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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 10/11/2011 - RESIDENTIAL ELECTRIC RATE OPTIONS, EFFICIENCY ANDDATE: October 11, 2011 STAFF: Brian Janonis, Patty Bigner, John Phelan, Laurie D’Audney, Bill Switzer, Steve Catanach Pre-taped staff presentation: available at fcgov.com/clerk/agendas.php WORK SESSION ITEM FORT COLLINS CITY COUNCIL SUBJECT FOR DISCUSSION Residential Electric Rate Options, Efficiency and Conservation. EXECUTIVE SUMMARY In two previous City Council work sessions, May 10 and September 13, 2011, staff presented electric rate design principles, four residential rate options, a change to the residential demand rate and a pilot Time of Use rate for electric vehicles. At the September 13 Work Session, Council also discussed a change to the General Service (GS) or commercial rate proposed by staff that will result in two rate classes, a GS (up to 25 kW) and GS 25 (25 – 50 kW). The September 13 Work Session resulted in two areas of follow-up: (1) further review of the four residential electric rate options with answers to five specific questions as noted in the work session summary; and (2) scheduling of a work session discussion on energy efficiency and water conservation. Staff and SAIC consultant Joe Mancinelli will provide additional information to answer questions from Council regarding the four residential energy rate options. Also, for this follow-up work session, staff will present a review of the City’s efficiency and conservation programs. Ordinances for General Service (GS or commercial) rate changes and the Residential Demand (RD) rate will be considered on October 18, 2011 and November 1, 2011. These Ordinances do not include proposed changes to the Residential (R) energy rate. Public outreach for these draft ordinances began on September 29 with a post card mailed to out-of-city limits customers and a public notice published in the Coloradoan on October 2, 2011. Once the Ordinances are adopted, additional public outreach will take place, beginning with a bill insert mailed throughout late November and December. Feedback from this work session will be used in drafting rate ordinances for public comment and Council consideration and implementation early in 2012. The tentative schedule for implementing changes to the Residential (R) rate include beginning public notification on November 6, followed by First Reading of the Residential rate Ordinance on November 15 and Second Reading on December 6, 2011. If this tentative schedule is finalized, the rate change will be effective February 1, 2012. Public outreach will begin January 1, 2012. Additional outreach will occur throughout the spring and early summer as needed to support customer understanding. October 11, 2011 Page 2 GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED 1. Has sufficient information been provided to support City Council’s decision to adopt a residential energy rate ordinance with one of the four options? 2. Which of the four options proposed for consideration does City Council prefer for implementation? BACKGROUND / DISCUSSION I. RESIDENTIAL ELECTRIC RATE OPTIONS As noted in the September 13, 2011 Work Session Summary, four electric rate options were proposed for Council discussion including: • Single Tier (current rate structure) • Seasonal (Platte River Power Authority pass-through) • Three Tier • Five Tier As follow-up to its discussion, Council requested the following additional information: 1. Assumptions related to elasticity (in plain English) – what kind of impact can be expected? What is the corresponding carbon reduction? Price elasticity of demand is a measure used in economics to show the responsiveness, or elasticity, of the quantity demanded of a good to a change in its price. It is expressed as percentage change in quantity demanded in response to a one percent change in price (holding constant all the other determinants of demand). Price elasticity is almost always negative, meaning as price rises, demand declines. The resulting carbon reduction is determined by the calculated energy reduction, converted to carbon based on the most recent conversion factors, coordinated with Climate Action Plan reporting. (See Attachment 4, Price Elasticity Graphs and Attachment 5, Estimated Reduction in Carbon Emissions) Are the options designed to be revenue neutral? If demand and energy are reduced, the purchase power requirements will also be reduced lowering overall revenue requirements. Yes, the options are designed to be revenue neutral. The term, “Revenue Neutrality” in the utility industry, and applied here, is the concept that each of the proposed rate form options is planned to collect the same amount of revenue from residential customers. Generally, Fort Collins does not collect more revenue than the cost of service from its retail rate classes (customers). During any given year, revenues may slightly exceed costs or fall short with the variations adding to or reducing reserves. With the reduction of demand and energy, purchase power requirements will also be reduced. (See Attachment 6, System Benefits and Attachment 7, Relationship Between System Costs and Retail Price) October 11, 2011 Page 3 Based on the experience of SAIC, as well as its review of industry literature, there does not appear to be any indication that a tiered rate structure would result in higher system demands than a non-tiered rate structure. While the impact on reduced demand is anticipated to be less than the reduction in energy due to a tiered rate structure, no studies (with which SAIC is familiar), have indicated a higher system demand as a result of implementing tiered rates. 2. Provide more data on the monthly variation in bill impacts, including the typical variation in monthly use. The table below shows average annual customer use expressed in terms of average and median for residential customers on two housing types (does not include residential demand rate customers). This information helps with understanding that the graphs illustrating average bill impacts use data points along the entire range of customer use, whereas the median, or group of customers in the middle, may have less of an impact. More information on this question is answered below. 2010 Residential Energy Rate Data Summary Statistics 2010 Data Total kWh/mo Single Family kWh/mo Multifamily kWh/mo Average 691 794 508 1st Quartile 353 444 253 Median 568 667 405 3rd Quartile 877 987 639 3. Provide sample (8 to 10) scenarios of year round use and the price impacts of the options. Examples: Large users with no AC, large users with AC, small users with AC, small users without AC, etc. A group of Utility staff/friends offered their billing data to help answer this question. This includes energy use among customers with various home sizes, family sizes and lifestyles offered their billing information for this request. (See Attachment 8, Bill Impacts on Selected Customers) Additional Information Relevant to Consideration of Change Rate Form A histogram has been compiled of customer bills that shows the distribution of the bills of a sample of low income customers and the range of their electricity use. Although customer data about income level is not generally known, this group of customers participated in a special program and provided their billing data voluntarily for staff analysis. (Attachment 9, Energy Usage for Low Income Customers) October 11, 2011 Page 4 Based on limited knowledge, as well as anecdotal information and the prevalence of low income assistance programs throughout the country, Utilities is expanding programs to assist this sector of its customers. Currently, Utilities offers payment assistance, zero interest loans and incentives for efficiency upgrades, but this assistance is not provided based on income qualifications. New programs will expand financing, offer additional audit and conservation assistance as well as other financial considerations. Similar provisions will be provided to customers with special medical needs. These programs are being planned regardless of the rate form adopted by City Council; however staff recognizes that all rate increases, and changes to rates (increasing blocks or tiers) that are designed to encourage conservation place an additional financial burden on low income customers, particularly those with higher than average energy use. Future Time of Use Rates The Advanced Meter Infrastructure (AMI) project involves installation of new digital meter technology that allows customers more information about their energy use, potentially supporting a new rate form for Fort Collins Utilities know as a Time of Use rate. Time of Use rates allow a price to be established not just for the unit of energy used, but also for the time of day when the energy is used. This provides a more accurate price signal to the customer, better reflecting the actual cost to generate and deliver electricity at different times throughout the day. Once the AMI project is completed, electricity use data will be compiled and may be used to develop Time of Use rates for residential customers. However, Utilities does not currently have the necessary data to accurately develop a Time of Use rate for its residential customers. II. CONSERVATION AND EFFICIENCY Efficiency and conservation are primary strategies related to City and Utility policies and resource related objectives. In recent years these programs and related outreach have received a number of awards and kudos from industry organizations. A. Recognition for Fort Collins Utilities Outreach • In 2009, Fort Collins Utilities launched a conservation messaging platform, Fort Collins Conserves. The messaging campaign received the Savvy Award of Excellence from the City-County Communications and Marketing Association in 2010 recognizing outreach achievement in support of public policy. Fort Collins Conserves provides a unified approach for both water and electricity conservation and efficiency outreach. Water • In 2010, Water Conservation Specialist Laurie D’Audney was awarded the Alice Darilek Water Conservation Award from the Rocky Mountain Section of the American Water Works Association. The award recognizes an individual for exceptional performance and commitment to water conservation in the region. October 11, 2011 Page 5 • Western Resource Advocate’s 2011 report, Filling the Gap: Commonsense Solutions for Meeting Front Range Water Needs, recognizes Acceptable Planned Water Supply Projects that meet their six “smart” principles including, “make full and efficient use of existing water supplies and reusable return flows before developing new diversion projects. The Utilities’ Halligan Reservoir Enlargement is labeled an acceptable project