HomeMy WebLinkAboutResponse to Constituent Letter - Mail Packet - 10/01/2024 - Letter from Mayor Jeni Arndt to Energy Board re Platte River Power Authority (PRPA) Integrated Resource Plan
Mayor
City Hall
Fort Collins, CO 80522
970.416.2154
970.224.6107 - fax
fcgov.com
September 26, 2024
Energy Board
c/o Brian Tholl, Staff Liaison
PO Box 580
Fort Collins, CO 80522
Dear Chair Loran and Board Members:
On behalf of City Council, thank you for providing us with the memorandum dated September
25, 2024, regarding Platte River Power Authority’s August 8th presentation of its Integrated
Resource Plan. We understand the Board’s input on the many complexities surrounding the
careful decisions required in order to support Our Climate Future goals while also sustaining
reliable, affordable sources of energy for our community.
Thank you for the valuable expertise and perspectives that you bring to the Board and share with
City Council.
Best Regards,
Jeni Arndt
Mayor
/sek
cc: City Council Members
Kelly DiMartino, City Manager
Utilities – Energy Board
700 Wood St.
Fort Collins, CO 80522
970.221.6702
970.416.2208 - fax
fcgov.com
M E M O R A N D U M
DATE: September 25, 2024
TO: Mayor Arndt and City Councilmembers
FROM: Thomas Loran, Energy Board Chairperson
RE: Platter River Power Authority 2024 Integrated Resource Plan (IRP), Observations
And Recommendations
ENERGY BOARD DUTIES AND FUNCTIONS
This memorandum presents the Fort Collins Energy Board’s observations and recommendations
regarding the Platte River Power Authority’s (PRPA) Integrated Resource Plan (IRP) as presented by
its staff on August 8, 2024. This memo is in accordance with our chartered duties and functions,
specifically:
(1) To advise the City Council and staff regarding the development and implementation of the Our
Climate Future Plan (OCF);
(2) To advise the City Council and staff in developing City policies that encourage the incorporation
of energy conservation and efficiency, carbon emissions reduction and renewable energy into the
development and provision of City utility services, the design and construction of City
transportation projects, and the way in which the City impacts the overall built environment within
the community;
(3) To advise the City Council and staff regarding the alignment of energy programs and policies
with City, ratepayer and community values and service delivery expectations.
BACKGROUND
At our regular meeting on August 8, 2024, the Fort Collins Energy Board received a presentation
detailing PRPA’s IRP from Dr. Masood Ahmad (Sr Manager, Resource Planning). Paul Davis
(Manager, Distributed Energy Resources) presented a summary of Distributed Energy Resource
(DER) integration and Virtual Power Plant (VPP) implementation, which are part of the IRP. Jason
Frisbie (General Manager and CEO) also participated in the discussion that accompanied the
presentation.
Driving the IRP is a Resource Diversification Policy, which includes the retirement of PRPA’s
Rawhide Unit 1 (coal fired power generation) with a total of 431 MW capacity. The planned date for
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Rawhide’s shut down is 2028 to allow some flexibility as that substantial resource is retired and
new capacity is brought online in advance of a firm deadline imposed by the state to retire all coal
fired power generation by 2030. This is occurring while electricity demand is forecast to steadily
increase, especially summer peak demand driven by increased air conditioning use.
The part of the IRP which has drawn the most focus and controversy is the addition of a new
dispatchable natural gas fired turbine to replace the Rawhide Unit. The cost for the new gas fired
turbines is approximately $250 million and will contribute to a 7-8%0F
i rate increase over a four-year
period.
SIGNIFICANT OBSERVATIONS
Addition of Dispatchable Resource
PRPA states that the new gas fired turbines are required to meet the specification of the Southern
Power Pool (SPP) RTO West. The IRP is filed with Western Area Power Administration (WAPA).
However, it is our understanding that WAPA does not require this replacement of generating
capacity. Neither can we find information that the SPP requires additional capacity for a utility to
join.
PRPA also asserts that the new gas fired turbine is required to meet peak demand and
accommodate the variability inherent in the increased reliance on wind and solar generation.
PRPA’s IRP considers so-called “dark calm” situations when wind and solar generation is reduced
by upwards of 90%. These “dark calm” periods can last several days and be expected to occur bi-
annually or more frequently (duration and frequency are inversely related). It is our understanding
that the current simple cycle “peaker” turbines can handle short periods as they currently do when
dispatched during peak energy demand and when Rawhide is down for annual maintenance.
However, it is our understanding that additional capacity is deemed necessary to reliably account
for service during peak demand and “dark calm” situations. The IRP specifies that acceptable
dispatchable technology must have, “…the ability to provide power for at least one week during
dark calms (p.110).”
