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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 09/04/2018 - FIRST READING OF ORDINANCE NO. 116, 2018, AMENDINGAgenda Item 11 Item # 11 Page 1 AGENDA ITEM SUMMARY September 4, 2018 City Council STAFF Kraig Bader, Standards Engineering Manager Tim McCollough, Light and Power Operations Manager Cyril Vidergar, Legal SUBJECT First Reading of Ordinance No. 116, 2018, Amending Chapter 26 of the Code of the City of Fort Collins to Extend Tiered Electric Rates Into 2019 for Customers Enrolled in Manually-Read Metering Services. EXECUTIVE SUMMARY The purpose of this item is to request an extension of the tiered Residential Energy Rate for a subset of customers who have manually-read electric meters. City Electric Utility personnel have just learned that the expected order of electric meters necessary to implement the time-of-day (TOD) rate for customers who have manually-read meters will not arrive in time to appropriately implement the TOD rate for those customers on schedule. Implementation of the TOD rate for all other applicable customer classes starts on October 1, 2018. This request applies to fewer than 200 customers who have requested manually-read meters at this point. STAFF RECOMMENDATION Staff recommends adoption of the Ordinance on First Reading. Staff recommends that the existing tiered Residential Energy Rate be temporarily retained beyond September 30, 2018, the date that it was originally expected to be removed from the electric rates under Ordinance No. 155, 2017, only for those customers who are currently served by manually-read meters. Those customers will remain on the tiered Residential Energy Rate until electric meters are available to implement the TOD rate for them. Staff's expectation is that the meters should be produced, tested, and installed by December 2018, but disruptions in the production schedule for the meters could potentially extend the transition to the TOD rate for these customers into early 2019. BACKGROUND / DISCUSSION The implementation of the TOD rate for manually-read meters requires a meter without a radio that will allow Utilities personnel to download interval-based consumption data that can then be loaded into the billing systems to calculate the customer’s bill. The selected manufacturer had the only meter with the appropriate file format that also worked with the collection software that is being used to download the meter information. Extensive review and analysis of the necessary file formats and the steps needed to automate the collection and manipulation of the data downloaded from the meters led to the chosen solution as the best means of supporting this rate and other future rates that may be applied in the future. The meter manufacturer also just informed Utilities that it has not mass-produced the meter ordered by the City and must perform some development work with its contract manufacturer so that the printed circuit boards can be produced correctly. This is leading to a delay in the assembly and delivery of the meters to Fort Collins. Since the meters’ printed circuit board design is essentially untested as manufactured, Utilities will also need to perform regression testing to verify functionality of the meters against the standards developed during the Agenda Item 11 Item # 11 Page 2 original review and selection of the technology. The timeline for assembly of these "first-article" production meters for verification testing is expected to occur in the early part of October 2018. Utilities’ regression testing is expected to take approximately 7 days after receipt of the first article meters. Upon confirmation of appropriate functionality, the remaining meters can be manufactured and delivered for installation, which could require anywhere from 8-12 weeks. The meter manufacturer is currently verifying the production schedule to offer a more robust timeline on delivery. Once the production meters are in staff’s possession, installation is expected to take about 5-7 days with existing meter shop personnel but can be accelerated using Light & Power field crews to supplement the meter shop work force. The steps described above could push the transition to TOD for manually-read meters out to early 2019. Utilities staff has extensively reviewed other options, such as alternative manufacturers, and temporary use of other manually-read meters, but to control cost and disruption for these customers, staff recommends that the City continue with the chosen meter and collection process before changing out manually-read meters. Because the manually-read meters that are currently installed cannot support TOD rates, it is recommended that the existing tiered Residential Energy rate be extended only for these customers until the selected meters are delivered and installed. In addition to retaining the tiered Residential Energy Rate for use with customers with manually-read meters, staff also recommends a temporary freeze on new manually-read electric customers until Utilities has the appropriate meters available to support the TOD rate. CITY FINANCIAL