as long as efficiency measures are implemented first. Energy • Fort Collins energy efficiency and conservation programs have begun to garner regional and national attention in the last several years. One gauge is simply the inquiries that are now coming to Utilities staff from other utilities and efficiency organizations around the country. In the last six months staff has fielded questions about how it is structuring programs and achieving results from E-Source, the Southwest Energy Efficiency Project (SWEEP), the National Renewable Energy Lab, the Department of Energy, the Environmental Protection Agency and many public utilities. • Earlier this year, SWEEP noted in a press release related to Fort Collins 2010 efficiency savings that, “This is one of the highest savings percentages achieved by any electric utility in the southwest region, demonstrating that even a small utility can implement very effective energy efficiency programs.” ( http://www.swenergy.org/news/news/default.aspx?Year=2011#336) • SWEEP also published a brief report earlier this year in which they noted, “While this utility is small in scale, its DSM programs are large in stature, outperforming most municipal and many investor owned utility DSM programs across the country.” (http://www.swenergy.org/publications/documents/Municipal%20Utility%20Energy%20 Efficiency%20Programs%20-%20Leading%20Lights.pdf) B. Policy Basis and Overview The City’s Climate Action Plan, Energy Policy, Water Supply and Demand Management Policy and Water Conservation Plan establish the policy direction for Fort Collins Utilities programs ranging from education and conservation messages to financial incentives designed to reach City Council goals and reflect community values. In 2003, Council adopted the Electric Energy Supply Policy, followed by the adoption of the Climate Action Plan in 2008 and the current Energy Policy in 2009. These policies clearly emphasize the need for implementation of various strategies and programs for the reduction of electricity use and associated carbon emissions. The Water Supply and Demand Management Policy was adopted by City Council in 2003, providing general direction on water conservation practices. The City’s Water Conservation Plan was approved by the Colorado Water Conservation Board in 2010. In the following descriptions, staff outlines the specifics of policy, what types of programs and services are offered to the community, how outcomes are tracked and reported and the overall benefits of conservation and efficiency from several perspectives. October 11, 2011 Page 6 Climate Action Plan Over a decade ago, Fort Collins was among the first wave of communities in the nation to commit to reducing local greenhouse emissions. City Council adopted a greenhouse gas reduction goal for 2010 and a plan to meet it. In 2008, Council adopted new carbon reduction goals for the Fort Collins community of reducing communitywide emissions 20% below 2005 levels by 2020 and 80% below 2005 levels by 2050. In December 2008, City Council adopted an updated Climate Action Plan for the entire community. (See www.fcgov.com/climateprotection/pdf/climate_action_plan.pdf.) Energy Policy The City of Fort Collins Energy Policy was adopted in January 2009. The primary goals of the Energy Policy are to sustain high-system reliability and to contribute to the community’s climate protection goals and economic health. Water Supply and Demand Management Policy and Water Conservation Plan Since 2003, the Water Supply and Demand Management Policy has provided general criteria for decisions regarding water supply projects, acquisition of water rights and demand management measures. The policy sets water use goals to be achieved by 2010, 185 gallons per capita per day (gpcd) for annual water consumption and 475 gallons per capita (gpc) for peak daily demand. Work is currently in progress to review and update the policy. In 2009, the City’s Water Conservation Plan was approved by the Colorado Water Conservation Board. The Plan reflects specific measures, metrics and costs related to the demand management criteria outlined in the Water Supply and Demand Management Policy. The Plan sets a demand goal of 140 gpcd, a decrease from the 185 gpcd goal in the policy. The Energy Policy, Water Supply and Demand Management Policy and Water Conservation Plan can be found at www.fcgov.com/utilities/what-we-do. Lowest Cost Resources Beyond the policy basis for efficiency and conservation, it has been demonstrated by programs here and around the country that efficiency and conservation are the lowest cost resource for energy and water. As the well known adage goes, the cheapest energy is energy that is not used at all. Efficiency programs can “deliver” electricity at a cost from one to five cents per kilowatt-hour, well below both retail and wholesale costs. Energy efficiency potential studies across the world come to common conclusions that we could be far more efficient in our use of energy and that there are significant barriers to achieving the potential benefits. Efficiency and conservation programs are designed to reduce these barriers to help customers be able to manage their energy use and bills. Water conservation has historically been viewed by the water industry as a temporary source of supply that is invoked during times of drought or other water shortage. This view of conservation’s October 11, 2011 Page 7 role is rapidly changing as utilities use conservation as a viable long-term water supply option. By implementing water conservation programs, Utilities has saved considerable capital and operating costs by deferring a treated water storage reservoir from 2007 to 2015 and delaying an expansion at the water reclamation facility from 2010 to 2028. Complementary Benefits There are many complementary benefits to pursuing and achieving efficiency and conservation savings. Together, these represent the triple-bottom-line benefits promised through sustainability: • Manage and reduce the community’s utility bills. Money not spent on monthly utilities has been demonstrated through research to be used on other goods and services in the local community. • Reduce carbon and pollutant emissions from fossil fuel power plants and reduce direct emissions from on-site natural gas use. Saving water decreases the amount of chemicals and energy used to produce, deliver and heat drinking water. • Improve comfort, health, safety and productivity from efficiency projects. For example, home combustion safety can be addressed or improved lighting quality from business efficiency projects. Customer Expectations Last but not least, Fort Collins customers expect Utilities to provide programs and services related to efficiency and conservation. Through customer satisfaction and other surveys, the results consistently show high levels of support related to these programs. A 2010 market survey found that 88 percent of those surveyed recognized the City as an environmental steward. 21st Century Utilities, Plan Fort Collins Efficiency and conservation are integral to Plan Fort Collins and the Utilities for the 21st Century initiative, which closely align with a broader community vision of protecting and preserving our quality of life in Northern Colorado. Because of the impacts of our environmental footprint and the many challenges facing municipal utilities today, the Utilities for the 21st Century initiative created an ambitious and intentional approach to how we conduct business. The initiative has helped us re-envision our historic and future actions within a framework of sustainable decisions and policy choices. The intention is to deliver a level of service our customers expect and do it in an environmentally and socially responsible way while making the best economic choices for the long term. Our purpose is what guides us today: inspiring community leadership by reducing environmental impact while benefitting customers, the economy and society. October 11, 2011 Page 8 History of Efficiency and Conservation Programs Faced with a drought in 1977, the Utilities hired its first staff dedicated to water conservation, with an emphasis on education programs. With City Council adoption of the Water Demand Management Policy in 1992, the program expanded with a fulltime staff member, additional conservation measures and educational efforts, and landscape and irrigation regulations. The program continues to grow; first with the 2003 Water Supply and Demand Management Policy and then the 2009 Water Conservation Plan. City Council adopted the measures recommended in the Water Conservation Plan through the Budgeting for Outcomes process for the 2011-2012 budgets. Today we offer a full range of incentives, education and regulation. Additionally, Utilities has provided programs and services to help customers manage their energy use for over 25 years. Early programs focused on education, with events such as the Environmental Program Series. Other programs which started in the early 1980s include Energy Score Home Energy Ratings and the ZILCH (Zero Interest Loan for Conservation Help) programs. In 1998, the first commercial financial program, the Integrated Design Assistance Program, started by supporting high performance new construction. Research studies on the state of residential construction performance were also completed in the mid-1990s which led to new education and training initiatives. In 2002 and 2003, Fort Collins began offering appliance rebates through a partnership with ENERGY STAR and Platte River began offering their first commercial and residential rebate programs. The adoption of the Electric Energy Supply Policy in 2003 led to the first dedicated funding for energy efficiency. Since that time, Utilities has added programs and resources in order to reach the goals laid out in the City’s climate and energy policies. Current programs are described later in this agenda item summary. C. Efficiency and Conservation Program Elements Conservation programs use a variety of strategies, or tools, together which provide a comprehensive approach to saving energy and water. Each element addresses specific barriers which customers face when trying to manage their utility use. • Financial incentives: Efficiency alternatives typically carry a price premium in the marketplace. Rebates or incentives are designed to help offset the additional first cost when making the decision to purchase an efficient piece of equipment. This may apply to nearly any energy or water using device, from heating and air conditioning equipment to appliances to light bulbs. A second use for incentives is to encourage the replacement of inefficient technology before the end of its life. Replacing working but inefficient fluorescent