those
owned by third-parties.
• Service areas are certified by the Public Utilities Commission (PUC) for investor
owned utilities and rural electric cooperatives.
• Regarding granting bonds, Moody's (bond rating agency) rates public power
electricity utilities according to the following criteria:
o The utility is a near monopoly in providing service.
o It is unregulated and has independent rate setting.
3
o It has lower cost structure due to the ability to issue tax-exempt debt.
o There is a lack of profit motive and a need to generate a return on equity.
o There is a strong link between the utility and sponsoring local government.
o Market position carries the highest importance among the rating criteria.
• In answer to a question from Clint Skutchan who asked what would endanger a
"monopoly" status, Steve Catanach stated that, under the existing code, we have a
large industrial customer that one of our neighboring utilities could get to without
crossing public right of way. So, under our current code, that utility could negotiate a
contract and take that large customer away from us. Retail competition in the service
area downgrades Moody's rating.
• Next year PRPA will be pursuing $120 million in bonds to finance projects and
upgrades. For example, every 1% increase in interest rate adds $17 million over life
of loan. This would ultimately be paid by customers. It's important to consider what
we do impacts on bonds.
■ Steve explained what they will be presenting to Council is what effect the code
change will have on different scenarios.
o No effect on off-grid customers
o No effect on customer generation for own use.
o No effect to customer generation for customer and tenant use not crossing the
right of way, however, the original customer can't mark up the cost and profit
from his tenant(master metering).
o No effect to customer generation for customer and tenant who is crossing the
right of way, but will require City Council approval and a franchise agreement
and PUC implications. Master metering requirements would apply as above.
o They do have concerns about third party retail sales.
• PRPA's bond council stated they would they allow this to occur if it is
tied to the net metering legislation. There is no concern for customers
under lOkW and below. Above that, there will have to be a wholesale
arrangement between that third party, PRPA and City to allow PRPA to
purchase energy from that generator at wholesale level and then selling
it back to the city and that customer. The agreement is that no
additional cost will be tacked on to that agreement
• Steve explained the Electric Board discussed the alterations to the code:
o They suggested removing the language in the code which states "the proposed
code provides for the recovery of all direct and indirect costs of the City and
PRPA and such additional amount as may be determined by the City."
o Should there be a requirement for insurance for the generators. There is no
concern with solar, but spinning generation could cause problems with the
system.
o Who should be responsible for upgrades to our infrastructure. The Electric Board
recommended the customer should be responsible for the costs.
Questions
• Joe Piesman asked Steve to give an example of what a 5 kW, 7 kW and 1 MW
facility would look like. Steve responded that a 5 kW would be 2-4 panels and would
4
service a residential customer without air conditioning and would go up 4 kW with air
conditioning. 1 MW would be 5 acres of solar array.
• In answer to a question from Eric Sutherland who asked if Fort Collins would own
and operate electric generation, Steve said in the current Contract with PRPA the City
itself is not allowed to own generation. PRPA needs to be our sole provider in order
to satisfy the bond requirements.
o The Energy Supply Contract that goes to Council work session on February 3,
2008 provides Fort Collins with the ability to develop 1%or 3,000 kW for
generation for City facilities,
o Eric said he thought the most economically feasible way to build the pickle
plant is to have a 3`d party in a position to capitalize on tax credits and sell
energy to Fort Collins because most businesses don't have a contract with
PRPA. He thought 3`d party generation should become the dominant
economic model for distribution. Steve answered the City code can be
changed but it is a long process.
• Joe Piesman asked if 3000 kW is 1% of the City's electric usage. Steve responded
the City as a whole peaks just under 300 MW. The City's building usage is about 5
MW. Some of them are not demand metered. They are also looking at cost benefit
analysis for Advance Metering (AMI)to provide instantaneous information.
• Alan Apt where the smart meters are in this. Steve stated they have already done a lot
of the digitization of our electric system and the AMI system is the first step to
monitor the health of the system. We're major participants in the Fort ZED grant
which is a smart grid project of a small communication network.
