HomeMy WebLinkAboutAgenda Packet 11/09/2010I. Call To Order
II. Roll Call
III. Approval Of Minutes For October 12, 2010
IV. Late Items
V. Discussion Items:
A. Golf Course Road Waterline Repairs (verbal report only)
B. Equipment Purchase — Light Operations Line Trucks (verbal report only)
C. Advanced Metering Infrastructure System Communications Plan
Presentation
D. Advanced Metering Infrastructure System Communications Plan
Consultant Agreement Amendment No. 1
E. Proposed Medic I Utility Rate Adjustments
F. Consultant Agreement: Combined Sewer Overflow Phase I,
Constructability Review
G. Bonneville Power Administration Commercial and Industrial Demand
Response Grant Acceptance
H. Energy Conservation Program Increase
I. Bonneville Power Administration Residential Exchange Program
Settlement Agreement
J. Amendment No. 2 to Telecommunications Consultant Agreement
VI. Information Only Items:
A. Retail Tiered Rate Methodology Study New Large Single Load
B. Wireless Mobile Data System Grant Business Case Evaluation Update
C. Advanced Metering Infrastructure System Update
D. Electric Utility Grant Status Report
VII. Next Meeting Date
VIII. Adjournment
N \uac \ final \110910
Utility Advisory Committee
Jack Pittis Conference Room
Port Angeles, WA 98362
November 9, 2010 @ 1:30 PM
AGENDA
December 14, 2010
Start time proposed 1:30pm due to 5pm City
Council meeting
City Council Special Meeting/Utility Advisory Committee
Jack Pittis Conference Room
Port Angeles, WA 98362
October 12, 2010
I. Call To Order
Chairman Di Guilio called the meeting to order at 3:00 p.m.
II. Roll Call
UAC Assigned Chairman Di Guilio, Cherie Kidd, Brooke Nelson
Councilmembers Present:
UAC Assigned N/A
Councilmembers Absent:
Other Councilmembers
Present: Pat Downie
Other Councilmembers Brad Collins, Max Mania, Don Perry
Absent:
UAC Members Present: Vice Chairman Reed, Paul Elliot
UAC Members Absent: N/A
Staff Present: Kent Myers, Glenn Cutler, Terry Gallagher, Dan
McKeen, Larry Dunbar, Phil Lusk, Brian Smith, Mark
Karjalainen, Cate Rinehart
Others Present: Patti Morris — Clallam County
Tom Callis — Peninsula Daily News
III. Approval Of Minutes
Chairman Di Guilio asked if there were any corrections to the minutes of September
14, 2010. Councilmember Kidd moved to approve the minutes. Dean Reed seconded
the motion, which carried unanimously.
IV. Late Items
None.
V. Discussion Items
c
A. Wireless Mobile Data System Grant Update
Terry Gallagher, Police Chief, emphasized that the system would be a technological
advancement that would result in more efficient, effective, and safer operations for
both Police and Fire services. A conference call was held with Dick Bull (National
Law Enforcement and Corrections Technology Center Outreach Specialist) and Dan
Brannon (City of Ripon Police Department Information Technology Administrator)
to share their knowledge and experience operating and maintaining a wireless mobile
data system. There was a brief discussion.
Information only. No action taken.
B. Bonneville Environmental Foundation Solar4R Schools
Funding Agreement
Phil Lusk, Power Resources Manager, advised that the City had been offered a
funding agreement for a renewable energy demonstration and education program at
the Feiro Marine Life Center. This program would provide hands -on teaching tools
such as science kits, lesson plans and photovoltaic solar arrays so students could learn
about solar, wind and other renewable energy technologies. A discussion followed.
Dean Reed moved to recommend City Council authorize the City Manager to
sign the Solar4R Schools Funding Agreement with the Bonneville
Environmental Foundation for the Feiro Marine Life Center. Councilmember
Nelson seconded the motion, which carried unanimously.
C. 2010 Utility Rate Studies Recommendation
Larry Dunbar, Deputy Director of Power Systems, provided a handout and reviewed
the information it contained which included reviewing current and proposed rates and
fees, reviewing City Council and public comments, and recommendations. There was
a lengthy discussion.
Councilmember Nelson moved to recommend City Council proceed with the
proposed rate and fee adjustments for the Electric, Wastewater, and Transfer
Station Utilities with no increase in water connection fees. Dean Reed seconded
the motion which carried unanimously with Councilmember Kidd in opposition.
D. Bonneville Power Administration Power Sales Agreement
Exhibit F Revision
Larry Dunbar, Deputy Director of Power Systems, advised that the Bonneville Power
Administration had offered the City a revision to Exhibit F of the new Power Sales
Agreement that will reduce the City's requirements for the Morse Creek hydroelectric
project. There was a brief discussion.
Dean Reed moved to recommend City Council authorize the City Manager to
accept the revision to Exhibit F of the Power Sales Agreement. Councilmember
Nelson seconded the motion, which carried unanimously.
Larry Dunbar, Deputy Director of Power Systems, explained that the Bonneville
Power Administration had offered the City a revision to Exhibit A of the
Transmission Services Agreement which incorporates minor modifications to
metering descriptions, points of receipt and delivery, and the incorporation of the new
BPA Power Sales Agreement as a network resource. There was a brief discussion.
Dean Reed moved to recommend City Council authorize the City Manager to
accept the revision to Exhibit A of the Network Integration Transmission
Service Agreement. Councilmember Nelson seconded the motion, which carried
unanimously.
VI. Information Only Items
VII.
VIII.
E. Bonneville Power Administration Network Integration
Transmission Service Agreement Exhibit A Revision
A. Bonneville Power Administration (BPA) Residential
Exchange Program Settlement Agreement
Information only. No action requested.
B. Advanced Metering Infrastructure (AMI) System Project
Update
Information only. No action requested.
C.
Metropolitan Area Network (MAN) Services Agreement Core
Switching Equipment And Customer Premises Equipment
Inspection Report
Information only. No action requested.
Next Meeting Date: November 9, 2010 — 1:30 p.m.
Adjournment: 4:57 p.m.
Dan Di Guilio, Mayor Janessa Hurd, City Clerk
Dean Reed, Vice Chairman Cate Rinehart, Administrative Specialist II
oRT NGELES
W A S H I N G T O N , U.S.A.
Utility Advisory Committee Memo
November 9, 2010
Date:
To: Utility Advisory Committee
From: Phil Lusk, Power Resources Manager
Subject: Advanced Metering Infrastructure System Communications Plan Presentation
Summary: A communications plan is crucial for the success of the Advanced Metering
Infrastructure System project. The draft communications plan will be presented in person by
Parker LePla at today's meeting.
Recommendation: For information only, no action requested.
Background /Analysis: A communications plan is crucial for the success of the Advanced
Metering Infrastructure (AMI) System, and includes customer (external) and staff (internal)
education with informational messages that need to be shared prior to, during, and after the project.
The City must clearly articulate the benefits of the new AMI System in order to promote dialog
and for the system to be accepted and embraced by our community. To the extent that we can
proactively communicate, we have the opportunity to obviate any customer misperceptions that
might arise. Furthermore, to the extent our citizens are directly engaged in activities related to the
AMI System implementation, we can generate their understanding and support for our efforts.
"Motivate customers through savings, control, and stewardship. Engage customers through rates,
technology, and education. Satisfy customers through easy, enjoyable, fulfilling experiences," says
one expert.
The draft AMI System Communications Plan (see attachment) will be presented to the Utility
Advisory Committee (UAC) by Parker LePla at today's meeting. The draft plan was developed
using an iterative process involving staff from the City Manager's Office, and the Departments of
Finance and Public Works and Utilities. An interview process with some members of the UAC
and City Council was also used to help identify key issues.
All feedback gathered at today's meeting will be incorporated into a similar presentation that will
be made at the November 16, 2010 City Council meeting.
Attachment: Draft AMI System Communications Plan
N \UAC \Final \AMI System Communications Plan Presentation doe
CITY OF PORT ANGELES
AMI System Communications Plan
November 5, 2010
COMMUNICATIONS OBJECTIVES
Par erLeP a
At its best, government is transparent as well as informative — particularly when it
undertakes major financial investment and change on behalf of its constituents.
The City must clearly articulate the benefits and potential drawbacks of the new
AMI system in order to promote dialog and for the system to be accepted and
embraced by your community. To the extent that you proactively communicate
you have the opportunity to confront misperceptions and address concerns as well
as educate and move your city forward. To the extent you engage citizens directly
in activities related to system implementation, you can generate understanding
and support. To that end this plan will:
• Help City of Port Angeles staff provide customers and residents with excellent
customer service throughout the AMI system implementation phase and beyond
o Ensure that all staff who have AMI system implementation and related
customer service responsibilities are able to accurately and fairly represent
its merits and potential drawbacks in formal and informal communications
o Ensure all staff with AMI customer service responsibilities are able to
accurately and fairly represent the new Time -of -Use demand -based rate
schedule
o Ensure that other city employees and leaders, including the City Council,
have the tools they need to explain the City's basic rationale for
implementing the AMI system on behalf of the community and to help
citizens learn more
o Detail a process for updating all personnel at the appropriate level before,
during and after implementation so the impacts are clearly understood and
accessible by the public
• Provide customers and residents of the City with timely information throughout the
transition to the new AMI system
• Ensure that results of the City's investment are shared
• Use a streamlined approach so materials and activities achieve maximum reach
using minimal resources
AMI Communications Plan— November 5, 2010 • Prepared for City of Port Angeles • www.parkerlepta com • 206.285 5280
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PHASE ONE: MAKING INFORMATION CLEAR AND AVAILABLE IN
MULTIPLE FORMATS THAT MEET CITIZEN AND CUSTOMERS'
NEEDS
1. Create a visual theme that expresses the value of AMI,
namely: "The sensible next step"
The visual theme is the basis for the look and feel of all communications about
the project —from bill inserts to a template for information documents to ads
inviting citizens to information meetings. It provides a visual cue so people
(city staff as well as citizens) recognize your communications as relating to
AMI. This is not an "over the top" image but a low -key design that
demonstrates the value of being sensible.
2. Create a series of flexible communication tools, each
with multiple uses
• Palm -sized cards that explain the AMI system's value and how to access more
information
• One and two -sided document templates in which to provide more in -depth
information, as needed, such as: project overview, FAQ's, and project updates via
utility bill inserts
• Posters, placed on city property, to inform staff and residents with key information
about the project and timeline
• Door hangers to inform customers about their installation
• Utility bill that is easy to read and provides information that helps customers
control their costs. Content and design based on vendor selected for AMI system.
• Utility bill insert one page, two -sided newsletter -style template designed to go
with new bill
AM Communications Ptan -- November 5, 2010 • Prepared for City of Port Angetes • www parkertepla corn • 206.285.5280
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3. Create an AMI project page /section in the Utility
Information Center on the City of Port Angeles website
• General information about AMI systems
• Specific information about the City's system and implementation plan
• In -depth information about the project and the technology
• Engage visitors via emailed questions /answers, news feed and links to AMI news
stories and information about other communities using AMI
a Site to submit form for "be sensible first" contest to have first meter
installed
• Coincide launch of new page(s) with initial public announcements regarding AMI
system
PHASE TWO: FOUNDATION FOR CITIZEN UNDERSTANDING—
STAFF PREPARATIONS
4. Train CSRs (customer service representatives) and AMI
implementation staff about the system's impacts so
they can appropriately inform the public
• Hold a 2 -hour interactive staff meeting to launch the project, celebrating the
change and expected impacts (include Energy Conservation, water division staff)
before the vendor equipment demos, if at all possible
o Build excitement: "Welcome to the 21s century and new ways to help
people benefit from new technologies and control resource usage on their
own terms. It's the sensible approach to dealing with change."
o Make the focus a communication workshop, training all on the key points
for keeping customers informed
o Provide:
• Palm -sized card containing write -up of the key communications
points
■ One -page project overview, including timeline
• FAQs document
AMI Communications Nan—November 5, 2010 • Prepared for City of Port Angeles • www parkerlepta corn • 206 285.5280
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o Include a brainstorming session for how best to assist the public when they
call with questions
• Create posters that explain AMI; place in the department break room as well in
other city government locations
5. Develop a detailed approach for answering questions
and concerns
• City of Port Angeles' AMI Communications Team uses input from all -staff meeting
to create a decision -tree for helping CSR and other utility employees route
questions to the best source to meet the particular need
o Post on the City's Intranet
• Create a plan to appropriately address a large volume of responses (positive and
negative)
• Provide city employees with a list of the appropriate people in the utility
department associated with key questions each is equipped to answer so they can
direct citizens to the information they need
o Post on the City's Intranet
o Post on City's website for citizens
o Lead discussion of benefits and the key points to cover in every
communication
o Lead discussion of benefits and the key points to cover in every
communication
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6. Explain the AMI system and its benefits to all city
employees and leaders, helping them be informative
spokespeople in accordance with their roles
• Meet with the Utility Advisory Committee to officially launch the project and
provide them with the write -up of key communications points
o Provide one -page overview of the project, including timeline, FAQs and
palm cards
• Schedule a brief information session with City Council to launch the project and
provide them with the write -up of key communications points
AMI Communications Ptan— November 5, 2010 • Prepared for City of Port Angeles • www parkerlepla.com • 206.285.5280
ParerLeP a
o Provide one -page overview of the project, including timeline, FAQs and
palm cards
• Hold three meetings at City Hall /Council Chambers (in order to include all city
staff, approximately 230 people) to launch the AMI project across all city
departments
o Include a brief communication "workshop" so employees feel informed and
able to help the public
o Provide employees with palm cards for themselves and to give to citizens to
help explain the project and connect the public to additional information
• Distribute the palm cards and overview document to police and fire department
staff and others unable to attend the launch meetings
o Make available on Intranet
o Leave copies in break rooms
• Place posters that explain AMI in City Hall, police and fire stations
o Customer - facing
o Break rooms
7. Ensure that city government leads the Port Angeles
community by example throughout the change —and
after
• Make a document available to the public that specifically addresses the cost of the
system and expected benefits tied specifically to cost as much as possible
o One -page overview
o Detailed report
o Post on City website and Intranet
• Establish a protocol for measuring and reporting current city government usage and
costs and for measuring impacts post- implementation
o Take some pre- installation benchmark measurements around fun things as
well as key usage statistics (then do this annually)
• Compare cost of a recreation center class at peak vs. a similar
recreation class at an off peak time
AMI Communications Plan — November 5, 2010 • Prepared for City of Port Angeles • www.parkertepla.com • 206.285.5280
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• Compare cost of different types of activities that happen at the
same time (like basket weaving vs. dance class)
• Compare costs of heating a fire station and the police station before
and after implementation
• Show how information the City gets from the "smart" meters about individual
usage is protected while that information contributes to helping the City reduce
energy usage and costs
• Report launch, implementation and system use results information on the home
page and utility information center /AMI page of the City's website
o Monthly updates or more frequently, as needed
• Help customers understand and take control of costs
o Create a working "smart" meter that you can take to in- person meetings to
show how they work and the potential benefits (Example: if we put in 50
cents worth of electricity at off -peak time 5 light bulbs stay on for x
minutes; at peak time you only get X minutes)
o Develop "sensible saving" scenarios (by changing X you can save Y amount
on your bill)
• Post on City website
■ Post on City Intranet
8. Prepare staff to provide informative outreach to key
customer and resident audiences
• Identify AMI system champions from within city government
o Leaders who are dedicated to the strategy that led to the decision and
individuals who are excited about the impact it will have
• Establish and train a team of "Energy Ambassadors" who will proactively seek to
meet community groups —from general "town hall" meetings to specific interest
groups, such as churches and the city's largest employers. The team will ideally
include:
o City Council members, including the Mayor
o City Manager
o Utility Advisory Committee members, including at least one citizen
representative
AM Communications Plan— November 5, 2010 • Prepared for City of Port Angeles • www parkerlepla com • 206.285 5280
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o Finance Department and Public Works and Utilities Department leadership
o AMI system champions from all levels of government
• Assign each Energy Ambassador to speak to groups that are the best natural fit as
much as possible
o See Phase Three of this plan for more detail
• Identify potential partners from within the Port Angeles community for
endorsement and in- person presentations (business leaders, environmental leaders,
spiritual leaders, local celebrities)
o Hold a roundtable meeting to present AMI to them and ask for their support
and active involvement
o Brainstorm ideas for engaging their communities of interest over the course
of the project
o Convene the group again to provide an update and share results, when
available; seek support for post- installation activities, if appropriate
• Create an engaging presentation for use by Energy Ambassadors that can be easily
given and tailored for each audience (and train the Energy Ambassadors to deliver
the presentation)
o Interactive
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o Provide written information, including palm cards, one -page overview and
FAQs to attendees
o Provide a role for private citizen partners who choose to participate
PHASE THREE: INFORMING CUSTOMERS AND CITIZENS PRIOR
TO AMI SYSTEM INSTALLATION
9. Announce to the Port Angeles community that the
City's decision to install the AMI system is about to be
implemented, inviting one and all to town halt style
meetings
Communicate the big - picture AMI story, explaining the reasoning behind and
benefits of the new AMI system, and the timeline. Invite community members
to learn more through a series of town hall meetings, encouraging questions
and dialog.
AMI Communications Plan— November 5, 2010 • Prepared for City of Port Angeles • www parkertepta corn • 206.285 5280
• Identify the town hall meeting locations, dates and times for the general public
o Ensure that citizens from all geographic areas have at least one meeting
that's convenient for them to get to.
• Announce the AMI system and invite the public to the town hall meetings via the
following vehicles:
o City of Port Angeles website
• Home page
• Utilities information center /AMI page, launched to coincide with the
other communications
o Utility bill insert
o Media engagement
ParcerLeP a
• Press release distributed via newswire and directly (to obtain
possible media coverage about the system and meetings) to:
• Peninsula Daily News
• KONP
• KPLU
• Quarter -page print advertisement in the Peninsula Daily News for
three days
• Focus on announcing the town hall meetings
• 60- second radio spot on KONP to run two times during prime
listening times (6:00 a.m. - 9:00 a.m., 12:00 p.m. and 3:00 p.m. -
6:00 p.m.) for three days
• Focus on announcing the town hall meetings
• Submit town meeting announcements to Peninsula Daily News and
KONP community calendars
o Send invitation letters to large commercial customers, business groups and
community groups such as churches and sports clubs re: town hall meetings
• Offer to schedule an Energy Ambassador from the City to speak to
their organization about the City's new AMI system
AMI Communications Plan — November 5, 2010 • Prepared for City of Port Angeles • www parkertepla.com • 206 285 5280
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Par erLeP a
10. Raise general awareness in the Port Angeles
community about the AMI change -over, the coming
BPA rate hike and the regional movement toward this
technology
• Place palm cards throughout the community after they are unveiled at the town
meetings (gathering places, businesses)
o Encourage employees to take them to the places they like to go
• Make the one -page project overview and FAQ sheets available at city offices, on
the City's website and Intranet
• Suggest media coverage by pitching story concepts (offering your staff as experts
they can interview) to selected media about:
o The coming BPA rate hikes and tiered structure
o How the Port Angeles AMI system fits into the larger Pacific Northwest
region's AMI and DR systems implementation (Other AMI systems, BPA DR
grantees, the DOE Pacific Northwest Smart Grid Demonstration Project) '
o An in -depth human interest story on Gig harbor's AMI system. Five years
down the road how has it affected life there? Councilwoman Brooke Nelson
lived there during the AMI transition; she could be a local angle into the
story.
o First Smart meter install /ribbon cutting with contest winner (see #11
below)
• Pitch the above noted articles /interest stories to the following news outlets:
o Peninsula Daily News
o KONP
o KPLU
11. Engage citizens in system implementation activities
• Hold a "be sensible first" contest to see where the first new smart meter will be
installed ending in a ribbon - cutting ceremony
AMI Communications Nan—November 5, 2010 • Prepared for City of Port Angeles • www.parkerlepla corn • 206 285 5280
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Par ereP a
o Announce contest as part of a pre- launch informational bill insert, news
release and media advertisements (see #9 above)
• Invite people to participate in contest via town hall meetings with
option of entering at City Hall
o Post invitation on City website
• Hold "sensible saving /how to" workshops for large customers and customer groups
(such as downtown businesses by block) on ways to reduce usage in high peak
times, lowering electricity costs.
o Submit meeting announcements to Peninsula Daily News and KONP
community calendars
• Set up a "sensible next step" AMI system educational booth at community events,
such as the Clallam County Fair, Olympic Peninsula Senior Games, local festivals
and school fairs.
o Create a calendar of events with the goal of participating in at least two
per month —try to reach as many different audiences as possible
o Bring the smart meter display unit to demonstrate the impact on cost of
using electricity during high vs. low rate times
PHASE FOUR: KEEPING CITY STAFF AND CITIZENS INFORMED
THROUGHOUT IMPLEMENTATION
12. Communicate to Customers about the install process
• Send a second bill insert announcing the beginning of installations, informing
customers of the installation phases and letting them know they will see a new billl
format in early 2012.
