HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 12/10/2013 - UTILITY BILLS AND CONSERVATION PROGRAMS REVIEWDATE: December 10, 2013
STAFF: Lance Smith, Strategic Financial Planning
Manager
WORK SESSION ITEM
City Council
SUBJECT FOR DISCUSSION
Utility Bills and Conservation Programs Review.
EXECUTIVE SUMMARY
The purpose of this work session is to provide City Council with an analysis of the impact of tiered rates
on residential electricity consumption and a summary review of Fort Collins Utilities resource conservation
programs and services.
Tiered rates were implemented for residential electric customers in 2012. The analysis herein is focused
on determining the effectiveness of the tiered rate structure on customer behavior. There is some
decrease on monthly energy consumption for those customers that use substantially more electricity each
month than the average residential customer. However, the overall monthly energy consumption
continues to increase year over year for the residential rate class.
It has been demonstrated by energy programs here and around the country that efficiency and
conservation are the lowest cost resources for energy and water. Fort Collins Utilities offers a
comprehensive portfolio of programs and services designed to reach all customer sectors and a wide
range of end uses. Survey results consistently show high levels of support related to the resource
conservation programs.
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
1. Does the Council support the current direction of the conservation programs?
2. Does the Council want any further discussion of tiered electric rates before considering a time of
use pilot in 2014?
BACKGROUND / DISCUSSION
Part A - Tiered Rate Analysis
In February 2012, a three-tiered rate structure was implemented for residential electric customers of Fort
Collins Utilities. The intent of the tiered structure was to provide some conservation incentive for these
customers. While the tiered rate structure was implemented smoothly, several other factors may have
contributed to some unfavorable customer response to the new rate structure in 2012. These factors
included:
- Platte River Power Authority implementing a seasonal price structure in 2012
- Ongoing drought conditions and unusually hot weather in June and July 2012
- The High Park Fire, which lasted for almost a month beginning in late June 2012
- Almost 2000 residential customers were moved from the Residential Demand rate class
to the Residential rate class in April 2012.
The relative impact each of these factors had on customer dissatisfaction with their utility bill is not known,
however, there have been no formal complaints about tiered electric rates made to Fort Collins Utilities in
2013. The analysis presented here is not focused on the factors listed above but rather is an attempt to
quantify the change in customer behavior that is the direct result of the new tiered rate structure.
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December 10, 2013 Page 7
Part B - Review of Conservation Programs and Services
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, City 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 energy 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.
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 resources for energy and water.
In addition, there are complementary benefits to achieving efficiency and conservation savings,
specifically:
Managing and reducing the community’s utility bills.
Reducing carbon and pollutant emissions from fossil fuel power plants, reducing direct emissions
from on-site natural gas use and decreasing the amount of chemicals and energy used to
produce, deliver and heat water.
Improving comfort, health, safety and productivity from efficiency projects.
Last but certainly not least, Fort Collins customers expect us to provide programs and services related to
efficiency and conservation. Survey results consistently show high levels of support related to these
programs.
Utilities offers a comprehensive portfolio of programs and services designed to reach all customer sectors
and a wide range of end uses. The following table lists programs and services for residential and
business customers. For a complete list of programs, see www.fcgov.com/conserve
<http://www.fcgov.com/conserve>. The programs are also linked closely to a range of related initiatives,
including demand response, renewable energy and advanced metering.
Fort Collins Utilities Efficiency and Conservation Programs and Services
Sector Building Type Program or Service
Residential Existing Home Efficiency Program (audits, rebates,
contractors)
Consumer products (energy and water)
Home Efficiency Reports Sprinkler system
audits
New NoCO ENERGY STAR Homes
Green Building Program
Consumer products (energy and water)
Commercial and Industrial Existing Efficiency assessments
Efficiency Works incentives (retrofit and
custom)
Consumer products (energy and water)
ClimateWise Integrated Design Assistance
Program
Landscape and irrigation standards for water
conservation
New Integrated Design Assistance Program
Green Building Program
Consumer products (water)
December 10, 2013 Page 8
Energy efficiency and conservation program results include:
Community carbon emissions from electricity use were 6% less in 2012 compared to the baseline
year of 2005. Electricity use has increased at a slower rate than population and economic factors,
even during a record breaking weather year.
Electricity use per capita, for all sectors, has decreased by 8% from 2005 to 2012.