• Liz Pruessner asked if a person installs solar on their home, how would it tie into the
city infrastructure and who would be responsible for that. Steve explained you put
panels on roof, the installer feeds it into your electric panel so that the electricity you
produce would spin meter backwards. The excess goes outside the house and back
onto our distribution system. The AMI would provide a monitor of your energy
usage.
• Liz also asked about solar energy storage capacity. Steve explained storage for large
amounts of electricity is not technologically feasible at this time
• In response to a question from Alan Apt, Steve stated they are looking at a small
hydro project at Horsetooth to generate energy that's being lost now.
• Joe Piesman asked, if the maximum allowable private energy generation is 1% of the
total PRPA load, if technology changed, could this be increased to 2%. Steve
indicated they had already posed that question to their bond council and anticipates a
response soon.
• Glen questioned the bond rates might have suffered from the current economic
situation. Steve stated they are currently in the process of selling $32 million bonds
for Mulberry Waste Water Treatment Plant. Utilities has asked their bond council
what effect the bond rate has on that and they indicated it would be fairly significant
since people are looking for no-risk investments.
• Glen stated Xcel is installing complex solar installations from third parties in Boulder
and wanted to know if Fort Collins could do similar things, or are our policies too
restrictive. Steve answered we've tried to obtain a balance and would not restrict
someone coming in with a 5 MW plant. Utilities would try to implement the
5
methodology to preserve financial benefits to City and PRPA are not trying to
block/stand in the way. We are trying to answer and achieve both goals.
• Guest Neil Kaufman asked if a HOA invested in solar panels, would the HOA be able
to operate up to 1,000 kW or would it be a third party. Steve responded it depends on
how the rules are written in the HOA and how the ownership is split up. It's a
complicated scenario.
• Eric Sutherland stated Xcel Energy rejected the 3`d parry model as too costly to
administrate. He suggested anything Fort Collins can do to put more energy on the
grid has huge financial benefits and Fort Collins should do it. The cost of inaction is
expensive. Fort Collins should have a welcoming environment for more energy
generation.
• Glen stated that if the money for bonds could be put into solar and wind it would
avoid the costs of upgrades of building new substations and lines. Steve answered
energy efficiency is the first priority. Solar is a fairly expensive media that does not
have a lot of generating capacity.
• Joe cautioned not to lock into anything you might regret 10 years from now when
technology could be vastly different than it is today, especially plug-in hybrids. The
electric system needs to be more flexible.
• Steve stated he may come back to the NRAB in January after the Council meeting for
an action item. Alan Apt stated he would like to see Electric Board recommendation
before the NRAB weighs in on this. Therefore, the NRAB made no recommendation
at this meeting.
6
ATTACHMENT
Below is an outline of the significant contractual provisions proposed for the"buy/sell"
agreement. This type of agreement would be required for third party generators above a
defined capacity threshold that propose to make retail sales to a host property owner. The
primary purpose of the agreement is to keep Platte River in the chain of title for sales by
generators of a size sufficient to be of concern to bond holders. The agreement is not intended
to alter the pricing terms reached between the generator and the host property owner, rather it
is intended to preserve the existing legal relationship between Platte River and the City.
1) Term-The term of the agreement would run for the length of the sales agreement
between the renewable generator and the host property owner, It is anticipated that the
generator will be owned and operated by the third party for a period sufficient to
exhaust tax benefits, and at the end of such period generator ownership will transfer to
the host property owner.The agreement would be assignable if the generator is
transferred to a different third party,but assignment would be unnecessary once
ownership vests with the property owner.
2) Parties-Parties to the agreement wouldinclude,at a minimum,the owner of the
renewable generation,Platte River and'th"e City. The host property of x zaay also
need to be included as a party.