• Create two door hangers for individual customer install communications
(electricity and water versions for each):
o Appointment notice: your appointment for install is at X time
o Outcome of installation: your new meter was successfully installed OR the
new meter wasn't successfully installed, why, and process for resolution
• Create a one page two -sided document that details information for customers who
will incur installation expenses (if repairs required for installation exceed $750)
o Distribute to impacted individuals
AMI Communications Plan — November 5, 2010 • Prepared for City of Port Angeles • www parkerlepla.com • 206 285 5280
10
o Post on City website
Par<erLeP a
13. Proactively communicate about progress with all
stakeholders
• Monitor relevant local print, radio and online community discussions about the new
system and implementation process
• Determine needed meeting schedule with CSR staff to triage volume of calls,
discuss general sentiment of callers and to provide ongoing guidance. Could be
daily at first, then less often.
o Adjust call center decision -tree, if needed
o Adjust outreach plan, as needed
o Adjust verbal communications (website, bill inserts, etc.), as needed
• Use regularly scheduled staff and team meetings to update everyone involved in
implementation at least weekly
o Post brief weekly updates on Intranet
• Provide formal monthly updates to City Manager, City Council and all Directors via
email and printed letter
o Request that updates be shared in department meetings (leadership and
field staff)
o Post on Intranet
• Use the above communication vehicles to link all city employees to information
about the impact of the AMI system on the City's electricity and water use and
expenditures via the City's website
• Press release announcing results post- initial installation phase, distributed via
newswire and directly to:
o Peninsula Daily News
o KONP
o KPLU
• Pitch story about the phase one results to all three media outlets linking the
results to larger benefits for the City and the region
AMI Communications Plan— November 5. 2010 • Prepared for City of Port Angeles • www.parkerlepla.com • 206 285 5280
11
PHASE FIVE: AFTER FULL IMPLEMENTATION, FULL
TRANSPARENCY
12
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14. Provide customers with the information they need to
manage costs
• Redesign the utility bill to simply communicate usage in peak and off -peak times;
highlight a usage comparison between the customer and the average for their
block or neighborhood and between the current year and the previous year's
usage.
o Explain the new bill through an accompanying utility bill insert so people
know how to read it.
o Create a newly designed newsletter style utility bill insert to send twice per
year, starting with the new utility bill
15. Measure customer satisfaction with the process and
system and make results public
• Send survey via utility bill insert two billing cycles after the install. Measure
satisfaction and ask about benefits /impacts via 2 open -ended questions.
o Provide postage -free response envelope
• Provide link to survey online via City website home page and Utility Information
Center
• Post results on City website and city Intranet, including detailed results on Utility
Information Center page
16. Keep city employees and the public informed about
city government and overall system usage (electricity
and water)
• Starting with pre- implementation, benchmark key statistics annually and
communicate the comparisons
o City website, Intranet and mini AMI website at least twice per year
o Bill insert newsletter twice per year
• Develop 2 press releases as usage and customer satisfaction results become
available (initial results post -full implementation and 6 months later)
AMI Communications Plan— November 5, 2010 • Prepared for City of Port Angeles • www.parkertepla corn • 206 285 5280
■
o Distribute via newswire and to the following media outlets:
• Peninsula Daily News
is KONP
• KPLU
• Pitch articles /coverage about the impacts of AMI to the same three news outlets
(see above).
17. Continue to engage customers and the larger
community
• Post customer "sensible success" stories on the Utility Information Center /AMI
section of the city's website
o Invite customers to submit their stories via website email form
Par erLeP a
o Free CFL (or other relevant promotional gift) for stories that are posted
• Enlist local businesses to compete against each other for the most energy saved
• Develop visuals that demonstrate usability and benefits of the system for the
Utility Information Center page
o Average usage patterns per neighborhood, allowing a customer to see how
their usage, as reported on their bill, compares to the average and to other
areas in the City
o Thermostat that illustrates the amount of peak hour use avoided (in
comparison to baseline year)
• Connect results to things people care about, such as conservation
o Report cumulative decrease in the amount of energy and water used
• Translate that into a concrete benefit such as the amount of salmon
or salmon habitat saved, the amount of greenhouse gas not emitted
• Integrate all the above via all established communications channels:
o Utility Information Center /AMI pages on the City's website
o Bill inserts
a Story ideas to local media
AMI Communications Plan— November 5, 2010 • Prepared for City of Port Angeles • www.parkerlepla.com • 206.285.5280
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IMPLEMENTATION BUDGET FOR PARKER LEPLA SERVICES
Parker LePla's role is to provide tools and support to the City of Port Angeles' AMI
system project staff so they are able to implement the plan outlined in this
document.
,'Phase One and :Phase •Two,Activities ensuring ;tha
Customer:Service Representatives
responsibility ' for - the: AMI. system, and outreac
stafareprepared to assist customers and..thaf
fundamental =` communications tools: to help.citizen s"
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2011
Phase One. Two, Three. Four and Five Activities,
ensuring that information is available to be shared
with customers and citizens in avariety of forms,
and that City leadership and all employees are $33,478 $1,522 $35,000
well- informed and able to assist citizens .
throughout the AMI system implementation
process; and begin updating customers on impacts:
(phase five will continue into 2012)_
AMI Communications Plan— November 5, 2010 • Prepared for City of Port Angeles • www parkerlepla.com • 206.285 5280
14
Professional
Services
(including printing)
Par erLeP a
Media
Placement
TOTAL
Date:
To:
From:
Subject:
PORT i NGELES
W A S H I N G T O N , U.S.A.
Utility Advisory Committee Memo
November 9, 2010
Utility Advisory Committee
Phil Lusk, Power Resources Manager
Advanced Metering Infrastructure System Communications Plan Consultant
Agreement Amendment No. 1
Summary: The firm of Parker LePla has completed its initial scope of work by developing a
Communications Plan to support the implementation of the Advanced Metering Infrastructure
System. As requested by the Utility Advisory Committee in August, Parker LePla is now
positioned to complete the remaining tasks by developing a companion Communications Plan for
the Demand Response Pilot Project, as well as developing and implementing media materials for
both plans.
Recommendation: Forward a favorable recommendation to City Council to authorize the
City Manager to sign Amendment No. 1 to the Agreement with Parker LePla in an amount
not to exceed $69,801, and to make minor modifications to the agreement, if necessary.
Background /Analysis: On August 17, 2010, City Council authorized the City Manager to
sign a consultant agreement with Parker LePla in an amount up to $35,917 to perform necessary
services to create a Communications Plan for the City's Advanced Metering Infrastructure (AMI)
System. The Communications Plan includes developing customer (external) and staff (internal)
education programs including informational messages that need to be shared prior to, during, and
after the project.
Based on input from the Utility Advisory Committee, development and implementation of needed
media materials as part of the Communications Plan were deleted from the original agreement with
Parker LePla. The needed media materials to support the demand response pilot project include
recruitment materials, a website, customer surveys, and ancillary marketing materials. The needed
media materials to support the AMI System include billing inserts, posters, and door hangers. The
cost of developing and implementing media advertisements is included in the amended scope of
work and the expenses have been included in the City's 2010 revised and 2011 proposed budgets.
Staff has negotiated a $9,550 fee for developing the Residential DR Communications Plan, and a
$15,450 fee for development and implementation of Residential DR media materials, for a total
amount not to exceed $25,000. Grant funding in the amount of $25,000 will be provided by the
BPA for the Residential Demand Response portion of the scope of work. Staff has also negotiated
a $44,801 fee for developing and implementing AMI System media materials.
N \UAC \Final \Communications Plan Consultant Agreement Amendment No 1 doc
Advanced Metering Infrastructure System Communications Plan Consultant Agreement Amendment No. 1
November 9, 2010
Page 2
The table below summarizes the proposed amendment to the scope of work and fee for consulting
services.
COMMUNICATIONS PLAN SCOPE OF WORK ADDITION Cost
Residential Demand Response Communications Plan Development $ 9,550
Communications Plan Subtotal $ 9,550
DEVELOPMENT & IMPLEMENTATION OF MEDIA MATERIALS SCOPE OF WORK ADDITION Cost
2010 AMI Media Materials $ 9,801
2011 AMI Media Materials $ 35,000
2011 Residential Demand Response Media Materials $15,450
Media Materials Not To Exceed Subtotal $60,251
Total $69,801
If City Council accepts the BPA Commercial and Industrial DR grant, a future amendment to the
consultant agreement with Parker LePla will be necessary.
Staff recommends that the Utility Advisory Committee forward a favorable recommendation to
City Council to authorize the City Manager to sign Amendment No. 1 to the Agreement with
Parker LePla in an amount not to exceed $69,801, and to make minor modifications to the
agreement, if necessary.
OJ NGELES
W A S H I N G T O N , U.S.A.
UTILITY ADVISORY COMMITTEE MEMO
Date: November 9, 2010
To: Utility Advisory Committee
From: Dan McKeen, Fire Chief
Subject: Proposed Medic I Utility Rate Adjustments
Summary: To reduce the size of future Medic I rate increases and to decrease the size of the
General Fund contribution to the Medic 1 Utility, staff is proposing a 9% adjustment to the rates.
This adjustment reflects a $0.39 increase for monthly residential rates and a $0.41 increase for
monthly commercial/business rates. In addition, staff is proposing to extend its Medic I Utility
rate discount programs to include multi- family facilities that provide subsidized housing to
seniors, people with mental or physical disabilities and to people who are homeless.
Recommendation: Forward a favorable recommendation to the City Council to:
1) Conduct a public hearing then provide a first reading of the proposed ordinance on
November 16, 2010, and
2) Continue the public hearing on December 7, 2010, close the public hearing, then provide
a second reading and adopt the proposed ordinance.
Background /Analysis: The City of Port Angeles' Medic I program is structured as a utility —
supported through an Enterprise Fund using transport charges, a monthly utility charge, and a
General Fund contribution. The Enterprise Fund is based upon a cost of service approach, with
the last cost of service study completed in 2009.
As a result of the 2009 cost of service study, the monthly residential rate was adjusted in 2010 by
$0.08 and the commercial/business monthly rate was adjusted by $0.19. This slight increase in
rates was made possible through the one -time use of $76,000 from the Utility's operating
reserves and was intended to soften the financial impact on customers from large rate increases
during the current economic climate. Unfortunately, the use of reserves cannot continue to 2011.
To avoid widening the gap between the Medic I Utility's expenses and the revenue received by
the Utility, staff is recommending a 9% adjustment to the Utility's monthly fees for 2011. Even
with this adjustment, it will be necessary to increase the General Fund contribution to support
Medic I over the amount budgeted in 2010.
Proposed Medic I Utility Rate Adjustments
Page 2
November 9, 2010
The proposed adjustment reflects a $0.39 increase for monthly residential rates and a $0.41
increase for monthly commercial /business rates. The amount of the proposed increase for high
demand user classifications, such as nursing homes and assisted living facilities, depends upon
their user classification.
As costs for basic needs increase, many low -wage and fixed- income households rely on
programs that provide discounted utility costs just to make ends meet. The City of Port Angeles
provides such utility discount programs, with many qualifying households participating. The
City's Medic I utility is part of this program. In addition, households that are Medicaid eligible
and receive in -home services can receive a Medic I Utility fee exemption under a separate
program.
Multi- family facilities that provide subsidized housing to seniors, people with mental or physical
disabilities and to people who are homeless; clearly meet the intent of providing a Medic I Utility
fee discount. Because some of these facilities are served by a single utility connection, they fall
outside of the Medic I rate discount programs. Staff is proposing to provide these facilities with
a 30% reduction in their monthly Medic I Utility rates. This discount would assist these facilities
in meeting their basic financial obligations and would have little impact on the utility as there are
a limited number of qualifying facilities.
Attachment: Proposed Ordinance
N \UAC \Final \Medic 1 Rate Study doc
Legal Dept. Draft 41; 11.01 10
AN ORDINANCE of the City of Port Angeles, Washington, revising Chapter
13.73 of the Port Angeles Municipal Code relating to Medic 1 Charges.
THE CITY COUNCIL OF THE CITY OF PORT ANGELES DO HEREBY ORDAIN
AS FOLLOWS:
Section 1. Ordinance 3215, as amended, and Chapter 13.73 of the Port Angeles
Municipal Code are hereby amended by amending section 13.73.300 and Exhibit A PAMC to
read as follows:
PART C - FEES
13.73.300 Utility Rate Setting.
ORDINANCE NO.
A. Fee Formula. A monthly service fee for the operation of the Utility shall be
established from time to time by ordinance of the City Council in conformity with RCW
35.21.766. The amount of the fee shall be based upon cost of regulating ambulance service and
the cost of providing Medic I as determined by a cost -of- service study done pursuant to RCW
35.21.766(3). Those costs, after transport charges and the general fund contribution, shall be
divided among Port Angeles residents and occupants based on a combined demand and
availability calculation consistent with accepted principles of utility rate setting.
The rate attributable to costs for availability of the Utility shall be uniformly
applied across user classifications within the Utility. The rate attributable to costs for demand
services of the Utility shall be established and billed to each utility user classification based on
each user classification's burden on the Utility. The fee charged by the Utility shall reflect a
combination of the availability cost and the demand cost. The resulting fee shall be assessed to
identifiable use classifications.
Fees will not exceed the revenue requirements to cover the costs of the Utility,
as authorized by the City Council by adoption of an annual budget and subsequent amendments.
Legal Dept Draft # 1; 11.01.10
B. Classifications. The monthly service fee shall be collected from each of the
following utility user classifications:
1. Residential.
2. Adult family homes.
3. Assisted living facilities
4. 24 -Hour nursing facilities
5. Group homes
6. Jail facilities
'7. Schools
8. Commercial/Business
9. City public areas
The owner or occupant of each unit in such classifications shall be responsible
for payment of this utility fee for the availability and use of ambulance services.
C. Service Fee Exemptions/Reductions.
1. All vacant, unoccupied parcels are exempt from the Utility fee.
2. Utility customers shall be eligible for the City's Senior and Disabled Low
Income Discount pursuant to PAMC chapter 13.20.
3. Any change in use of a parcel or any other change in circumstance that
eliminates application of an exemption from the service fee shall immediately make the affected
property subject to applicable service fees. The service fee shall become due and payable as of
the date of the change in use and shall continue until the parcel again meets exemption
requirements.
4. Monthly rates shall not be prorated. Initial and final charges may be
prorated in accordance with the City's standard utility proration practices.
5. Any customer seeking an exemption from payment of the service fee
and/or conversion from covered to exempt status, must file a written petition with the Finance
Director seeking a determination as to whether a specific parcel satisfies the exemption
requirements set forth in this section.
6. The combined rates charged shall reflect an exemption for persons who are
medicaid eligible and who reside in a nursing facility, boarding home, adult family home, or
receive in -home services.
7. The combined rates charged may reflect an exemption or reduction for
designated classes consistent with Article VIII, Section 7 of the state Constitution.
8. The amounts of exemption or reduction shall be a general expense of the
Utility, and designated as an availability cost, to be spread uniformly across the Utility user
classifications.
9. Multiple residential units that are served by a single utility connection shall
be given the option of (1) paying the utility fees for the units as a single combined amount or (2)
charging an monthly fee to each unit occupant. Those that select the first option shall be entitled
to a rate adjustment based on average occupancy, and shall receive a 25% reduction from the
utility fees calculated pursuant to Section 13.73.400.
10. Federal or state subsidized multi - family housing complexes that are served
by a single utility connection shall receive a 30% reduction in the combined rates charged from
the utility fees calculated pursuant to Section 13.73.400. For purposes of the preceding sentence.
-2_
Legal Dept Draft #1; 11 01.10
subsidized housing means housing provided to people who are categorized (11 as low - income
and Mare 65 years of age. or have mental or physical disabilities or who without the subsidized
housing. would be homeless.
D. Periodic Service Fee Review. The City Manager or his /her designee will
periodically perform financial review and analysis of the Utility's revenues, expenses,
indebtedness, fees and accounting, and recommend budgets, fee adjustments and financial policy.
Based on such review, the City Manager or his designee shall recommend changes, amendments
or additions for adoption by the City Council.
E. The total revenue generated by the rates and charges shall not exceed the total
costs necessary to regulate, operate, and maintain an ambulance utility.
Section 2. Ordinance 3215, as amended, and Chapter 13.73 of the Port Angeles
Municipal Code are hereby amended by amending Section 13.73.400 and Exhibit A PAMC to
read as follows:
PART D
13.73.400 Charges Established. In accordance with the rate study presented to the City
Council, effective January 4, 2010 the base rates and fees for the Utility shall be as follows:
User Classification
Residential
Adult family homes*
Assisted living facilities*
24 -Hour nursing facilities*
Group homes*
Jail facilities*
Schools*
Commercial/Business
City public areas
Rate
$52.20 per year, per unit
$852.00 per year, per classification
$12,574.00 per year, per classification
$6,184.00 per year, per classification
$1,936.00 per year, per classification
$1,290.00 per year, per classification
$2,031.00 per year, per classification
$54.93 per year, per unit
$12,947.00 per year, per classification
* Rates for individual facilities do not include allowable exemptions and vary based upon their
percentage of use within that classification. For individual facility rates, with allowable
exemptions, see Exhibit A.
* Effective January 1. 2011. the 2010 individual rates established by section 13.73.400 and
determined by Exhibit A. shall be increased by nine (9) percent.
Legal Dept. Draft ill, 11.01 10
Section 3 - Severability. If any provisions of this Ordinance or its applications to
any person or circumstances is held to be invalid, the remainder of the Ordinance or application
of the provisions of the Ordinance to other persons or circumstances is not affected.
Section 4 - Corrections. The City Clerk and the codifiers of this ordinance are
authorized to make necessary corrections to this ordinance including, but not limited to, the
correction of the scrivener' s /clerical errors, references, ordinance numbering, section/subsection
numbers and any references thereto.
Section 5 - Effective Date. This ordinance, being an exercise of a power specifically
delegated to the City legislative body, is not subject to referendum. This ordinance shall take
effect January 1, 2011.
PASSED by the City Council of the City of Port Angeles at a regular meeting of said
Council held on the day of , 2010.
ATTEST:
Janessa Hurd, City Clerk
PUBLISHED• . 2010
By Summary
Dan Di Guilio, Mayor
APPROVED AS TO FORM:
William E. Bloor, City Attorney
G \LEGAL1a ORDNANCES &RESOLUTIONSSORDINANCES 2010120 - Medic. 1
Uubty Rates.Chapter 13 102S10.wpd (November I. 2010)
24 -Hour Nursing Facility
Crestwood
1116 E Lauridsen Blvd
Group Homes
2nd Street House
138W2n
Clallam County Hostelries
1132 Hazel
Serenity House
2321W18
Adult Family Homes
Home Away. From Home
1319 W 16"
Olympic RN Adult Family
1725 W 11'
Good Shepherds Haven
2314 S Lincoln
Assisted Living
Laurel Park
1 133 6 Park Avenue
Park View Villa
1435 & 1445 Park View Ln
Peninsula Manor
1017 W t7
St. Andrews Place
520 East Park Avenue
Medic 1 Utility 2011 Annual Fees
Exhibit A
Amount Annual Fee After 2011
Facility Base Rate Utilization Before % of Exemption After Availability 2010 gala
Exemption Exemption Amount Exemption Adjustment Annual Fee Adjustment
$6,184 100% $6,184 60% $3,710 $2.474 $1 $2.475 $2,698
$1.936 15.2% $294 98% $288 $6 $1 $7 $8
$1,936 21.7% $420 100% $420 $0 N/A $0 0
51,936 63.1% $1,222 29%
1 $354 $868 $1 $869 $947
$852 58.3% $497 40% $199 $298 ! $1 $299 $326
$852 29.2% $249 0% $0 $249 $1 $250 $273
$852 12.5% $106 0% $0 $106 $1 $107 $117
1
$12,574 21.0% 1 $2,641 16% $423 $2,218 $1 $2,219 $2,419
$12,574 43.4% $5,457 0% $0 $5,457 $1 $5,458 $5,949
$12,574 5.8% $729 50% $365 $364 $1 $365 $398
$12,574 29.8% $3,747 63.57% $2,382 $1,365 $1 $1,366 $1,489
Facility Base Rate
Jail Facilities
Clallam County Adult
223 E 4'
Clallam County Juvenile
1912 W 18
Schools
Lincoln School
924 W 9'
Franklin Middle School
2505 S Washington
Hamilton Middle School
1822 W 7
Jefferson Middle School
218 West 12
Peninsula College
1502 E Lauridsen
Port Angeles High School
304 East Park Avenue
Queen of Angels
209 W 11'
Stevens Middle School
1 139 W 14th
$2,031
$2,031
$2,031
$2,031
$2,031
$2,031
$2,031
$2,03 I
Utilization
%
Amount
1 Before
E xemption
of Exemption
Exemption Amount
$1,290 71% $916 N/A N/A $916 $1 $917 $1,000
51,290 29% $374 N/A N/A $374 $1 $375 $409
4.3% $87 NIA N/A $87 $ 1 $88 $96
2.1% $43 N/A N/A $43 $1 $54.93 $59.87
6.4% $130 N/A N/A $130 $1 $131 $143
2.1% $43 N/A N/A $43 $1 $54.93' $59.87'
14.9% $303 N/A N/A $303 $1 $304 $331
34.1% $692 N/A N/A $692 $1 $693 $755
10.6% $215 N/A N/A $215 $1 $216 $235
25.5% $518 N/A N/A $518 $1 $519 $566
1 High demand user classifications that do not qualify for an exemption cannot have a per -unit fee less than that of the commercial /business classification.
2
Annual Fee
After
Exemption
Availability I 2010
Adjustment 1 Annual Fee
After 2011
9%
Adjustment
Facility
Gerald Austin Apartments
1305 E 1st
Bayview Apartments
306 W 1st
8th Street Apartments
615 W 8th
Housing Authority Apart
323 East 2nd
Housing Authority Apart
401 E 5th
Morning Glory Apartments
529 E 1st
Rozelle Apartments
212W3rd
Jean Tyson Apartments
405 E Front
Uptown Apartments
120 S Laurel Street
Tempest Apartments
112 N Albert Street
Apartment Buildings with Single Utility Connection
Fee After Combined
Base Rate Average Vacancy Vacancy 25% Billing Fee After 25% Availability 2010 After 2011
Vacancy Amount Exemption Adjustment Adjustment Adjustment Annual Fee
P Adjustment Adjustment
$1,337 20% $267 51,070 $268 $802 $29 $831 $906
$617 18% $111 $506 $127 $379 $13 $392 $427
$411 40% $164 $247 $62 $185 $9 $194 $211
$3,600 2.02% $73 $3,527 $882 $2,645 $77 $2,722 $2,967
$2,057 0% $0 $2,057 $514 $1,543 $44 $1,587 $1,730 2
$463 0%
$0 $463 $116 $347 $10 $357 $389
$514 0% $0 $514 $129 $385 $11 $396 $432
$206 0% $0 $206 $52 $154 $4 $158 $172
$309 0% $0 $309 $77 $232 � $7 $239 $26
$669 0% $0 $669 $167 $502 $14 $516 $562
1 Less 30% subsidized housing adjustment of $890 for a final 2011 annual fee of $2,077
2 Less 30% subsidized housing adjustment of $519 for a final 2011 annual fee of $1,211
3 Less 30% subsidized housing adjustment of $169 for a final 2011 annual fee of $393
3
p ORTANGELES
W A S H I N G T O N , U.S.A.
Utility Advisory Committee Memo
Date: November 9, 2010
To: Utility Advisory Committee
From: Michael Puntenney, P.E., City Engineer
Subject: Consultant Agreement: Combined Sewer Overflow Phase I, Constructability Review
Summary: The City has committed to completing the Phase 1 Combined Sewer Overflow (CSO)
Project by the end of 2013. The complexity of this project is extensive in both its technical
requirements as well as the interdependencies that exist between the multiple organizations that
will be involved during construction. Presently the City has received Brown and Caldwell's 90%
design sub'mission. A constructability review of the design at this stage is an indispensable step for
a project of this complexity.
