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HomeMy WebLinkAboutMemo - Mail Packet - 3/7/2017 - Memorandum From Kevin R Gertig Re: Colorado State University Renewable PledgeUtilities electric · stormwater · wastewater · water 222 Laporte Ave PO Box 580 Fort Collins, CO 80522 970.221.6700 970.221.6619 – fax V/TDD 711 utilities@fcgov.com fcgov.com/utilities M E M O R A N D U M DATE: March 1, 2017 TO: Mayor Troxell and Councilmembers FROM: Kevin R. Gertig, Utilities Executive Director THROUGH: Darin Atteberry, City Manager RE: Colorado State University (CSU) Renewable Pledge Leadership Planning Team (LPT) Comments from January 30, 2017 Meeting: Mayor Troxell reported on the following items related to CSU: 1. They have established a goal to be 100% renewable by 2030. How can we partner with CSU to help them accomplish this goal? It was suggested this topic could be explored at the next City-CSU Liaison Meeting. Bottom Line: Utilities and City staff members are developing a project plan in order to effectively coordinate with Colorado State University (CSU) staff on their recent 100% renewable pledge. The goal will be to create the project charter that supports roles and responsibilities, scope of deliverables and collaboration with communication based on a timeline to support CSU’s desired outcome. The project would include developing an understanding of the impact on the financial and climate models used by Utilities and Sustainability Services. Background: On January 25, CSU signed a pledge with The Climate Reality Project as being committed to receive 100% of its electricity from renewable resources by 2030. CSU is a Key Account of Fort Collins Utilities and have proven itself as a University that is a leader, both locally and globally, in the area of sustainability. In the past year CSU has partnered with Utilities and Platte River Power Authority (Platte River) staff to understand the implications of several projects, particularly the implications of providing large-scale renewables to the Fort Collins campus, with a recent example being a feasibility study on combined heat and power for the campus. The January pledge is in line with these other actions as well as CSU’s climate action goals, namely a 75 percent reduction in carbon emissions by 2030. The following are projects and information relating to the City and Platte River’s coordination with CSU’s renewable goals. 100% Renewable Project Plan Utilities will be the lead in managing, with Sustainability Services and Platte River, to create a project charter and planning in order to set timelines and deliverables (as well as desired deliverables) to manage CSU’s expectations on this endeavor. Key to the success of this project will be developing an understanding of the customer’s metrics for success and desired timeline that includes preferred phases. This plan will also include consideration of potential impacts on Utilities’ DocuSign Envelope ID: 8BA076E4-6325-463E-9709-416E5B9F3F78 Page 2 of 3 and Platte River’s infrastructure, operating costs, and carbon accounting, as well as consideration of whether existing rate structures can adequately recover operational system costs based on the services and infrastructure provided. The current timeline for this project is: • Second Quarter 2017 – Develop project charter and assemble project team • Third Quarter 2017 – Develop stakeholder review process and feedback on data and scenarios • Fourth Quarter 2017 – Consider opportunities that may come from the Customized Resource Plan (CRP) being developed by Platte River; develop draft proposals • First Quarter 2018 – Progress Report to City Council Wind RFI Process In November of 2016, CSU released a Request for Information (RFI) to supply the University with wind power, up to the total capacity of CSU’s three campuses in Fort Collins. This January’s 100% renewable pledge is linked to this RFI process that Utilities and Platte River have responded to. Key information highlights are: 1. CSU has indicated, through the RFI process, that it does not have a definitive timeline beyond the 2030 commitment date at this time. 2. Utilities and Platte River has given two options for pursuing renewable energy and are prepared to partner with CSU as managed through the project charter and planning process. 