PRPA maintains that there are currently no viable renewable energy technologies that can cost-
effectively meet the area’s peak demand and “dark calm” requirements. It is our understanding
that a limited number of other utilities are using various energy storage technology and
geographical distribution of resources to achieve these goals. However, we recognize that they
were not deemed as cost-effective, reliable options when limited to the scenarios developed by
consultants chosen for the IRP.
Converting to Greener Fuel Source
PRPA has stated that the contract for the new gas fired turbines includes a provision that mandates
the specified aeroderivative turbine be convertible from gas to hydrogen fuel. This transition is very
important to the city achieving its climate goals. The IRP considers, “progressively converting to
green hydrogen when it is economically available in large quantities (p. 111).” However, the
contractual terms of what type of hydrogen will be used and timeframe of this transition are not
known. Additionally, it is our understanding that converting to hydrogen will create additional
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challenges, in particular regarding hydrogen transportation and storage. This will come at a
significant additional cost, above the initial investment for the new gas turbine, and should be
taken into consideration given the four-year rate increase of 7-8% that is already projected.
Achieving Climate Future Goals
PRPA stated during the meeting that the new gas turbines will be “fired up” by the “market” only
when less expensive renewable energy alternatives are unable to meet load demand. According to
a study by ICF International 1F
ii, the SPP currently has a challenge meeting its reserve margins. This
leads us to believe that the gas turbines may be “fired up” more frequently than planned to meet
the “shortfall” in other regions of the SPP. If this occurs, the rate payers should benefit from the
sale of electricity to the market at a premium price. At the same time, the gas turbines will release
air emissions into our local environment and may hamper progress towards achieving the city’s
climate goals. This makes conversion to hydrogen fuel even more critical.
PRPA claims that they will be securing additional PPAs for renewable energy to meet the area’s
growing energy demand. This is an important aspect of the IRP and to achieving the city’s climate
goals. Whereas we question the reliance on PPAs uniquely, we commend the PRPA for its
continuous efforts to add more renewable energy to its energy mix and for striving to achieve its
100% renewable energy by 2030.
PRPA Planning Review
PRPA indicated that they utilized at least six third-party consultancies (Black & Veatch, APEX,
Dunsky, ACES and Astrape) to conduct studies that informed the IRP. In addition, the IRP
document2F
iii notes that,
Platte River’s resource planning staff actively consulted with national institutes and public
power councils, including the Electric Power Research Institute (EPRI), National Renewable
Energy Laboratory (NREL) and the Large Public Power Council. (p. 45)
The consultant studies are published by PRPA on their website.3F
iv Other than the brief mention in the
IRP cited above, we are not aware of any disclosure of the results of third-party review of the IRP to
date.
RECOMMENDATIONS
We commend PRPA for the actions they have taken so far. We recognize PRPA is in a very difficult
situation being forced to retire a coal-fired steam turbine while expected to continue providing
safe, reliable and affordable electricity and simultaneously achieving aggressive climate goals. This
is no easy task and there seems to be a lot of misinformation and misunderstanding regarding the
need, viable, cost-effective technologies, and final decision-making process.
With this in mind, we provide the following recommendations on behalf of the rate payers for the
City Council to consider.
• Verify the requirement for PRPA to add additional capacity to join the market by the SPP.
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• Request more details regarding contractual obligations of the selected vendor to convert the
gas turbine to a hydrogen turbine to understand the potential cost to rate payers and impact on
Our Climate Future goals.
• Request PRPA provide access to any technical reviews of the IRP by any independent, re-
spected organizations such as the National Renewable Energy Laboratory and make it available
to the public.
• Request third-party review(s) of the IRP by the Colorado Public Utility Commission or the Na-
tional Renewable Energy Laboratory if there are no such reviews provided by PRPA. The third-
party review should seek to validate assumptions and provide assurances to rate payers that a
new gas fired turbine is necessary and the best alternative to achieve Fort Collins Utility’s goals
of safe, reliability, and affordable electricity while also achieving the city’s climate goals. These
results should be published online and made available to rate payers.
As always, the Energy Board is grateful for the opportunity to provide comment and appreciates
City Council’s consideration.
Respectfully submitted on behalf of the Energy Board,
__________________________
Thomas Loran
Energy Board Chairperson
cc: Brian Tholl, Energy Board Staff Liaison
Christie Fredrickson, Energy Board Support
i According to City of Fort Collins Utilities rate forecast presented to Energy Board on September 12, 2024.
ii https://www.icf.com/insights/energy/higher-reserve-margin-southwest-power-pool
iii https://www.prpa.org/wp-content/uploads/2023/04/2024-Integrated-Resource-Plan.pdf
iv https://www.prpa.org/2024irp/information/
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