Recommendation: Forward a favorable recommendation to City Council to authorize the
City Manager to sign a consultant agreement for a constructability review for the Combined
Sewer Overflow Phase 1 project design.
Background /Analysis: The City has committed to completing the Phase 1 Combined Sewer
Overflow Project by the end of 2013. The complexity of this project is extensive in both its
technical requirements as well as the interdependencies that exist between the multiple
organizations that will be involved during construction. This first phase of the CSO project
includes a gravity sewer main, two new force mains to convey flow from pump station #4, flow
diversion facilities, various plant improvements and conversion of an existing industrial high
capacity outfall to relocate discharges to a location outside of Port Angeles Harbor. The project
goes through the Rayonier industrial site including areas of potential contaminated soil with Model
Toxics Control Act (MTCA) cleanup requirements as well as archaeological aspects. With a
construction budget in the range of $20M - $25M, the City will have a large investment at stake.
Presently the City has received Brown and Caldwell's 90% design submission. A constructability
review of the design at this stage by an independent third party is an indispensable step for a
project of this complexity. Constructability reviews for projects of this nature are performed to
lower construction costs by reducing the risk of change orders and to avoid unnecessary delays
during construction. Industry -wide, the expected savings from constructability reviews varies
from design to design, but typically reduces change order costs by at least five times the amount
invested in the review, and in some case studies the return on investment has been 25 fold.
N \UAC \Final \CSO Constructability Review doc
Consultant Agreement: Combined Sewer Overflow Phase I, Constructability Review
November 9, 2010
Page 2 of 2
Typical benefits of a constructability review include:
• Reduced quantity of change orders and savings in contingency funds
• Reduced Requests for Information (RFI's), saving time and the cost of processing
• Improved ability to keep projects on schedule
• Reduced contract administrative costs
• Improved relationships between the owner, designer, contractor, and regulators
The City is on a very tight timeline to effect the sale of the Rayonier property, obtain State
sponsored loans, complete the design effort, obtain permitting, and advertise the construction
project by summer 2011. To maintain the schedule, it is imperative that this constructability
review be completed by mid - December 2010. Consequently, the consultant agreement for this
constructability review is needed by mid - November. Staff has advertised for Statements of
Qualification (SOQs) in the Seattle Daily Journal of Commerce and the Peninsula Daily News,
with receipt of SOQs on November 5, 2010. The schedule for this effort is as follows:
• Nov 5 Open proposals
• Nov 9 Recommendation to UAC, and negotiate contract
• Nov 16 Council approval to sign contract
• Nov 17 Notice to Proceed
• Dec 17 Recommendations to Brown and Caldwell
• Jan 20 Final Design Submission
• Feb 5 Final Review Complete
• Feb 15 Final Design Signed and Issued
Results of the evaluation of the SOQs has not been completed as of the authoring of this
memorandum. An updated version of this memorandum will be provided at today's meeting.
CITY OF
FPORT NGELES
W A S H I N G T O N , U.S.A.
Utility Advisory Committee Memo
Date: November 9, 2010
To: Utility Advisory Committee
From: Phil Lusk, Power Resources Manager
Subject: Bonneville Power Administration Commercial & Industrial Demand Response Grant
Acceptance
Summary: A proposal was submitted in September to the Bonneville Power Administration for a
Commercial and Industrial Demand Response Pilot Project and an award in an amount not to
exceed $384,520 was offered to the City.
Recommendation: Forward a favorable recommendation to City Council to authorize the
City Manager to sign an agreement with the Bonneville Power Administration for up to
$384,520 for the City's Commercial and Industrial Demand Response Pilot Project, and
make minor modifications to the agreement, if necessary.
Background /Analysis: Demand response (DR) is a practice that cycles or shuts down
customer equipment during peak electric utility demand events to reduce Bonneville Power
Administration (BPA) wholesale demand charges. At its simplest, DR uses a device to briefly
curtail the power supplied to major appliances, equipment loads, or space conditioning units. Peak
demand is measured as the maximum rate of energy consumed during one hour within heavy load
hours (6am to 10pm Monday through Saturday) each month.
Although DR is not a new practice for electric utilities across the nation, it has not been used by
most electric utilities buying power from the BPA due to low peak demand rates. However,
beginning October 1, 2011, the primary opportunity for the City to reduce its wholesale power
costs under BPA's new wholesale Tiered Rate Methodology (TRM) will be to manage its peak
demand. While there are many unresolved details, peak demand management may be able to
reduce the City's TRM wholesale power costs by as much as $3 million annually ($1.6 million
distribution system; $1.4 million industrial transmission system).
Earlier this year, the Utility Advisory Committee supported and City Council approved the
submission of a proposal to the BPA to participate in its Funding Opportunity for Commercial and
Industrial (C &I) Demand Response (DR) Pilot Projects. The City submitted a proposal, and the
BPA issued a formal notification of its intent to award an agreement to the City, with the BPA
cost -share not to exceed $384,520. Staff has been advised that the BPA is still deliberating
whether to use a Cooperative Agreement or a Memorandum of Understanding as the contracting
instrument to be used for the award.
N \UAC\Final \BPA C &1 DR Grant Acceptance doc
BPA Commercial and Industrial Demand Response Agreement
November 9, 2010
Page 2
While a number of key commercial and industrial accounts will participate in the pilot, staff is
particularly pleased with one element of the award that would allow The Landing Mall to install a
Catalyst Energy Technologies (CET) intelligent energy storage package referred to as Smart
Storage KitsTM (SSK). The SSK is intended for load shaping, added reliability, and for reducing
generator fuel consumption in off -grid applications. CET, a Port Angeles -based company, has
established relationships with key component providers, tested relevant key technologies, installed
pilot systems, conducted marketing studies and is developing a utility -grade SSK in sizes from 4-
kW to 50 -kW. The first lithium -ion (LI) battery test was successfully completed in mid - September
2010 and the next development stage is installing a 48 -kW SSK in a controlled, commercial
application.
While the exact amount of funding may be reduced, the City's proposal requested a total of
$384,520 from BPA. Of this amount, a total of $333,920 in BPA funds is currently programmed
for DR equipment and customer incentives.
As with the Residential DR Pilot Project, EES Consulting, Inc. (EESC) will assist the City by
performing the economic evaluation of the cost - effectiveness of C &I DR and other technical
project - related support services. At the conclusion of its evaluation, EESC will provide the City
and BPA with a final report describing the data input, the economic analysis and resulting cost -
effectiveness of the C &I DR strategies evaluated. This final report will provide the information
required to determine if a full -scale deployment of C &I DR is warranted. The EESC contractual
services will not exceed a total of $40,600, with a 100% cost share to be provided by the BPA.
The economic and technical services are important to BPA because they plan to use the final report
as part of its decision making for future programs.
Similar to the efforts on the AMI System and Residential DR Pilot Project, the C &I DR project
will include the development of a communications plan for the City's C &I customers using the
consulting firm of Parker LePla, whose contractual services will not exceed a total of $10,000,
with a 100% cost share to be provided by the BPA.
Staff plans to be propose amendments to the consulting agreements for EES Consulting and Parker
LePla for the C &I DR project at a future Utility Advisory Committee meeting.
Staff requests that the Utility Advisory Committee forward a favorable recommendation to City
Council to authorize the City Manager to sign an agreement with the Bonneville Power
Administration for up to $384,520 for the City's Commercial and Industrial Demand Response
Pilot Project, and make minor modifications to the agreement, if necessary.
Attachments: C &I DR Narrative Proposal
COMMERCIAL AND INDUSTRIAL
DEMAND RESPONSE PILOT
SUBMITTED BY:
CITY OF PORT ANGELES, WASHINGTON
u• PORT A
4 :40,4 4p s ie li f
grik
SUBMITTED TO:
U.S. DEPARTMENT OF ENERGY
BONNEVILLE POWER ADMINISTRATION
SEPTEMBER 30, 2010
City of Port Angeles Commercial and Industrial DR Pilot Projects
TABLE OF CONTENTS
1. PROJECT DESCRIPTION 1
1.1 GENERAL DESCRIPTION 1
1.2 PROJECT RATIONALE 1
1.3 GOALS AND OBJECTIVES 2
1.4 END -USER IMPACT 2
1.5 INCENTIVE 3
1.6 PERSISTENCE OF ASSETS 3
2. PROPOSED TECHNOLOGY 3
3. EXPECTED IMPACT TO CAPACITY 4
4. READINESS 4
5. TASKS 4
5.1 TASK 1- ADMINISTRATION 5
5.2 TASK 2 - DEVELOPMENT OF DEMAND RESPONSE PROTOCOL 5
5.3 TASK 3 - DEMAND RESPONSE EQUIPMENT TESTING 5
5.4 TASK 4 - ECONOMIC EVALUATION 11
6. PROJECT TIMELINE 11
7. MEASUREMENT AND VERIFICATION 12
8. CHALLENGES 12
9. KEY PERSONNEL 12
9.1 THE CITY OF PORT ANGELES 13
9.2 EES CONSULTING 14
9.3 CAPACITY PROVISIONING, INC. 14
9.4 AMI SYSTEM VENDOR 15
10. BUDGET 15
ATTACHMENT A- RESUMES
ATTACHMENT B - PROPOSED BUDGET
ATTACHMENT C- BUDGET JUSTIFICATION NARRATIVE
ATTACHMENT D- LETTERS OF SUPPORT AND CITY COUNCIL APPROVALS
September 30, 2010 Pagel
City of Port Angeles Commercial and Industrial DR Pilot Projects
LIST OF TABLES
TABLE NO. TITLE
3 -1 MAXIMUM DEMAND REDUCTION
5 -1 INTEGRATED LOAD MANAGEMENT RESOURCES
5 -2 INTEGRATED LOAD MANAGEMENT SUMMARY
5 -3 FAST DR / RENEWABLE ENERGY INTEGRATION SUMMARY
5 -4 DIRECT LOAD CONTROL SUMMARY
6 -1 PROJECT TIMELINE
PAGE No.
4
6
7
8
9
11
LIST OF FIGURES
FIGURE NO. TITLE PAGE No.
9 -1 PROPOSED PROJECT TEAM ORGANIZATION CHART 12
September 30, 2010 Page it
City of Port Angeles Commercial and Industrial DR Pilot Projects
1. PROJECT DESCRIPTION
1.1 GENERAL DESCRIPTION
This proposal is submitted in response to the Project Implementation Plan issued by the Bonneville Power
Administration (BPA) and Global Energy Partners, LLC (Global) for Commercial and Industrial (C &I)
Demand Response (DR) Pilot Projects. The City's Utility Advisory Committee (UAC) and City Council
authorized the submission of this proposal during July 2010. The proposed pilot project will fulfill all
key goals that have been identified as regional focus areas. These focus areas are: 1) Integrating
renewable into grid; 2) Managing winter peaks; 3) Handling grid disruptions, and; 4) Integrating energy
efficiency and DR activities.
The City of Port Angeles (City) is actively involved in upgrading its electric utility with an Advanced
Metering Infrastructure (AMI) system with smart meters capable of incorporating rate designs to mimic
BPA's forthcoming wholesale power Tiered Rate Methodology (TRM). If this pilot project is selected
for funding by BPA, the City will purchase and install DR equipment at selected C &I facilities and
integrate BPA and City load data via a fiber optic network. Once the pilot DR equipment is operational,
the City will collect qualitative and quantitative data for a maximum of 15 months. The pilot project will
conclude with the submission of a report that, based on load and survey data, will evaluate the cost -
effectiveness of DR and the City's C &I customer's acceptance of DR technologies, including lessons
learned during the test period.
As a result, the City is uniquely positioned to be able to assist the BPA in achieving its objectives for the
C &I Pilot Project, with the overarching objective to identify and implement practical DR pilots in the
C &I sectors. The City supports BPA's vision that experiences from these pilots will be used to broaden
the DR knowledge base in the Pacific Northwest and that findings from these pilots will ultimately be
shared in some form with regional participants. Specific priorities for reaching these objectives in the
City's proposal include: 1) Ensure stakeholder involvement and a transparent project implementation
process; 2) Identifying, preparing, and securing viable pilot participants; 3) Demonstrating the technical
feasibility of DR pilots that have not been proven elsewhere; 4) Successfully demonstrating how DR can
facilitate grid integration of intermittent renewable resources, especially wind, to address generation
variability; 5) Demonstrating load shifting strategies in combination with load curtailment that result in
shifting peak period loads to off -peak hours, along with load reduction during peak periods; 6) Building
customer success with DR, and; 7) Demonstrating solutions that can be scaled up and applied elsewhere.
1.2 PROJECT RATIONALE
The City, located on the Northern Olympic Peninsula in Washington State, is an ideal location for C &I
DR technologies because the peninsula is presently served by a capacity- constrained, single -feed radial
transmission system. The area has experienced significant population growth and it is projected that
power- transmission capacity in the region may be inadequate to supply demand during extremely cold
winter conditions'. The development of wide -scale C &I DR options has the potential to benefit the City
and the region in avoiding costly transmission upgrades and lowering wholesale power supply costs.
Transmission issues may be further exacerbated by the Elwha Ecosystem Restoration Project, which is
the second - largest ecosystem restoration project in the history of the National Park Service after the
Everglades. This federal project will consist of removing two dams, the Glines and Elwha, and their
reservoirs from the Elwha River, which is expected to begin in 2011. Together, these two dams generate
2 Pacific Northwest National Laboratory, Pacific Northwest Grid Wise Testhed Demonstration Protects. Part 1 Olvmoic Peninsula Protect, DOE
Contract Number DE- ACO5- 76RL01830, October 2007
September 30, 2010 Page 1
City of Port Angeles Commercial and Industrial DR Pilot Projects
over 28 megawatts of electricity and are the only significant sources for power generation on the Northern
Olympic Peninsula. Their removal may create further challenges as power balancing between distant
generation sources and local demand for the City and the BPA.
In 2010 and 2011, Port Angeles will purchase and install a new AMI system, including electric and water
meters for nearly all of its utility customers, and will develop a robust two -way communications system
and integrate it with the City's existing fiber -optic network. This project also includes an initial
investigation of "Smart Grid" applications such as distribution automation, peak load management and
DR, and business area networks. A key deliverable for the AMI system will be its flexibility to interface
with the electric utility's Supervisory Control and Data Acquisition (SCADA) System to control DR
events and the City's substation Voltage Optimization (VO) system.
In preparing for the shift to the BPA's TRM for wholesale power purchases effective October 1, 2011, the
City has conducted an assessment to evaluate methods to equitably allocate the BPA wholesale TRM
power costs to customer rate classes (e.g., residential, commercial, etc.), develop retail rate design options
for each rate class based on the shift to BPA wholesale TRM power costs, evaluate cash reserve needs,
and develop a capital financing strategy. The most advantageous retail rate design to respond to BPA's
wholesale TRM was found to be a seasonal Time -of -Use (TOU) rate with a demand charge, which was
approved by City Council on August 17, 2010, and will become effective on January 1, 2012. This
recommended rate design for all customer classes, similar to the City's current Municipal Water Pump
rate design and an optional TOU rate schedule that has been available to all City electric utility customers
since 2007, will also feature an inclining block demand rate. As a result, future DR programs for all
customer classes are planned to incentivize customer's to avoid exceeding their contract demand quantity
(CDQ), to help maintain similar load shape to BPA, and to help mitigate critical peak periods
1.3 GOALS AND OBJECTIVES
In addition to the regional goals noted above, the City has two primary project goals. In anticipation of
the change to the TRM, the first project goal is to demonstrate the ability to mitigate the City's critical
peak demand period in order to meet the following objectives:
• Delay or eliminate regional transmission system upgrades
• Reduce the City's peak demand above its assigned CDQ
• Reduce wholesale power supply costs to the City's electric utility customers.
The second project goal is to work with BPA to reduce demand on BPA's transmission system. This
proposal includes implementing the Open Automated Demand Response Communication Standards
(OpenADR) communications protocol between BPA and the City so that BPA is able to take advantage
of the identified automated and dispatchable DR resources.
1.4 END -USER IMPACT
The City, along with Global, approached more than 20 of the City's largest customers regarding their
participation in the C &I DR Pilot Project. The City will move forward at this time with DR pilot projects
with nine of the City's largest C &I customers and another 250 commercial customers. Following the
implementation of the pilot project, these DR efforts will be expanded to include other City C &I
customers as will be further detailed below. For this pilot project, the City expects to achieve an initial
overall peak reduction of 1.98 MW as outlined in Table 3 -1 below. The City is also proposing a
dispatchable DR component to the pilot project that would allow BPA to control its peaks for both
generation and transmission systems serving Port Angeles.
z The City's electric utility's non - coincident peaks in the winter month have a greater than 90% probability of occurring between 6 00 a m and
10 00 a m For the purposes of the proposal, this time period will be referred to as the City's "critical peak "
September 30, 2010 Page 2
City of Port Angeles Commercial and Industrial DR Pilot Projects
1.5 INCENTIVE
As previously noted, the City is in the process of implementing demand rates for all customer classes. At
a minimum, the City's future demand rate will be set at BPA's wholesale rate to the City (the current
indicative rate is estimated to be $8.50/kW). Project participants will have to be able to consistently
reduce their monthly demand to maintain cost savings through lower retail demand costs on their utility
bill. For the City's C &I customers scheduled to participate in the Integrated Load Management project
component, incentives are based upon a "mock" market concept that has a rate adder during the DR event
plus an equipment incentive. The "mock" market concept would not really penalize for not shedding, but
post -event information will be used to educate customers about the increased costs they would incur for
not reducing load. Using this "mock" market model, the city proposes using a hypothetical rate adder in
calendar year 2011 of up to $5.00/kW (in addition to current demand rates that vary by rate class) during
scheduled DR events.
1.6 PERSISTENCE OF ASSETS
The City intends to continue to use the pilot project assets following the pilot project's completion. The
City anticipates expanding this pilot project to include offering all C &I customers DR opportunities as it
strives to avoid exceeding its anticipated CDQ, to better match BPA's load shape and to minimize its use
of BPA's capacity constrained transmission system. Minor extensions of the City's fiber optic network
will be completed by Capacity Provisioning, Inc, which will be continued after pilot project completion.
2. PROPOSED TECHNOLOGY
The City is in the process of selecting a vendor for the purchase and installation of a turnkey AMI system
for its electric, water and wastewater utilities. The AMI system vendor will provide and install the DR
equipment proposed for this pilot project, some of which will directly interface to the City's electric
utility SCADA system.
The City is planning to use the following technologies:
• OpenADR communications infrastructure
• Client devices to accept OpenADR resources
• Metering (if required)
• System level network controllers
• Load control switches
• In- business displays
• Smart thermostats
• Data presentment
OpenADR communications infrastructure will consist of poly -phase and CT metered customers that will
receive DR signals directly from the City's SCADA system. OpenADR specifications will be essential to
ensure interoperability among technical components with open standard, platform- independent and
transparent end -to -end technologies or software systems. The design of the pilot will consider the
applicability of these technologies to specific industries or customer segments. OpenADR allows
customers to choose their level of response and how to enable DR strategies. OpenADR communications
will increase the number of facilities that participate in DR and eventually lead to reduced cost to frequent
participation in DR events.
September 30, 2010 Page 3
City of Port Angeles
3. EXPECTED IMPACT TO CAPACITY
As outlined in Table 3 -1, the C &I DR Pilot Project proposed by the City is expected to achieve a
maximum peak reduction of 1.98 MW each month. As a matter of scale, this represents the potential
ability to reduce the City's critical peak by about 1.5 %. Because the City does not have access to natural
gas, it is feasible to expand this DR pilot project to nearly all C &I customers to varying degrees with the
expectation that a mature C &I DR program might have up to a 50% market penetration among the
eligible customers. As will be further explained, dispatchable DR could add even a greater potential.
Task 3.1 — Integrated Load Management
Task 3.2 — Fast DR/RE Integration
Task 3.3 — Direct Load Control
TOTAL
Commercial and Industrial DR Pilot Projects
Maximum Load Shed (kW)
1,842.25
48.00
89.04
1,979.29
4. READINESS
The City is in the process of selecting an AMI system vendor, and has completed its initial review and
interviews of the responding vendors. The procurement process includes recommendation of the
preferred vendor to the Utility Advisory Committee (UAC). The UAC reviews all major projects and
issues affecting the City's utilities and makes recommendations to the City Council. The UAC is
composed of three City Council members, a representative from the industrial rate class and a
representative from the residential /commercial rate classes. The UAC meets monthly and the meetings
are open to the public.
The City Council approved the issuance of a revenue bond that provides funding for the AMI system.
The City expects to issue the AMI system vendor contract in November 2010. The selected AMI vendor
is required to install a "Phase 1" of the AMI system in conjunction with the BPA- sponsored residential
pilot DR equipment by March 2011, which will consist of the 600 AMI systems to be in support of the
residential DR pilot project. The complete balance of AMI system will be scheduled for completion in
the spring of 2011.
As will be further detailed, the AMI system can include ZigBee® as an integral part of the electric meter
for approximately 500 commercial general service customers. ZigBee functionality may only be
available for electric meter forms 1S, 2S and 12S, as around 500 other commercial meters may not be
functional with ZigBee. Among other measures, the C &I DR Pilot Project includes installing equipment
on the C &I customer side of the electric meter to manage energy use and demand. Further, the City has
staff available for the administration of the C &I DR Pilot Project as outlined later in this proposal.
5. TASKS
The purpose of the proposed pilot project is to implement a C &I DR effort aimed at reducing the City's
critical peak demand. The following tasks accomplish this goal on a pilot scale that can easily be
expanded to the City's remaining C &I customers.
September 30, 2010 Page 4
City of Port Angeles Commercial and Industrial DR Pilot Projects
5. 1 TASK 1- ADMINISTRATION
The City will provide the overall coordination of the DR pilot project. The City will coordinate all
vendor installation schedules with its electric utility customers. - The City will administer the day to day
tasks, including the following:
• Contractual agreements, if necessary, with customers to participate in the pilot project
• Communicate with customer participants
o Onsite training
o Notify customers of DR events
o Resolve customer issues
• Collect and compile metering data for evaluation task
• Prepare regular status reports to BPA
5.2 TASK 2 - DEVELOPMENT OF DEMAND RESPONSE PROTOCOL
The City also proposes to acquire BPA's load - balancing signal and transmit that information via the fiber
optic network in real -time to the pilot participants, along with real -time information regarding the City's
distribution system load, through its SCADA system. In general, the City is interested in scheduling a
total of four DR events with durations not expected to exceed two hours. Events will be categorized
according to the City's system characteristics, but they will likely occur during the winter heating season.