lighting or high water use toilets are examples. • Technical assistance: Customers often do not have the internal resources to help them make complex decisions about the best strategies for improving efficiency. Utilities technical assistance resources can provide a roadmap to assist customers make the most effective decisions for their home or business. October 11, 2011 Page 9 • Education: Education is the foundation which helps people understand how their utility use impacts their personal life, the community and our local and global environment. Utilities has a robust education program which serves youth and adults. • Trade allies: Trade allies are the direct service providers within our community. They include retailers, other supply chain vendors, contractors, designers and consultants. Utilities programs promote the awareness of our programs amongst this group, training related to best practices and standards and maintaining provider lists for customer information. • Marketing, outreach, communications, recognition: Efficiency and conservation programs can only be successful based upon the participation of customers. Effective marketing and outreach drives customer awareness, interest and knowledge about available programs. Recognition of customers can also provide a key motivation to help them reach their own goals, such as that provided by the Climate Wise program. • Rate forms: Rate forms can provide additional motivation and alignment with available conservation and efficiency programs. N In 2003, the water rate structures were revised in response to the drought and continue as a means to send a strong conservation message. Residential customers currently have a three-tiered water rate. Commercial and multi-family customers are on a seasonal rate with higher rates from May through September. Commercial rates also have a second tier for higher water use. N Tiered electric rates are under discussion at this work session. There are a number of strategic approaches to achieving efficiency and conservation savings. While they are useful to provide a general understanding of demand side strategies, they are not mutually exclusive. The various strategies reinforce each other and are best used together. • Direct energy or water savings (sometimes called resource acquisition) uses incentives and rebates to achieve quantifiable project results. This is a proven approach of using direct payments to customers to encourage them to use a more efficient technology. The goal for targeted energy savings is essentially to buy energy and demand savings. The strengths of this approach are in the degree of control and measurability. By tracking the number of participants for each rebate type, the budgets and impacts can be well defined and evaluated. • Market transformation strategies promote the manufacture, distribution and purchase of energy and water efficient products and services. The goal of this approach is to establish sustained market share of these products and services and document quantifiable energy and water savings. Market transformation works to remove barriers that limit the adoption of high efficiency products or services. Examples of market barriers include limited availability of energy efficient products, lack of consumer awareness of the products and their benefits, resistance to new products in general and an over emphasis on upfront cost versus operating costs. October 11, 2011 Page 10 • Behavioral programs are relatively new, but are able to quantify the savings achieved through encouraging conservation behavior. Utilities Home Energy Reports is an example of a program which provides specific education and awareness information to a subset of customers. The effects of the additional information can be measured based on the response of a large group of customers compared to those who do not receive the report. Principles for Program Design and Evaluation The following list summarizes a number of principles for how staff design and implement efficiency and conservation programs. • Leverage other successful programs from peer utilities. Most programs have models from which we can learn what has worked or not worked in other service territories. Utilities are generally very willing to share their experiences, results and lessons learned. As we have become more successful with our programs, we are being consulted on a regular basis by other utilities. • There is a robust body of work in the regulatory arena and professional organizations for how to calculate, verify and evaluate efficiency program results. Utilities uses these best practices for reporting on our overall and program specific results. • Minimum efficiency standards continue to change over time, typically with federal regulations on common products (i.e., toilets, refrigerators, motors, light bulbs). Program rebate criteria and levels need to evolve and adapt to ensure that funds are accountable for higher efficiency and utility savings. Collaboration Collaboration is another key principle for Fort Collins implementation of efficiency and conservation programs, deserving of its own section. Key collaborative partnerships include: • Platte River Power Authority: Platte River also has energy efficiency goals with dedicated staff and funding. Several of the programs are administered at the Platte River level on behalf of all four member cities. The mix of programs and funding levels has varied over the last nine years, reflecting the varied goals of each member community and Platte River. Platte River currently provides approximately one quarter of total energy efficiency expenditures in Fort Collins. • Platte River member cities: Utilities also works directly with the other member cities, sharing results, program materials, planning and results. For example, starting in fall 2011, Fort Collins and Loveland are sharing responsibility for the Home Efficiency Program contractor list. • Community partners: Key community partners include Colorado State University, Larimer County and Poudre School District. CSU has implemented many efficiency projects, both in campus buildings and in CSU housing. Utilities has also provided support for education and behavioral change competitions implemented in campus housing. Poudre School District has been a leader in the design, construction and operation of high performance buildings. October 11, 2011 Page 11 With the assistance of Utilities’ efficiency programs, PSD has gained a national reputation for their green new construction and ENERGY STAR labeled schools. Utilities has worked for three years with the Larimer County Youth Conservation Corp to provide direct efficiency assistance to low income customers while providing job training to young adults. • Governor’s Energy Office (GEO): The GEO has provided several grants to Fort Collins related to energy efficiency. The grants have helped to improve the efficiency of municipal buildings, establish a Northern Colorado ENERGY STAR Homes program and demonstrate the capability of using advanced data systems to enhance efficiency programs. The GEO continues to consult with Fort Collins to help demonstrate best practices in efficiency for other utilities in Colorado. • Utilities regularly works with local stakeholders to design programs, reach customers and provide valuable feedback. These stakeholders include the Chamber of Commerce, Fort ZED, the Fort Collins Board of Realtors, the Fort Collins Sustainability Group and the Community for Sustainable Energy. D. Efficiency and Conservation Programs and Services Utilities offers a comprehensive portfolio of programs and services designed to reach all customer sectors and a wide range of end uses. The following tables list program and service offerings from two view points. First the programs are structured to how they reach residential and business customers, both for existing buildings and new construction. The second table shows these programs from an end use and operational perspective. Together they provide a clear picture of Utilities efficiency and conservation portfolio. For a complete list of programs, see www.fcgov.com/conserve. The programs are also linked closely to a wide range of related initiatives, including: • Demand response and load management: The Energy Policy also includes goals related to load management. Programs are offered related to residential electric water heaters and air conditioners and for businesses to help them control coincident demand bill components. • Distributed generation and renewable energy programs are often the next step for customers after implementation of efficiency and conservation measures. • Advanced metering and pricing are also linked because of the relationship between information and specific bill components. With our large commercial rates, close attention is focused on both general efficiency and conservation opportunities as well as time differentiated load management. This will become an increasing focus as the new advanced meters are installed in the coming two years. October 11, 2011 Page 12 Fort Collins Utilities Efficiency and Conservation Programs and Services (sector view) Sector Building Type Program or Service Residential Existing • Home Efficiency Program (audits, rebates, contractors) • Consumer products (energy and water) • Home Energy Reports • Environmental Program Series • Sprinkler system audits New • NoCO ENERGY STAR Homes • Green Building Code amendments • Consumer products (energy and water) Commercial and Industrial Existing • Efficiency assessments • Electric Efficiency Program incentives (equipment and custom) • LightenUP Program incentives (business lighting) • Consumer products (energy and water) • Energy Challenge • Climate Wise • Landscape and irrigation Standards for Water Conservation New • Integrated Design Assistance Program • Green Building Code amendments • Consumer products (water) Fort Collins Utilities Efficiency and Conservation Programs and Services (end use view) Program Type Description Consumer Products • ENERGY STAR clothes washer and dishwasher rebates • Refrigerator and freezer recycling • Compact fluorescent light bulbs • LED lighting (bulbs and holiday lighting) • Watersense labeled toilet and urinal rebates • Sprinkler equipment rebates Retrofit and capital upgrade incentives • Insulation and air sealing • Business lighting • Major equipment for business • Custom energy and water incentives • Office equipment/information technology • Food service equipment (energy and water) • Refrigeration equipment • Windows October 11, 2011 Page 13 Program Type Description Operations, conservation, education, technical assistance • Business building tune-up (retro-commissioning) • Business Efficiency Challenge • Home Energy Reports • Xeriscape Design Clinics • Xeriscape Demonstration Garden • Sprinkler system audits • Environmental Program Series • Business Innovation Fair • Climate Wise • Efficiency Assessments Regulations • Wasting water enforcement • Landscape and Irrigation Standards for Water Conservation • Building Code Green Amendments E. Accountability and Reporting The Energy Policy has two objectives which relate to efficiency and conservation. One is related to carbon emissions and the other is verifiable electricity savings. As noted, Fort Collins has a community goal of reducing carbon emissions 20% below 2005 levels by 2020. One of the Energy Policy objectives is to support this community goal with reductions at the same level from the electric utility sector. Fort Collins annually reports on the community emissions with the Climate Action Plan Status report and the Energy Policy Annual Update. A critical distinction of the emissions reporting at the community scale is that it is by definition an inventory. In this respect, “everything” counts because the results incorporate the local economy, weather impacts and all customer efficiency and conservation behavior. The Energy Policy also has a specific objective related to efficiency and conservation program results. This objective is to annually achieve verifiable program savings equivalent to 1.5% of the community’s electricity use. This is often mischaracterized as having the outcome that Fort Collins electric use will be reduced by 1.5% per year. The net impact of whether electricity use goes up or down is first and foremost tied to economic activity and weather. If electricity use would have grown by 2.0% in a given year, it should be reduced to 0.5% with successful efficiency program implementation. This efficiency program annual target is an aggressive goal compared to many utilities around the country. However, it is also very valuable because it provides a specific electric savings target which supports both budgeting and reporting. The Water Conservation Plan sets a goal of 140 gallons per capita per day (gpcd) by the year 2020. This goal represents realistic and achievable demand reductions in all customer sectors. Achieving this goal will provide an additional measure of reliability to the water supply system to ensure high quality serve to customers in case of future drought, climate change and unforeseen shortages. The per capita annual consumption is calculated by dividing annual total system-wide water use by the population served and 365 days. This calculation is adjusted for weather to provide a fair October 11, 2011 Page 14 comparison with other years. Utilities monitors water demand and reports the gcpd calculations through an annual report. In 2010, the adjusted average demand was estimated to be 144 gpcd, compared with 147 gpcd in 2009. F. Program Results This section summarizes the quantifiable results of Utilities efficiency and conservation programs. Various metrics are used which together help to describe a comprehensive picture of both the community’s electricity and water use as well as energy efficiency program savings. Attachment 10 shows charts of the results described here. Water Efficiency and Conservation Results Water use trends have continued to decrease based on a number of factors. Historical use (1985- 1992) was over 230 gpcd. Low-flow plumbing standards and metered water taps contributed to the reduction of per capita water use which was 196 gpcd in the pre-drought period (1993-2001). More recently, when adjusted for the weather conditions of 2010, per capita use declined from 2009. Tiered and seasonal water rates, and continuing water conservation efforts, have all contributed to the trend of decreased water use. The most recent period from 2004-2010 water use is at 153 gpcd. Energy Efficiency and Conservation Program Results The following sections describe specific metrics related the community’s electricity use and savings from verified efficiency programs. • Community Carbon Emissions from Electricity Sector: The 2010 Energy Policy update documents electricity carbon emissions from the community. Compared to the 2005 baseline, emissions were over 11% less in 2010. • Community Electric Use Per Capita (2002 – 2010): While electricity use per capita is not one of the Energy Policy goals, it is one indicator of how efficient the community is in using electricity. Compared to the 2005 baseline, per capita electricity use was 8.8% less in 2010. • Customers Served through Efficiency Programs (2002 – 2010): Efficiency programs have completed 689 business projects, over 19,000 residential rebates and over 175,000 retailer transactions since 2002. The programs are successfully reaching a wide range of our customer base. • Fort Collins Efficiency Programs – Annual Electricity Savings (2002 – 2010): Annual program savings is a key metric for Utilities, as it relates to the Energy Policy goal and can be benchmarked with other utilities. Since 2002, programmatic savings have increased an average of 48% per year, reaching over 20 million kilowatt-hours in 2010. • Fort Collins Efficiency Programs – Cumulative Annual Electricity Savings (2002 – 2010): Energy efficiency projects have a lifetime, based on the technology and project type. Projects completed this year continue to save energy in years two and beyond. This metric reflects the annual savings from current and past years combined. In 2011, the community October 11, 2011 Page 15 is using over 84 million kilowatt-hours less than they would have without efficiency program savings. • Fort Collins Efficiency Programs – Investment and Customer Savings (2002 – 2010): It is also important to document the investment and savings related to efficiency programs. Since 2002, Utilities and Platte River have invested over $9M in efficiency programs. The savings for customers has accumulated to over $5M PER YEAR in 2011. ATTACHMENTS 1. PowerPoint Presentation 2. Work Session Summary, May 10, 2011 3. Work Session Summary, September 13, 2011 4. Price Elasticity Graphs 5. Estimated Reduction in Carbon Emissions 6. System Benefits 7. Relationship Between System Costs and Retail Price 8. Bill Impacts on Selected Customers 9. Energy Usage of Low Income Customers 10. Efficiency and Conservation Results and Metrics Attachment 1, October 11, 2011 1 © 2011 by R. W. Beck, An SAIC Company. All Rights Reserved. Residential Electric Rate Options; Efficiency and Conservation FORT COLLINS CITY COUNCIL WORK SESSION October 11, 2011 R. W. Beck, An SAIC Company | 22 Council Direction During September 13, 2011 work session, Council requested more information related to the residential electric rate options: ƒ Price elasticity ƒ Benefits to the system ƒ Customer impacts ƒ Efficiency and conservation programs Attachment 1, October 11, 2011 2 R. W. Beck, An SAIC Company | 33 Agenda/Purpose ƒ Council Direction & Response ƒ Definitions/Clarifications ƒ Price Elasticity ƒ Residential Customer Class Rate Design and Staff Recommendations ƒ Efficiency and Conservation Programs Briefing R. W. Beck, An SAIC Company | 44 Questions for City Council 1. Has sufficient information been provided to support City Council’s decision to adopt a residential energy rate ordinance with one of the four electric rate options? 2. Which of the four options proposed for consideration does City Council prefer for implementation? Attachment 1, October 11, 2011 3 R. W. Beck, An SAIC Company | 55 Residential Electric Rate Options R. W. Beck, An SAIC Company | 66 Response to City Council Questions ƒ Refined price elasticity calculations ƒ Added price elasticity to Seasonal Rate Option ƒ Minor adjustment to Three and Five‐Tier Rate Options ƒ Calculated proposed rates on a monthly and annual basis for the majority of residential customers ƒ Calculated bill impacts on: ƒ 12 months of historical class billing data ƒ Actual bills from a select group of customers with demographic information (house size, number of occupants, etc) Attachment 1, October 11, 2011 4 R. W. Beck, An SAIC Company | 77 Definitions/Clarifications ƒ Rate Structure is the design of utility’s means of recovering its costs from its customers. An unbundled rate structure shows itemized charges on the bill reflecting the costs associated with each utility function. ƒ Fixed Charge is a monthly charge that recovers the cost of metering, billing, collecting, providing customer service, and all other customer‐related costs. ƒ Distribution Facilities Charge recovers the operational cost of distribution substations, poles, wires, conductors, and transformers required to deliver power to customers. For residential customers this charge is applied on a $/kWh basis. ƒ Energy Charge recovers the cost of fuel, purchased power, and all other variable costs associated with the production of electricity. ƒ Demand Charge recovers fixed production function costs related to building and financing generation facilities. R. W. Beck, An SAIC Company | 88 Definitions/Clarifications ƒ PILOT (Payment in Lieu of Taxes) is a transfer from the Utilities to the City’s General Fund. ƒ Seasonal Rates are a simple type of time‐of‐use rates in which rates vary depending on the time of year. ƒ Tiered Rates/Block Rates are a rate structure that charges differing amounts for each unit of consumption within each tier on a kWh basis. Inclining tiers/blocks, charge higher prices for each unit of energy consumed as consumption increases. ƒ Top Tier/Block is the last tier/block of energy in a tier rate structure ƒ Revenue Neutrality is the concept that each of the proposed rate form options is planned to collect the same amount of revenue from residential customers . Attachment 1, October 11, 2011 5 R. W. Beck, An SAIC Company | 99 Definitions/Clarifications ƒ Time‐of‐Use Rates (TOU) are designed to better reflect variations in the utility’s power costs (seasonally and at various times of the day) and provide an incentive for customers to reduce energy during peak periods and/or shift energy usage to times when the utility’s production is more efficient and costs are lower. ƒ PRPA (Platte River Power Authority) is Fort Collins Utility’s wholesale power supply provider. ƒ Pass Through are costs Fort Collins Utilities incurs from Platte River Power Authority and passes on to customers. R. W. Beck, An SAIC Company | 1100 Definitions/Clarifications ƒ Price elasticity of demand is a measure used in economics to show the responsiveness, or elasticity, of the quantity demanded of a good to a change in its price ƒ It is expressed as percentage change in quantity demanded in response to a one percent change in price (holding constant all the other determinants of demand) ƒ Price elasticity is almost always negative, meaning as price rises, demand declines