3) Metering and communications-The agreemeiwould need to address a number of
issues concerning metering of the renewable generator and facility loads. For example:
ownership and cost responsibility for the metering equipment, specifications for the
metering equipment, accuracy testing,when the meter will be lead and by whom. Also,
for the larger generation facilities,Platte River,would like to access metering information
to help us track the be and costs of trteseacflit+es on our system and accurately
apply charges for ancillary services, etc.
4) Billing and payment-Inserting Platte River and the City in the chain of title will
require billing end payment arrangements with the renewable generator. Instead of
billing the host property owner for the generator output, the renewable generator would
bill Platte River foirenewable energy generation. Platte River would pay the generator
and Separately bill the amount of generation to the City. In turn,the City would include
the amount of thg renewable generator output in its bill to the host property owner.
}„Pricing-One o ate issues cltrwhch Fort Collins Utilities is seeking guidance is cost and
fee recovery
from the.host property owner. Platte River is willing to transact the
generated power absent any mark-up. However,for generators above one megawatt,
standby and/or ancillary services charges may apply. Such charges are contemplated
under existing Platte 7Ziver tariffs for generators of this size,regardless of generation
type (renewable or other sources).
6) Interconnection and safety requirements -For most renewable generators this will be a
City issue,but Platte River may become involved if the interconnection could impact
substation or transmission facilities.
7) Insurance -Presumably the renewable generator will carry insurance. In general,
interconnection agreements require the generator to carry insurance,although the
interconnecting utility (in this instance FCU) can waive this protection. In instances in
which insurance is required, Platte River will want to be listed as an additional insured.
Typically this does not increase the costs of insurance.
8) Operation and maintenance responsibilities - It is assumed that the third party
renewable generator will be responsible for the operation and maintenance of the
1
ATTACHMENT
generation facility during the term of the agreement. Clarification of this should not be
controversial.
9) No joint venture -The agreement will need to clarify that Platte River and the City have
no relationship with the renewable generator beyond the"buy/sell" agreement,and
that the parties are not partners or joint venturers.
10) Generation sizing-The size of the renewable generation facility should not exceed the
service entrance size of the host property owner. Additional coordination will be
required with FCU to insure that the distribution infrastructure serving the facility is
sized appropriately. System protection must also be coordinated with FCU.
11) Single location service -The generator facility will not serif"loads beyond the
commercial building or facility to which it is interconnected.
12) Regulatory compliance-The owner of the renewable generator is solely responsible for
compliance with any and all regulatory requirements that may apply to the activities
undertaken by the generator.
2
Proposed Service Code Change
Steve Catanach , PE
Light & Power Manager
Current Fort Collins Code
• Became aware that Fort Collins code might allow
" behind the fence " competitors
• Concern to Utilities and Platte River because loss of
large customers could adversely affect the City and
Platte River bonds
• With knowledge , bond counsel has advised that
disclosure will be required
Proposed Code Change Goals
• Generally conform with " regulated monopoly"
• Bring Fort Collins code in line with bond holder
expectations
• Recognize and support installation of renewable
generation including those owned by third - party' s
F�t\ Collins
Certificated Area
• Service areas are certified by the Public Utilities
Commission ( PUC ) for Investor Owned Utilities and
Rural Electric Cooperatives .
• Previous code language allowed other entities to
serve if they were granted a franchise agreement
from the City .
• Franchise was only required if crossing public Rights-
of-Way .
• Other Utilities could be serving some of our
customers .
F tfs
Bonds
• Moody' s states that the rating assessment of a public
power electric utility begins with the recognition of the
following characteristics :
— Near monopoly position in providing an essential service
— Unregulated and independent local rate-setting
— Lower cost structure due to the ability to issue tax-exempt
debt
— Lack of profit motive and need to generate a return on equity
— A strong link between the utility and sponsoring local
government.