3. Utilities and Platte River staff met with CSU on February 17 to discuss the response to the RFI, takeaways from that conversation include: a. CSU received numerous responses to the RFI b. CSU’s primary concern is price stability c. CSU may release an RFP in third quarter for renewable energy Aligned Projects Customized Resources Portfolio Study with Platte River CSU’s 100% renewable pledge aligns with the Customized Resources Plan (CRP) that Platte River is preparing for Fort Collins, Estes Park, Longmont, and Loveland. Through the CRP, Platte River is studying resource plans that can meet each municipality’s individual electricity supply goals, such as a minimum percentage of renewable energy or achieving a reduction in greenhouse gas emissions. The first step in the CRP is to model increasing quantities of renewable energy, both wind and solar, in order to determine the effect on the wholesale electric system, including estimates of costs and benefits. As these impacts are better understood, the next step will be to consider wholesale rates that can support the renewable customization desired by each municipality. These results—the estimated renewable costs and benefits, as well as the wholesale rate structure—will help support CSU’s planning efforts related to their 100% renewable pledge. Current timeline for CRP: • Second Quarter 2017 - Phase 1 preliminary results (based on utility-scale resources) delivered to municipalities for review and feedback • Third Quarter 2017 - Results of Phase 1 revisions delivered to municipalities. Develop additional scenarios based on customer-scale resources determined in collaboration with municipalities. DocuSign Envelope ID: 8BA076E4-6325-463E-9709-416E5B9F3F78 Page 3 of 3 • Fourth Quarter 2017 - Finalize Phase 1 results, including estimated costs and benefits of increasing levels of renewable resources. Decision point for municipalities to proceed jointly or separately. • 2018 - Begin Phase 2: Development of business model and tariffs to support customized resource portfolio cost allocation among municipalities Regional ISO/RTO Model Platte River has been engaged in discussions with six other regional utilities about joining a regional wholesale market in the Rocky Mountain West, including most of Colorado, and portions of Wyoming, South Dakota, New Mexico, and Arizona. Regional transmission organizations (RTOs) and independent system operators (ISOs) are generally not-for-profit organizations that serve as third-party operators of a pooled transmission system under a common tariff (sometimes referred to as “power pools”). Platte River provided a draft whitepaper on organized markets to its Board of Directors and Utilities has shared a copy with City Council. An ISO/RTO could be functioning in the Rocky Mountain West region by 2019. While this effort adds uncertainty in the current planning for renewables (and other resources), it is expected that an ISO/RTO will ultimately facilitate the addition of renewable supply while maintaining reliable service. This is due to two primary factors. First, in an ISO/RTO there will be a single transmission tariff within the region, eliminating “pancaking” that occurs today, where there are multiple transmission tariffs that stack up when moving electricity across multiple transmission systems. Second, a market could make it easier to procure energy and services from a wider area to balance the variable output from wind and solar generation. Significant uncertainty remains as the process toward a regional market unfolds. Coordination With Other Customers Utilities held a workshop with commercial customers on February 7 to determine business needs, desired processes and intention to install renewables locally. Twenty-three businesses answered the initial survey and 15 attended the workshop, giving considerable feedback. Staff has synthesized the results from this workshop in the 2017 Business Renewables Workshop Report (attached). Next Steps: • Mayor, City Manager and Utilities Executive Director scheduled to meet with CSU staff about the pledge on March 7, 2017. • Create Project Charter with plan based on deliverables and timelines with CSU, Platte River, Fort Collins Utilities and Sustainability Services in second quarter 2017. CC: Lisa Rosintoski Jacqueline Kozak-Thiel Lance Smith Lucas Mouttet Dan Clark Lucinda Smith Tim McCollough John Phelan John Bleem; Brad Decker; and Paul Davis (Platte River) DocuSign Envelope ID: 8BA076E4-6325-463E-9709-416E5B9F3F78 Fort Collins Utilities – Customer Accounts Report 2/7/2017 Business Renewables Workshop Results Executive Summary Fort Collins Utilities has specific goals targeting increased renewable adoption by our customers, as part of the Energy Policy and funded budget offers for 2017-2018. Included with this is a goal of rebating 1.0 MW of net metered onsite solar generation for commercial customers, and XX MW of solar produced from Power Purchase Agreements (PPAs), likely with commercial customers or their contractor. In addition, Utilities is looking to develop a new community solar garden (possibly in collaboration with Platte River Power Authority), that may be an option for businesses who are looking to utilize more renewable energy. Utilities staff have answered questions around several potential large-scale renewable projects in the past year from Key Accounts, and wanted to bring together more Key Account customers, as well as smaller commercial customers to understand their needs. Staff also sought to receive feedback from commercial customers on development of the 2017/2018 power purchase program and structure of the community solar garden. Utilities