IMPACTS The TOD rate is designed to be revenue-neutral compared to the tiered Residential Energy Rate, so the impact to the City and the Customer will be minimal if the Residential Energy Rate is temporarily extended for this small subset of residential customers. The recommended approach for manually-read customers is the most cost-effective means of implementing the TOD rate initially and into the future. Temporary meter installations that do not produce the appropriate file format result in additional staff time to manually extract data from proprietary file formats in addition to incurring twice the labor costs associated with multiple meter exchanges. BOARD / COMMISION RECOMMENDATION This topic is scheduled to be discussed by the Energy Board on September 13, 2018. PUBLIC OUTREACH Customers with manually-read meters have received communication that electric meters at their residence will be exchanged prior to implementation of the TOD rate. These communications gave them the opportunity to continue with manually-read meters, or to select an automated-read option. The majority of those who responded to these communications elected to remain with manually-read meters, but some have chosen automated reads. Affected customers who chose to remain on the manually-read option will be contacted to inform them of potential delays in the implementation of the TOD rate if Council approves extension of the tiered Residential Energy Rate. No postcard notice was sent for this change because all affected customers are located in the City. -1- ORDINANCE NO. 116, 2018 OF THE COUNCIL OF THE CITY OF FORT COLLINS AMENDING CHAPTER 26 OF THE CODE OF THE CITY OF FORT COLLINS TO EXTEND TIERED ELECTRIC RATES INTO 2019 FOR CUSTOMERS ENROLLED IN MANUALLY-READ METERING SERVICES WHEREAS, on February 4, 2014, City Council adopted Ordinance No. 017, 2014, approving amendments to Chapter 26 of the City Code related to manually-read electric metering services and updating the associated fee established under Ordinance No. 033, 2012; and WHEREAS, on July 21, 2015, City Council adopted Ordinance No. 078, 2015, approving amendments to Chapter 26 of the City Code and authorizing a residential pilot time-of-use (TOU) rate study to run from October 1, 2015 through September 30, 2016; and WHEREAS, following the pilot study, Utility Services staff recommended to City Council a transition from tiered-based electric rates to a TOU-based rate structure, beginning October 1, 2018; and WHEREAS, on November 21, 2017, City Council adopted Ordinance No. 155, 2017, approving amendments to Chapter 26 of the City Code and transitioning the electric service rates to a TOU-based structure for all meter readings on or after October 1, 2018; and WHEREAS, pursuant to the rate transition deadlines established in Ordinance No. 155, 2017, Utility Service staff began performing meter replacement and equipment upgrades necessary to accommodate TOU-based rates; and WHEREAS, on May 1, 2018, City Council adopted Ordinance No. 053, 2018 revising the name of the TOU electric rates to “time-of-day” (TOD) electric rates; and WHEREAS, Utility Service staff has determined that upgrades to equipment located at premises where residential customers are enrolled in manually-read metering service may not be complete in time to transition these customers to TOD-based rates as of October 1, 2018; and WHEREAS, approximately 200 residential Electric Utility customers are enrolled in manually-read metering service, including those on Residential, Residential Demand, Medical Assistance, Net metering, Net metering-community solar projects, and Income Qualified Assistance Program (“IQAP”) rate schedules; and WHEREAS, staff recommends amending Chapter 26 of the City Code to extend application of tiered-based electric rates for customers enrolled in manually-read metering service as of August 31, 2018 until completion of upgrades to metering equipment necessary to serve such customers on TOD rates, while all other customers will transition to TOD rates for meter readings as of the dates established in Ordinance No. 155, 2017. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS as follows: -2- Section 1. That the City Council hereby makes and adopts the determinations and findings contained in the recitals set forth above. Section 2. That no additional residential utility customers may enroll to receive manually-read electric metering service from the City’s Electric Utility between September 1, 2018 and March 30, 2019; and Section 3. That Subsections 26-464(c), (p) and (r) of the Code of the City of Fort Collins are hereby amended to read as follows: Sec. 26-464. - Residential energy service, schedule R. . . . (c) Monthly rate. (1) Tiered. The monthly rates for this schedule shall be the sum of the following charges, applied to all remote-read meter readings on or after January 1, 2018, through September 30, 2018. Customers enrolled in manual meter reading services as of August 31, 2018 shall remain on the tiered rates below until the date meter upgrades necessary to serve such customers on time-of-day rates are completed, as