The specific frequency and time period for the events will be further defined in conjunction with the BPA
and the pilot project participants. There is also an opportunity for the BPA to schedule DR events that
can be determined upon project award.
Task 2 includes developing load reduction strategies for each participating customer, depending on
available resources. Different protocol may be designed based on curtailment event. Two types of DR
resources will be evaluated in each protocol. For customers where integrated load management is
possible, DR resources will consist of process rescheduling and /or voluntary load curtailment. For
customers where direct load control is appropriate, end -use will be curtailed using DR controllers.
5.3 TASK 3 - DEMAND RESPONSE EQUIPMENT TESTING
Under this task, the City will implement specific DR pilot projects at selected facilities. These DR pilot
projects can be divided into three categories:
• Integrated Load Management
✓ Nippon Paper Industries: Equipment shutdown during critical peak periods.
✓ Olympic Medical Center: Equipment shutdown and possible use of an alternate boiler fuel during
critical peak periods.
✓ Port Angeles Hardwood: Equipment shutdown during critical peak periods, combined with a
start-up time delay to provide load- shifting during morning hours.
✓ City of Port Angeles Water Treatment Plant: Reschedule backwash operation to non -peak
periods.
• Fast DR/Renewable Energy Integration
✓ Catalyst Energy Technologies: Incorporate an intelligent energy storage package referred to as a
Smart Storage Kit on the customer's side of the meter at The Landing Mall. The Landing Mall,
located on the downtown waterfront, is home to 18 groups and businesses. Among others, these
September 30, 2010 Page 5
City of Port Angeles Commercial and Industrial DR Pilot Projects
include three restaurants, two art galleries, the National Oceanic and Atmospheric
Administration, and the Chamber of Commerce.
• Direct Load Control
✓ North Olympic Library System: Heating, ventilation and air conditioning (HVAC) set point
change during the critical peak period.
✓ Clallam County Courthouse: Direct load control of two boilers and a freezer used for food
storage.
✓ Clallam County Housing Authority: Direct load control of domestic hot water supply provided
by electric water heaters.
✓ City of Port Angeles: Direct load control of electric water heaters, boilers, heat pumps, air
conditioners, and refrigeration in several buildings.
To ensure that the DR impacts can be captured over two heating seasons, data will be collected for a
maximum 15 -month period beginning January 1, 2011 and ending March 31, 2012. Pilot project details
follow.
TASK 3.1 — INTEGRATED LOAD MANAGEMENT
City C &I customers may enter into contracts with the City, or otherwise agree to curtail load by a pre -
specified amount (e.g., full /partial shutdown) during a DR event. This, combined with load shifting (e.g.,
rescheduling operations) provides for an integrated load management DR pilot project. Table 5 -1 below
summarizes the integrated load management resources identified for the C &I Pilot Project.
,Table5-1.
- , .,
vailable`; In' t e�rated Loadna�emenf,Resou'rces..;,
Fully OpenADR Day -Ahead Notice Rescheduling Curtailment
Automated
Nippon Paper Industries I I X I X I I X
PA Hardwood I X I X I X I I X
Olympic Medical Center I X I X I X I I X
PA Water Treatment Plant I X I X I X I X I X
The integrated load management pilot projects in this subtask are further described below. Table 5 -2
illustrates the potential demand reduction capable at each customer's facility, such as the current potential
demand reduction from a complete plant shutdown during a critical peak period or rescheduling the
backwash process to a period other than a critical peak period at the water treatment facility. As detailed
below, the maximum potential load shed from the integrated load management pilot projects is 1.84 MW.
Nippon Paper Industries, USA Co., Ltd is equipped with an individual custom load controller.
Programmable logic controllers (PLC) can be added and programmed to include automatic shut down.
Port Angeles Hardwood is equipped with Allen Bradley PLC's that are networked and provide complete
plant visibility from an operator console. Logic can be added to the controllers to include automated
shutdown.
Olympic Medical Center is equipped with a Siemens Direct Digital Control (DDC) system; a DR
strategy can be integrated into the Siemens DDC system to reset supply air temperatures for a specified
air - handling unit. The Pilot Project would decrease supply air temperature in the winter and increase
September 30, 2010 Page 6
City of Port Angeles
supply air temperature in the summer. The Olympic Medical Center also uses two electric boilers that are
manually operated, and with advance notice the electric boilers could be cycled off.
City of Port Angeles Water Treatment Plant is a new facility equipped with a fully- automated control
system. The facility operates a backwash cycle that is staggered during a week. The cycle includes a 15
minute process per filter for six filters. This process might be rescheduled to avoid a critical peak period.
Type of Equipment
Nippon Paper Industries
Filter Plant Back Wash Pumps
Subtotal
Port Angeles Hardwood
De- barker Ring
Hog
Whole Log Chipper
Overhead Dust Collector
Kilns (7)
Subtotal
GRAND TOTAL
T able;5 -2
ntegrated 1Vlanagement•ReSdOrce Summa
,,.� � � i t
Base Load Total for All Units
(kW)
18.65
18 65
59.70
149.20
238.70
44.80
564.00
1,056 30
Commercial and Industrial DR Pilot Projects
Maximum Load Shed
(kW)
18.65
18 65
59.70
149.20
238.70
44.80
564.00
1,056 30
Olympic Medical Center
Supply Air Temperature Reset 8.00 8.00
Electric Boiler (2) 625.00 625.00
Subtotal 633 00 633 00
City of Port Angeles Water Treatment Plant
Blower Motor 59.7 59.7
Pump and Motor 14.9 14.9
Pump and Motor 59.7 59 7
Subtotal 134 3 1343
1,842.25 1,842.25
TASK 3.2 — FAST DR / RENEWABLE ENERGY INTEGRATION
The Landing Mall will install a Catalyst Energy Technologies (CET) intelligent energy storage package
referred to as Smart Storage KitsTM (SSK). The SSK is intended for load shaping, added reliability and
arbitrage, and for reducing generator fuel consumption in off -grid applications. CET, a Port Angeles -
based company, has established relationships with key component providers, tested relevant key
technologies, installed pilot systems, conducted marketing studies and begun the development of a utility -
grade SSK in sizes from 4 -kW to 50 -kW. The first lithium -ion (LI) battery test was successfully
completed in mid - September 2010 and the next development stage is installing a 48 -kW SSK in a
controlled, commercial application. This battery-set is controlled by a patented Battery Management
System (BMS). The heart of the SSK is a proprietary inverter with the unique ability for capturing
reactive power (VAR) from any circuit with inductive loads, such as motors and florescent lighting, and
redelivering it back to the system as useful power. This unique characteristic can extended the storage -
duration in the batteries and deliver power with a unity power factor.
September 30, 2010 Page 7
City of Port Angeles , Commercial and Industrial DR Pilot Projects
For the C &I DR pilot, the SSK will operate on the customer side of the meter and provide power to the
end -user for an initial period of 90 days. During this period, the batteries will be cycled at least once a
day and the parties will evaluate the operation of the battery bank, inverter, charger and general benefits
to the end -user. The charging current will be provided by the utility (purchased by the end -user) and may
be supplemented by other renewable resources such as wind. During the initial pilot project phase, stored
power will not be exported to the utility. The City will be able to manually control the charging and
discharging cycles through its SCADA system, and evaluate the power factor improvement offered by
CET's inverter, as well as achieve some limited level of load shaping. The next pilot project phase will
install remote dispatching and communication hardware and software that will fully interface with the
City's SCADA system. This will allow the SSK to demonstrate its capability to fully function as an
instantaneously dispatchable resource ( "Fast DR ") and demonstrate how DR can facilitate grid integration
of intermittent renewable resources, especially wind, to address generation variability. CET will work
closely with the City during this pilot project phase to ensure the communication and dispatching protocol
is an exact fit. When all phases of the pilot project are completed, CET will turn over the project
equipment to The Landings Mall.
Each SSK unit provides 48 kW /48 -kWH of storage capacity, an aggregated array of these units could
provide an exceptionally reliable and highly flexible reserve to the electric utility. The location of these
kits may also allow the utility to reduce its transmission and distribution demand during the peak periods
by dispatching the stored power from the LI batteries at the point of use. As shown in Table 5 -3, the
maximum load shed potential from the Fast DR/Renewables Integration pilot project component is almost
0.05 MW.
Type of Equipment
The Landing Mall
Battery Storage
TOTAL
TASK 3.3 - DIRECT LOAD CONTROL
Table; 5 -.
enewable En`ergy.Integ "ration
Base Load Total for All Units
(kW)
48.00
48.00
Maximum Load Shed
(kW)
48.00
48.00
Direct load control allows the electric utility to manage the demand of a customer's end -use equipment,
including air conditioners, heat pumps, electric space heaters, and water heating systems. Direct load
control equipment will be obtained from the AMI system vendor, and will be ZigBee compliant. All
signals for a DR event will be executed through the City's SCADA system via the customer's smart
meter. A smart thermostat will allow remote adjustment of temperature setting on space conditioning
systems, allowing the utility to adjust the set point down during a critical peak period and return the
temperature to the previous set point at the conclusion of the event. For water heaters, a load control
relay with a two -way paging device (receiver) will be installed. Water heaters will be shut off remotely
(curtailed), using the paging system, for up to two hours each weekday morning during the City's critical
peak period. If desired, participants will be able to override the curtailment by logging into a secure web
site via the Internet. Interval meter data and load control data will be collected for later analysis. Table 5 -4
summarizes the direct load control resources available from the five currently participating customers,
and the total maximum load shed in the winter is estimated to be almost 0.09 MW.
September 30, 2010 Page 8
City of Port Angeles
Type of Equipment
Nippon Paper Industries
Water Heater Tanks (3)
Subtotal
able
Direct Load:Cont"rol'Sumina
Base Load Total for All Units
(kW)
162.00
162 00
City of Port Angeles City Hall
Hydronic Central Boiler 324.20
Subtotal 324 20
City of Port Angeles West City Hall
Water Heater 6.00
Subtotal 6 00
Commercial and Industrial DR Pilot Projects
Maximum Load Shed
(kW)
19.44
19 44
North Olympic Library System
Rooftop Variable- Air - Volume Unit 84.00 10.10
Roof Mounted Heat Pumps (2) 18.00 2.20
AC Unit (2) 6.00 0 70
Subtotal 108 00 13 00
Clallam County Courthouse
Boiler (e) 180.00 5.60
Freezer 1.50 1.40
Electric Boiler (N) 480.00 15.00
Subtotal 661 50 22 00
Clallam County Housing Authority
Heat Pump (2 units at office) 18.00 2.20
Water Heater Control (6 units at 3 sites) 25.00 2.50
Subtotal 43 00 4 70
22.00
22 00
City of Port Angeles Vern Burton Gym
Kitchen Water Heater 31.10 1.60
Icemaker (Kitchen) 2.30 0.20
Locker room water heater 8.70 0.90
Subtotal 42 10 2 70
City of Port Angeles Police Wing
Water Heater 6.00 0.60
HVAC for main offices 7.00 0.40
Subtotal 15.30 1 00
0.50
0 50
September 30, 2010 Page 9
City of Port Angeles Commercial and Industrial DR Pilot Projects
City of Port Angeles Fire Hall
RTU Heat pumps 2.30 0.10
Subtotal 2 30 0 10
City of Port Angeles Senior Center
Walk -in freezer 1.00 1.00
Ground -level heat pumps 52.50 2.60
Subtotal 53 50 3 60
Grand Total
1,417.90 89.04
Direct load control participants include the Nippon Paper Industries, USA Co., Ltd, the North Olympic
Library System, Clallam County, the Clallam County Housing Authority, and the City of Port Angeles.
The roll -out of the AMI system can also include ZigBee as an integral part of the meter for an additional
500 commercial general service customers. ZigBee functionality is only available for electric meter
forms 1S, 2S and 125, and the City has approximately 500 other commercial meters that may not be
functional with ZigBee. ZigBee functionality will be very similar to the residential demand response pilot
project, with water heater load control being the primary opportunity targeted. Investing in ZigBee
functionality may be an upfront cost that becomes a lost opportunity resource if the initial investment is
not made. Replacing a new smart meter with another smart meter having ZigBee functionality in the near
future would be a poor use of ratepayer funds. The City therefore intends to use the C &I Pilot Project as
an opportunity to provide ZigBee functionality to all of its compatible commercial account meter forms.
As many commercial customers have expressed an interest in DR, the City also proposes to purchase an
additional number of controllers that could be placed, with the customer's approval, into service along
with the AMI system roll -out. Including the controllers for the committed customers mentioned above, a
total of 250 ZigBee- compliant controllers will be purchased. Also, the AMI system inherently allows the
use of in business displays that show current energy consumption rates and peak demand events. As part
of this proposal, 10% of the City's general service customers, around 100 customers, would be provided
entry-level in- business displays. A total of 15 of the larger general service customers would be provided
with a more sophisticated business area network. Lastly, the City intends to provide a data presentment
service to up to 100 of its C &I customers who request the service. The main thrust of this service is to
provide daily consumption information tied to the utility rate structure to conduct "what if' analysis and
make quality decisions on efficiency and demand reduction opportunities. The data presentment service
also provides a five -day weather algorithm, which will allow some ability to predict peaking events since
weather is highly correlated with the City's distribution system critical peaks.
TASK 3.4 - DISPATCHABLE DEMAND RESPONSE
The focus of this task is to test the methodology for ADR dispatching during BPA's generation and
transmission critical peak demand periods. This task will test the ability for the BPA to remotely and
securely initiate a request to reduce the City's C &I load during its critical peak periods.
The City is nearing the completion of its previously mentioned distribution system VO project. The AMI
system is capable of integrating 24 voltage sensors into the City's SCADA System that will dynamically
adjust substation transformer voltage to ensure that customers at the end of any feeder would not
experience any under- or over - voltage issues. As part of this proposal an interface would have to be
programmed for the voltage sensors for each substation to ensure that the lowest sensor output is used to
adjust transformer voltage.
September 30, 2010 Page 10
City of Port Angeles Commercial and Industrial DR Pilot Projects
The City could also set up a communication protocol through its SCADA system to allow BPA to
remotely initiate a request to reduce the City's voltage through its VO project, impacting commercial and
residential customers. Investigations by the City show that a 2.5% -3.75% reduction in voltage could
result in a 1.3 % -1.5% reduction in the electric utility's demand for its distribution customers (Industrial
Transmission excluded). This could potentially contribute another 2.0 -2.5 MW of load reduction during
BPA's critical peak period. This process could also be expanded in the future to allow the BPA to
dispatch the 5.8 MW of stand -by generation that the City owns and operates. The two resources could
easily be considered dispatchable resources given an appropriate economic incentive from the BPA.
5.4 TASK 4 - ECONOMIC EVALUATION
The economic evaluation will look at the cost - effectiveness of DR from four perspectives; (1) BPA's
perspective, (2) the City's perspective, (3) the customer's perspective, and (4) the total resource cost
(TRC) perspective.
1) From BPA's perspective, the analysis will look at avoided transmission facilities upgrades,
functionality of dispatchable DR, and large - scale, system -wide benefits.
2) From the City's perspective, the analysis will account for avoided generation and transmission peak
demand charges, functionality of large -scale cooperative dispatchable DR, avoided distribution facilities
upgrades, customer relations and response to incentives.
3) From the customer's perspective the analysis will include reductions to their utility bills due to the
demand cost savings, incentives, and equipment costs.
4) The TRC test will be applied to determine if this application is beneficial to the region as a whole.
The proposed C &I Pilot Project results can be scaled to the Pacific Northwest Region, as the savings
determined from this project might apply to BPA customers in other service territories. Other utilities
might use the savings data to conduct benefit -cost analyses for similar DR projects as they apply to their
own territory. Likewise, savings estimates from other utility studies might be used in the future as the
City evaluates DR projects for other customer /building types (such as commercial retail, restaurants, or
other consumption patterns not included in this pilot project).
6. PROJECT TIMELINE
The project timeline is outlined on a quarterly basis in Table 6 -1. The timeline, presented on a calendar
year basis, will be further refined during the planning and design phase.
Installation
Testing/Operation
Evaluation of Results
September 30, 2010
Table Ci
alendar,Year Project Timeline
2010 I 2011
Q I Q1 I Q2 I Q3
Planning and Design � I
Q4 I Q1 I
I A
2012
Q2
Page 11
City of Port Angeles Commercial and Industrial DR Pilot Projects
7. MEASUREMENT AND VERIFICATION
The C &I DR Pilot Project will be evaluated by calculating the baseline consumption (kW) for the period
of interest (calendar year 2011) and comparing the actual consumption to the estimated baseline. The
measurement and verification model will use fixed effects so that savings will be evaluated on an
individual basis for each participant. The baseline consumption will be calculated using a forecast of
average kW consumption that is developed using historic data. All participants are currently demand
metered or will be demand metered upon the installation of the AMI system. Weather variables will be
included in the forecast model to match consumption data to the weather data observed in 2011. In
addition, known energy efficiency improvements will be accounted for in the forecast of the baseline.
Peak demand reduction savings from the Northwest Power and Conservation Council's 6 Power Plan
documents will be used to account for energy efficiency improvements. Actual savings will be based on
observed weather. Estimated savings as a percentage may be extrapolated to similar industries and
commercial electric rate classes only.
8. CHALLENGES
The City is in the process of securing a vendor to install the AMI system and has requested that the
vendor supply and install the DR equipment outlined in this proposal if the City is selected by BPA for
the C &I DR Pilot Project. The timing of the AMI system's installation and the C &I DR Pilot Project
proposal is a challenge; however, the City is in a unique position to be able to the installation the AMI
system at the same time as the DR equipment. This presents the unique opportunity to demonstrate a C &I
DR pilot project with the least possible cost. In any event, the Integrated Load Management projects and
the Fast DR/Renewable Integration project can proceed independently of the AMI system's deployment.
9. KEY PERSONNEL
The project team is composed of the City of Port Angeles, EES Consulting Inc., Capacity Provisioning,
Inc., and an AMI/DR equipment vendor to be determined during the course of the City's AMI project.
The City will function as the prime organization as shown in Figure 9 -1. Larry Dunbar will be the City's
project manager for this effort, and Phil Lusk will serve as the BPA's principal investigator for the City.
Both team members have more than 25 years of professional experience in the energy industry. Specific
qualifications from each team member organization and staff follows.
-
EES' C onsulting; "Inc.
FIGURE 9 -1: Proposed Project Team Organization Chart
CITY OF PORT ANGELES
Larry Dunbar
Project Manager•
Phil Lusk..
Principal Investigator
i
/ AMI SYSTEM VENDOR \ / TELECOMMUNICATIONS
SERVICE PROVIDER ,
(TBD)
Capacity, Provisionirig, Inc:•,
September 30, 2010 Page 12
City of Port Angeles Commercial and Industrial DR Pilot Projects
9.1 THE CITY OF PORT ANGELES
The City is a non - charter code city incorporated in 1890. The City encompasses an area of approximately
10.7 square miles in northwestern Clallam County along State Highway 101 on the northern shore of
Washington's Olympic Peninsula. The City had an estimated population of 19,170 in 2008.
The City's electric utility serves around 10,765 industrial, commercial and residential customers using 9
miles of transmission, 103 miles of overhead distribution and 40 miles of underground distribution with 7
substations. The utility purchases its bulk power from the BPA and also operates the 465 -kW Morse
Creek hydroelectric facility. The BPA maintains a 69 -kV substation in Port Angeles and all of the power
to the City is delivered over BPA's transmission system and through their substation.
Capacity on the City's system is directed through two 69 -kV transmission lines that form a 9 mile loop
around the City, to seven 69/12.47 -kV substations down to a total of 24, 12.47 -kV distribution feeders to
its customer portfolio. The highest coincident peak the City had with BPA generation in 2008 was 108.6 -
MW and its highest distribution system peak was 144.9 -MW. The City also averaged 83.5 -aMW in 2008
and, largely due to milder winter weather, an average of 79.1 -aMW in 2009.
The following City employees will perform the work associated with this project.
Glenn A. Cutler, P.E., Public Works and Utilities Director
Glenn A. Cutler is a registered professional engineer in Washington and Georgia with 30 years of
experience in managing public works and utility functions for the United States Navy and the City of Port
Angeles. He has been the Director of Public Works and Utilities for the City since June 1999. Mr. Cutler
is responsible for managing the City's utility systems (electric, water, wastewater, storm water, and solid
waste collection and disposal), project management and design, road and street maintenance and
improvements and energy programs.
Larry Dunbar, Deputy Director of Power Systems, City of Port Angeles
Mr. Dunbar has 28 years of experience working for electric, water, wastewater and solid waste utilities
including the Snohomish County Public Utility District No. 1, City of Richland, Energy Northwest, and
the City of Port Angeles. Dunbar was the advanced metering infrastructure project manager for the City
of Richland, which replaced its remote electric meters and basement -set water meters with meters capable
of wireless communications. As the fiber optic project manager for the City of Port Angeles, Dunbar
developed a municipal area network providing advanced telecommunications services and oversaw the
design and installation of local area networks within numerous utility and municipal facilities.
Phil Lusk, Power Resources Manager, City of Port Angeles
Among other items, Phil Lusk manages the conservation program and assists with other projects relative
to rate structures, power resources, and power management activities. Prior to his coming to Port Angeles
in 2008, he worked as a consultant for a range of public and private clients where his duties included
business case and plan development, scenario analysis for various financial strategies, trending analysis,
capital investment analysis, and due diligence.
Terry Dahlquist, P.E., Electrical Engineering Manager, City of Port Angeles
Terry Dahlquist has a Bachelor's degree in Electrical Engineering with 39 years of experience in the
design of medium voltage power distribution systems. He started with Public Service Company of
Colorado designing overhead and underground distribution in the metropolitan Denver area, and became
the lead engineer in charge of the network system serving downtown Denver. Subsequently, he worked
with several consulting firms on utility and primary metered military and industrial systems throughout
September 30, 2010 Page 13
City of Port Angeles
Commercial and Industrial DR Pilot Projects
the Rocky Mountains. He is a licensed professional engineer in ten states and has been an expert witness
in several court cases relating to utilities. He has been with the City of Port Angeles since 2006.