sent out a pre-workshop survey, receiving 23 responses from mainly large to industrial customers. For this group of customers, which happens to be a very engaged audience, we found that approximately half were looking to utilize some capacity of renewables in the coming years. These customers mostly have corporate sustainability goals driving their efforts, but generally not specific target amounts of renewables needed. During the workshop staff prepared questions to further analyze what types of renewables the customers were looking for as well as desire around programmatic design. In addition, there was time dedicated to discussions at the tables for there were many unanswered questions pertaining to financing and cost of each type of renewable energy. City staff may be assuming that customers know more about renewables and financing than is truly the case. Renewable Energy Credits (RECs) were also a prominent discussion point, especially for the businesses with the most aggressive strategies. The bottom line is: Fort Collins Utilities’ most engaged customers have a desire to install or purchase more renewable energy but still have a lot to learn about financing, technical feasibility, and accounting for REC’s. Utilities, along with City stakeholders, will analyze these results, determine programmatic changes needed to be made, report back to original customers on list, and decide on how to keep the conversation going with customers moving forward. Fort Collins Utilities Customer Accounts & Resource Conservation Staff DocuSign Envelope ID: 8BA076E4-6325-463E-9709-416E5B9F3F78 Fort Collins Utilities – Customer Accounts Report 2/7/2017 Background This event had two main goals 1. Inform and educate commercial customers about existing clean energy programs and rebates 2. Seek feedback from commercial customers about their efforts and barriers and to learn how the City of Fort Collins can best structure programs to engage these customers Audience The audience for this event was commercial utility customers. Invitations were sent to all Key Accounts as well as ClimateWise partners. Below is a list of all people who attended: Name Company Baumgarn, Stacey CSU Boyle, Theresa USDA Cochran, Carol Horse & Dragon Daharsh, Andrew Faith Church Davis, Paul PRPA Dollard, Carol CSU Gagner, Christopher Front Range Village Geppert, Molly Trees, Water & People Johnson, Gayla Advanced Energy Morgan, Randy Outpost Sunsport Murray, Mike Spirae O'Gan, Laura USDA Randall, Michael CSU Reeve, Stu City of FTC Tanguay, Paul Broadcom Trimbath, Trudy PSD Villenueve, Dana New Belgium York Broadcom RSVPd, but did not attend: Brown, Samantha Spirae Bussel, Brian Broadcom Carpenter, Evelyn Solas Energy Consulting Drigot, John UC Health Odell, Corey Odell Brewing Rohloff, Cabel Air Comfort Schroyer, Steve Blue Ocean/Otterbox Pre-Workshop Survey We conducted an email survey prior to the event (same email list as invited to the event). This survey was designed to gather some preliminary information that we could build on at the meeting. Attached to this report is an excel file of the complete results. DocuSign Envelope ID: 8BA076E4-6325-463E-9709-416E5B9F3F78 Fort Collins Utilities – Customer Accounts Report 2/7/2017 Basic survey information: • The survey was sent to Key Account customers and Climatewise members. • 23 customers responded • Due to the nature of the survey, we can’t draw broad conclusions about our entire commercial customer base. The respondents to the survey represent a small portion of very environmentally engaged customers. Highlights of Survey Responses • The survey drew from a very engaged audience, mostly large/industrial customers • Slim majority have corporate environmental sustainability goals • Cost and financial metrics matter the most • Where renewables are located and what type of renewables are not driving factors • 39% Currently have on-site solar • 13% Buy off-site renewable energy • 50% Actively pursuing additional renewable energy • 40% plan to invest onsite in renewables • 20% will add more renewable energy in the next 2 years Selected slides from presentation to customers on responses to pre-workshop survey. DocuSign Envelope ID: 8BA076E4-6325-463E-9709-416E5B9F3F78 Fort Collins Utilities – Customer Accounts Report 2/7/2017 Detailed Survey Questions and Responses: Is your organization actively pursuing additional renewable energy resources? 50% Yes, 50% No 1. Does your organization currently have on-site solar? 39% Yes, 61% No 2. Does your organization currently purchase off-site renewable energy beyond the 14% already provided by the City of Fort Collins? 13% Yes, 87% No 3. If you answered YES to question 3, what is the source of the renewable energy? All purchase wind power. 4. Does your organization have plans to invest in additional renewable energy at your Fort Collins facility/facilities? 43% Yes, 57% No 5. If you answered YES to question 5, when are you planning to make additional renewable energy investments? Does your organization have specific goals regarding environmental sustainability? 