which time the time-of-day rates under subsection (2) of this Section shall apply.: . . . . . . e. Income-qualified assistance program (“IQAP”) discount. Discount applied to monthly charges in "a.", "b.", and "c." for IQAP participating residential customers, as further described in Section 26- 724 of the Code. 23 percent (2) Time-of-day. The monthly rates for this schedule shall be the sum of the following charges, applied to all remote-read meter readings on or after October 1, 2018. Customers enrolled in manual meter reading services as of August 31, 2018 shall be billed based on time-of-day rates as of the date meter upgrades necessary to serve such customers on time-of-day rates are completed.: . . . (p) Net metering. . . . (5) a. Tiered. The customer-generator's consumption of energy from the utility and production of energy that flows into the utility's distribution system shall be measured on a monthly basis. The energy from the utility consumed by the customer-generator shall be billed at the applicable seasonal tiered rate as outlined -3- in Subsection (c) of this Section. The energy produced by the customer-generator shall be credited to the customer monthly as follows, applied to all remote-read meter readings on or after January 1, 2018, through September 30, 2018. Customers enrolled in manual meter reading services as of August 31, 2018 shall remain on the tiered rates below until the date meter upgrades necessary to serve such customers on time-of-day rates are completed, at which time the time-of-day rates under subsection (b) of this Section shall apply.: . . . b. Time-of-useday. For customer-generators on a "time-of-useday" (TOU) rate, consumption of energy from the utility and production of energy that flows into the utility's distribution system shall be measured on a monthly basis. The energy from the utility consumed by the customer-generator shall be billed at the applicable rates under Subsection (c) of this Section. The energy produced by the customer-generator shall be credited to the customer monthly as follows, applied to all meter readings on or after October 1, 2018. Customers enrolled in manual meter reading services as of August 31, 2018 shall be credited based on time-of- day rates as of the date meter upgrades necessary to serve such customers on time-of-day rates are completed.: . . . (r) Net metering—community solar projects. . . . (3) a. Tiered. Both the customer's consumption of energy from Fort Collins Utilities and interest in the production of energy that flows into Fort Collins Utilities' distribution system shall be measured on a monthly basis. The energy from Fort Collins Utilities consumed by the customer shall be billed at the applicable seasonal tiered rate as outlined in Subsections (c) of this Section. The method used to measure energy produced and issue credits under this Section shall be the same for subscriber-owned facilities and dedicated program-managed facilities. The energy produced by the customer's portion of the qualifying facility shall be credited to the customer monthly as follows, applied to all remote-read meter readings on or after January 1, 2018, through September 30, 2018. Customers enrolled in manual meter reading services as of August 31, 2018 shall remain on the tiered rates below until the date meter upgrades necessary to serve such customers on time-of-day rates are completed, at which time the time-of-day rates under subsection (b) of this Section shall apply.: . . . b. Time-of-useday. For customer-generators on a "time-of-useday" (TOU) rate, the customer's consumption of energy from Fort Collins Utilities and interest in the production of energy that flows into Fort Collins Utilities' distribution system shall be measured on a monthly basis. The energy from the utility -4- consumed by the customer-generator shall be billed at the applicable rates under Subsection (c) of this Section. The method used to measure energy produced and issue credits under this Section shall be the same for subscriber-owned facilities and dedicated program-managed facilities. The energy produced by the customer- generator shall be credited to the customer monthly as follows, applied to all remote-read meter readings on or after October 1, 2018. Customers enrolled in manual meter reading services as of August 31, 2018 shall be credited based on time-of-day rates as of the date meter upgrades necessary to serve such customers on time-of-day rates are completed.: . . . Section 4. That Section 26-465(c)(2) of the Code of the City of Fort Collins is hereby amended to read as follows: Sec. 26-465. - Residential demand service, schedule RD. . . . (c) Monthly rate. (1) The monthly rates shall be the sum of the following charges, applied to all remote-read meter readings on or after January 1, 2018, through September 30, 2018. Customers enrolled in manual meter reading services as of August 31, 2018 shall remain on the tiered rates below until the date meter upgrades necessary to serve such customers on time-of-day rates are completed, at which time the time-of-day rates in subsection (2) of this