HomeMy WebLinkAboutResponse to Constituent Letter - Mail Packet - 07/08/2025 - Letter from Mayor Jeni Arndt to Energy Board re Proposed Large Methane User Fee
Mayor
City Hall
Fort Collins, CO 80522
970.416.2154
970.224.6107 - fax
fcgov.com
July 3, 2025
Energy Board
c/o Christie Fredrickson, Staff Liaison
PO Box 580
Fort Collins, CO 80522
Dear Chair Smith and Board Members:
On behalf of City Council, thank you for providing us with the June 20, 2025 memorandum
regarding the Proposed Large Methane User Fee. Thank you for thoroughly reviewing the
various aspects and impacts of this issue and discussing those in your memo.
We understand that the Board does not believe that the proposed LMUF in its current form is an
appropriate measure for further Staff consideration. Additionally, we note the Board does
recommend that Council direct staff to look for other ways to reduce natural gas emissions in
collaboration with all stakeholders.
Thank you for the 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: June 20, 2025
TO: Mayor Arndt and City Councilmembers
FROM: Brian Smith, Energy Board Chairperson
RE: Proposed Large Methane User Fee
BACKGROUND
In February 2025, Energy Board members received a notification from a member of the Colorado
Renewable Energy Society (CRES) to further explore the Large Methane User Fee (LMUF) proposal
put forth by the Fort Collins Sustainability Group (FCSG). Their request was for the Energy Board to
consider the fee proposal and for the Board to recommend that City Council direct Staff to examine
and further develop this fee.
The Energy Board reviewed materials from FCSG from their website, reviewed the City’s’ natural
gas use and GHG emissions with Staff (April 24, 2025 work session), and reviewed the submitted
memo to Council on this topic from the Air Quality Advisory Board and the Natural Resources
Advisory Board (May 2025). The Board also considered feedback from the business community on
the perceived impacts of the LMUF (see addendum for May 6, 2025 Chamber of Commerce Memo).
ENERGY BOARD DUTIES AND FUNCTIONS
The Energy Board has considered the proposed LMUF 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) including tracking of the staff developed Council Action Roadmap for
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 City.
(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;
OBSERVATIONS
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• After electricity generation and ground travel, natural gas use is the 3rd largest portion of com-
munity GHG emissions (MTCO2e).
• As GHG emissions from electricity and other sources decrease, the portion from natural gas
becomes a larger percentage of total municipal GHG emissions.
• Commercial gas consumption is relatively stable from 2005 levels, while residential gas con-
sumption has grown by ~30% in the same period.
• Commercial gas consumption is ~53% of City usage, residential ~47%.
• There are several in-progress programs that can nudge businesses reduce gas emissions and
increase efficiency:
o Xcel 1% fee in City franchise agreement could be increased
o Proposed building performance standards have been developed over last 3 years
with community task force involvement and were shared with Council in 2024.
o Building Energy & Water Scoring Program collects gas usage from some customers.
• Because gas consumption data is not readily available like electric AMI data, there are many
unknowns about how many businesses would qualify as large users, and how these busi-
nesses might be impacted a 10% fee on their gas usage.
• Even with funds available, not all large users can feasibly switch to electric alternatives -- espe-
cially those requiring high-temperature industrial processes. In these instances, the fee be-
comes punitive with no GHG reduction.
RECCOMENDATION
The Energy Board recognizes that natural gas use is a major component of the City’s GHG
emissions and that more action must be taken for Fort Collins to reduce emissions to achieve our
2030 climate goals. After a thorough review of materials, the Board does not believe that the
proposed LMUF in its current form is an appropriate measure for further Staff consideration. The
Energy Board does recommend that City Council direct staff to continue to find and develop
innovative methods and programs to reduce natural gas emissions while working in collaboration
with all stakeholders, including the businesses and organizations that are some of the largest gas
users in the city.
As always, the Energy Board is grateful for the opportunity to provide comments and appreciates
City Council’s consideration.
Respectfully submitted on behalf of the Energy Board,
__________________________
Brian P. Smith
Energy Board Chairperson
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