Attachment 1, October 11, 2011 6 R. W. Beck, An SAIC Company | 1111 Price Elasticity of Electricity Rates Price elasticity varies widely ƒ Electric Power Research Institute (EPRI) reviewed results of numerous pricing pilots; results ranging from ‐0.08 to ‐0.39 ƒ Common finding was that higher‐use customers exhibit larger price elasticity ƒ Brattle Group found that long‐run price elasticity is substantially higher than short‐run price elasticity R. W. Beck, An SAIC Company | 1122 Price Elasticity of Electricity Rates ƒ Public Utilities Fortnightly (August 2008) article ƒ Inclining block rates can provide energy consumption savings ƒ Price elasticity ranges: Distribution of Residential Price Elasticities Low Most Likely High Short Run Block 1 ‐0.01 ‐0.13 ‐0.20 Block 2 ‐0.02 ‐0.26 ‐0.39 Long Run Block 1 ‐0.03 ‐0.39 ‐0.60 Block 2 ‐0.06 ‐0.78 ‐1.17 Source: Ahmad Faruqui, Brattle Group, Inclining Toward Efficiency Attachment 1, October 11, 2011 7 R. W. Beck, An SAIC Company | 1133 Residential Energy Customer Class Single‐family dwellings and individually metered apartments R. W. Beck, An SAIC Company | 1144 Current Residential Rate Current Rate Fixed Charge ($/Bill) $3.91 Distribution Facilities Charge ($/kWh) $0.0220 Total Energy Charge ($/kWh) (Energy Charge + Demand Charge) $0.0532 Attachment 1, October 11, 2011 8 R. W. Beck, An SAIC Company | 1155 Residential Rate Structure Alternatives ƒ Single Tier (Current Rate Structure) ƒ Seasonal Rate (PRPA Pass Through) ƒ Three‐Tier Rate ƒ Five‐Tier Rate * All alternatives are designed to recover the same amount of revenue in 2012. R. W. Beck, An SAIC Company | 1166 Residential Customer Class – Energy Usage Characteristics Attachment 1, October 11, 2011 9 R. W. Beck, An SAIC Company | 1177 Energy Usage Characteristics of Low Income Single Family Households vs. Overall System Low Income single family comparison (2010 data) 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% - 100 200 300 400 500 600 700 800 900 1000 1100 1200 1300 1400 1500 1600 1700 1800 1900 2000 2100 2200 2300 2400 2500 2600 2700 2800 2900 3000 kWh block % of bills in block Sample of 179 single family low income Single family population R. W. Beck, An SAIC Company | 1188 Low Income multi-family comparison (2010 data) 0% 2% 4% 6% 8% 10% 12% 14% Attachment 1, October 11, 2011 10 R. W. Beck, An SAIC Company | 1199 Single Tier Single Tier Rate Fixed Charge ($/Bill) $4.48 Distribution Facilities Charge ($/kWh) $0.0252 Total Energy Charge ($/kWh) (Energy Charge + Demand Charge) $0.0540 R. W. Beck, An SAIC Company | 2200 Single Tier 23,877 46,131 67,267 76,559 74,925 68,003 58,309 47,721 37,865 29,993 42,169 26,392 9,253 7,293 10,533 6,936 6,301 3,549 2,454 3,469 ‐ 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000 ‐10% 0% 10% 20% 30% 40% 50% 60% 70% 80% Annual Number of Bills Percentage Change from Current Bill Monthly Energy Per Bill (kWh) Number of Bills Current Rate Summer % Change Non Summer % Change Annual % Change Attachment 1, October 11, 2011 11 R. W. Beck, An SAIC Company | 2211 Single Tier Bill Impacts ‐ Number of Customers 0 5,000 10,000 15,000 20,000 25,000 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% 20.0% Number of Customers Range [5.4 to 12%] R. W. Beck, An SAIC Company | 2222 Seasonal Rate (PRPA Pass Through) Seasonal Rate Fixed Charge ($/Bill) $4.48 Distribution Facilities Charge ($/kWh) $0.0256 Total Energy Charge (Energy Charge + Demand Charge) Summer* ($/kWh) $0.0640 Non Summer ($/kWh) $0.0506 *Summer Months: June, July, & August Attachment 1, October 11, 2011 12 R. W. Beck, An SAIC Company | 2233 Seasonal Rate (PRPA Pass Through) 23,877 46,131 67,267 76,559 74,925 68,003 58,309 47,721 37,865 29,993 42,169 26,392 9,253 7,293 10,533 6,936 6,301 3,549 2,454 3,469 ‐ 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000 ‐10% 0% 10% 20% 30% 40% 50% 60% 70% 80% Annual Number of Bills Percentage Change from Current Bill Monthly Energy Per Bill (kWh) Number of Bills Current Rate Summer % Change Non Summer % Change Annual % Change R. W. Beck, An SAIC Company | 2244 Seasonal Rate (PRPA Pass Through) Bill Impacts ‐ Number of Customers Attachment 1, October 11, 2011 13 R. W. Beck, An SAIC Company | 2255 Tiered Rate Structure Rate Design Objectives ƒ To send a strong pricing signal to large users of electricity to incentivize conservation ƒ To generate sufficient revenue to meet the residential class revenue requirement ƒ To follow the seasonal variation in PRPA wholesale power costs ƒ To design tiered rates so that monthly customer bills will be greater than or equal to bills rendered under the existing rate structure R. W. Beck, An SAIC Company | 2266 How does a Tiered Rate work? Tier (A) Rate ($/kWh) (B) kWh (A x B) Calculation Tier 1 [1-500 kWh] $0.0500 500 $25.00 Tier 2 [501-1000 kWh] $0.0600 500 $30.00 Tier 3 [1001 kWh & Higher] $0.0900 200 $18.00 Total or Average $0.0667 1,200 $73.00 1,200 kWh Customer Attachment 1, October 11, 2011 14 R. W. Beck, An SAIC Company | 2277 Three‐Tier Rate Three-Tier Rate Fixed Charge ($/Bill) $4.48 Distribution Facilities Charge ($/kWh) $0.0256 Total Energy Charge (Energy Charge + Demand Charge) Summer* ($/kWh) Tier 1 [1-500 kWh] $0.0531 Tier 2 [501-1000 kWh] $0.0689 Tier 3 [1001 kWh & Higher] $0.1005 Non Summer ($/kWh) Tier 1 [1-500 kWh] $0.0482 Tier 2 [501-1000 kWh] $0.0520 Tier 3 [1001 kWh & Higher] $0.0603 *Summer Months: June, July, & August R. W. Beck, An SAIC Company | 2288 Three‐Tier Rate 23,877 46,131 67,267 76,559 74,925 68,003 58,309 47,721 37,865 29,993 42,169 26,392 9,253 7,293 10,533 6,936 6,301 3,549 2,454 3,469 ‐ 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000 ‐10% 0% 10% 20% 30% 40% 50% 60% 70% 80% Annual Number of Bills Percentage Change from Current Bill Attachment 1, October 11, 2011 15 R. W. Beck, An SAIC Company | 2299 Three‐Tier Rate Bill Impacts ‐ Number of Customers R. W. Beck, An SAIC Company | 3300 Five‐Tier Rate Five-Tier Rate Fixed Charge ($/Bill) $4.48 Distribution Facilities Charge ($/kWh) $0.0256 Total Energy Charge (Energy Charge + Demand Charge) Summer* ($/kWh) – June, July & August Tier 1 [1-500 kWh] $0.0514 Tier 2 [501-1000 kWh] $0.0655 Tier 3 [1001kWh – 1500 kWh] $0.0938 Tier 4 [1501-2000 kWh] $0.1362 Tier 5 [2001 kWh & Higher] $0.1873 Non Summer ($/kWh) Tier 1 [1-500 kWh] $0.0482 Tier 2 [501-1000 kWh] $0.0515 Tier 3 [1001kWh 1500 kWh] $0.0577 Tier 4 [1501-2000 kWh] $0.0660 Tier 5 [2001 kWh & Higher] $0.0686 Attachment 1, October 11, 2011 16 R. W. Beck, An SAIC Company | 3311 Five‐Tier Rate 23,877 46,131 67,267 76,559 74,925 68,003 58,309 47,721 37,865 29,993 42,169 26,392 9,253 7,293 10,533 6,936 6,301 3,549 2,454 3,469 ‐ 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000 ‐10% 0% 10% 20% 30% 40% 50% 60% 70% 80% Annual Number of Bills Percentage Change from Current Bill Monthly Energy Per Bill (kWh) Number of Bills Current Rate Summer % Change Non Summer % Change Annual % Change R. W. Beck, An SAIC Company | 3322 Five‐Tier Rate Bill Impacts ‐ Number of Customers Attachment 1, October 11, 2011 17 R. W. Beck, An SAIC Company | 3333 Comparing All Residential Options 23,877 46,131 67,267 76,559 74,925 68,003 58,309 47,721 37,865 29,993 42,169 26,392 9,253 7,293 10,533 6,936 6,301 3,549 2,454 3,469 ‐ 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000 ‐10% 0% 10% 20% 30% 40% 50% 60% 70% 80% Annual Number of Bills Percentage Change from Current Bill Monthly Energy Per Bill (kWh) Summer Rates Number of Bills Current Rate Single Tier Seasonal Rate Three‐Tier Rate Five‐Tier Rate R. W. Beck, An SAIC Company | 3344 Comparing All Residential Options 23,877 46,131 67,267 76,559 74,925 68,003 58,309 47,721 37,865 Attachment 1, October 11, 2011 18 R. W. Beck, An SAIC Company | 3355 Comparing All Residential Options 23,877 46,131 67,267 76,559 74,925 68,003 58,309 47,721 37,865 29,993 42,169 26,392 9,253 7,293 10,533 6,936 6,301 3,549 2,454 3,469 ‐ 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000 ‐10% 0% 10% 20% 30% 40% 50% 60% 70% 80% Annual Number of Bills Percentage Change from Current Bill Monthly Energy Per Bill (kWh) Annual Average Rates Number of Bills Current Rate Single Tier Seasonal Rate Three‐Tier Five‐Tier R. W. Beck, An SAIC Company | 3366 Comparing All Residential Options Bill Impacts - Number of Customers 0 5,000 10,000 15,000 20,000 25,000 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% 20.0% Attachment 1, October 11, 2011 19 R. W. Beck, An SAIC Company | 3377 Comparing All Residential Options Bill Impacts - Number of Customers 0 5,000 10,000 15,000 20,000 25,000 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% 20.0% Number of Customers Single Tier Seasonal R. W. Beck, An SAIC Company | 3388 Comparing All Residential Options Bill Impacts - Number of Customers 0 5,000 10,000 15,000 20,000 25,000 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% 20.0% Number of Customers Single Tier Seasonal Three‐Tier Attachment 1, October 11, 2011 20 R. W. Beck, An SAIC Company | 3399 Comparing All Residential Options Bill Impacts - Number of Customers 0 5,000 10,000 15,000 20,000 25,000 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% 20.0% Number of Customers Single Tier Seasonal Three‐Tier Five‐Tier R. W. Beck, An SAIC Company | 4400 Bill Impacts on Selected Customers Selected House Square Feet # of Occupants A/C Annual Average (kWh) Highest Winter Usage (kWh) Highest Summer Usage (kWh) A 4,242 2 Yes 633 851 726 B 3,306 4 Yes 1,692 3,026 1,762 C 3,000 3 Yes 928 1,075 1,485 D 2,980 7 No 641 915 594 E 2,850 2 Yes 567 876 650 F 2,700 4 Yes 654 566 1,112 G 2,621 2 Yes 482 615 644 H 2,600 2 Yes 803 1,057 1,137 I 2,500 4 Yes 362 508 406 J 2,275 2 No 507 524 625 K 2,000 2 No 606 1,391 474 Attachment 1, October 11, 2011 21 R. W. Beck, An SAIC Company | 4411 Bill Impacts on Selected Customers R. W. Beck, An SAIC Company | 4422 Bill Impacts on Selected Customers Selected House Average Monthly Bill % Difference Single Tier % Difference Seasonal % Difference Three‐Tier % Difference Five‐Tier A $51.17 6.03% 5.88% 1.92% 0.92% B $126.41 5.61% 5.29% 11.98% 11.33% C $85.00 5.74% 5.51% 6.79% 5.29% D $50.67 6.08% 5.09% 1.05% 0.29% E $45.58 6.11% 6.13% 1.51% 0.59% F $51.67 6.02% 7.83% 4.86% 3.18% G $44.25 6.14% 5.63% 0.97% 0.20% H $70.58 5.83% 5.72% 4.46% 2.97% I $30.83 6.49% 6.22% 0.79% 0.14% J $42.25 6.18% 6.22% 1.01% 0.19% K $47.83 6.08% 4.78% 1.28% 0.52% Attachment 1, October 11, 2011 22 R. W. Beck, An SAIC Company | 4433 System Benefits Estimated Percent Change in Annual Energy No Elasticity Mid Elasticity High Elasticity Seasonal 0.0% ‐1.0% ‐1.5% Three‐Tier 0.0% ‐1.1% ‐1.6% Five‐Tier 0.0% ‐1.2% ‐1.7% Estimated Percent Change in Summer Peak Demand No Elasticity Mid Elasticity High Elasticity Seasonal 0.0% ‐1.8% ‐2.7% Three‐Tier 0.0% ‐1.8% ‐2.6% Five‐Tier 0.0% ‐1.8% ‐2.6% R. W. Beck, An SAIC