Section shall apply.: . . . . . . f. Income-qualified assistance program (“IQAP”) discount. Discount applied to monthly charges in "a.", "b.", and "c." above for IQAP participating residential customers, as further described in Section 26-724 of the Code. 23 percent (2) Time of day. The monthly rates for this schedule shall be the sum of the following charges, applied to all remote-read meter readings on or after October 1, 2018. Customers enrolled in manual meter reading services as of August 31, 2018 shall be billed based on time-of-day rates as of the date meter upgrades necessary to serve such customers on time-of-day rates are completed.: . . . . . . ef. Income-qualified assistance program (“IQAP”) discount. Discount applied to monthly charges in "a.", "b.", and "c." above for IQAP participating residential customers, as further described in Section 26-724 of the Code. 23 percent . . . -5- (q) Net metering. . . . (5) a. Tiered. The customer-generator's consumption of energy from the utility and production of energy that flows into the utility's distribution system shall be measured on a monthly basis. The energy from the utility consumed by the customer-generator shall be billed at the applicable seasonal tiered rate as outlined in Subsection (c) of this Section. The energy produced by the customer-generator shall be credited to the customer monthly as follows, applied to all remote-read meter readings on or after January 1, 2018, through September 30, 2018. Customers enrolled in manual meter reading services as of August 31, 2018 shall remain on the tiered rates below until the date meter upgrades necessary to serve such customers on time-of-day rates are completed, at which time the time-of-day rates in subsection (b) of this Section shall apply.: . . . b. Time-of-useday. For customer-generators on a "time-of-useday" (TOU) rate, consumption of energy from the utility and production of energy that flows into the utility's distribution system shall be measured on a monthly basis. The energy from the utility consumed by the customer-generator shall be billed at the applicable rates under Subsection (c) of this Section. The energy produced by the customer-generator shall be credited to the customer monthly as follows, applied to all remote-read meter readings on or after October 1, 2018. Customers enrolled in manual meter reading services as of August 31, 2018 shall be credited based on time-of-day rates as of the date meter upgrades necessary to serve such customers on time-of-day rates are completed.: . . . (r) Net metering—community solar projects. . . . (3) a. Both the customer's consumption of energy from Fort Collins Utilities and interest in the production of energy that flows into Fort Collins Utilities' distribution system shall be measured on a monthly basis. The energy from Fort Collins Utilities consumed by the customer shall be billed at the applicable seasonal tiered rate as outlined in Subsections (c) of this Section. The method used to measure energy produced and issue credits under this Section shall be the same for subscriber-owned facilities and dedicated program-managed facilities. The energy produced by the customer's portion of the qualifying facility shall be credited to the customer monthly as follows, applied to all remote-read meter readings on or after January 1, 2018, through September 30, 2018. Customers enrolled in manual meter reading services as of August 31, 2018 shall remain on -6- the tiered rates below until the date meter upgrades necessary to serve such customers on time-of-day rates are completed, at which time the time-of-day rates under subsection (b) of this Section shall apply.: . . . b. Time-of-useday. For customer-generators on a "time-of-useday" (TOU) rate, the customer's consumption of energy from Fort Collins Utilities and interest in the production of energy that flows into Fort Collins Utilities' distribution system shall be measured on a monthly basis. The energy from the utility consumed by the customer-generator shall be billed at the applicable rates under Subsection (c) of this Section. The method used to measure energy produced and issue credits under this Section shall be the same for subscriber-owned facilities and dedicated program-managed facilities. The energy produced by the customer- generator shall be credited to the customer monthly as follows, applied to all remote-read meter readings on or after October 1, 2018. Customers enrolled in manual meter reading services as of August 31, 2018 shall be credited based on time-of-day rates as of the date meter upgrades necessary to serve such customers on time-of-day rates are completed.: . . . Introduced, considered favorably on first reading, and ordered published this 4th day of September, A.D. 2018, and to be presented for final passage on the 18th day of September, A.D. 2018. __________________________________ Mayor ATTEST: _______________________________ City Clerk Passed and adopted on final reading on the 18th day of September, A.D. 2018. __________________________________ Mayor ATTEST: _______________________________ City Clerk