.8r Co
Bonds
• While there are many factors in determine the
rating , Market Position carries the highest
importance among the rating criteria . Moody' s
Rating criteria published in April 2008 establishes
the following criteria related to retail competition :
• Monopoly in service area and retail competition
unlikely — Aaa/Aa
• Monopoly in service area and possible retail
competition — A
• Retail competition in service area — Baa
F`�t_f�
Bonds
• PRPA is about to issue $ 120 , 000 , 000 worth of bonds
to finance :
— New 230 kV transmission from Fort St . Vrain to
Longmont .
— Capacity upgrades
— Substation upgrades
• Every 1 % increase in interest rate will cost an
additional $ 17 , 740 , 000 over the 30 year life of the
loan .
F�t\ Collins
Scenario Application
• Off-grid customer — OK
• Customer generation for own use — OK
• Customer generation for customer and tenant use
absent crossing of streets and ROW — OK with PUC
implications ( master meter requirements )
• Customer generation for customer and tenant use
with ROW crossings — OK but :
— Will require city council approval
— PUC implications ( master meter requirements )
F,�t_f
Scenario Application
• Third party retail sales
— Allowable from Qualified Renewable Resource
— Qualified generation above 10 kW for residential
and above 25 kW for commercial will require a
buy-sell agreement
%WMjMMjj F�t\ Collins
Policy Questions
• Should the language below remain in the Code
Language?
— The proposed code states " . . . . . . . provides for the
recovery of all direct and indirect costs of the City
and Platte River Power Authority and such
additional amount as may be determined by the
City . "
• Should the buy-sell agreement be cost neutral ?
— PILOTS ?
— Insurance ?
— System impacts FGt` lin
5kW plant
Month Bill kWh Use kWh Gen Net -' New Bill PILOT-A-
Jan $ 52.53 748 562 186 -' $ 16.01 $4.73 .-
Feb $ 55.59 795 561 234 "1' $ 19.14 $5.00 .-
Mar $ 45.43 639 656 (17) ;' $ 3.91 $4.09 .-
Apr $ 40.17 558 643 (85) MA' $ 3.91 $3.62 .-
May $ 37.95 524 669 (145) mil $ 3.91 $3.42 .-
Jun $ 43.79 614 666 (52) J' $ 3.91 $3.94 $1.31
Jul $ 55.69 797 672 125 MA' $ 12.02 1 $5.01 $1.67
Aug $ 59.00 848 685 163 MI $ 14.49 1 $5.31 .-
Sep $ 52.08 741 649 92 ML$ 9.91 j $4.69 .-
Oct $ 40.22 559 640 (81) -
Nov $ 42.82 599 508 91 -' $ 9.81 '--
Dec $ 53.01 756 531 225 �' $ 18.51 .--
Totals $ 578.27 8,177 7,442 735
PILOTS lost-- $ 27.53 Sales Taxes Lost= $ 13.77
AW plant
Month Bill kWh Use kWh Gen Net New Bill PILOTS
Jan $ 52.53 748 756 (8) $ 3.91 ' $4.73 $1.58
Feb $ 55.59 795 715 80 $ 9.131 $5.00 $1.67
Mar $ 45.43 639 889 (250) $ 3.91 ' $4.09 $1.36
Apr $ 40.17 558 849 (291) ' $ 3.91 ' $3.62
May $ 37.95 524 885 (361) � ,-
Jun $ 43.79 614 883 (269) ----