Efficiency programs generated over $20 million in local economic benefits through reduced utility
bills, direct rebates and leveraged investment.
Customer electricity savings from 2012 efficiency programs totaled over 23,000 megawatt-hours
(MWh), or 1.5% of the community’s annual usage. This is equivalent to the annual electric use of
over 2,500 typical Fort Collins homes.
2012 efficiency programs saved electricity with a lifecycle cost-of-conserved energy of 2.3 cents
per kilowatt-hour (kWh), compared to an average wholesale electricity cost of 5.0 cents per kWh.
Water use trends have continued to decrease based on a number of factors. Historical use (1985-1992)
was over 230 gallons per capita per day (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). 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 2004-2011 water use is at 151 gpcd.
Financial Impacts of Programs
Utilities provides support to customers through direct rebates and incentives, technical support and
staffing to plan, implement and report on various programs. For energy efficiency and conservation
programs, expenditures in 2012 were $3.1M or 2.8% of electric revenue. The cost of conserved energy
(utility costs divided by lifetime kilowatt-hour savings) for the 2012 program portfolio was 2.2 cents per
kWh. Customer electricity bill savings from cumulative annual results is over $8.8M.
Water conservation expenditures for 2012 were $541,000.
Environmental Impacts of Programs
Efficiency and conservation results have direct and indirect environmental benefits, including:
Reducing carbon and pollutant emissions from fossil fuel power plants. Energy Policy related
programs avoided annual carbon emissions of over 161,000 metric tons.
Reducing direct emissions from on-site natural gas use.
Decreasing the amount of chemicals and energy used to produce, deliver and heat water.
ATTACHMENTS
1. Powerpoint presentation (PDF)
Tiered Rates and Conservation
Programs Summary
City Council Work Session
12/10/2013
Agenda
• Alignment
• Tiered electric rate summary
• Conservation programs
• Future tools for customers to track energy
usage
• Energy Policy
Policy •Water Supply and Demand Management Policy
•City Plan
•City Strategic Plan
•Climate Action Plan
Plans •Water Conservation Plan
• Efficiency and Conservation (energy and water)
•Green Building
Programs•ClimateWise
Budget •Budget for Outcomes
•City Code – Chapter 26
Rates • Tiered Rates
Tiered Rates Summary
• Began in February 2012
• Designed to be revenue neutral – compared
to the alternative flat seasonal rate increase
for 2012
• City Code – Chapter 26
Rates • Tiered Electric Rates
$0.0000
$0.0200
$0.0400
$0.0600
$0.0800
$0.1000
$0.1200
$0.1400
0 500 1000 1500
$ / kWh
Monthly Consumption (kWh)
2012 Summer Residential Rate Structure
Flat
3-Tiered
Tiered Rates Summary
• What happened in 2012?
– PRPA changed to a seasonal rate structure
– Adopted a 3-tiered, seasonal rate structure
– Moved residential customers with gas heat off
of residential demand rate
– High Park Fire
– Extreme heat combined with ongoing drought
• City Code – Chapter 26
Rates • Tiered Electric Rates
Tiered Rates Summary
• Limitations of analysis
– Limited residential demand meters in 2012
– Limited study period under tiered rates
– Weather normalization doesn’t account for High
Park Fire
• City Code – Chapter 26
Rates • Tiered Electric Rates
Tiered Rates Summary
• Was it revenue neutral?
• Did we see any change in customer
behavior?
– Did customers use more or less electricity?
– Did customers impact the peak demand for
electricity?
• City Code – Chapter 26
Rates • Tiered Electric Rates
Tiered Rates Summary
• Was it revenue neutral?
• City Code – Chapter 26
Rates • Tiered Electric Rates
$0.0000
$0.0200
$0.0400
$0.0600
$0.0800
$0.1000
$0.1200
$0.1400
0 500 1000 1500
$ / kWh
Monthly Consumption (kWh)
2012 Summer Residential Rate Structure
Flat
3-Tiered
Tiered Rates Summary
• Was it revenue neutral?
• City Code – Chapter 26
Rates • Tiered Electric Rates
Tiered Rates Summary
• Why was excess revenue generated in 2012?
• City Code – Chapter 26
Rates • Tiered Electric Rates
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
20000
0
200
400
600
800
1000
1200
1400
1600
1800
2000
2200
2400
2600
2800
3000
3200
3400
3600
3800
4000
4200
4400
4600
4800
5000
# of Bills
Monthly Energy per Bill (kWh)
Residential Customer Bill Distribution (Jun - Aug)
2011 Jun - Aug
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
20000
0
200
400
600
Tiered Rates Summary
• Did customers use more or less electricity?