Company | 4444 System Benefits Estimated Annual GHG Savings (Metric Tons) No Elasticity Mid Elasticity High Elasticity Seasonal 0 3,046 4,518 Three‐Tier 0 3,463 5,031 Five‐Tier 0 3,667 5,185 Estimated Annual Purchased Power Savings ($) No Elasticity Mid Elasticity High Elasticity Seasonal $0 $218,535 $324,174 Three‐Tier $0 $244,370 $354,732 Five‐Tier $0 $257,237 $363,223 Attachment 1, October 11, 2011 23 R. W. Beck, An SAIC Company | 4455 System Benefits Estimated Avoided Capital Cost of New Peaking Capacity ($1,000) No Elasticity Mid Elasticity High Elasticity Seasonal $0 $1,336 $1,982 Three‐Tier $0 $1,336 $1,928 Five‐Tier $0 $1,344 $1,880 R. W. Beck, An SAIC Company | 4466 Summary: Residential Rate Alternatives Single Tier Seasonal (PRPA Pass Through) Three-Tier Five-Tier Increasing Conservation Signal Attachment 1, October 11, 2011 24 R. W. Beck, An SAIC Company | 4477 Staff Recommendation ƒ 3‐Tier Residential Rate ƒ Aligns with Energy Policy and Climate Action Plan ƒ Supports participation in efficiency and conservation programs ƒ Other Considerations ƒ Customer outreach ƒ Expansion of customer assistance programs, including low‐ income and special medical needs R. W. Beck, An SAIC Company | 4488 Efficiency and Conservation Programs (Energy and Water) Attachment 1, October 11, 2011 25 R. W. Beck, An SAIC Company | 4499 ƒ Recognition of Fort Collins Results ƒ Policy Direction and Goals ƒ Rationale for Efficiency Programs ƒ History ƒ Program Elements, Strategies and Principles ƒ Current Programs ƒ Performance Results and Metrics Overview R. W. Beck, An SAIC Company | 5500 Definitions/Clarifications ƒ Efficiency: reducing resource use to achieve the same outcome (light level, comfort, production, etc.) ƒ Conservation: reducing resource use through behavioral change and eliminating waste ƒ Demand‐Side Management: Utility term for programs which impact the “customer side” of the meter ƒ Demand Response: Utility term for programs which strive to impact the time when energy is used (Load management, load control, time‐of‐ use, etc.) Attachment 1, October 11, 2011 26 R. W. Beck, An SAIC Company | 5511 Recognition for Fort Collins ƒ Outreach ƒ 2009 Savvy award for “Fort Collins Conserves” campaign ƒ Water ƒ Water Conservation Specialist Laurie D’Audney was awarded the Alice Darilek Water Conservation Award from the Rocky Mountain Section of the American Water Works Association (2010) ƒ Western Resource Advocate’s report, Filling the Gap: Commonsense Solutions for Meeting Front Range Water Needs, Halligan Reservoir Enlargement labeled an Acceptable Planned Water Supply Projects with associated efficiency measures (2011) R. W. Beck, An SAIC Company | 5522 Recognition for Fort Collins ƒ Energy kudos from the Southwest Energy Efficiency Project (SWEEP) ƒ “This is one of the highest savings percentages achieved by any electric utility in the southwest region, demonstrating that even a small utility can implement very effective energy efficiency programs.” (reporting on 2010 results) ƒ “While this utility is small in scale, its DSM programs are large in stature, outperforming most municipal and many investor owned utility DSM programs across the country.” Municipal Efficiency, Leading Lights (2011) Attachment 1, October 11, 2011 27 R. W. Beck, An SAIC Company | 5533 Energy Related Goals ƒ Climate Action Plan Goals (2008) ƒ Reduce emissions to 20% below 2005 levels by 2020 ƒ Reduce emissions to 80% below 2005 levels by 2050 ƒ Energy Policy (2009) ƒ Support the Climate Action Plan goals ƒ Annual efficiency program savings of 1.5% of the community’s electricity use R. W. Beck, An SAIC Company | 5544 Water Related Goals ƒ Water Supply and Demand Management Policy (2003) ƒ Annual Water Consumption Goal: 185 gallons per person per day (gpcd) by 2010 ƒ Peak Day Use Goal: 475 gpcd by 2010 ƒ Water Conservation Plan (2010) ƒ Annual Water Consumption Goal: 140 gpcd by 2020 Attachment 1, October 11, 2011 28 R. W. Beck, An SAIC Company | 5555 Rationale for Efficiency and Conservation ƒ Lowest cost resource ƒ Efficiency and conservation are the lowest cost resource for energy and water. ƒ Energy programs can deliver electricity at a cost less than purchasing wholesale electricity. ƒ Water conservation programs are cheaper than developing/purchasing new water supply. Also saves on capital and operating costs. R. W. Beck, An SAIC Company | 5566 Sustainability Benefits ƒ Economic ƒ Lower customer’s utility bills ƒ Reduced costs for Utilities ƒ Environmental ƒ Reduce carbon and pollutant emissions ƒ Decrease energy and chemical use ƒ Social ƒ Increase comfort, health, safety and productivity Attachment 1, October 11, 2011 29 R. W. Beck, An SAIC Company | 5577 Community Values ƒ Community values support efficiency and conservation ƒ Customer expectations (survey data) ƒ 21st Century Utilities ƒ Plan Fort Collins ƒ Fort Collins Conserves ƒ Deliver level of service our customers expect with environmental, social and economically responsible outcomes for the long term R. W. Beck, An SAIC Company | 5588 History of Water Conservation ƒ Program began with a drought in 1977 ƒ 1992: Water Demand Management Policy ƒ 2003: Water Supply & Demand Management Policy (currently being updated) ƒ 2010: Water Conservation Plan Attachment 1, October 11, 2011 30 R. W. Beck, An SAIC Company | 5599 History of Energy Programs ƒ Have provided energy programs and services for over 25 years ƒ Early programs: residential program series, ZILCH loans, home energy ratings ƒ 1998: first commercial financial incentive, integrated design assistance ƒ 2002: appliance rebates ƒ 2003 Energy Policy: first dedicated funding R. W. Beck, An SAIC Company | 6600 Efficiency Program Strategies and Principles ƒ Strategies ƒ Reduce barriers ƒ Achieve verifiable energy and water savings ƒ Provide programs for various customer groups ƒ Principles ƒ Leverage other programs ƒ Best practices for verification ƒ Adapt to changing regulations ƒ Collaboration Attachment 1, October 11, 2011 31 R. W. Beck, An SAIC Company | 6611 Efficiency and Conservation Program Elements ƒ Program Elements ƒ Awareness and education ƒ Financial incentives ƒ Technical assistance ƒ Industry partners – building contractors, suppliers, retailers, etc. ƒ Rates/Pricing R. W. Beck, An SAIC Company | 6622 Residential Programs ƒ Existing Homes ƒ Home Efficiency Program (audits, rebates, contractors) ƒ Consumer products (energy and water) ƒ Home Energy Reports ƒ Environmental Program Series ƒ Sprinkler system audits ƒ New Homes ƒ NoCO ENERGY STAR Homes ƒ Green Building Code amendments ƒ Consumer products (energy and water) Attachment 1, October 11, 2011 32 R. W. Beck, An SAIC Company | 6633 Business Programs ƒ Existing Buildings ƒ Efficiency assessments ƒ Electric efficiency program incentives (equipment and custom) ƒ LightenUP program incentives (business lighting) ƒ Consumer products (energy and water) ƒ Energy Challenge ƒ Climate Wise ƒ New Buildings ƒ Integrated Design Assistance Program ƒ Green Building Code amendments ƒ Consumer products (water) R. W. Beck, An SAIC Company | 6644 Efficiency and Conservation Programs by Strategy ƒ Consumer products ƒ Retrofit and capital upgrade incentives ƒ Operations, conservation, education, technical assistance ƒ Regulations Attachment 1, October 11, 2011 33 R. W. Beck, An SAIC Company | 6655 Efficiency and Conservation Programs: Consumer Products ƒ ENERGY STAR® clothes washer and dishwasher rebates ƒ Refrigerator and freezer recycling ƒ Compact fluorescent light bulbs ƒ LED lighting (bulbs and holiday lighting) ƒ WaterSense labeled toilet and urinal rebates ƒ Sprinkler equipment rebates R. W. Beck, An SAIC Company | 6666 Efficiency and Conservation Programs: Retrofit and Capital Upgrade Incentives ƒ Insulation and air sealing ƒ Business lighting ƒ Major equipment for business ƒ Custom energy and water incentives ƒ Office equipment/information technology ƒ Foodservice equipment (energy and water) ƒ Restroom fixtures ƒ Irrigation equipment ƒ Refrigeration equipment ƒ Windows Attachment 1, October 11, 2011 34 R. W. Beck, An SAIC Company | 6677 Efficiency and Conservation Programs: Operations, Conservation, Education, Technical Assistance ƒ Business building tune‐up (retro‐commissioning) ƒ Business Efficiency Challenge ƒ Home Energy Reports ƒ Xeriscape Design Clinics ƒ Xeriscape Demonstration Garden ƒ Sprinkler system audits ƒ Environmental program series ƒ Business Innovation Fair ƒ Climate Wise ƒ Efficiency Assessments R. W. Beck, An SAIC Company | 6688 Efficiency and Conservation Programs: Climate Wise ƒ Climate Wise ƒ Technical assessments ƒ Public recognition ƒ Networking opportunities ƒ Reporting and tracking ƒ Energy ƒ Water ƒ Recycling/Waste ƒ Transportation Attachment 1, October 11, 2011 35 R. W. Beck, An SAIC Company | 6699 Efficiency and Conservation Programs: Regulations ƒ Wasting water enforcement ƒ Landscape and Irrigation Standards for Water Conservation ƒ Building Code Green Amendments R. W. Beck, An SAIC Company | 7700 Program Results and Metrics ‐ Water Water Conservation Plan Goal Attachment 1, October 11, 2011 36 R. W. Beck, An SAIC Company | 7711 Program Results and Metrics ‐ Water R. W. Beck, An SAIC Company | 7722 Program Results and Metrics ‐ Energy Description 2005 (baseline) 2010 Percent Change Carbon emissions 1,198,083 1,062,850 -11.3% Community Carbon Emissions from Electricity Sector Year Business customer projects Residential rebates Retailer transactions 2002 1 580 0 2003 6 1,002 0 2004 17 5,366 0 2005 31 2,040 35,249 2006 42 1,667 33,481 2007 72 1,507 44,137 2008 86 1,931 22,684 2009 145 2,266 25,082 2010 289 2,712 15,857 Total 689 19,071 176,489 Customers Served through Efficiency Programs (2002 – 2010) Attachment 1, October 11, 2011 37 R. W. Beck, An SAIC Company | 7733 Program Results and Metrics ‐ Energy 0 5,000 10,000 15,000 20,000 25,000 megawatt-hours per year 2002 2003 2004 2005 2006 2007 2008 2009 2010 Fort Collins Efficiency Program Savings Annual EE Savings (MWh/yr) Fort Collins Efficiency Programs – Annual Electricity Savings (2002 – 2010) R. W. Beck, An SAIC Company | 7744 Program Results and Metrics ‐ Energy 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 megawatt-hours per year 2002 2003 2004 2005 2006 2007 2008 2009 2010 Fort Collins Efficiency Program Savings Annual EE Savings (MWh/yr) Cumulative annual EE Savings (MWh/yr) 84,000,000 kilowatt-hours Fort Collins Efficiency Programs – Cumulative Annual Electricity Savings (2002 – 2010) Attachment 1, October 11, 2011 38 R. W. Beck, An SAIC Company | 7755 Program Results and Metrics ‐ Energy Fort Collins Efficiency Investment and Customer Savings -$3,000,000 -$2,000,000 -$1,000,000 $0 $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 2002 2003 2004 2005 2006 2007 2008 2009 2010 Annual Investment and Savings FC expenditures PRPA expenditures Cumulative Annual Utility cost savings Fort Collins Efficiency Programs – Investment and Customer Savings (2002 – 2010) R. W. Beck, An SAIC Company | 7766 Thank you! October 11, 2011 FORT COLLINS CITY COUNCIL WORK SESSION Attachment 1, October 11, 2011 39 R. W. Beck, An SAIC Company | 7777 Questions for City Council 1. Has sufficient information been provided to support City Council’s decision to adopt a residential energy rate ordinance with one of the four options? 