Bob Williams, Electric Services Foreman, City of Port Angeles
Bob Williams has 35 years experience with electric utilities including City of Port Angeles, Snohomish
County PUD, Clallam County PUD and Lee County Electric Co -op (Ft. Myers Florida). Positions include
Substation and Meter Supervisor, Relay Technician, Wireman, Senior Meterman, and Meterman. At the
City of Port Angeles, Mr. Williams installed and configured a small AMI pilot project in downtown Port
Angeles. He also supervised and participated in the installation of a SCADA system providing control to
seven city -owned substations. Job responsibilities also include all metering, substation control, and
electric system dispatcher. Bob also had conducted seminars for Northwest Public Power Association,
Northwest Electric Meter School, and has provided training for the City's apprentices.
Richard G. Hostetler, Customer Service Manager, City of Port Angeles
Richard Hostetler has been employed with the City of Port Angeles for more than 28 years. He is the
employee most familiar with the City's utility billing software, and associated policy and procedures.
Richard is familiar with all City functions as a whole because of his 28 years experience and is quite
familiar with all of the City's neighborhoods and streets. Mr. Hostetler played a key role when meter
reading transformed from paper to handheld computers. He also was the main resource related to utility
billing when the City installed its current integrated finance system software.
Bob Kajfasz, Commercial Energy Analyst, City of Port Angeles
Bob Kajfasz holds a Certified Energy Manager certificate from the Association of Energy Engineers. Mr.
Kajfasz started work with the City of Port Angeles in 1996 and has been administering the City's energy
conservation program since 2001. Over the past nine years, Bob has designed, implemented,
administered, and provided reports on the City's conservation program fulfilling the requirements of
Bonneville Power Administration's Conservation and Renewables Discount, Conservation Acquisition
Agreement, Conservation Augmentation Agreement, Multi- sector Standard Offer, Conservation Rate
Credit, and the Energy Conservation Agreement.
9.2 EES CONSULTING
EES Consulting is a multidisciplinary management consulting and registered professional engineering
firm providing a broad array of services to clients involved in electric, water, wastewater,
telecommunications, natural gas and other natural resource related businesses. EES Consulting has
assisted clients in meeting the challenges in evolving competitive, regulatory and technical environments.
For this project, EES Consulting proposes that project management be performed by Kevin Smit with
day -to -day analytical tasks performed by Steve Andersen, Kelly Tarp and Amber Nyquist and quality
control and oversight provided by Gary Saleba and Anne Falcon. If necessary, the expertise of other staff
members can be drawn on for specific technical assistance. Resumes of all key EES Consulting project
team members are available upon request.
9.3 CAPACITY PROVISIONING, INC.
Capacity Provisioning Inc. (CPI) is the largest fiber optics service provider on the Olympic Peninsula of
Washington State, maintaining and serving systems and networks for organizations including the City of
Port Angeles, Clallam County, Olympic Medical Center, the Port Angeles School System, Peninsula
College and hundreds of area businesses. CPI was created in 2001, from a partnership between Excel
Utility Construction Inc. and Angeles Communications Inc. In 2002, another partnership was formed that
brought government and private business together to provide high -speed fiber optic data access to the
City of Port Angeles and the surrounding area. The venture formed between the City of Port Angeles,
September 30, 2010 Page 14
City of Port Angeles Commercial and Industrial DR Pilot Projects
Northland Cable (now Wave Broadband) and CPI, provided an interconnecting fiber optic ring within the
community and provided a high quality outer - connecting fiber optic link with the global community.
Resumes of all key CPI project team members are available upon request.
9.4 AMI SYSTEM VENDOR - The City is in the process of selecting an AMI system vendor capable of providing the DR equipment
specified in this proposal. The City has requested pricing for the DR equipment proposed for the C &I DR
Pilot Project. If this project is funded, the selected vendor will provide and install the necessary
equipment on the time schedule outlined in this document. If necessary, the City will use other vendors
to install C &I DR equipment that is beyond the scope of its AMI system.
10. BUDGET
The City proposes a project having a total budget of $745,115. This includes a $384,520 budget request
from the BPA. The City will contribute a total of $360,595, with $72,390 budgeted for in -kind services
and $288,205 provided as a cash match. As the proposal results in a 52% cost -share for the BPA, the
proposed budget plan provides a good cost value to BPA and to its ratepayers. Please see Attachment B
for the proposed budget and Attachment C for the budget justification.
September 30, 2010
Page 15
Date:
PART NGELES
W A S H I N G T O N , U.S.A.
Utility Advisory Committee Memo
November 9, 2010
To: Utility Advisory Committee
From: Phil Lusk, Power Resources Manager
Larry Dunbar, Deputy Director of Power Systems
Subject: Energy Conservation Program Increase
Summary: The Northwest Power and Conservation Council's 6 Northwest Power Plan will
result in a 67% increase in the Bonneville Power Administration conservation program beginning
October of 2011. An increase to City staff will be needed which qualifies for 90 -100%
administrative reimbursement. An increase to City staff is recommended in January 2011 to
increase low - income weatherization, demand response, take advantage of new programs, prepare
for a significant program increase due to the 6 Power Plan, contribute to the local economy, and
help the Electric Utility and its customers postpone exposure to Tier 2 power supply purchases.
Recommendation: Forward a favorable recommendation to City Council to add one full
time equivalent employee needed to support increased activities under the energy
conservation program as part of the 2011 proposed budget beginning January of 2011.
Background /Analysis: During the last thirty years the Bonneville Power Administration
(BPA) has provided conservation programs to the Electric Utility, which in turn provides
conservation programs and incentives to Port Angeles electric customers. Over the years BPA
funding has ranged from minimum viable to aggressive levels. BPA has also altered the
conservation measures that are available, the material and installation specifications, and
incentives to encourage customer participation. The last time BPA offered conservation program
funding at an aggressive level was shortly after the Western U.S. Energy Crisis of 2000 and 2001.
BPA conservation funding has been at a stable level for several years and will continue at a similar
level through September of 2011. The City currently receives a credit on its BPA wholesale
generation bill that annually provides about $400,000 for operation of the conservation program.
The credit provides from 90 -100% of the cost of program administration, and provides incentives
to encourage customer participation in the range of 20 -70% of cost. If the City was not able to
fully use its credit, any unspent funds would have to be returned to the BPA.
Last year as a result of the Northwest Public Power Association Tier 2 Power Supply Workshop
for the Utility Advisory Committee and City Council, the direction to staff was to double the
conservation program to postpone future Tier 2 power supply purchases.
N \UAC \Final \Energy Conservation Program Increase doc
Conservation Program Increase
November 9, 2010
Page 2
As part of the 2010 budget City Council approved a $300,000 increase in conservation activities
which are funded by the Electric Utility. Earlier this year City Council amended the Conservation
Fund to incorporate appropriate references to State law that allow electric utilities to fund
conservation activities.
Energy conservation is the least cost power supply resource, can be obtained at a lower risk
compared to other resources, and funding levels can be increased or decreased as necessary. The
minimum 1 year cost benefit ratio of the current conservation program is 6, over a 10 -year period
the cost benefit ratio is 17. The City ranks the second most effective operator of BPA conservation
programs in Washington State and is currently on track to use the BPA credit available through
September 2011. Conservation funding contributes to the local economy and the estimated
economic multiplier effect is $2,000,000 per year.
The City's Tier 2 exposure could dramatically increase if there are any reductions to the federal
based system, if we experience higher than normal customer growth, or if there is a new large
single load. The City's Tier 2 exposure could also dramatically decrease if there is a curtailment
of one or more large customer loads. The City's next Tier 2 decision will need to be made by
September 30, 2011 for the time period of October 2014 through September of 2019. Based on the
2010 Resource Plan the planned rate of conservation acquisition will postpone Tier 2 power supply
purchases through year 2016.
Due to the Northwest Power and Conservation Council's (NPCC) 6 Northwest Power Plan (that
increases BPA obligations to acquire conservation by 67 %) BPA is developing and offering new
conservation and demand response programs to its Electric Utility customers. New programs and
dramatic increases to funding levels are anticipated to begin October of 2011 and should continue
for five- years. So far this year the City has been awarded a $908,520 increase in BPA funding.
Future increased conservation activities due to the 6 Power Plan will require an addition to City
staff in 2011.
Although the increased conservation activities due to the 6 Power Plan won't begin until October
of 2011, staff recommends that an addition of one full time equivalent employee be added in
January of 2011. Prior to the end of 2013 a review will be conducted to determine if the position is
still required. The staff addition will focus on low- income weatherization, demand response, and
other residential energy conservation efforts. The staff addition will enable the City to pursue
BPA funding for new programs, provide some lead time to prepare for increased activity due to the
6 Power Plan, and has no Electric Utility ratepayer impact. As a backstop to BPA administrative
reimbursement, the Energy Conservation and Renewable Energy Program Fund has adequate
reserves available to fund personnel expenses.
On August 10, 2010, staff requested guidance on the proposed staff addition from the Utility
Advisory Committee and was directed return to the Committee at today's meeting. If the Utility
Advisory Committee supports staffs recommendation, it is requested that a favorable
recommendation is made to City Council to add one full time equivalent employee needed to
support increased activities under the energy conservation program as part of the 2011 proposed
budget beginning January of 2011.
Columbia Telecommunications Corporation • 10613 Concord Street • Kensington, MD 20895
301.933.1488 • fax: 301.933.3340 • www.CTCnet.us
Via Electronic Mail
Mr. Larry Dunbar
Deputy Director
Public Works and Utilities Department
321 East Fifth Street
Port Angeles, WA 98362 -0217
Re: CPI Oversight Proposal
Dear Mr. Dunbar:
111 ■■CTC
1I COMMUNICATIONS ANALYSIS
■ ■ ■ FOR THE UBLIC INTEREST
October 31, 2010
This letter is a follow -up to our discussions concerning the City's need for additional technical
support in its oversight of the CPI upgrade and cable plant extension. Under the terms of its
contract with the City, CPI is required to upgrade the network to 10 Gb operation and construct
and implement redundant paths for critical portions of the network. Additionally, they are
required to provide documentation for the upgrade and meet certain minimal performance
standards.
Columbia Telecommunications Corporation (CTC) proposes to assist the City in its ongoing
work of overseeing the implementation of pertinent technical requirements included in the City's
contract with CPI. In September, we inspected the core facilities associated with upgrading the
network, this work will focus on meeting operational and functional requirements.
The attached statement of work defines specific tasks that we will undertake as an amendment to
our current contract to provide technical support to the City. We will attempt to combine travel
for this project with travel for other projects we have with the City; our estimated cost for travel
expenses has been reduced accordingly.
We appreciate the opportunity to work with the City and to provide continuing technical support
on this project. Please do not hesitate to call me with any questions about this proposal.
Very truly yours,
4t
Lee Afflerbach, PE
California • Illinois • Maryland • Minnesota • North Carolina
Tennessee Valley • Washington, D.C. • Wisconsin
Mr. Larry Dunbar
October 31, 2010
Page 2 of 15
Proposed Statement of Work
This scope of work is a proposed amendment to CTC's existing contract with the City to provide
ongoing technical support for oversight of the City's Metropolitan Area Network (MAN)
services agreement.
CTC proposes to address additional technical support activities required to verify CPI's
compliance with the terms of its contract with the City.
Under this amendment we propose to provide the following technical support services:
• Review CPI technical plans for installing redundant fiber network paths required under
the contract agreement
• Provide on -site inspection of fiber cable plant construction associated with redundant
fiber paths
• Review all CPI as -built documentation of system upgrades and fiber plant associated with
City facilities
• Assist City staff in reviewing and performing tests on network performance for the
purpose of verifying requirements established in the contract agreement.
Mr. Larry Dunbar
October 31, 2010
Page 3 of 15
Project Cost
CTC proposes a not -to- exceed cost of $7,500 for the tasks _listed above, with an additional
$2,400 estimated for out -of- pocket travel expenses.
CTC work will be billed at the following hourly rates:
Director of Engineering $160
Principal Engineer /Analyst $150
Senior Project Engineer /Analyst $140
Senior Engineer /Analyst $130
Staff Engineer /Analyst $120
Engineer Aide II $ 65
Services to clients are billed on an hourly basis. CTC's billing rates are inclusive of all routine
expenses including administrative, accounting, and computer support, telephone calls, and
photocopying. Non - routine expenses and long- distance travel are recovered at direct cost with no
mark -up. Payment is due within thirty (30) days of invoice.
Mr. Larry Dunbar
October 31, 2010
Page 4 of 15
Project Team
Our proposed project team comprises three engineers who have assisted the City on previous
projects: Lee Afflerbach, P.E., Matthew DeHaven, and Eric Wirth. Resumes for each are below.
Additional resumes and references are available on request.
Mr. Larry Dunbar
October 31, 2010
Page 5 of 15
LEE AFFLERBACH, P.E.
Principal Engineer
Lee Afflerbach is a telecommunications systems engineer with 40 years of experience serving
federal, state, and local government clients. Mr. Afflerbach's expertise covers a wide range of
broadband (video, voice, and data) communications technology. He has designed, tested, and
planned numerous wireless, coaxial cable, telecommunications, and fiber optic networks for
government, public safety, educational, and non - profit clients.
Mr. Afflerbach's extensive experience and expertise in both wireless and wired technologies
results from years of evaluating and meeting emerging communications needs for government in
general —and public safety agencies in particular. He has designed command and control centers
for transportation agencies, has designed 911 systems, has developed communications design
and requirements for highway systems; and has developed standards and assured compliance
with standards for public safety communications equipment.
During the period of November 1976 through June 1981, Mr. Afflerbach served as an on -site
technical advisor in Frankfurt, Germany under contract to the Bundesansalt fuer Flugsicherung
(German FAA) to oversee the design and implementation of a national flight data network and
real -time database to oversee air traffic in Germany.
He is a nationally recognized authority on wired and wireless communications. Mr. Afflerbach
has served as a consultant and expert witness for public sector clients and has taught numerous
courses in broadband communications technology, both in the United States and abroad,
including United Kingdom, Germany, Netherlands (Amsterdam).
Mr. Afflerbach is a licensed Professional Engineer.
Communications Network Enzineering
Mr. Afflerbach has planned and designed communications networks for numerous
municipalities, including Montgomery County, MD; New York City; Baltimore; Cincinnati;
Tampa; Santa Monica; Ventura; Tucson; Austin; and St. Paul. These stand -alone broadband
networks employ a range of wired and wireless technology to provide video, voice, and data
capability within and between municipal facilities.
Mr. Afflerbach has assisted local governments in the cable franchise renewal process, providing
technical expertise on state -of -the -art network technologies. He has presented workshops to
network users on requirements analysis and system solutions. He has conducted requirements
analyses, prepared system -level network designs, provided construction coordination with the
cable operator, and supported network integration with existing municipal networks. Mr.
Afflerbach provides technical franchise renewal support to such communities as Los Angeles,
San Francisco, and San Jose.
Over the course of his long career in broadcast engineering, Mr. Afflerbach has conducted
feasibility analyses to support the authorization of new broadcast facilities. Activities included
Mr. Larry Dunbar
October 31, 2010
Page 6 of 15
the study of groundwave and skywave propagation in the 550 kHz -900 MHz spectrum range;
and evaluation of potential interference areas, service area losses, and compliance with
international treaties.
Some select examples of his work include:
• Planned, designed, and built City -wide fiber network for agency needs for New York City.
Designed and integrated video and data applications for criminal justice, financial
management, and education/training purposes. On 9/11 in Lower Manhattan, every network
but one failed - the surviving network was designed by CTC.
• Design and integration solution for cablecast channel for Monterey County. Analyzed the
existing audio visual and broadcast systems and developed recommendations for future
development. Designed an IP -based video server system capable of recording and airing live
meetings and scheduling cable /broadcasts. Completed on -site integration, testing, and
training on the video server system.
• Prepared a design for a video transmission and switching system for the City of Santa Clara.
The system provides links between multiple sites for video programming that is transmitted
over the channel on the cable system. The system is also designed to allow basic video
conferencing between the origination locations.
• Prepared the design for the fiber optic network interconnecting Gilroy, Hollister and San
Juan Bautista to a shared programming center. In addition, the design allowed the
interconnection of the communities for data networking and potential video conferencing.
Public Safety Network Interonerability and Interconnection
Mr. Afflerbach has been instrumental in the development and implementation of an Enhanced
Traffic Advisory Radio System (E -TARS) for the State of Delaware that uses statewide radio
signals to distribute traffic and emergency information collected by Delaware's Intelligent
Transportation Management System (ITMS). He was also involved in similar efforts for the
Georgia Department of Transportation; Arlington County, VA; and Howard County, MD.
Mr. Afflerbach developed a design and deployment strategy for the Howard County Office of
Emergency Management and the Arlington County Office of Emergency Management for an
AM broadcast radio system to disseminate information to the public during emergency
situations. In Howard County, he assisted the County to obtain AM broadcast radio licenses and
developed candidate system designs.
Land - Mobile Communications System Design
Under funding provided by the Law Enforcement Assistance Administration (LEAA), Mr.
Afflerbach performed and managed communications design studies for federal, state, and local
law enforcement agencies, including the Federal Bureau of Investigation (FBI), Drug
Enforcement Administration (DEA), New York State Police, and Georgia State Police. Tasks
involved user requirements analysis, system design, and specification preparation for land -
mobile radio, computer- assisted dispatching, and 911 emergency telephone systems.
Instruction/Exnertise
Mr. Afflerbach has prepared training courses providing information on communications designs,
Mr. Larry Dunbar
October 31, 2010
Page 7 of 15
applications, and operations. The courses have been presented at:
• George Washington University
• ITS America
• University of Maryland
• COMNET
• Amsterdam
• Frankfurt
• London
• University of Alabama
• National Security Agency
o Headquarters
o UK
EMPLOYMENT
Since 1983 Principal Engineer, Columbia Telecommunications Corporation (CTC)
1983 Established CTC
1981 - 1983 Vice President of Engineering, The Bertman Group, Vienna, VA
1971 - 1981 Group Leader, MITRE Corporation, McLean, VA and Frankfurt, Germany
1969 - 1971 Project Manager, Kelly Scientific Corporation, Washington, D.C.
1966 - 1969 Staff Engineer, Federal Communications Commission
EDUCATION
Bachelor of Arts, Electrical Engineering, Drexel University, 1966
PROFESSIONAL CERTIFICATIONS/LICENSES
• IL Professional Engineer
• DE Professional Engineer
• MD Professional Engineer
• WA Professional Engineer
• District of Columbia Professional Engineer
HONORS /ORGANIZATIONS
• National and Maryland Societies of Professional Engineers (NSPE)
• Institute of Electrical and Electronic Engineers (IEEE) -- Broadcast and Computer Societies
• National Association of Telecommunications Officers and Advisors (NATOA)
SELECTED PUBLICATIONS/PRESENTATIONS /COURSES
• Principal author, "Telecommunications and ITS: What You Need To Know," web -based
course module, prepared for University of Maryland Center for Advanced Transportation
Technology, 2002.
• "Telecommunications and ITS: What You Need To Know," prepared curriculum for two -
day training course for the University of Maryland, 2001.
• "Telecommunications and Intelligent Transportation Services," two -day training course,
presented in multiple cities for ITS America, 1999.
Mr. Larry Dunbar
October 31, 2010
Page 8 of 15
• "Building Integrated Voice, Data, and Video Networks for the Local and Wide Area,"
two -day training course, presented for the University of Maryland, College Park,
Maryland, April 29-30, 1999.
• "Integrated Data, Video & Voice Broadband Networks," week -long training course,
presented at the COMNET Exposition, Washington, D.C., January, 1999.
• "LANs: Design and Installation of Networks that Support Voice, Data, and Video
Applications," multi -day training course, presented for the George Washington
University Continuing Engineering Education Program, September 1983 through May
1999.
• "Integrated Data, Video & Voice Broadband Networks" and "Design & Implementation
of Metropolitan Area Networks (MANs)," presented at the COMNET Exposition,
Washington, D.C., January, 1998.
Mr. Larry Dunbar
October 31, 2010
Page 9 of 15
Matthew DeHaven
Principal Engineer
Matthew DeHaven specializes in wired and wireless communications and broadband
telecommunications technology for public safety and other institutional needs. He has more than
a decade of extensive engineering experience designing, developing, installing, and overseeing
the integration of local and wide area networks for institutional, public safety, ITS applications,
video networking solutions, and peer -to -peer information systems. Mr. DeHaven is experienced
in providing clients with reviews and solutions for network interoperability, reliability, and
security issues. He serves as CTC's lead engineer on numerous wide area network projects.
Mr. DeHaven has experience at many levels of network design, procurement, and
implementation for high - capacity metropolitan -area networks to support converged video, voice,
and data communications. He assists in network design and the preparation of specifications for
competitive bid processes, and he oversees implementation and testing for a wide range of
government clients. Mr. DeHaven prepares designs and cost models to support decision - makers
in the deployment of a range of data network technologies, traditional telephone systems, voice -
over-IP (VoIP) networks, one -way video distribution, and two -way videoconferencing. His data
network experience includes work with SONET, Ethernet, and ATM networks using a range of
fiber optic, copper, and wireless technologies.
Wireless Communications
Mr. DeHaven assesses clients' existing and projected wireless broadband needs and recommends
potential strategies for using new technologies to enhance and improve network operations and
services. Some select examples of his ongoing projects include:
• Developing a strategic plan for a wireless data network to meet public safety and local
government needs in Seattle, WA. CTC previously conducted a feasibility study that
identified these needs.
• Providing an updated assessment and review to Cincinnati, OH of the City's current
networks and recommended updates to the long -term strategic plan originally prepared in
2004. This project involves assessing and identifying new department and network
application needs, assessing the current networks to meet identified needs, assessing
emerging fiber and wireless technologies, recommending wireless strategies, and
providing recommendations and strategies for meeting foreseeable needs.
• Conducting a needs assessment of the current network in Port Angeles, WA, and
reviewing identified public safety mobile data communications considerations.
Some examples of past projects include:
• Design of a broadband wireless network for Annapolis, MD that will serve as a backbone
to link all city facilities and ultimately provide connectivity for a citywide video
surveillance system. The network will also have substantial reserve capacity to support
the addition of new video requirements, expand toll - quality IP -based voice and data
services, and, potentially, provide backhaul for a future mobile wireless solution.
Mr. Larry Dunbar
October 31, 2010
Page 10 of 15
• Oversight of the design and implementation of a "wireless downtown" for Skokie, IL to
enhance economic development and Internet accessibility for residents and visitors.