• City Code – Chapter 26
Rates • Tiered Electric Rates
-
10,000
20,000
30,000
40,000
50,000
60,000
June July August
Monthly Energy Consumed (MWH)
2011-13 Summer Residential Energy Use (kWh)
Weather Normalized
2011
2012
2013
Tiered Rates Summary
• Did customers use more or less electricity?
• City Code – Chapter 26
Rates • Tiered Electric Rates
0
500
1,000
1,500
2,000
2,500
3,000
Average Q1 Q2 Q3 Q4
kWh / Month
Summer Monthly Residential Use (kWh)
Weather Normalized
2011
2012
0
500
1,000
1,500
2,000
2,500
3,000
Average Q1 Q2 Q3 Q4
kWh / Month
Summer Monthly Residential Use (kWh)
Weather Normalized
2011
2012
2013
Tiered Rates Summary
• Did customers impact the peak demand for
electricity?
• City Code – Chapter 26
Rates • Tiered Electric Rates
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Contribution to Coincident Peak ( by Non-MV customers)
2012 2008 2009 2010 2011 2013
Tiered Rates Summary
• City Code – Chapter 26
Rates • Tiered Electric Rates
40,000
45,000
50,000
55,000
60,000
65,000
70,000
75,000
80,000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
MWH/mo
Summer (Jun, Jul, Aug) Electric History for Total Residential and Small Commercial Use
MWH
100
110
120
130
140
150
160
170
180
190
40,000
45,000
50,000
55,000
60,000
65,000
70,000
75,000
80,000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Coincident Peak (MW/mo)
MWH/mo
Summer (Jun, Jul, Aug) Electric History for Total Residential and Small Commercial Use
MWH CP MW
100
110
120
130
140
150
160
170
180
190
40,000
45,000
50,000
55,000
60,000
65,000
70,000
75,000
80,000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Tiered Rates Summary
• City Code – Chapter 26
Rates • Tiered Electric Rates
-
50
100
150
200
250
300
350
400
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Cooling Degree Days/mo
Summer (Jun, Jul, Aug) Electric History for Total Residential and Small Commercial Use
CDD
100
110
120
130
140
150
160
170
180
190
-
50
100
150
200
250
300
350
400
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Coincident Peak MW/mo
Cooling Degree Days/mo
Summer (Jun, Jul, Aug) Electric History for Total Residential and Small Commercial Use
CDD CP MW
100
110
120
130
140
150
160
170
180
190
-
50
100
150
200
250
300
350
400
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Tiered Rates Summary
• City Code – Chapter 26
Rates • Tiered Electric Rates
-
50
100
150
200
250
300
350
400
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Cooling Degree Days/mo
Summer (Jun, Jul, Aug) Electric History for Total Residential and Small Commercial Use
CDD
40%
45%
50%
55%
60%
65%
70%
-
50
100
150
200
250
300
350
400
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Coincident Peak Load Factor
Cooling Degree Days/mo
Summer (Jun, Jul, Aug) Electric History for Total Residential and Small Commercial Use
CDD CP load factor
40%
45%
50%
55%
60%
65%
70%
-
50
100
150
200
250
300
350
400
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Coincident Peak Load Factor
Cooling Degree Days/mo
Summer (Jun, Jul, Aug) Electric History for Total Residential and Small Commercial Use
CDD CP load factor Linear (CDD) Linear (CP load factor)
Tiered Rates Summary
• Was it revenue neutral? Yes - to within 1% in 2012;
to within 0.03% in 2013
• Did we see any change in customer behavior? In
some customers
– Did customers use more or less electricity? On average
slightly more; with the largest consumers using less
– Did customers impact the peak demand for electricity?