2. Which of the four options proposed for consideration does City Council prefer for implementation? Utilities City of electric stormwater• wastewater water F : LL 700 Wood Street O rt 0 P0 Box 580 Fort Collins, CO 80522 TDD utilities @fcgov.com fcgov.com/utilities MEMORANDUM Date: May 13,2011 To: Mayor Weitkunat and City Councilmembers Thru: Darin Atteherry, City Manager Brian Janonis, Utilities Executive l)irector From: Patty Bigner, Utilities Customer and Employee Relations Manager P /‘/- Re: Work Session Summary— May 10, 2011 re: Rate Design Philosophy All City Councilmembers were present except Aislinn Kottwitz. Utilities Executive Director Brian Janonis provided introductions and background on the need for financial strategy and the development of the Financial Strategy and Rate Design Philosophy. Staff answering questions included Steve Catanach and Patty Bigner. SAIC Consultant Joe Mancinelli provided a brief presentation on industry trends, emerging technology and its impact on rate design. In addition, SAIC consultant Scott Burnham previously taped a niore comprehensive presentation on the details of the philosophy. City Council generally supported the approach proposed by staff and offered some suggested edits to the document. Council wanted to see how the principles and objectives would he applied to rate forms before considering adoption of the Rate Design Philosophy. Other requests for follow-Lip include: 1. Maps that show boundaries for the four City utilities (this item needs to he compiled - follow— up in separate memo) 2. Comparison of Fort Collins rates to the rest of the state and country to provide context (this item needs to he compiled - follow-up in separate memo) 3. Application of the rate design philosophy to current rate structures (same as number I & 2 — follow—up in separate memo) 4. Describe stall’s vision of what the electric utility of the future might look like (this item will he covered at the Advanced Meter Infrastructure City Council Work Session on June14, 20 I I ATTACHMENT 2 Utilities City of electric. stormwater. wastewater water 700 Wood Street Fort CoLLins 970 224 6003 TDD utilities @fcgov.com fcgov.com/utilities Memorandum Date: September 15, 2011 To: City Councilmembers Thru: Darin Atteberry, City Manager Brian Janonis, Utilities Executive Director From: Patty Bigner, Utilities Customer and Employee Relations Manager Re Work Session Summary (Partial) — September 13, 2011 Electric Rate Options All City Councilmembers were present. Utilities Executive Director Brian Janonis provided introductions and noted that the consideration of a change to the electric rate form is unprecedented in the history of the Light and Power Utility. Presentations were provided by Patty Bigner and SAIC consLiltant Joe Mancinelli. Staff answering questions included Bill Switzer, Steve Catanachm and Patty Bigner. SAIC consultant Joe Mancinelli provided a brief presentation on industry trends and response to those trends by utilities across the country, with specific information on electric rates, customer assistance, time of use rates, and special programs for electric vehicles. The residential energy rate options proposed for Council discussion included: • Single Tier (current rate structure) • Seasonal (Platte River Power Authority IPRPA] pass-through) • Three Tier • Five Tier Staff also proposed phasing out the Residential Demand Rate and suggested limiting the rate to residential customers who could provide documentation of total electric residence (no natural gas). One change to the rate form is proposed for the commercial rate classes. As noted in the Agenda Item Summary, the proposed change to the General Service (GS) or commercial rate class would more accurately reflect electric use of this diverse group of customers. This change would create a fourth commercial rate class to include the lower end of the mid-sized commercial customers by splitting the GS customer class into two customer classes, GS and GS 25. ATTACHMENT 3 Fort City of CoLLins Examples of customers in the proposed GS customer class include housing services for condos and apartments (lights, laundry, etc.); small retail; professional offices; non-profit agencies: and small churches. The proposed GS 25 customer class includes fast loud restaurants, medium- sized churches, restaurants, larger retail, fraternity and sorority houses, convenience stores, copy centers and banks. The remaining large commercial industrial rates will remain in the coincident peak form hut with a seasonal adjustment. Questions for City Council included: Residential Rate Options I. Of the four proposed rate options for the residential energy rate, which specific option is preferred’? 2. Does City Council support the proposed change to the residential demand rate’? Commercial Rate Options 1. Does City Council support the proposed change that would create an additional rate class from the existing General Service rate class? Questions from Councilmembers primarily focused on aspects of the residential energy rate, its merits in addressing carbon reduction and energy efficiency goals, and its impacts on customers as well as the perceived value or lack of value to the system (generation, transmission and distribution). Other questions focused on the impacts to customers related to size of households and square footage of homes, number and type of appliances, and electricity use associated with lifestyle (home office or other differences). City Council requested additional information: 1. Assumptions related to elasticity (in plain English) — what kind of impact can he expected’? What is the corresponding carbon reduction’? 2. Are the options designed to he revenue neutral? If demand and energy are reduced, the purchase power requirements will also be reduced lowering overall revenue requirements. 3. Provide more context on system impacts. How might the tiered rates affect shifts in demand which may have a negative impact on the overall load’? 4. Provide more data on the monthly variation in bill impacts, including the typical variation in monthly use. 5. Provide sample (8 to 10) scenarios of year-round use and the price impacts of the options. Examples: Large users with no air conditioning (AC), large users with AC, small users with AC, small users without AC, etc. Changes to the Residential Demand Rate and the Commercial General Service Rate were discussed and generally seemed acceptable. Councilmembers had a number of unresolved questions regarding the Residential Energy Rate and requested a follow-up Work Session, now scheduled for Oct. II, 2011. Councilmembers recognized that the schedule for implementation 2 City of Fort Collins of the rate, if it is changed, will be delayed beyond January 1,2012. Typically, rate changes occur with the first meter reading of the new year. Staff plans to move forward with rate changes with the exception of the Residential Energy Rate. Rate ordinances for the Residential Demand, GS, GS 25, GS 50 and GS 750 rate classes will be discussed Fort Collins City Council Work Session, Oct 11, 2011 Attachment 4 Price Elasticity Graphs Price elasticity varies widely ƒ Electric Power Research Institute (EPRI) reviewed results of numerous pricing pilots; results ranging from ‐0.08 to ‐0.39 ƒ Common finding was that higher‐use customers exhibit larger price elasticity ƒ Brattle Group found that long‐run price elasticity are substantially higher than short‐run price elasticity ƒ Public Utilities Fortnightly (August 2008) article ƒ Incline block rates can provide energy consumption savings ƒ Price elasticity ranges: Distribution of Residential Price Elasticity Low Most Likely High Block 1 ‐0.01 ‐0.13 ‐0.20 Short Run Block 2 ‐0.02 ‐0.26 ‐0.39 Block 1 ‐0.03 ‐0.39 ‐0.60 Long Run Block 2 ‐0.06 ‐0.78 ‐1.17 Fort Collins City Council Work Session, Oct 11, 2011 Attachment 5 Estimated Reduction in Carbon Emissions Estimated Annual GHG Savings (Metric Tons) No Elasticity Mid Elasticity High Elasticity Seasonal 0 3,046 4,518 Three‐Tier 0 3,463 5,031 Five‐Tier 0 3,667 5,185 Fort Collins City Council Work Session, Oct 11, 2011 Attachment 6 1 System Benefits Estimated Percent Change in Annual Energy No Elasticity Mid Elasticity High Elasticity Seasonal 0.0% ‐1.0% ‐1.5% Three‐Tier 0.0% ‐1.1% ‐1.6% Five‐Tier 0.0% ‐1.2% ‐1.7% Estimated Percent Change in Summer Peak Demand No Elasticity Mid Elasticity High Elasticity Seasonal 0.0% ‐1.8% ‐2.7% Three‐Tier 0.0% ‐1.8% ‐2.6% Five‐Tier 0.0% ‐1.8% ‐2.6% Fort Collins City Council Work Session, Oct 11, 2011 Attachment 6 2 Estimated Avoided Capital Cost of New Peaking Capacity ($1,000) No Elasticity Mid Elasticity High Elasticity Seasonal $0 $1,336 $1,982 Three‐Tier $0 $1,336 $1,928 Five‐Tier $0 $1,344 $1,880 Fort Collins City Council Work Session, Oct 11, 2011 Attachment 7 Relationship Between System Cost and Retail Price To assist in understanding this concept from a different perspective, it may be helpful to understand how cost of service is determined. There is a fundamental relationship between what residential electricity customers use on a monthly basis, what they pay for service and their costs to the system. The cost of service analysis unbundles total electric utility costs into three functions (customer service, electric distribution, and purchased power). The cost structure of each function is different. Costs associated with the customer service function are fixed and do not vary with energy usage. These costs are incurred by the utility largely due to the number of customers on the system. Therefore, the majority of customer service costs are allocated to customer classes based on the number of customers. Costs associated with the distribution function are also fixed. These costs are incurred by the utility to deliver power to the customers regardless of their location. Additionally, infrastructure is sized to meet localized system demands in order to maintain high system reliability. Therefore, if customer use less energy or reduce demand consumption, customer service and distribution costs will not change. The purchased power function is variable. Fort Collins Utilities only pays its wholesale power supplier (Platte River Power) for demand and energy used. Therefore, if customers