• Project oversight in developing an infrastructure plan to support the implementation of
WiFi services throughout a downtown area targeted for economic development in
Rockville, MD. The plan focuses on deploying a flexible architecture of physical support
infrastructure to enable a wide range of wireless connectivity options for visitors,
residents, and business tenants while maintaining the aesthetics of the development.
• Evaluation of bids from wireless service providers who responded to the city of Mesa,
AZ's RFP. CTC also, in an earlier phase of the project, provided an assessment of WiFi
technology and potential expansion of the fiber -optic infrastructure via mass wireless
communications — potentially for an intelligent transportation system application and for
free Internet access for citizens.
• Research on current and future wireless technologies and evaluation of the feasibility of
implementing a secure public safety wireless network in Prince George's County, MD.
Designed and implemented a pilot project to test the feasibility of a public safety
network. A successful solution was deployed to enable Mobile Data Computers in
emergency response vehicles to securely roam from a carrier CDMA network to private,
County- operated WiFi hotspots.
Public Safety Networking
In Anne Arundel County, MD, Mr. DeHaven recently assisted with the deployment of
emergency traffic surveillance cameras. He provided analysis of candidate technical solutions for
cameras using the County's high -speed fiber -optic I -Net to transport video and control signals.
Mr. DeHaven was also involved in the planning and implementation of a statewide network in
Delaware for the purpose of providing traffic information and traffic control capabilities to
transportation management facilities. Such a network allows remote control of traffic signal
systems and variable message displays, while providing real -time traffic surveillance in the form
of video images and microwave sensor data. He has developed expertise in the numerous forms
of technology used in this type of project, ranging from fiber optics to wireless digital spread -
spectrum communications.
Mr. DeHaven serves as CTC's lead engineer with respect to the Delaware Department of
Transportation's Advanced Traffic Advisory Radio System, the first Advanced TARS system in
the country. In that capacity, he is responsible for training and advising on -site staff, specifying
and installing new equipment, and monitoring performance of the system.
Video and Broadcast Communications Engineering
Mr. DeHaven's experience includes the management, design, and procurement of video, voice,
and data networks. Some select examples of his recent project work include:
• Analysis of the technical options to allow The Rockville Channel (Rockville, MD) to
support live cablecasting from multiple facilities, including the implementation of an IP-
based video and audio transmission system. He also managed the relocation of the master
control and studio production systems for The Rockville Channel. CTC successfully
executed the relocation during the tight window of opportunity between live production
Mr. Larry Dunbar
October 31, 2010
Page 11 of 15
events, while making enhancements to system layout and cabling infrastructure and
keeping the channel "on -air" during the process.
• Development and implementation of videoconferencing and teleconferencing tools for
the 21 jurisdictions in the National Capital Region (DC, MD, VA) Emergency Operations
Centers (EOCs) and Emergency Communications Centers (ECCs) over a state -of -the -art
fiber -optic and microwave network. CTC developed the systems' designs and oversaw
implementation under a grant from the Department of Homeland Security Urban Areas
Security Initiative (UASI).
• Preparation of system -level design recommendations and cost estimates for an extensive,
countywide system to support interactive and on- demand video training communications
for the Anne Arundel (MD) County Fire Department. CTC also developed the design for
a video display system for the Fire Department's new dispatch center, intended to allow
key sources of information to be prominently displayed throughout the facility.
• Preparation of system -level design recommendations and cost estimates for an extensive,
citywide system to support interactive and on- demand video communications for
training, emergency collaboration, and routine meetings between Mesa, AZ Fire
Department personnel. CTC also integrated a pilot videoconferencing system to
demonstrate certain capabilities of the system design.
• Development of a videoconferencing system for homeland security applications on behalf
of Arlington County, VA —the site of the September 11, 2001 Pentagon attack. The
system links numerous public safety and other government users and aims to ensure
uninterrupted emergency communications in the event of a terrorist attack or natural
disaster.
Instruction /Expertise
Mr. DeHaven led the CTC research team in preparing a Web -based Intelligent Transportation
System (ITS)- Communications course on behalf of the University of Maryland Center for
Advanced Transportation Technology. He currently serves as an online instructor for that course.
EDUCATION
Bachelor of Science, Electrical Engineering, in progress, The Johns Hopkins University,
Baltimore, Maryland
PUBLICATIONS /COURSES
• "What's the Fuss About Fiber? A Comparative Analysis of Fiber and Copper Physical
Media," Journal of Municipal Telecommunications Policy, Spring 2009.
• "Deploying Public Safety Networks: Costs and Benefits – 4.9 GHz for Video
Surveillance," presented at annual SEATOA Conference, April 2008.
• "Busting the Technology Myths," presented at the annual NATOA Conference, October
2007.
• "WiFi and Beyond: Taming Technology for your Community," presented at the annual
TATOA Conference, August 2007.
• "Looking Beyond Traditional I -Nets: NSCC Case Study," presented at the annual
TATOA Conference, August 2007.
• "Magical Solutions for Public Safety Wireless," presented to the National Association of
Mr. Larry Dunbar
October 31, 2010
Page 12 of 15
Telecommunications Officers and Advisers, September 2006.
• "VoIP and Enhanced 911 Services: A Primer on the Technology and its Limitations,"
Journal of Municipal Telecommunications Policy, Fall 2005.
• "IP Technologies: An Overview for Local Government," presented at the annual NATOA
Conference, September 2005.
• "The IP Revolution: what does it mean for PEG programmers and how can we prepare
for the future ?," Journal of Municipal Telecommunications Policy, Summer 2005.
• Instructor for "Introduction to Telecommunications" and "Telecommunications and ITS:
What You Need To Know," offered on -line by University of Maryland Center for
Advanced Transportation Technology, 2005.
• "Homeland Security Applications Over the I- Net," presented to the National Association
of Telecommunications Officers and Advisers, September 2002.
Mr. Larry Dunbar
October 31, 2010
Page 13 of 15
Eric Wirth
Senior Project Engineer
Mr. Wirth has more than five years of communications engineering experience and specializes in
the evaluation of broadband (video, voice, and data) telecommunications networks and analysis
of broadband technology. He also specializes in the design of broadband networks for
institutional uses and in analysis of emerging broadband technologies. In addition, Mr. Wirth is
conducting extensive and ongoing research on applications for Internet Protocol (IP) technology,
including video over IP for video transmission over wide area networks and video conferencing,
voice over IP (VoIP), and other telephony applications for cable systems, as well as on emerging
cable hardware technologies.
Wireless Communications
Mr. Wirth has extensive experience working on numerous wireless networking projects, from
analysis and feasibility to design and implementation. These networks range in scope from small
hot spots to area -wide and regional networks. Some representative examples of his projects
include:
• Assisting Ames, IA with review of existing architecture, development of a network
design, and preparation of detailed cost estimates for the acquisition and installation of
WiFi hot spots and supporting infrastructure. This project has now moved into
implementation preparations.
• Acting as lead engineer for the design and implementation of a microwave network to
enable patient tracking by the public safety and public health communities in the 19-
jurisdiction National Capital Region (DC, MD, VA) in the event of an emergency. This
innovative inter jurisdictional microwave network was designed to mesh with a fiber-
optic network connecting the D.C. metro jurisdictions and area hospitals. This multi -year
project is funded by grants from the U.S. Department of Homeland Security Urban Areas
Security Initiative (UASI) and the Department of Commerce Public Safety Interoperable
Communications (PSIC) Grant Program. This project is currently in the implementation
phase.
• Designing and specifying the equipment needed for a wireless network of hot spots in the
central business district in Northbrook, IL.
• Reviewing a conceptual design, the proposed business plan and staffing requirements,
and a cost - benefit analysis for the development of a city -wide wireless network in
Bountiful City, UT.
• Designing a cost - effective broadband wireless network for Annapolis, MD. This network
will serve as a backbone to link all city facilities, and ultimately will provide connectivity
for a citywide video surveillance system. The network will have the capacity to meet all
current needs, provide 99.999% availability, and have substantial reserve capacity to
support the addition of new video requirements, expanded toll - quality IP -based voice and
data services, and support backhaul for a potential mobile wireless solution.
Mr. Larry Dunbar
October 31, 2010
Page 14 of 15
Public Safety Networking
Some representative examples of Mr. Wirth's projects include:
• Lead engineer for the design of a fiber optic public safety interconnection network,
NCRnet. NCRnet is the 19-jurisidcition regional interoperability network in the National
Capital Region (DC, MD, VA). Fiber routing, site surveys, cost analysis, network design,
and vendor selection have been completed. Fiber construction, site activation, and as-
built documentation are underway.
• Performed radio frequency (RF) coverage analysis and prepared design recommendations
for improving public safety radio coverage for Warren County, PA. Included analysis of
the County's existing public safety radio system and recommendations to improve
coverage for both the County's public safety radio system and commercial cellular
coverage.
• Collaborated on the development of a master telecommunications plan for the Delaware
Department of Transportation. The plan acts as a guide for the department to consolidate
several disparate network environments into a unified communications network capable
of supporting current and future transportation and public safety applications. Part of the
plan involves developing a system -level design that incorporates fiber optics, microwave,
and land - mobile radio. The plan requires coordination among a variety of state agencies
to develop a network that meets the department's critical public safety requirements.
Fiber Optic Communications
Mr. Wirth's experience includes the design and implementation of a variety of fiber optic
communications network. Some select examples of his work include:
• Design and feasibility analysis for the Murfreesboro Electric Department of
Murfreesboro, TN. The project consisted of developing a plan and cost estimate to
construct fiber to key department facilities. The project goal was to increase
communications for improved SCADA functions and newer high- bandwidth
applications. Mr. Wirth also developed materials lists and construction manuals to allow
the department to construct fiber with its existing personnel. The project is currently in
the implementation stage.
• Design and implementation of a fiber optic network for Norwich Public Utilities of
Norwich, CT. The project consisted of developing detailed fiber optic route design and
costs estimates, network electronic design and costs estimates (including SCADA
transportation), and developing an RFP for Norwich's use in selecting a contractor to
complete the installation. In addition to serving the utility's needs, the fiber optic network
was designed to serve additional city, schools, and hospital users.
• Fiber optic network and electronics design and RFP development for the City of Dover,
DE Electric Department. Mr. Wirth developed a fiber optic network design to provide
additional redundancy and functionality to the existing city fiber optic network. In
addition, he developed a network electronics design to leverage the new fiber optic
communications links to increase the reliability of the City's network.
• Fiber optic network design and feasibility analysis for the City of Palo Alto, CA. The
City is examining several fiber optic construction projects to expand its existing fiber
optic network to further meet the needs of the City and surrounding school districts, and
Mr. Larry Dunbar
October 31, 2010
Page 15 of 15
to increase the footprint of its commercial fiber optic network. As a municipal electric,
Palo Alto is exploring several options for fiber optic design.
Video and Broadcast Communications Engineering
Mr. Wirth's experience includes the design and implementation of video, voice, and data
networks. Some select examples of his work include:
• Developed a design and integration solution for cablecast channels for Monterey County,
CA. Analyzed the existing audio - visual and broadcast systems and developed
recommendations for future development. Designed an IP -based video server system
capable of recording and airing live meetings and scheduling cable/broadcasts.
Completed on -site integration, testing, and training on the video server system.
• Developed recommendations for a broadcast and videoconferencing system for the Mesa,
AZ Fire Department. Prepared system -level design recommendations and cost estimates
for an extensive, citywide system to support interactive and on- demand video
communications for training, emergency collaboration, and routine meetings between
Mesa Fire Department personnel. Also integrated a pilot videoconferencing system to
demonstrate certain capabilities of the system design.
• Designed and implemented state -of -the -art videoconferencing and teleconferencing tools
for the 19 jurisdictions in the National Capital Region (DC, MD, VA) Emergency
Operations Centers (EOCs) and Emergency Communications Centers (ECCs). CTC
developed the systems' designs and oversaw implementation to interconnect the EOCs
and ECCs throughout the region, under a grant from the U.S. Department of Homeland
Security Urban Areas Security Initiative (UASI).
EDUCATION
Bachelor of Science, Electrical Engineering, University of Virginia, School of Engineering and
Applied Science, Charlottesville, Virginia, 2004.
PUBLICATIONS /COURSES
• "Leveraging Existing Assets for Municipal Broadband Projects." Presentation to
eNATOA — Webinar, 2007.
• "Using IP networks to Enhance Digital PEG Capabilities." Presentation to eNATOA —
Webinar, 2007.
PRIOR TO COMING TO CTC IN 2004
1998 -2003, Technician, Schnabel Engineering, Inc., Baltimore, Maryland
pcRTjGELEs
W A S H I N G T O N , U.S.A.
Utility Advisory Committee Memo
Date: November 9, 2010
To: Utility Advisory Committee
From: Larry Dunbar, Deputy Director of Power Systems
Subject: Bonneville Power Administration Residential Exchange Program Settlement Agreement
Summary: A settlement agreement is being prepared for City Council consideration regarding
the Bonneville Power Administration's Residential Exchange Program. A meeting has been
arranged on December 15, 2010 to discuss and clarify the advantages and disadvantages of the
settlement agreement.
Recommendation: Determine the Utility Advisory Committee and Councilmembers that will
attend the December 15, 2010 meeting to discuss the settlement agreement.
Background /Analysis: A settlement agreement is being prepared for City Council
consideration regarding the Bonneville Power Administration's Residential Exchange Program.
The settlement agreement is a very significant issue for the Electric Utility and will affect future
wholesale power costs for the next twenty years. A factsheet dated 2007 providing a history of the
Residential Exchange Program is attached for additional information.
Through the City's memberships with the Western Public Agencies Group and the Public Power
Council, a meeting has been arranged for Utility Advisory Committee members and staff on
December 15, 2010 to discuss and clarify the advantages and disadvantages of the settlement
agreement. The meeting facilitator is Terry Mundorf and the host utility is Mason County Public
Utility District No. 1, a total of 7 regional Electric Utilities have been invited to attend. The
settlement agreement should be available prior to the meeting, and it's anticipated that City
acceptance would be required by the end of this year.
The meeting will be held at the Alderbrook Resort located in Union, WA from 9am to 1pm.
Travel to the meeting would be by City vehicle which would leave City Hall at 6am and return by
4pm. The estimated cost is $50 per person for the room, lunch and refreshments. Staff
recommends that a delegation of the Utility Advisory Committee members, Councilmembers, and
staff attends the meeting. Staff requests that the headcount be determined at today's meeting if
possible.
Attachment: Factsheet, A History of BPA's Residential Exchange Program
N \UAC \Final \BPA Residential Exchange Program Settlement Agreement doc
B O N N E V I L L E P O W E R A D M I N 1ST R A T I O N
factsheet.
A history of BPA's
Residentia Exchange Program
On May 3 :-2007; the US. Ninth Circuit Court:o
Appeals ruled ontwo lawsuits that have significant
- implications for the Bonneville PowerAdministra -,
tion s ResidentiallExchange Program (REP):, In,
light of the: Courts decision and the heightened -
interest'it has: created, over, the REP. BPA has pre-
pared;this : history and background of the REP.
The REP was'established' in Section 5(c) of the
PacifreNorthwest Electric ,Power Planningand
Conservation Act of 198,0 (known commonly as_the,
Northw'VestPOwerAct): The goal of the program - has
been 'to provide. rate:'relief to Northwest residential '•
and small farm customers served by high- cost..
investor -owned utilities,'as well;asto residential
and small -farm customers 'servedby high - cost'
F rom its start, the Residential Exchange
Program (REP) has been a source of nearly
continuous controversy. Its roots go back to
the 1970s when electricity rates between public and
private utilities began to diverge sharply. Public
preference was at the heart of the debate between
public and private interests.
Historically, private and public utility rates had been
comparable. This changed after 1973 when, faced
with likely energy shortages, BPA halted firm power
sales to the region's investor -owned utilities. The
rates of some IOUs then began to rise sharply.
Oregon drafts DRPA legislation
At that point, Oregon's Public Utility Commissioner
awarded a 90 -day contract "to find a legal way to
overturn ... the preference clause,' thus qualifying
Oregon's private utility customers for the same
June 2007
utilities with preference rights_- At the same, time,
Congress intended to' limit-the financial exposure `of
piiblic-utilities to certain costs occurring under the
Northwest Power.Act.
In .craftingSection `(5), Congreskdirected that-the;,
benefits of the FederallColumbia River Power:
Sy tern () would be shared with ,those= -:
Northwest utilities whose'average system cost.or
ASC (average cost of resources) was high relative
to BPA 's applicable Pr' iority,Firm Exchange rate.
The benefits BPA.provides through the program
_must be passed on:.toeach.utility's residential and
small-farm ; customers; and,cannot be used for any
_ other- purpose,' as pro fi_ or, to subsidize ot ter '=
; as`pects; of a, u tili t y ' s business
' Section 4 of the Bonneville Project Act of 1937 grants public
bodies and cooperatives priority access to federal power
This is known as the preference clause
electricity rates that public power customers enjoy."
When it appeared preference could not be overturned
legally, the state turned to an innovative solution.
In 1977, the Oregon state legislature approved form-
ing the entire state into a Domestic and Rural Power
Authority (DRPA), which was to lay claim as a
publicly owned utility to federal hydropower to
benefit all of the state's citizens. DRPA was to be-
come effective March 1, 1979, if no federal energy
bill addressing the problem had been passed. The
deadline later elapsed because, by that time, it
appeared national legislation was imminent.
In 1977, the Pacific Northwest Utilities Conference
Committee (PNUCC), which includes both public
and private utilities, presented draft legislation "for
discussion purposes" to the region's congressional
delegation to address multiple issues precipitated by
growing concern about power shortages. Fearing their
right to first call on federal power would be curbed,
Snohomish PUD and Seattle City Light broke ranks
and opposed the draft. Snohomish introduced rival
legislation aimed at protecting public preference.
Public preference challenged
As various proposals emerged, the fight over prefer-
ence heated up. Washington Governor Dixie Lee Ray
dubbed it "a regional civil war."
Idaho threatened to follow Oregon's lead to create a
domestic and rural power authority. The executive
director of the Washington Public Utility District
Association declared DRPA "nothing but a facade to
protect the profits of private power companies serving
his [Oregon governor's] state."
In February 1978, the governors of Oregon and Idaho
declared BPA "must honor the commitments in acts
of Congress that domestic and rural customers have
first call on energy from the Federal dams that are
even more basic than those of what BPA calls prefer-
ence customers."
BPA Administrator Sterling Munro strongly defended
preference. His view was that the way to get cheap
federal power to the three "have -not " states was to
increase the size of the resource pie, rather than do
away with preference. Oregon Congressman Robert
Duncan responded, "If the preference clause isn't
changed, then we'll bust the sonofabitch in a lawsuit.
The people of the Northwest, all of the people of the
Northwest, are entitled to similar energy rates, and
they should share the burden of those costs."
By the late 1970s, a number of proposals were
coalescing into what eventually would culminate in
the Northwest Power Act. Any legislation would have
to pass through the Senate Energy and Natural
Resources Committee, headed by Senator Henry
"Scoop" Jackson. Jackson, who was from Washington
2
state, was an advocate of public power and not overly
sympathetic to the public - private power rate disparity
arguments. Eventually, however, he realized that, if
the legislation was to have any chance, it had to deal
with the issue. Otherwise, the principle of preference
would be at risk.
DSI "subsidy" paves way
for exchange
A breakthrough came when the direct - service indus-
tries, facing expiration of their contracts, agreed to
pay significantly higher rates for a limited period in
return for new 20 -year contracts. At the time "assured
supply" was more important to them than price. Under
this arrangement, public power would continue to get
first call on federal power, but a "subsidy" from the
DSIs (the higher rates the industries were willing to
pay) would offset and lower IOU rates. This "money
deal," which only covered five years, paved the way
for an "exchange clause" in the new legislation.
The exchange provision allowed BPA to offer IOUs
and certain public power entities that owned higher -
cost generating facilities a quantity of power at BPA's
standard rates equivalent to the total needs of those
utilities' residential and small -farm customers. In
exchange, BPA would accept from these utilities an
equal quantity of power at their average system costs.
No power needed to change hands; in reality, it was
primarily a monetary paper transaction. Under the
exchange, the utilities were required to pass on the
benefits to their residential and small -farm customers
in the form of lower rates.
Section 7(c)(1) of the Act addressed the DSI provi-
sion saying that DSI rates shall be established for the
period prior to July 1, 1985, at a level sufficient to
recover the costs of resources required to serve the
DSIs' loads and "the net costs incurred by the Admin-
istrator pursuant to Section 5(c) of this Act." Section
5(c)(1) stipulates the exchange of power with eligible
utilities requesting such an exchange.
2 The "have -not states" refers to Oregon, Idaho and western
Montana, which, unlike Washington, are served pnmanly by
investor -owned utilities that do not have preference to BPA
power
Not all the DSIs were happy with the arrangement.
In August 1978, Reynolds Metals objected, saying the
draft bill language placed too much of the burden of
exchange costs on the DSIs. At the time, the alumi-
num industry had a great deal of leverage as it was
providing enormous benefits to the region in terms
of wages, freight services and state and local taxes.
The industry had provided about 30 percent of BPA's
revenues.
NW Power Act changes
regional landscape
After several stops and starts, the Northwest Power
Act finally emerged and was signed into law in
December 1980. The Act's exchange provision
extended benefits of the federal system "at cost" to
2.5 million residential and small -farm consumers of
IOUs and a handful of consumer -owned utilities that
had relatively high ASCs.
To win public power support while the Northwest
Power Act was being developed, or at least to counter
opposition, an amendment had been added in the
form of a rate test to provide some cost protection to
the preference customers' rates. This is the 7(b)(2)
test, which compares costs developed pursuant to the
Act with costs reflecting five specified assumptions
listed in Section 7(b)(2). In very general terms, it was
designed to ensure public customers would pay BPA
no more than if their rates had been developed based
on the five assumptions.
BPA is required to formulate a hypothetical case to
assess what costs would have been by using the five
assumptions in Section 7(b)(2). If the rate test shows
preference customers would have to pay more for
firm power under actual rates than under the hypo-
thetical case, the Administrator must lower the rates
of public utilities to eliminate the excess costs and
shift the burden to BPA's other customers. The Act
contains five assumptions under Section 7(b)(2) to
be used in determining what the hypothetical world
would look like.
