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Home My WebLink AboutMemo - Read Before Packet - 1/10/2017 - Updated Power Point Presentation Re: Electric Capacity Fees (Agenda Item #2)Electric Capacity Fees PURPOSE of tonight’s discussion: Propose a more accurate and comprehensible method of calculating electric capacity fee charges for development ahead of the February 14, 2017 discussion on development fees. Direction sought by staff: Should staff use this method for determining the Electric Capacity Fees to be discussed in February? 1 Updated Presentation: January 10, 2017 2 Fee Coordination Feb 14th Work Session will include: • Why do we have fees, how are they calculated and how do we use the revenue • Total increase proposed – Capital Expansion, Street, Electric PIF and Cash in Lieu Water • Impact on cost of housing, total cost stack impact since 2010, comparison to other communities • Alternatives for implementation 2018 2019 2020 Phase I QII QIII QIV QI QII QIII QIV QIV QIV QIV QIV Capital Expansion Fees Index Adopt Index Index Index Index Study Adopt Street Oversizings Index Adopt Index Index Index Index Study Adopt Utility PIF & Fees Adopt Adopt All Adopt Study Adopt Development Fees Adopt Study Adopt Phase II Administrative Fees Adopt Adopt 2021 Electric & CIL Wet Study Fee Study Fee Study Fee Study 2016 2017 Evaluation Electric Capacity Fees Timeline: • Summer 2016 - Engaged NewGen Solutions • December 19, 2016 – Council Finance Committee discussion • January 10, 2017 – Council Work Session on Methodology • February 14, 2017 – Citywide development fee discussion • Community outreach, communication plan, fee Ordinances 3 January 10, 2017 PROPOSED ELECTRIC CAPACITY FEE MODEL REVISIONS Fort Collins Utilities – City Council 4 NEWGEN STRATEGIES AND SOLUTIONS, LLC Electric Capacity Fee (ECF)? • Why does Fort Collins have a ECF? – “Greenfield” development necessitated this in the past – Supports “Growth pays for Growth” • Chapter 26 section 473(b) of Code – Able to assign specific costs to serve new load 5 NEWGEN STRATEGIES AND SOLUTIONS, LLC Electric Capacity Fee (ECF) • Why are we changing the ECF? – Fort Collins ECF based on older growth assumptions – Model is complex, challenging to update – Cumbersome to administer – Need to reflect new realities of the system and development in the community 6 NEWGEN STRATEGIES AND SOLUTIONS, LLC Existing ECF Structure • Existing fee – Assumes “greenfield” development – Based on outdated planning model • New development / re-development – Occurs in areas of “re-development” – City close to “build-out” – Recognizes capacity paid through previous ECF for re-development 7 NEWGEN STRATEGIES AND SOLUTIONS, LLC Proposed ECF • “Buy-In Method” • Results in similar charges by other PRPA members • Methodology for electric utilities – Similar to approach by Provo, UT • Equivalent to existing capacity “value” – $/kW basis – Different for Residential / Commercial 8 NEWGEN STRATEGIES AND SOLUTIONS, LLC Current vs Proposed ECF Structure 9 • Proposed Method – Simplifies Calculation – Relatively easy to explain compared to the current method – Simplifies administration of the charge Class Method Formula Residential Current ECF = [($/ft 2 ) x ft 2 ] + [($/LF) x