57% Yes 43% No How will you measure your sustainability goals? Tons of Carbon reduced 26% % of Renewable Energy Used 22% Cost Savings 17% Other 13% No response 22% Location and Ownership: Rate the following options. Option % that rated it appealing or Very Appealing Build, own and operate solar electric generation on-site 65% Purchase solar electric generation from on-site generation owned and operated by an independent solar company through a Purchased Power Agreement (PPA) 65% Buying regional wind power from a location within 150 miles of our facility 65% Buying local solar power from an array in the city limits of Fort Collins through a PPA 65% Purchase a mix of renewable energy (wind and solar) from an off-site generation owned and operated by an independent company through a PPA 65% 6 months - 1 year from now 3 13.0% 1 - 2 years from now 2 8.6% 3 - 5 years from now 2 8.6% More than 5 years from now 1 4.3% No specific timeframe or not at all 4 17.3% DocuSign Envelope ID: 8BA076E4-6325-463E-9709-416E5B9F3F78 Fort Collins Utilities – Customer Accounts Report 2/7/2017 Buying regional solar power through a PPA from a utility scale array within 150 miles of Fort Collins 59% Own wind turbines within 150 miles of Fort Collins and pay to transport power to my location 26% What factors are most important to you when making renewable energy purchases? Return on Investment - receiving a positive return 86% rated this Important or Very Important Cost effective- generating the most renewable energy for least cost. 91% rated this Important or Very Important Cost Predictability 82% rated this Important or Very Important Sustainability - we want to consume fewer natural resources and generate fewer 82% rated this Important or Very Important Greenhouse gas mitigation - we want to minimize our greenhouse gas emissions due to concerns regarding climate change 68% rated this Important or Very Important DocuSign Envelope ID: 8BA076E4-6325-463E-9709-416E5B9F3F78 Fort Collins Utilities – Customer Accounts Report 2/7/2017 Workshop To kick off the workshop, John Phelan (Utilities Resource Conservation Manager) presented information about the City’s goals for renewable energy and what programs we plan to use to help customers install solar arrays. The Green- Energy Program (Green-e certified) was also discussed as a way for customers to buy green energy from Fort Collins Utilities. TurningPoint clicker questions Due to confusion on some questions and the diversity of understanding of financial models related to the different types of solar, some of these results may be biased. See explanations below. Motivation to buy renewables- The motivations clicked were very evenly matched between environmental concerns, corporate goals, cost savings and marketing. However, several people mentioned that they saw corporate goals and environmental concerns being the same thing. Based on that discussion, we can see that the combination of corporate goals / environmental concerns is by far the greatest reason. Interest in hedging- Using renewable energy to stabilize prices over time is a concept that many participants would like to investigate but the terms, pricing and other contractual factors would need to be outlined in greater detail for them to make a firm decision. Source of Renewables- Customers were asked to rank the most desirable source of renewable energy from six options. The chosen options were weighted by how the customers prioritized them. 1. Rooftop solar owned and operated by my organization 22% 2. Rooftop solar owned by a 3rd party and electricity sold to us 20% 3. Renewable Mix- Buy a combination of wind and solar power from your utility 19% 4. Local Community solar- buy solar energy from a community owned array 15% 5. Regional Wind- buy wind power from a wind farm within 150 miles 13% 6. Rent the roof- Rent space on our roof for solar panels but not buy the electricity 12% The discussion around this topic came back to cost with some participants saying it is very difficult to rate the options without price considerations included. SP3 Project selection- Customers were asked what method for selecting projects they would prefer. “We will be accepting proposals for the SP3 program soon. Assuming that all technical interconnection requirements are met by each project submission, which method do you prefer for selecting projects?” 