The language in Section 7(b)(2) is complex and has
been subject to differing interpretations. Former BPA
3
e'7Z(b)(2);:rate-tes
e:Northwest • Power -A'ct provides, througl
ection'7(b)(2), a: complex'formula:(rate #test)
_that,in general. terms, shields preference
- ersfom Certain n' impacts of the Northwest Power
Basically, thisyratetest is designed ensure'
>th gip cost the Residential Exchange Pro -'
am and -other factors, when considered togeth -`
. .er, do not raise tlierates'.of public'utilities,beyond,
what they would have been absent` the,North
- Power Act.'
- Section7(b)(2),includes five- assumptions the y.
:Administrator uses; to,develop; a set;of costs that :
�is-coinpared with alsetofcosts refecting;the;;
.,Northwest, Power`Act. This comparison.is -use
.in'setting preference.ratesr(See boxon five-
assumptions:),
?If Section 7(b)(2) : "trigger's,'then. an "amount;
-of'costs,is allocatedtoirates otler',,than the PF'
--(Priority Firm), power rate, =the?rate t;
; applies to - p'r`eference customers ;requirements
foads.
Consequently;-BPA-develops a' PF Exchange'
;rate for REP loads that includes.costs,fromrany
`Section 7(b)(2) is -a
- trigger,,the, PF_Exchange rate is higher than.tl
-PF.Preference rate, and the difference' between
the PF_Exchange rate the',utility7s A
multiplied:by the 's residential - and °sma
farm` l oad, :determines'the a'
`,qualifying utility.:
Administrator Peter Johnson said of this section,
" ... I know how Alice felt when she stepped through
the mirror. We seem to have entered an unreal world.
The assumptions direct BPA to hypothesize power
supply arrangements between itself and its customers
— arrangements that are quite different from reality.
The Act bounces us back and forth between what
might have been had the Act not been passed and
what is."
Section includes'five assumptions the
Administrator is to observe :°in „setting preference'
rates.,These-assumptions envision a world that
contrasts'with -the worktunder- the Northwest Power'
Act. In' other words, the Administrator m ust assume
that in this hypotheticalwold: ,
1. BPA is not'engaging'in an =exch "ange of power. t `
with IOUs -and consumer -owned utilities, to provide
' ''rate, relief to those utilities' residential arid' small,
farm customers.
2.13PA'spublientilit customers would serve .certain
of the direct - service industries With ,100 percent firm
power: The industries that would lie served by''the'
public utilities.are (a)' those industries served.by BPA
and.(b).those that are situated- within or adjacent. to _
the - service territories of'the'public customers.'
In 1983, BPA sought to clarify Section 7(b)(2) and,
after an initial round of comments, published a
"Notice of Proposed Legal Interpretation of Section
7(b)(2)." After adopting the legal interpretation, BPA
developed a Section 7(b)(2) Implementation Method-
ology. BPA published the Implementation Methodol-
ogy, which reflected its legal interpretation of 7(b)(2),
in the Federal Register in March 1984. Subsequently,
BPA developed computer models, in consultation
with customers, for the rate test.
The 7(b)(2) rate test has triggered several times. In
BPA's 1996 and 2002 power rate cases, the upward
pressure on the PF Exchange rate was significantly
more than in previous years. In the WP -96 and
WP -02 rate cases, due to high 7(b)(2) triggers, the
PF Exchange rate was 8.3 mills per kilowatt -hour and
13.7 mills per kilowatt-hour higher, respectively, than
the PF Preference rates.
ASC Methodology established
BPA established its initial Average System Cost
Methodology in 1981, issuing a Record of Decision
on Aug. 26 of that year and filing the methodology
with the Federal Energy Regulatory Commission
'e ; five'assurnptions ;,
4
3. The preference, customers' load, .including the
DSI loads,mentioned* in.the second'assumption,
would ' ' ” nth Federal Base System.
power.'
4. If,the preference' customers require more power
to'serve ,their- loadsthan' federal resources can
supply,'the additional ' power to4meetthese
would be acquired =froin.certain specified sources:
This additional power would be'provided in'a least=
cost -first manner.,',_
5: There are no dollar savings to the preference
customers as a.result of- reduced = financing costs: dues
to BPA backing of resource acquisitions,' ;and rio;
reserve ' benefits; due to ;the-Administrator's actions
under the Act Accrue to them:
the following day. FERC granted interim approval
effective Oct. 1, 1981, and final approval of the ASC
Methodology on Oct. 6, 1983 (retroactive to 1981).
At its inception, the REP was implemented through
Residential Purchase and Sale Agreements (RPSA)
first executed in 1981. These contracts established
exchange benefits only through July 1, 2001. Between
1981 and BPA's Subscription Strategy proposal, all of
the RPSAs held by the utilities that had received REP
benefits had been settled, except for one, which was
in "deemer" status.
BPA's 1981 RPSAs did not require a customer to own
generation or transmission facilities to qualify for an
RPSA. Utilities were able to include wholesale
purchase power expenses and wheeling contracts with
third parties as costs to establish an ASC. Distribution
costs were excluded from the ASC calculation.
3 BPA used a computer -based model known as the Supply Pricing
Model (SPM) The model simulated the rate - setting process
4 BPA's 1981 RPSAs included a provision described as a deemer
account. Deemer referred to a status wherein a utility sets its
ASC equal to BPAs PF Exchange rate and does not receive
positive monetary benefits but accrues a negative balance that
must be worked off before resuming receipt of additional
monetary benefits
Average System' Cost -
An ASC represents the average.cost of resourc-
- es for ,any given utility. An ASC cannot, by',law, ,
include additional resource costs to serve
large single loads'or extra- regional load'o the.'..
costs of a,resource terminated prior to pommer-
cial operation. The calculation:includes'a
number of details, but generally, Costs
and certain transmission costs are currently
, included' in.the ASC, although distriliutiomcosts,
are excluded., Customers, with market purchases
or those who own their,own generation are most
, likely to have ASCs that; arehigher than BPA's
PF ,Exchange,rate. Since many, of the North -
west's investor -owned utilities:own coal gas -
fired plants, historically they have had'higher
ASCs�than BPA's PF Exchange rate.
BPA's 1981 RPSAs included a number of contractual
terms and conditions describing BPA's right to
purchase power in lieu of the utility's resources
priced at its ASC. These reflected the electric power
industry of the period and assumed that a utility
would be developing its own resources or entering
long -term purchase power contracts to serve its loads.
BPA revises ASC Methodology
From the start, things did not go smoothly. The DSIs,
who were bearing the cost of the exchange through
1985, complained that the IOUs were including
inappropriate costs and overhead in their average
system costs. In 1983, Northwest Aluminum News
wrote, "The main problem — and a monumental
one — is that some participating utilities are using
the exchange to recover costs other than `resource'
costs ... Some of the questionable costs include items
such as taxes, overhead, and expenses related to
uncompleted or discontinued power plant projects."
The IOUs denied the costs were improper. At the
same time, public utilities that weren't participating
in the exchange complained that attempts to include
inappropriate costs in the ASC calculation were driv-
ing up the costs of power they were buying from BPA.
5
Beginning in 1983, the DSIs and public agency
customers sought a change in the ASC Methodology.
They had a number of concerns, including perceived
abuses to the system related to the attempted inclu-
sion of terminated plant costs. BPA had previously
removed terminated plant costs from an ASC filing
made by an exchanging utility.
BPA Administrator Peter Johnson agreed that the
exchange was "not working as Congress intended."
A BPA issue alert described the existing methodology
as "unworkable, expensive, time consuming, and
difficult to administer." Consequently, BPA staff
recommended tighter procedures for computing
the ASC.
Section 5(c) of the Northwest Power Act provides
that the Administrator shall develop an ASC Method-
ology in consultation with the Northwest Power and
Conservation Council, the Administrator's customers
and appropriate state regulatory bodies. BPA initiated
a consultation process open to the public to begin
revising its ASC Methodology to address multiple
issues.
These issues included the source data for the method-
ology, determination of whether transmission costs
should be treated as resource costs, subsidization of
construction work in progress, treatment of equity
return, treatment of income taxes, determination of
generating resources that could be included in com-
puting ASC, treatment of affiliated fuel costs, includ-
able conservation costs and functionalization between
subsidized and nonsubsidized accounts. A Federal
Register notice on the consultation process was issued
in October 1983.
5
In the context of the REP, "in lieu" comes up when the market
price of power (or the price of other resources) is less than the
exchanging utility's average system cost In that case, the
Northwest Power Act allows BPA to purchase power "in lieu" of
exchanging at the utility's ASC BPA would buy power at the
market or resource rate and sell to the exchanging utility al the
PF Exchange rate, thus reducing the level of benefits to the
difference between the market price and PF Exchange rate
The utility would then have to find something else to do with the
high -cost resources that have been "in lieued." Or, instead of
being stuck with unwanted power, it could deem its ASC to be
equal to the cost of the resource BPA would have acquired and
sold to the utility Either way, BPA saves on a unit basis the
difference between the utility's ASC and the lower in -lieu
resource cost
After taking regional comment, BPA published a
proposal on a revised ASC Methodology in February
1984 and, after a public comment period, issued a
record of decision on its revised ASC Methodology in
June 1984. In that year, nine IOUs and 16 public
utilities were participating in the exchange.
IOUs challenge ASC revisions
Although the IOUs challenged the ASC Methodology
change in the FERC proceeding, FERC approved the
revised methodology. A number of IOUs challenged
the change in the Ninth Circuit Court of Appeals, but
the Court upheld BPA's decision (PacifiCorp v. Fed.
Energy Regulatory Comm 'n, 759 F.2d 816 ((9th Cir.
1986)) in 1986. While the Court's opinion upheld the
revised ASC Methodology, it held that it did not
"sanction any permanent implementation of these
exclusions." Id. at 823. Since then, the IOUs have
argued that the Court upheld the 1984 ASC Method-
ology as a "temporary" change to address terminated
plant cost issues and did not intend a permanent
change.
The ASC Methodology provides for future changes.
Under the ASC Methodology, the Administrator may
initiate a consultation process to determine whether to
change the existing ASC Methodology at his discre-
tion or upon request from three- quarters of utilities
with Residential Exchange contracts, three- quarters
of BPA's preference customers or three- quarters of
BPA's DSIs (which was relevant at the time).
Arguments continued into the 1990s as IOUs disputed
BPA's calculation of the ASCs and other determina-
tions related to the REP. Throughout the decade the
disputes were essentially continuous. Key elements of
the disputes included benefits under the RPSAs — not
enough in the IOUs' opinions and too much accord-
ing to the publics and DSIs — as well as BPA's ASC
Methodology, utilities' ASCs, deemer balances, "in
lieu" transactions and BPA's PF Exchange rate.
Region conducts
Comprehensive Review
The advent of deregulation of the electric power
industry in the 1990s changed the industry dramati-
6
cally. Utilities no longer solely constructed generation
or made long-term purchases. Increasingly, they
purchased power on the wholesale market from
independent producers, wholesale marketing entities
and others, and some purchases were short-term. BPA
began to face tough competitive challenges, and some
questioned the agency's ability to fit into the newly
deregulated world.
In the mid- 1990s, the Depailinent of Energy, BPA and
the governors of the four Northwest states all called
for a Comprehensive Review of BPA's future role in
the Northwest. One of the things that came out of the
Comprehensive Review recommendations was a pro-
posed Subscription process that would set parameters
for allocating federal system benefits. This was pre-
cipitated by the fact that power sales contracts custom-
ers had signed with BPA were due to expire in 2001.
The Comprehensive Review, which published a final
report in December 1996, took the opposite stance of
an earlier BPA Administrator, Sterling Munro, who
had said the way to spread the benefits of the federal
system was to increase the size of the pie. Instead, the
Comprehensive Review said BPA should get out of
the business of acquiring new resources to meet
customers' load growth, except in those cases where
the customer would bear the additional costs.
The Comprehensive Review Steering Committee
encouraged BPA and other parties in the region to
explore a settlement of the REP with the region's
IOUs based in part on a sale of power to them rather
than the historic practice of monetary payments.
Congress helps stabilize exchange
By the mid- 1990s, deregulation of the electric utility
industry, spiraling fish costs brought by Endangered
Species Act filings and reduced hydro supply had
pushed BPA rates up. The most important factor,
however, was the decrease in market price of power
due largely to the entry of independent power produc-
ers selling gas -fired generation. As market prices
6 The formal name of the review was the Comprehensive Review
of Northwest Energy Systems.
dropped, some BPA customers removed load from
BPA. For the first time, BPA's PF Exchange rate was
higher than many of the utilities it was exchanging
power with. As public power customers sought to exit
contracts, concerns arose over whether BPA would
have adequate customers to cover its costs.
In August 1995, BPA reported "The calculation
7(b)(2) required by the law has forced BPA to
make the most significant reduction in Residential
Exchange benefits in 11 years. The proposed reduc-
tion could cause up to 45 percent of the region's
residential and small -farm customers to see an
increase in rates." BPA cited increased competition,
especially from natural gas, and said "... for the first
time in its history, BPA has lost wholesale customers
to private utilities. " At the time, BPA had been
paying approximately $200 million a year to utilities
participating in the REP.
BPA's Initial Proposal in its 1996 power rate case
indicated a large reduction of benefits under the REP
starting in fiscal year 1997. BPA was assuming REP
benefits of about $65 million a year. Concern about
reduced benefits prompted Congress to take action.
The Energy and Water Development Appropriations
Act of 1996 specified setting 1997 exchange benefits
at the 1996 level of $145 million for the one -year
period. BPA was to distribute the benefits to each
participating utility at the percentage share each
received in fiscal year 1995.
In the 1996 Conference Report of the Energy and
Water Development Appropriations Act, Congress
recognized BPA's authority " ... to implement in lieu
transactions, among other actions, which could effect-
ively terminate the residential exchange after 2001."
The report went on to say, "Consistent with the
regional review, Bonneville and its customers should
work together to gradually phase out the residential
exchange program by October 1, 2001." BPA,
however, could not eliminate implementing the REP
without direct action by Congress to change the law.
In September 1997, BPA and the Northwest Power
and Conservation Council jointly launched a review
of BPA's costs. The purpose was to set the stage for a
7
8 Puget had a Penodic Rate Adjustment Mechanism (PRAM) to
true up rates two years after the end of each rate penod In
1991, BPA and Puget formulated a "true -up" mechanism to
permit an accurate determination of Puget's ASC benefits in
conjunction with the Washington Utility and Transportation
Commission's PRAM PRAM true -up benefits were to be paid
two years after the end of the exchange period
successful Subscription process by providing further
cost - cutting recommendations to build customer
confidence that BPA was doing all it could to contain
costs. Among the recommendations, the Cost Review
said the REP made no sense in the current market:
place and should be eliminated, although this could
not be accomplished without legislative change.
In early summer 1996, Puget Sound Energy, Pacific
Power and Portland General Electric expressed
interest in a possible settlement of REP disputes. BPA
entered negotiations with the three IOUs regarding a
settlement of such disputes but deferred negotiations
after failing to reach agreement on the total dolla r
settlement. Eventually, BPA settled with Puget in
January 1997 and with Pacific in April of that year.
BPA settled with PGE, then owned by Enron, a year
later in April 1998. These agreements specified that
they did not set precedents for how the Residential
Exchange would be handled after 2001. Payments
to the IOUs for the 1998 -2001 period averaged
$59 million annually.
As it turned out, 1996 was the last year that exchange
benefits were determined through the traditional REP
process (i.e., Appendix 1 filings, calculation of ASCs
and PF Exchange rates). Congress set the level of
exchange benefits for 1997. Following that, benefits
were determined through the settlement agreements.
Such settlements had been recommended by the
Comprehensive Review and Congress. These settle-
ments had the advantage of being far less labor
intensive. Running the regular REP required abo at
50 BPA staff as well as significant numbers of staff
from utilities.
7 In February 1995, BPA listed four key pressures driving up
its rates 1) protracted drought, 2) increased salmon costs,
3) generation debt service due to the way refinancing for Wash-
ington Public Power Supply System bonds had been structured,
and 4) additional generation costs due to short-term purchases
and new generation projects including Tenaska, a gas -fired
combustion turbine
2000 REP Settlements crafted
In the late 1990s, the market began to change as
natural gas prices began to rise. BPA's Competitive-
ness Project, launched in 1993, - was paying off in {
terms of improved financial performance and cus-
tomer confidence. BPA's net revenues for 1997 were
the best since 1991. In 1998, BPA launched a Sub-
scription process generally consistent with recom-
mendations from the Comprehensive Review. It was
designed to culminate in new 10 -year power sales
contracts for the post -2001 period.
When BPA does a-7(b)(2) test, - it must
hypothetical,case'to, determine what_the costs to
pref erence .customers would have been under the-,
, five-7(b)(2) assumptions. There are many: arcane
issues embedded in this calculation that'have a
significant•iinpact oti ,tha-p level, of REP
- ;payments.
. 'One assumption,(see five - assumptions, box) is
if preference customers require, iriore power than
federal resources can supply, BPA;would_acquire
the additional power to meet these' needs dom.' a -
resource stack'in a least - cost =first sequence, This ,
.,brings up the question- of what can be included,in',
, BPA's resource stack in this, hypothetical' world.
An example is the Mid - Columbia resources. not
dedicated,to public. load (approximately 80114W:
of hydropower, which- are.relatively cheap): The
publics that, own the Mid- Columbia dains'sold' a
, 'significant amount ofthe,power to the IOUs by
_. contract. If the Act is interpreted to'mean;that these
Mid- Columbia-resour'ces; sold to the IOUs can be
,. s''resource stack in.the hypothetical-
"scenario, BPA's resource costs would be„compara-
tively'low; That ,would meanr,a surcharge is more ' '
likely to be added to''the'PF'•Exchange.rate'to ensure:
- Keyissues can swing REP:.payments' substantially
- 'I f the Act means that in the hypothetical`
- case those Mid- Columbia resources dedicated to
IOU' load are unavailable to BPA, thenBPAwould
have to go to the next cheapest resources iri the'
resource - stack, ,which is much more expensive than
'the'Mid= Columbia,hydro. ,This makes - 7(b)(2) less -
likely to trigger, and therefore means higher REP
benefits for the IOUs.
The issue of whether the Mid - Columbia resources
could be included in the, BPA resource- stack ,came
up in 1996- but:turned out to=bemootsince at the
time there were enough Federal System
resources to Meet public needs without these
additional resources. At the time, -BPA assumed
that ; only the resources exported could tie included';,
the publics aren't paying- more they would
have in circumstances' reflecting. the five 7(b)(2)
assumptions,•This would REP benefits:
8
As part of the Subscription Strategy, BPA proposed to
either continue the traditional REP through agree-
ments known as Residential Purchase and Sale Agree-
ments (RPSA) or enter into negotiated settlements of
REP disputes for the FY 2002 -2011 period. Such
settlements were intended to provide benefits for the
IOUs in return for their waiver of claims. In the
settlements, the benefits reflected possible outcomes
of ASC determinations and the effect of Section
7(b)(2) on BPA's PF Exchange rate.
r The issue next arose in where it once again
became moot Duringthe WP 2007, -power rate
case, the issue *was not litigated because of a partial
Settlement, However; the next time BPA develops
rates this is' likely to be,an it °remains an
open question.
BPA has calculated that. this issue alone would
,'create a difference between the IOUs receiving '-
$30 million annually'versus annually:
There '. are other similarly arcane issues that can
swing:the benefit levels substantially
The concept of substituting a power sale for the
"paper" exchange was discussed extensively during
BPA's public involvement process for Subscription
and was supported by many public utilities and other
interests, as well as IOUs.
BPA's proposed settlement of REP issues had a value
of $140 million a year to be provided in the form of
both a power sale and money. BPA estimated that,
under its traditional calculation of REP benefits, the
IOUs would receive $48 million annually for the
FY 2002 -2006 period. The IOUs were advancing a
position under which payments could be $323 million
or more annually. The IOUs' agreements, which were
for 10 years, provided power at a specified rate — to
be determined in a Section 7(i) rate hearing — and
stipulated monetary benefits were to be paid based on
a comparison of the REP settlement power rate and at
a rate related to market prices.
BPA offered the IOUs 1,800 aMW for the FY 2002-
2006 period with 1,000 aMW in the form of power
and the rest as cash payments. BPA also offered to
IOU and Public Agency Residential Exchange Benefits
(2005 $)
O
O
O
450,000
400,000
350,000
300,000 - ,
250,000 -
200,000 -
150,000
100,000
50,000 -
9
provide 2,200 aMW during the 2007 -2011 period.
The intent at the time was that the 2,200 aMW would
be entirely physical power deliveries, although
whether the benefits would be power, monetary or a
mixture was not decided. BPA felt that such power
deliveries would be possible due to the expiration of
existing long -term surplus sales and public power's
interest in diversification due to market conditions.
This theory did not anticipate the West Coast energy
crisis along with its impact on the value of power,
public power's willingness to buy from BPA and the
impacts on IOU and BPA rates.
Through the settlement, BPA hoped to resolve long-
standing REP disputes, eliminate the administrative
burden of implementing the REP (i.e., processing
average system costs, filings, etc.) and align the
interests of the IOUs with BPA and its other custom-
ers by providing them benefits comparable to what
would have been provided within the range of
possible REP outcomes. BPA also hoped to prove de
longer-term certainty through the settlements.
'4. �D,v - �-9r' i i� �Dy �4v - �� r- -0 / 1V4 -4, 2 24 4��4 �4.���by 41 6
c� J 84 J 6� 8 D / J J' l 9 ! J S 7'Oi > ° I
Fiscal Year
FYs 2007 through 2011 benefits were computed prior to the May 3, 2007, 9th Circuit decision
• All IOUs
• All Publics
• Puget Sound Energy
❑ PGE
• PacifiCorp (UP &L)
• PacifiCorp (PP &L)
• North Western Energy
❑ Montana Light & Power
❑ Idaho Power
• CP National
D Avista Cora
All six IOUs elected to execute 2000 REP Settlement
Agreements. The state public utility commissions
recommended how the benefits of the settlement
would be allocated among the IOUs and asked for
an additional 100 aMW for FY 2002 -2006. BPA's
decision making leading to adoption of these recom-
mendations involved extensive public review.
The publics go to court
Within 90 days of the execution of the 2000 REP
Settlement Agreements, a number of Northwest
public power entities challenged the agreements in
the Ninth Circuit Court of Appeals. Some IOUs filed
petitions, but the basis for such petitions was resolved
shortly thereafter. The petitions were consolidated
into Portland General Electric Co. v. Bonneville
Power Administration.