LF] + [($/du) x #du] Proposed ECF = [$/kW]res x kW Commercial Current ECF = [($/ft 2 ) x ft 2 ] + [($/LF) x LF] + [($/kW) x kW] Proposed ECF = [$/kW]com x kW NEWGEN STRATEGIES AND SOLUTIONS, LLC Proposed ECF • Multifamily will be charged the residential $/kW ECF fee – Distinctions will be made within the residential class • Single family • Multifamily • Electric heat • Panel size 10 Residential Unit Type Peak Demand (kW) Per Unit ECF Charge ($) Single Family 150 amp or less 9.0 $1,537 Single Family 200 amp 11.0 $1,879 Single Family Electric Heat 14.7 $2,511 Multi Family 7.9 $1,349 Multi Family Electric Heat 12.1 $2,067 NEWGEN STRATEGIES AND SOLUTIONS, LLC Impacts to Electric Development Charges Example ECF Charges (1) 11 (1) Note: Rounded and does not include Building Site Charges Customer Type Example Load kW Existing ECF ($) Proposed ECF ($) Differenc e ($) Percent Change Residential 34 single family 150 Amp units 9 $86,310 $52,273 -$34,037 -39% Multi-Family 200 Units 200 units 7.9 $544,988 $269,907 -$275,081 -50% Multi-Family 325 Units 325 units 7.9 $432,151 $438,599 $6,448 1% Large Commercial Building 600 Amp, 480Volt, 3 phase, 40,000 sq. ft., 175 linear ft. 185 $43,830 $79,421 $35,591 81% Commercial - Three Phase Office 200 Amp, 208Volt, 3 phase, 40,000 sq. ft., 175 linear ft. 27 $13,824 $10,388 -$3.436 -25% Commercial - Single Phase Office 200 Amp, 240 Volt, 1 phase, 40,000 sq. ft., 175 linear ft. 18 $12,133 $6,769 -$5,364 -44% NEWGEN STRATEGIES AND SOLUTIONS, LLC Recommendations/Direction 12 • Recommendation – Adopt updated modeling approach for ECF based on “buy-in” method • Direction sought – What options would Council like staff to consider for implementation? NEWGEN STRATEGIES AND SOLUTIONS, LLC Questions? Scott Burnham | NewGen Strategies & Solutions, LLC Executive Consultant Office: (720) 259-1762 | Mobile: (303) 902-9174 sburnham@newgenstrategies.net 13 NEWGEN STRATEGIES AND SOLUTIONS, LLC Agenda • What is a Electric Capacity Fee (ECF)? • Existing ECF structure – Platte River four City comparison – Other utilities • Proposed ECF changes – American Water Works Association (AWWA) Manual • Impacts to development community • Recommendations 14 NEWGEN STRATEGIES AND SOLUTIONS, LLC Electric Capacity Fee (ECF)? • What is a ECF? – One time charge that recovers costs of off-site assets needed to provide service • Only for distribution system • Platte River Power Authority (PRPA) recovers costs through wholesale rates • On-site assets unique to each project are billed separately • Is not monthly charges, which recover operations and maintenance – Electric capacity fee, development fee, impact fee – Common in water / wastewater industry – Some type of fee typical for electric utilities 15 NEWGEN STRATEGIES AND SOLUTIONS, LLC Existing ECF Structure • Residential Fee Structure – Square Foot Charge ($/sq. ft.) – Front Foot Charge (Linear - $/ft.) – Dwelling Unit Charge ($/dwelling) • Commercial Fee Structure – Square Foot Charge ($/sq. ft.) – Front Foot Charge ($/ft.) – Capacity Fee (estimated usage $/kW) 16 NEWGEN STRATEGIES AND SOLUTIONS, LLC Existing ECF Structure – Other Utilities • PRPA utilities – Longmont – Loveland – Estes Park • Colorado Utilities – Colorado Springs – Xcel Energy (IOU) – United Power (Coop) – Poudre Valley REA (PVREA) • Provo, Utah – Similar to proposed “system value” fee 17 NEWGEN STRATEGIES AND SOLUTIONS, LLC Proposed ECF + System replacement cost (investment) - Adjusted for portion “utilized” - Adjusted for debt service (recovered in rates) = System Value for ECF • Allocated by demand to residential and commercial customers • ECF Rate ($/kW) based on total demand by class – Residential ECF fee by anticipated demand (kW) – Commercial ECF by amperage and voltage 18 System Value $ 181,103,000 (1) ECF Rate ($/kW) Residential Share $88,255,000 $170.83 Commercial Share $92,848,000 $427.64 (2) (1) System Value subject to further review (2) Average rate, see sliding scale NEWGEN STRATEGIES AND SOLUTIONS, LLC Existing ECF Structure 19 $- $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 2008 2009 2010 2011 2012 2013 2014 2015 2016 Off Site Electric Development Fee Revenue Off Site Electric Development Fees NEWGEN STRATEGIES AND SOLUTIONS, LLC Commercial ECF – Implementation Options 20 0 100000 200000 300000 400000 500000 600000 12 AM 02 AM 04 AM 06 AM 08 AM 10 AM 00 PM 02 PM 04 PM 06 PM 08 PM 10 PM Hourly Average Class KW July Peak Day Class Demand Peak Hour Commercial GS Commercial GS25 Commercial GS50 Commercial GS750 Residential NEWGEN STRATEGIES AND SOLUTIONS, LLC Commercial ECF – Implementation Options 21 0 500 1000 1500 2000 2500 12 AM 02 AM 04 AM 06 AM 08 AM 10 AM 00 PM 02 PM 04 PM 06 PM 08 PM 10 PM Average Hourly KW per Customer July Peak Day per Customer Demand Peak Hour Commercial GS Commercial GS25 Commercial GS50 Commercial GS750 Residential NEWGEN STRATEGIES AND SOLUTIONS, LLC Commercial ECF – Implementation Options 22 -2 -1.5 -1 -0.5 0 0.5 1 1.5 2 2.5 3 3.5 12 AM 02 AM 04 AM 06 AM 08 AM 10 AM 00 PM 02 PM 04 PM 06 PM 08 PM 10 PM Average KW July Peak Day Peak Hour Residential Residential w/Solar NEWGEN STRATEGIES AND SOLUTIONS, LLC Commercial ECF – Implementation Options Charges by Demand 23 Commercial by kW Secondary ($/kW) Secondary Total ($) Primary ($/kW) Primary Total ($) Installation Size 10 $368.66 $3,687 $230.94 $2,309 30 $391.72 $11,752 $239.60 $7,188 50 $402.45 $20,122 $243.63 $12,182 70 $409.51 $28,666 $246.29 $17,240 90 $414.79 $37,331 $248.27 $22,344 200 $431.56 $86,311 $254.57 $50,913 400 $446.11 $178,444 $260.03 $104,013 600 $454.62 $272,773 $263.23 $157,938 800 $460.66 $368,530 $265.50 $212,399 1,000 $465.35 $465,347 $267.26 $267,259 2,000 $479.90 $959,802 $272.73 $545,452 3,000 $488.41 $1,465,242 $275.92 $827,772 4,000 $494.45 $1,977,816 $278.19 $1,112,771 5,000 $499.14 $2,495,696 $279.95 $1,399,764 NEWGEN STRATEGIES AND SOLUTIONS, LLC Commercial ECF – Implementation Options Charges by Amperage 24 Voltage 208 240 208 240 480 Amps Single Phase Single Phase Three Phase Three Phase Three Phase 10 $173 $202 $311 $362 $757 30 $558 $650 $1,000 $1,164 $2,427 50 $960 $1,118 $1,719 $2,001 $4,165 70 $1,372 $1,597 $2,455 $2,857 $5,942 90 $1,791 $2,084 $3,203 $3,726 $7,746 200 $4,168 $4,848 $7,444 $8,656 $17,966 400 $8,663 $10,074 $15,454 $17,966 $37,239 600 $13,282 $15,442 $23,678 $27,523 $57,006 800 $17,980 $20,902 $32,040 $37,239 $77,092 1,000 $22,739 $26,431 $40,506 $47,075 $97,417 2,000 N/A N/A $83,844 $97,417 $201,368 3,000 N/A N/A $128,250 $148,992 $307,785