Jul $ 55.69 797 898 (101) ----
Aug $ 59.00 848 903 (55) ----
Sep $ 52.08 741 871 (130) ----
Oct $ 40.22 559 848 (289) ----
Nov $ 42.82 599 686 (87) -� -
Dec $ 53.01 756 710 46 -- $4.77 .-
Totals $ 578.27 81177 91893 (11716) --qm $52.04.-
PILOTS lost-- $ 31 .39 Sales Taxes Lost-- $ r7O
�J
WPM ■
Rate GSSO 150 kw ' 1125000 Savings ,
Month kWh Km ,CWP Bill l kWh Gen kWh $ kWo $ kWp $ 11 Savings , New Bill I
Jan 52,769 134 himii $ 2,763.16 'mm $304 $611 $1,12511 $2,040 1 723.49
$ 2,876.27 M�3 $298 ` $613 $1mmmlr ,179II $2,090 , 786.56 Feb 55,752 134 ■`
Mar 49,702 136 NJ$ 2,790.97 I= $402 %W11"I $2,223 ff 567.68 I
Apr 53,760 'mmialii!$ 2,813.78 _ $377 �I $2,145 1 669.20
May 51,243 i--'$ 3,076.57 'w $373 $642 $1,436 $2,451 1 625.64
Jun 54,703 --I$ 3,132.64 I= $357 L $1,420 $2,425 707.59
Jul 58,426 ir 168 IMP$ 3,574.71 '_ $368 . $1,716 $2,798 777.20
Aug 56,696 II 149 ■I $ 3,238.89 '_ $369 $682 $1,455 $2,W6 732.79
Sep 71,123 II 159 ■J$ 3,826-55 ' 9,350 $368 ' $728 $1,723 $2,818 , 1,008.14
Oct 55,854 II 160 ■'$ 3,458.40 'M8,864 $358 ' $688 $1,685 $2,731 , 727.68
Nov 55,296 II 142 ■J$ 2,915.53 15,754 $299 ' $648 $1,192 $2,139 , 776.18
IN
Dec 52,048 138 $ 2,776.33 15,498 $294 J $629 $1,134 $2,057 L719.42
Totals 667,371 i" $37,243.79 2�1111111I!11111111111111111001 $7,860 $16,405 $28,422
PILOTS Collected $2,108.14 _ $529
PILOTS Lost = $1,578.86
Fort Collins
I
Rate GS-750 IN morpmmP 500000 ' Savings
kWh I, Kwo W Bill WjFWh Gen ' kWh $ kWo $ kWp $ ' Savings New Bill
1,579,833 I, 2,806 1F,158 $67,770.92 & 126,921 ' $2,373 $3,444 $10,1871 $16,005 $ 51 ,766
1,664,117 I, 2,801 12,319 $71 ,464.73 1127,138 ' $2,377 $3,444 $10,1871 $16,009 $ 55,456
1,516,699 I, 2,828 ' 2,409 $69,988.45 , 180,410 ' $3,374 $3,444 $10,1871 $17,005 $ 52,984
1,690,182 I, 2,992 ' 2,335 $72,746.74 , 180,139 ' $3,369 $3,444 $10,187 $17,000 $ 55,747
1,666,923 I, 3,075 ' 2,874 $79,698.41 IN 183,850 ' $3,438 $3,444 $10,187 $17,069 $ 62,629
1,776,194 I, 3,107 02,884 $81 ,963.97 . 177,479 ' $3,319 $3,444 $10,187 $16,950 $ 65,014
1,780,595 I, 3,275 3,011 $84,249.77 172,429 ' $3,224 $3,444 $10,187 $16,856 $ 67,394
2,086,998 I, 3,643 . 3,475 $97,240.57 176,056 ' $3,292 $3,444 $10,187 $16,923 $ 80,317
2,140,119 I, 3,729 ' 3,442 $98,054.94 + 169,382 ' $3,167 $3,444 $10,187 $16,799 $ 81,256
1,914,308 I, 3,531 ' 3,399 $92,663.71 , 158,154 ' $2,957 $3,444 $10,1871 $16,589 $ 76,075
1,894,092 I, 3,321 ' 2,868 $84,613.66 1 127,667 ' $2,387 $3,444 $10,1871 $16,019 $ 68,595
1,753,450 1! 3,188 hW& $77,408.09 122,311 ' $2,287 $3,444 $10,1871 $15,918 $ 61,490
21,463,510 ` i $977,863.94 &51566 $41,329 $122,2.4AL$199,141 $ 778,723
r
PILOTS Collected $55,350.79 $46,723.40
PILOTS Lost = $8,627.39
Rins
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