Difficult to say beyond that these customers are using
more energy and their contribution to the coincident
peak is increasing slightly faster than their energy
consumption is increasing
• City Code – Chapter 26
Rates • Tiered Electric Rates
Resource Conservation
• Guided by
– Plans and Policies
– Customer interest
• Energy Policy
Policy •Water Supply and Demand Management Policy
•City Plan
•City Strategic Plan
•Climate Action Plan
Plans •Water Conservation Plan
Efficiency Programs
• What we offer
• Results and benchmarking
• Customer interest and support
• Related efforts
• Next steps
• Efficiency and Conservation
Programs (energy and water)
Efficiency Programs
• Comprehensive
residential and
business programs
– Products
– Retrofits
– Design
– Operation
– Regulation
• Efficiency and Conservation
Programs (energy and water)
Energy Programs - Results
• Efficiency and Conservation
Programs (energy and water)
• Customers served since 2004
– Business
• 2,300 customers (41%)
• $5.8M annual bill savings
– Residential
• 2,900 homes (5%)
• 18,500 appliances
• 421,000 bulbs
• 40,000 on-going
home energy reports (80%)
• $3.3M annual bill savings 2012 electric savings
Energy Programs - Results
• Efficiency and Conservation
Programs (energy and water)
Cumulative
annual savings
• 118,000 MWh
• Equivalent to
– 14 MW fossil
fuel
– 40 MW wind
– 79 MW solar
Greenhouse gas goal
baseline year
Energy Programs - Results
• Efficiency and Conservation
Programs (energy and water)
Energy Programs - Benchmarking
• Efficiency and Conservation
Programs (energy and water)
Comparison of public power utilities 2012 efficiency
performance
• Annual portfolio savings as percent of community
electric use
– Fort Collins, 1.5%
– Austin Energy, 0.8%
– Sacramento Municipal Utility District, 1.55%
– Seattle City Light, 1.4%
Data from Large Public Power Council, Energy Efficiency Working Group
Water Programs - Results
• Efficiency and Conservation
Programs (energy and water)
232
195 by 2010 196
185 by 2010
151 150
140 by 2020
0
50
100
150
200
250
1985-1992 Use 1992 WDMP
Goal
1993-2001 Use 2003 WSDMP
Goal
2004-2011 Use 2012 WSDMP
Plan Demand Level
Current WCP
Goal
Gallons per Capita per Day (GPCD)
City of Fort Collins - GPCD Comparisons
Water Programs - Results
Programs • Efficiency and Conservation
(energy and water)
208 205
206
196
201 198
204
198
189
157
150
155 156
156
153
147
144 144
152
0
50
100
150
200
250
1994 1995 19961997199819992000200120022003200420052006200720082009201020112012
Use (gallons per capita per day - GPCD)
Year
Fort Collins Utilities - Per Capita Water Use
Actual Use Normalized Use
These values do not include
large contractual water use.
Energy Programs – Customer Interest
• How would you describe the level of Fort Collins Utilities
energy conservation programs?
– Not enough, about right, too much, don’t know
• Efficiency and Conservation
Programs (energy and water)
2011 survey data results
Water Programs – Customer Interest
• How would you describe the level of Fort Collins Utilities
water conservation programs?
– Not enough, about right, too much, don’t know
• Efficiency and Conservation
Programs (energy and water)
2011 survey data results
Efficiency Programs – Related Efforts
• ClimateWise
• Green building
• Economic and
social sustainability
• Electric vehicles
• Efficiency and Conservation
Programs (energy and water)
Efficiency Programs – Next Steps
• Make it easy
– Simplification
• Increase participation
– Reach new segments and demographics
• Improve collaboration
– With Platte River and Cities
– e.g. Efficiency Works
• Information, education, pricing
– e.g. Advanced meter web portal, rate calculators
• Efficiency and Conservation
Programs (energy and water)
Next Actions
• 2014 updates or revisions to
– Community greenhouse gas goals
– Energy Policy
– Water Conservation Plan
• Continued analysis of customer data
• Development of a Time of Use (TOU) Pilot in 2014
Policy
Plans
Coincident Peak MW/mo
Cooling Degree Days/mo
Summer (Jun, Jul, Aug) Electric History for Total Residential and Small Commercial Use
CDD CP MW Linear (CDD) Linear (CP MW)
Coincident Peak (MW/mo)
MWH/mo
Summer (Jun, Jul, Aug) Electric History for Total Residential and Small Commercial Use
MWH CP MW Linear (MWH) Linear (CP MW)
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# of Bills
Monthly Energy per Bill (kWh)
Residential Customer Bill Distribution (Jun - Aug)
2012 Jun - Aug
2011 Jun - Aug
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Residential Customer Bill Distribution (Jun - Aug)
2012 Jun - Aug
2011 Jun - Aug
2013 Jun - Aug
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