1. Qualifications – Most likely to deliver 59% 2. Market based- lowest cost 35% 3. First come, first served 6% 4. Lottery 0% The discussion around this subject was helpful for us to consider how to structure the application process and shows that using a market based approach combined with a high level of qualifications in the proposals would be an effective method. DocuSign Envelope ID: 8BA076E4-6325-463E-9709-416E5B9F3F78 Fort Collins Utilities – Customer Accounts Report 2/7/2017 How much Solar? – This question was modified prior to customer participation to say, “How much renewable energy will your organization be purchasing 10 years from now? More than 100% of yearly kWh 19% 100% of yearly kWh 31% Between 50% and 100% of yearly kWh 19% Less than 50% of yearly kWh 31% Discussion from table Table Participants Topic Results 1 ? Barriers • Time to manage processes and system (FRV) • Financial- need ROI (2-5yrs) o Competing for capital o Hedging maybe an option (Broadcom) • Understanding viability (outpost sunsport) o Technical (eg. Roof capacity and age) • Access to capital -> long term PPA • Competing projects for capitol o Financial comparison • REC’s- scope 1&2 emissions targets Benefits Marketing, consumer perception Next for FCU • Ownership of REC’s- who gets to count results? o City vis-à-vis customers o If recs are retired, do we care? • Incentives drive action o EE & Solar competing for $$ • Technical assistance o Need admin/turn-key approaches • RE can be turn key • Simplify • Split incentives/turnover in ownership and customer/end user 2 USDA CSU Barriers • USDA/Gov’t policy • RECs- count or retain? o 2030 goals CSU similar to utilities Benefits • RTO/ISO: consolidating Transmission to enable “Wheeling” o Transparent distribution charges • More CFC demonstrations in CFC Bldgs • Codes: “solar ready” for both residential and commercial 3 PSD Advanced Energy Horse & Dragon Barriers • Financial o Hard for startups  Financing could help o Adding Debt is scary o Building leases are temporary • Legal DocuSign Envelope ID: 8BA076E4-6325-463E-9709-416E5B9F3F78 Fort Collins Utilities – Customer Accounts Report 2/7/2017 o Funds tied up in other places • Structural/land/roof logistics. Incentives • LANDLORD pays for solar o Attractive incentive to potential tenants FCU actions • Rebates- make more clear what is available • Advertise benefits of solar • More educational events • More community solar o Good PR and functional o Allow commercial investment • Audits o Add energy producing factor to audits o Promote more! • More incentives and disincentives (ie- higher rates) 4 Broadcom and ? • Hot water system for laundry- Broadcom • City buldings solar have grown. Some solar- ready energy efficiency priority • Because rates are lower- managing an on-site renewable project isn’t worth cost/time >financial & size (Broadcom) • TWP-residential property -> efficiencies 1st • Competition for resources -> how many to buy-down system • Lack of space for solar -> community solar • Balance of life cycle • Incentives -> cint to invest in efficiency updates • Renewables built in neutral for user/customer >cost revenue • Decreased rates for solar • Carbon tax -> PRPA • Even if your customers are engaged and on board w/ renewables -> cost will drive decision • Facility demand continues to impact solar benefit • Overall good follow-up from staff • Reliability is still important • What is happening within community re. partnerships? (eg Spirae- >microgrids w other customer) -> rates impact this Parking Lot All All • Hard to make a decision based on cost (stacy B- slide 20) • Environment decision vs cost (slide 17 or 18) • REC’s- who owns them, how they are counted locally Summarizing Clicker Questions and Discussion The customers at the workshop were fairly knowledgeable about programs, renewable opportunities and barriers in their organizations. The financial aspects of the options will drive the method of receiving the renewable energy. For us to take the discussion a step deeper, we must provide more specific options with estimated pricing. This would be the most effective way to accelerate the deployment of more renewable energy in Fort Collins. DocuSign Envelope ID: 8BA076E4-6325-463E-9709-416E5B9F3F78 Fort Collins Utilities – Customer Accounts Report 2/7/2017 Conclusion For this group of customers, which happens to be a very engaged audience, we found that approximately half were looking to utilize some capacity of renewables in the coming years. These customers mostly have corporate sustainability goals driving their efforts, but generally not specific target amounts of renewables needed. There were many unanswered questions pertaining to financing and cost of each type of renewable energy. City staff may be assuming that customers know more about renewables and financing than is truly the case. Renewable Energy Credits (RECs) were also a prominent discussion point, especially for the businesses with the most aggressive strategies. The bottom line is: Fort Collins Utilities’ most engaged customers have a desire to install or purchase more renewable energy but still have a lot to learn about financing, technical feasibility, and accounting for REC’s. Next Steps Utilities, along with City stakeholders, will analyze these results, determine programmatic changes needed to be made, report back to original customers on list, and decide on how to keep the conversation going with customers moving forward. DocuSign Envelope ID: 8BA076E4-6325-463E-9709-416E5B9F3F78