use less energy or reduce demand consumption, wholesale power costs will be lower. To the extent possible, rate design tries to parallel cost of service results. The cost of service analysis indicates that there are three distinct service offerings by Fort Collins Utilities with the following cost causation characteristics: Function Cost Characteristic Customer Service Fixed Distribution Fixed Purchased Power Variable To equitably recover these costs, a rate structure could have a customer charge ($ per customer per month), a demand charge ($ per kilo-watt (kW)) and an energy charge ($ per kilo-watt hour (kWH)). In fact, these rate structures are often seen for commercial customers. However, residential customers do not typically have demand charges. This is a direct result of metering technology and the fact that residential customer demands are relatively homogenous compared to commercial customer classes. The existing residential rate structure at Fort Collins Utilities includes a customer charge ($3.91 per customer per month) and energy charges (a distribution charge of $0.0220/kWh, a demand charge of $0.0284/kWh, and an energy charge of $0.0248/kWh). The customer charge is designed to recover the cost associated with meters, and customer services (billing systems, etc). These cost are fixed and do not vary with energy usage. The distribution charge is designed to recover utility costs for substations, feeder lines, distribution systems, and energy services. While the distribution charge does not vary with electricity, Fort Collins Utilities has elected to recover these charges on an energy basis rather than a on a per customer basis. Fort Collins Utilities does not have demand meters on these standard residential accounts and therefore cannot implement a demand charge. The demand and energy costs associated with purchased power are recovered through an energy charge in the current rate structure.Because the existing rate includes a fixed (customer charge) and variable (energy charge), the more electricity used on a monthly basis the lower the effective unit rate applicable to that customer. This does not suggest that larger users are paying less in total for utility service. It is merely recognizes that as more units of electricity are used, the fixed cost components of the rate is recovered over more kWh, thus the average costs per unit decreases. See example below: Monthly Use (kWh) / Charge ($) 10 kWh 100 kWh 1,000 kWh Fort Collins City Council Work Session, Oct 11, 2011 Attachment 7 Customer Charge $3.91 $3.91 $3.91 Distribution Charge ($0.0220 / kWh) $0.22 $2.22 $22.20 Demand Charge ($0.0284 / kWh) $0.284 $2.84 $28.4 Energy Charge ($0.0248 / kWh) $0.248 $2.48 $24.8 Total Bill $4.66 $11.45 $79.31 $/kWh $0.47 $0.11 $0.08 In a typical distribution system, small users of electricity place less demand on the system than larger users. However, the rate, as illustrated above, does a good job of recognizing this cost difference as the larger users are paying significantly more towards the utilities demand related costs compared to the smaller users. However, if you look at the unit cost, smaller users pay a higher $/kWh due to the nature of the fixed and variable price structure. This is the same in any industry that has a fixed and variable component. A cell phone bill typically has a fixed portion (for monthly service) and a variable portion (for the number of phone calls made or data received). The larger the variable portion becomes, the lower the unit costs ($/minutes used or $/data received). A refinement in rate design that would add to the equitability of fixed cost recovery associated with the residential rate structure would be the addition of a demand charge, but these options are not available to Fort Collins Utilities at this time. In general, the utility recovers the costs to serve its customers based on its rate structures that vary by customer class. The costs to serve customer classes (residential, commercial, industrial) are different; industrial customers require additional equipment, larger sized power lines, and, of course, additional electricity than residential users. Within the residential customer class, however, the fixed costs to serve a low user and a high user are the same. The variable costs to serve these customers are different; larger users require more energy than lower users. Further, Fort Collins Utilities elects to charge users for the fixed costs of its distribution system on a variable basis, therefore, larger users are contributing more to the costs of the distribution system than smaller users (because they use more electricity and the distribution charge is based on $/kWh). The utility collects the costs to serve each customer class with the rates for that class; therefore, some customers contribute less to the total costs (low users) whereas some contribute more to the total costs (high users). In total, rates are designed such that all of the customers within the class provide the utility with the total costs for the service they receive. Therefore, rates are designed to be revenue neutral for the class such that Fort Collins Utilities neither over- collects or under collects for its costs to serve its customers. Fort Collins City Council Work Session, Oct 11, 2011 Attachment 8 1 Bill Impacts on Selected Customers Selected House Square Feet # of Occupants A/C Annual Average (kWh) Highest Winter Usage (kWh) Highest Summer Usage (kWh) A 4,242 2 Yes 633 851 726 B 3,306 4 Yes 1,692 3,026 1,762 C 3,000 3 Yes 928 1,075 1,485 D 2,980 7 No 641 915 594 E 2,850 2 Yes 567 876 650 F 2,700 4 Yes 654 566 1,112 G 2,621 2 Yes 482 615 644 H 2,600 2 Yes 803 1,057 1,137 I 2,500 4 Yes 362 508 406 J 2,275 2 No 507 524 625 K 2,000 2 No 606 1,391 474 Fort Collins City Council Work Session, Oct 11, 2011 Attachment 8 2 Fort Collins City Council Work Session, Oct 11, 2011 Attachment 8 3 Selected House Average Monthly Bill % Difference Single Tier % Difference Seasonal % Difference Three‐Tier % Difference Five‐Tier A $51.17 6.03% 5.88% 1.92% 0.92% B $126.41 5.61% 5.29% 11.98% 11.33% C $85.00 5.74% 5.51% 6.79% 5.29% D $50.67 6.08% 5.09% 1.05% 0.29% E $45.58 6.11% 6.13% 1.51% 0.59% F $51.67 6.02% 7.83% 4.86% 3.18% G $44.25 6.14% 5.63% 0.97% 0.20% H $70.58 5.83% 5.72% 4.46% 2.97% I $30.83 6.49% 6.22% 0.79% 0.14% J $42.25 6.18% 6.22% 1.01% 0.19% K $47.83 6.08% 4.78% 1.28% 0.52% Fort Collins City Council Work Session, Oct 11, 2011 Attachment 9 Energy Usage of Low Income Customers Low Income single family comparison (2010 data) 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% - 100 200 300 400 500 600 700 800 900 1000 1100 1200 1300 1400 1500 1600 1700 1800 1900 2000 2100 2200 2300 2400 2500 2600 2700 2800 2900 3000 kWh block % of bills in block Sample of 179 single family low income Single family population Low Income multi-family comparison (2010 data) 0% 2% 4% 6% 8% 10% 12% 14% - 100 200 300 Fort Collins City Council Work Session, Oct 11, 2011 Attachment 10 Community Water Use, Historic Averages and Goals Description 2005 (baseline) 2010 Percent Change Carbon emissions 1,198,083 1,062,850 -11.3% Community Carbon Emissions from Electricity Sector Water Conservation Plan Goal Fort Collins City Council Work Session, Oct 11, 2011 Attachment 10 5,000 6,000 7,000 8,000 9,000 10,000 11,000 12,000 2002 2003 2004 2005 2006 2007 2008 2009 2010 Per Capita Annual kilowatt‐hours Fort Collins Electric Use Per Capita Community Electric Use Per Capita (2002 – 2010) Year Business customer projects Residential rebates Retailer transactions 2002 1 580 0 2003 6 1,002 0 2004 17 5,366 0 2005 31 2,040 35,249 2006 42 1,667 33,481 2007 72 1,507 44,137 2008 86 1,931 22,684 2009 145 2,266 25,082 2010 289 2,712 15,857 Total 689 19,071 176,489 Customers Served through Efficiency Programs (2002 – 2010) Fort Collins City Council Work Session, Oct 11, 2011 Attachment 10 0 5,000 10,000 15,000 20,000 25,000 megawatt-hours per year 2002 2003 2004 2005 2006 2007 2008 2009 2010 Fort Collins Efficiency Program Savings Annual EE Savings (MWh/yr) Fort Collins Efficiency Programs – Annual Electricity Savings (2002 – 2010) 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 megawatt-hours per year 2002 2003 2004 2005 2006 2007 2008 2009 2010 Fort Collins Efficiency Program Savings Annual EE Savings (MWh/yr) Cumulative annual EE Savings (MWh/yr) 84,000,000 kilowatt-hours Fort Collins Efficiency Programs – Cumulative Annual Electricity Savings (2002 – 2010) Fort Collins City Council Work Session, Oct 11, 2011 Attachment 10 Fort Collins Efficiency Investment and Customer Savings -$3,000,000 -$2,000,000 -$1,000,000 $0 $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 2002 2003 2004 2005 2006 2007 2008 2009 2010 Annual Investment and Savings FC expenditures PRPA expenditures Cumulative Annual Utility cost savings Fort Collins Efficiency Programs – Investment and Customer Savings (2002 – 2010) 400 500 600 700 800 900 1000 1100 1200 1300 1400 1500 1600 1700 1800 1900 2000 2100 2200 2300 2400 2500 2600 2700 2800 2900 3000 kWh block % of bills in block Sample of 270 multi-family low income Multi-family population at the City Council Finance Committee on Sept. 26, 2011. Public notification will begin October 2 and Electric Rate Ordinances will be considered by City Council at first reading Oct. 18, 2011. Second reading is Nov. 1, 2011. Next Steps September 26 - Council Finance Committee related to all utilities rates and fees October 11 - Work session on Residential Energy Rate October 18 - I ‘ reading of Electric Rates (without changes to Residential Energy Rate); also I ‘ reading of ordinances for water and wastewater rates and PIFs/development fees October 25 - Work session on Energy Conservation Programs November 1 - 2’ reading of Rates and Fees Jan. 1, 2012 - all rates effective except for Residential Energy Rate Late 2011 or early 2012 - I SI reading of ordinance changing Residential Energy Rate to be effective shortly thereafter. 3 Number of Customers 29,993 42,169 26,392 9,253 7,293 10,533 6,936 6,301 3,549 2,454 3,469 ‐ 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000 ‐10% 0% 10% 20% 30% 40% 50% 60% 70% 80% Annual Number of Bills Percentage Change from Current Bill Monthly Energy Per Bill (kWh) Non Summer Rates Number of Bills Current Rate Single Tier Seasonal Rate Three‐Tier Rate Five‐Tier Rate Monthly Energy Per Bill (kWh) Number of Bills Current Rate Summer % Change Non Summer % Change Annual % Change - 100 200 300 400 500 600 700 800 900 1000 1100 1200 1300 1400 1500 1600 1700 1800 1900 2000 2100 2200 2300 2400 2500 2600 2700 2800 2900 3000 kWh block % of bills in block Sample of 270 multi-family low income Multi-family population Energy Usage Characteristics of Low Income Multi‐family Households vs. Overall System