The public agencies alleged the settlements provided
more benefits to the IOUs than the Northwest Power
Act allowed. The parties argued that BPA lacked
statutory authority to settle disputes under the REP as
proposed and that the 2000 REP Settlement Agree-
ments must comply with Sections 5(c) and 7(b) of the
Northwest Power Act. They said that, by executing
the settlements, BPA did not comply because it failed
to implement the ASC Methodology, in lieu transac-
tions and BPA's PF Exchange rate based on the
7(b)(2) test. BPA believed it complied with the law
because it considered all of these factors in establish-
ing the REP settlements.
West Coast power crisis
shocks region
By the summer of 2000, West Coast power prices
were escalating rapidly. As a result, public power
customers were showing increasing interest in placing
substantial amounts of load on BPA for the post -2001
period. By the time contracts were signed in October
2000, it was apparent that BPA would need to acquire
approximately 3,000 aMW beyond its existing supply
to meet its contractual commitments to public utili-
ties, IOUs and DSIs with deliveries to begin in
October 2001.
10
In the winter of 2001, wholesale power prices explod-
ed. BPA estimated that it would need to raise rates
250 percent if it were to acquire the full 3,000 aMW
at the then current prices. In the first six months of
FY 2001 alone, BPA spent more than $1 billion
buying power. Facing this extreme situation, BPA
developed a three- pronged load reduction program
that included conservation, reductions in power
demand by utilities and load curtailments by DSIs.
In May and June of 2001, BPA executed 2001 Load
Reduction Agreements with Pacific and Puget,
eliminating BPA's obligation to deliver power for the
FY 2002 -2006 period in exchange for cash payments.
The IOU agreements were structured so that BPA's
payment in FY 2002 was lower than the FY 2003-
2006 annual payments. These agreements to forego
power deliveries in exchange for a cash payment
eliminated BPA's need to buy large amounts of more
costly power on the market.
While the efforts to reduce BPA costs were largely
successful, public power utilities still saw their rates
go up 45 percent in October 2001. At the same time,
IOU REP benefits to Pacific and Puget increased
substantially as a result of the load reduction agree-
ments. Some public utilities whose rates historically
had been much lower than those of neighboring IOUs
suddenly found themselves having to raise their
residential rates above those of IOUs. Total benefits
flowing to the IOUs' residential and small -farm
consumers, including payments to reduce load on
BPA, rose to about $370 million annually, compared
to $58 million annually in the previous rate period.
BPA moves to lower public rates
An extended drought in the Northwest made it
difficult for BPA to recover financially from the West
Coast energy crisis and thus to lower power rates for
public utilities. BPA looked for new initiatives that
could further lower its costs and bring about rate
reductions.
Such cases are often referred to by the name of the first
petitioner
In 2003, BPA proposed a global REP litigation
settlement with all BPA customers that was designed
to provide rate relief for public utilities. The settle-
ment was fragile from the start because it required
support of nearly 100 preference customers that were
parties to various lawsuits. The 2003 Litigation
Settlement ROD provided that, among other things,
if any preference customer failed to sign the stipula-
tion and other settlement documents within 90 days
after the effective date (Jan. 21, 2004), the proposed
settlement would be void.
The proposed settlement would have decreased
FY 2004 rates for public utilities by 7 percent (from
what they otherwise would have been) by eliminating
$200 million in IOU REP benefits and deferring
another $270 million of benefits into the five -year rate
period beginning in 2007. The proposed settlement
also would have settled lawsuits brought by public
utility customers regarding the level of benefits going
to IOU customers.
The settlement proposal failed for lack of sufficient
signatures. BPA received support from 86 customers,
while six opposed the settlement and others did not
respond formally.
Settlement "lite" offered
After the failure of the proposed global litigation
settlement, in 2004 BPA proposed contract amend-
ments to the underlying IOU settlements. This came
to be known as "settlement lite."
In April 2004, BPA sent a letter asking for comment
on a proposal in which Pacific and Puget would
waive $160 million of payments between 2004 -2006
and defer another $100 million, plus interest, until
FY 2007 -2011 when BPA expected to be on better
financial footing. The amendments offered similar
terms to the other IOUs, and all six signed agree -
ments. In return, the IOUs would receive greater
certainty about their benefits. The benefits were
defined as financial payments, not power deliveries.
The proposed agreement established a floor of
$100 million a year with an annual cap of $300 mil-
lion for FY 2007 -2011. By removing the $200 million
11
from power costs, FY 2005 -06 power rates were
6 percent lower than they otherwise would have been.
The majority of commenters approved the proposal.
The IOUs agreed to the new settlement primarily
because it gave them greater certainty as to how post -
2006 benefits would be calculated. On May 25, 2004,
BPA published the 2004 Agreements Regarding
Payment ROD adopting the proposal to amend the
underlying agreements.
Clark requests exchange
In June 2005, Clark Public Utilities, headquartered
in Vancouver, Wash., sent BPA a letter requesting
exchange benefits. Clark had experienced a sharp rise
in its fuel costs for its gas -fired plant. Historically,
while the bulk of exchange benefits had gone to
IOUs, over the years more than 30 publicly owned
Northwest utilities had participated in the program.
All previously participating publics either had
terminated contracts or settled the amount of their
benefits.
BPA offered Clark an RPSA, which Clark signed in
August 2005. This initiated the analysis to determine
the utility's REP benefits. The following December,
BPA and Clark reached a settlement, with exchange
benefits scheduled to go into effect in January 2006.
As part of the settlement, Clark returned to BPA's
control area and replaced its power purchase contract
with a partial service product.
REP discussed as part of
Regional Dialogue
Since 2002, BPA has engaged with the region in a
Regional Dialogue aimed at defining BPA's future
power sales role after 2011 when current wholesale
power contracts with preference customers expire.
The future of the REP has been a prominent part of
these discussions involving both public and investor -
owned utilities. These discussions, extending over
five years, focused on forging a regional consensus on
10 Certain provisions for Avista, Idaho Power, NorthWestem and
PGE were different from those in Pacific's and Puget's contracts
a new financial formula to settle REP disputes for the
2012 -2027 period. While no agreement was reached,
the parties did narrow their differences and were
prepared to continue discussions. BPA and the IOUs
agreed on principles for a new settlement, but further
progress was put on hold after the Ninth Circuit
decision on May 3, 2007.
Ninth Circuit weighs in
On that date, the U.S. Ninth Circuit Court of Appeals
ruled on two lawsuits that had Residential Exchange
implications. The first suit is known as the PGE
(Portland General Electric) suit and was filed against
BPA by numerous parties challenging BPA's 2000
REP Settlement Agreements with six IOUs (for the
FY 2002 -2011 contract period). Public utilities were
the primary petitioners, although investor -owned
utilities and industrial customers also filed petitions.
In the PGE case, the Court held that BPA exceeded its
settlement authority and concluded that the settlement
was not consistent with Sections 5(c) and 7(b) of the
Northwest Power Act, which established the Residen-
tial Exchange Program. The Court also said BPA
avoided the full statutory scheme of protecting
preference customers under Section 7(b)(2).
The second lawsuit, known as the Golden Northwest
suit, addressed, among other things, BPA's FY 2002-
2006 power rates. In this case, the Western Public
Agencies Group, Public Power Council and Grays
Harbor PUD had contended BPA improperly allo-
cated costs of the REP settlements to the PF Prefer-
ence rate. The Court referred to its ruling in the PGE
case, noting that the IOU settlements were unlawful.
The Court held BPA should not have allocated costs
of the settlement as business costs under Section 7(g)
of the Northwest Act.
BONNEVILLE POWER ADMINISTRATION
DOE /BP -3811 • JUNE 2007
12
At the time of the Court's decision, the IOUs had
collectively been receiving about $327 million in
annual benefits. As a result of the Court's hearing,
BPA formally notified the IOUs" in writing of its
decision to suspend REP settlement payments imme-
diately due to the uncertainty created by the recent
Ninth Circuit Court rulings. BPA certifying officials
are personally liable if payments are made that are not
consistent with law, and, in this case, the Court's
rulings created substantial questions over whether
additional settlement payments are consistent with the
law. These payments amounted to about $28 million
each month to investor -owned utilities for their
residential and small -farm consumers.
The IOUs involved include Portland General Electric, Pacific
Power, Rocky Mountain Power, Avista, Puget Sound Energy,
Idaho Power and Northwest Energy At the time of the settle-
ment, Rocky Mountain Power was part of PacifiCorp, parent of
Pacific Power
ORT)/NGELES
W A S H I N G T O N , U.S.A.
Utility Advisory Committee Memo
Date: November 9, 2010
To: Utility Advisory Committee
From: Larry Dunbar, Deputy Director of Power Systems
Subject: Amendment No. 2 to Telecommunications Consultant Agreement
Summary: By the end of this year Capacity Provisioning, Inc. will prepare the plans and
specifications for additional fiber optic facilities and local area network improvements that are
required by the Metropolitan Area Network Services Agreement and will be constructed in 2011.
Staff recommends that Columbia Telecommunications Corporation is retained for design review
and construction inspection services.
Recommendation: Forward a favorable recommendation to City Council to authorize the
City Manager to sign Amendment No. 2 to the Agreement with Columbia
Telecommunications Corporation in an amount not to exceed $9,900 for consulting services
in support of the Metropolitan Area Network, and authorize the City Manager to make
minor modifications to the Agreement, if necessary.
Background /Analysis: On March 17, 2009, City Council authorized the Mayor to sign a
consulting services agreement with Columbia Telecommunications Corporation (CTC) for a
network needs assessment and public safety considerations. The consulting services sought were
advertised and a total of eight consulting proposals were reviewed at that time, with CTC
providing the best qualifications and most responsive proposal. On July 21, 2009 City Council
authorized the Mayor to sign an amendment to the consulting services agreement for preparation
of a request for proposals for the Metropolitan Area Network and a grant application for the
Wireless Mobile Data System. CTC's services have been of high quality and they have been very
responsive and supportive of the City's needs.
On April 6, 2010, City Council authorized the Mayor to sign the Metropolitan Area Network
(MAN) Services Agreement with Capacity Provisioning, Inc. (CPI). At last month's Utility
Advisory Committee meeting, staff provided a report on CTC's inspection of CPI's core switching
equipment and customer premises equipment replacement within the fiber optic network, which
were a requirement of the MAN Services Agreement. The work was inspected by CTC and
accepted as complete.
N \UAC \Final \Telecommunications Consultant Agreement Amendment 2 doc
Amendment No. 2 to Telecommunications Consultant Agreement
November 9, 2010
Page 2
By the end of this year CPI will prepare the plans and specifications for the redundant fiber optic
facilities, leachate pump stations 1 & 2 fiber optic facilities, commercial and industrial customer
demand response fiber optic facilities, and local area network improvements that are required by
the MAN Services Agreement. Construction is scheduled to be complete by April 15, 2011. The
City's share of this future expense in 2011 is approximately $163,000.00. Staff anticipates that it
will report on the status of this project to the Utility Advisory Committee in January and May of
2011.
Based on CTC's performance and familiarity with the City's telecommunications needs and
agreements, staff recommends that they are retained to provide engineering services to review the
design and inspect the construction of fiber optic facilities and local area networks under the MAN
Services Agreement. A summary of the proposed scope of work, schedule and not to exceed
prices for services are provided below.
Scope of work
Task 1 — Review plans and specifications
Task 2 — Provide on -site inspection
Task 3 — Review as- builts
Task 4 — Travel expenses
Completion by I Price
February 25, 2010
May 31, 2010
May 31, 2010 I $7,500
N/A I 2,400
Total I $9,900
Staff recommends that the Utility Advisory Committee forward a favorable recommendation to
City Council to authorize the City Manager to sign Amendment No. 2 to the Agreement with
Columbia Telecommunications Corporation in an amount not to exceed $9,900 for consulting
services in support of the Metropolitan Area Network, and authorize the City Manager to make
minor modifications to the Agreement, if necessary.
1
pORT NGELES
W A S H I N G T O N , U.S.A.
Utility Advisory Committee Memo
Date: November 9, 2010
To: Utility Advisory Committee
J
From: Phil Lusk, Power Resources Manager
Subject: Retail Tiered Rate Methodology Study New Large Single Load
Summary: The Electric Utility needs to establish a policy for new large single loads to address
how marginal power supply costs will be recovered. Staff will be returning to the Utility Advisory
Committee no earlier than February of 2011 to consider a proposed new large single load
ordinance.
Recommendation: For information only, no action requested.
Background /Analysis: The Pacific Northwest Electric Power Planning and Conservation
Act (Act) defines a New Large Single Load (NLSL) for the Bonneville Power Administration
(BPA) to be any new load or expansion of an existing load at a single facility whose power
requirements increase by 10 average megawatts (aMW) or more in any consecutive 12 -month
period as compared to its consumption during the immediately preceding 12 -month period. For
the City's Electric Utility, an appropriate NLSL may be 2 aMW under the new BPA wholesale
tiered rate methodology (TRM).
Under the BPA wholesale TRM that will become effective on October 1, 2011, load requirements
in excess of our "High Water Mark" (HWM) will be purchased at higher market power prices
( "Tier 2 "). If a 2 aMW NLSL requests retail electric service, Tier 2 power costs using today's
retail rate setting practices would be rolled into the total Electric Utility's revenue requirement
with the potential to increase retail rates by about 1.5% for all of the City's retail electric
customers. In contrast, a 10 aMW NLSL could increase retail rates by about 5.9%
There are two key NLSL issues: the aMW level the City establishes for it's NLSL, and if the Tier
2 power supply costs associated with serving a NLSL are shared with all retail electric customers.
Quite simply, a NLSL could either result in significantly more expensive retail rates for the new
customer or a modest retail rate impact for all customers. The issue presents the classic policy
trade -off between encouraging economic development by providing competitive rates for NLSL's,
or making new customers face the marginal power supply costs that they impose on the system.
Bonneville Power Administration (2001) New Lame Smele Load Policy
N \UAC \Final \Retail TRM Study New Large Single Load doc
Retail Tiered Rate Methodology Study New Large Single Load
November 9, 2010
Page 2
Staff is confident that Tier 2 power purchases can be delayed until at least 2014 as long as we
continue to experience historical customer growth, maintain our expanded energy conservation
program, and there are no reductions to the federal based system. However, a NLSL policy should
be developed in the coming months as a safety net in case a large commercial or industrial
customer expands or a new one locates in our service territory.
Public Works and Utilities staff plans to interact and involve the City's Community and Economic
Development Department, the Clallam County Public Utility District No. 1, and the Clallam
County Economic Development Council in discussions on NLSL issues. Staff anticipates
returning to the Utility Advisory Committee with a proposed NLSL ordinance for consideration no
earlier than its February 2011 meeting.
ORT NGELES
W A S H I N G T O N , U.S.A.
Utility Advisory Committee Memo
Date: November 9, 2010
To: Utility Advisory Committee
From: Larry Dunbar, Deputy Director of Power Systems
Subject: Wireless Mobile Data System Grant Business Case Evaluation Update
Summary: Last month Police Chief Terry Gallagher arranged a conference call that provided
additional information to the Utility Advisory Committee about the realistic cost of operating and
maintaining a wireless mobile data system. Staff has updated the assumptions in the business case
evaluation and can present a revised summary of the estimated operating and maintenance costs of
the proposed wireless mobile data system at today's meeting.
Recommendation: For information only, no action requested.
Background /Analysis: On May 11, 2010, staff provided the Utility Advisory Committee
information on the City's proposed wireless mobile data system that is a sub -grant to the
Northwest Open Access Network's (NoaNet) grant application under the Broadband Technology
Opportunities Program (BTOP. The Utility Advisory Committee directed staff to provide
additional information about the estimated operating and maintenance costs of the proposed
wireless mobile data system at a future meeting.
Last month staff shared information from other agencies that are experienced in wireless mobile
data systems such as the Cities of: Ripon, CA; Lebanon, OR; Prineville, OR; and Brookline, MA.
Based on the experience of other cities staff now anticipates a much longer equipment life
(previously 7 years was assumed and now from 12 to 20 years is reasonable which is similar to
voice radio equipment) and that outsourcing design, construction, operation, maintenance, and
services to the public would significantly lower the City's ongoing costs. Mr. Dick Bull, the
former Chief of Police for the City of Ripon, CA, joined last month's meeting by conference call
and shared his knowledge and experience operating and maintaining a wireless mobile data
system.
Staff has updated the assumptions in the business case evaluation and can present a revised
summary of the estimated operating and maintenance costs of the proposed wireless mobile data
system at today's meeting.
N \UAC \Final \Wireless Mobile Data System BCE Update doc
pORTANGELES
W A S H I N G T O N , U.S.A.
Utility Advisory Committee Memo
Date: November 9, 2010
To: Utility Advisory Committee
From: Larry Dunbar, Deputy Director of Power Systems
Subject: Advanced Metering Infrastructure System Project Update
Summary: Staff is continuing to make progress on the Advanced Metering Infrastructure System
project.
Recommendation: For information only, no action requested.
Background /Analysis: On November 1, 2010, staff learned that it's Commercial and
Industrial (C &I) grant application to the Bonneville Power Administration (BPA) for a Demand
Response (DR) project was successful. The C &I DR equipment will be integrated into the AMI
System and electric utility Supervisory Control and Data Acquisition System.
Staff will present information at today's meeting on the potential impacts of a New Large Single
Load (NLSL) which was included in the Retail Tiered Rate Methodology Study. A NLSL would
have retail rate impacts if the Electric Utility is required to purchase more expense Tier 2 power
supply. As part of the presentation staff will provide recommendations to address this policy issue
for the Electric Utility.
Parker LePla is scheduled to present the Communications Plan to the Utility Advisory Committee
at today's meeting. The Communications Plan will include a campaign theme, key messages, and
a schedule for various educational and advertising materials for the AMI System. Amendments to
the Communications Plan scope of work and fee will be necessary for the residential DR project,
which will be considered at today's meeting. Staff plans to request consideration of another
amendment to the Communications Plan scope of work and fee will be necessary for the C &I DR
project at next month's meeting.
AMI System proposals are continuing to be evaluated and over the last month each vendor
provided a presentation on their DR proposals, references were checked, and a revision to their
proposals was requested. Staff now anticipates that it may be requesting the Utility Advisory
Committee's recommendation to City Council on the AMI System Agreement at their December
14, 2010 meeting.
An executive summary of the Utility Advisory Committee involvement in the overall project is
available on the following page.
N \UAC \Final \AMI System Project RFP Update doc
AMI System Project Update
November 9, 2010
Page 2
Milestones
Advertisement
Proposal Deadline
UAC Consideration
City Council
Consideration
Milestones
UAC Consideration
City Council
Consideration
UAC Consideration
City Council
Consideration
'Revised dates.
AMI
System
5/10/2010
8/6/2010 I 4/19/2010 I 9/30/2010
I 12/14/2010' I 7/13/2010 I 11/9/2010
12/21/2010' 7/20/2010 11/16/2010
AMI
System
12/11/2011
12/18/2011
Request for Proposals Summary
BPA DR Projects
Commercial Communications
Residential & Industrial Plan
2/18/2010 6/10/2010
Scope of Work Summary
BPA DR Projects
Commercial
Residential & Industrial
Phase I Construction
3/8/2011
3/15/2011
Phase II Construction
12/11/2011'
12/18/2011
Communications
Plan
Consultant Report
11/9/2010
11/16/2010
Retail TRM
Study
5/10/2010 1/25/2010
7/2/2010 I 3/5/2010
8/10/2010 ( 4/13/2010
8/17/2010 4/20/2010
Retail TRM
Study
8/10/2010
8/17/2010
NLSL
TBD
TBD
ORT NGELES
W A S H I N G T O N , U.S.A.
Utility Advisory Committee Memo
November 9, 2010
Date:
To: Utility Advisory Committee
From: Phil Lusk, Power Resources Manager
Subject: Electric Utility Grant Status Report
Summary: The Electric Utility has applied for eleven grants over the last two years for projects
included in the Capital Facilities Plan. A Grant Status Report has been prepared that summarizes
success rates and leverage provided.
Recommendation: For information only, no action requested.
Background /Analysis: The Electric Utility has applied for eleven grants over the last two
years for projects included in the Capital Facilities Plan. A Grant Status Report has been prepared
that summarizes the success rates and leverage provided.
The highlights of the Grant Status Report include:
✓ 64% success rate obtaining grants (7 out of 11 grant applications were approved, 2 rejected,
2 still under review)
✓ 58% funding success rate ($3,605,967 of grant funding towards a total City project cost of
$5,695,390)
✓ $1.75 funding leverage rate ($3,605,967 of grant funding divided by $2,089,423 City cost
share)
✓ $37.74 consultant leverage rate ($3,605,967 of grant funding divided by $97,070 in
consultant fees to prepare grant applications)
For more information please refer to the attached Grant Status Report.
N \UAC \Final \Electric Utility Grant Status Report doc
City of Port Angeles
Public Works & Utilities Power Systems Division
Grant Status Report
GRANTS AWARDED Grants City Cost -Share TOTAL
ARRA Community Block Grant 135,000 300,000 435,000
Bonneville Environmental Foundation 16,661 18,739 35,400
BPA C &I DR 384,520 360,595 745,115
BPA Residential DR 367,000 287,110 654,110
BPA Wind Integration 157,000 0 157,000
BTOP 2,559,036 1,096,729 3,655,765
Shared Resource Conservation Manager 43.750 26.250 70.000
TOTAL $3,662,967 $2,089,423 $5,752,390
GRANTS UNDER REVIEW Grants Cost -Share TOTAL
EPA Street Lights 867,500 884,000 1,751,500
Google Fiber for Communities 2
TOTAL 867,500 884,000 1,751,500
REJECTED Grants Cost -Share TOTAL
Advanced Hydro 368,104 231,896 600,000
Smart Grid Investment Grant 1.388.000 1.388.000 2.776.000
TOTAL $1,756,104 $1,619,896 $3,376,000
GRAND TOTAL $6,286,571 $4,593,319 $10,879,890
CONSULTING FEES PAID TO DEVELOP PROPOSALS Consultant
Advanced Hydro None 0
ARRA Community Block Grant McKinstry 4,860
Bonneville Environmental Foundation None 0
BPA C &I DR EES 12,300
BPA Residential DR EES 12,050
BPA Wind Integration None 0
BTOP CTC 45,000
EPA Street Lights (in review) EES 4,860
Google Fiber for Communities (in review) None 0
Shared Resource Conservation Manager None 0
Smart Grid Investment Grant EES 18.000
TOTAL FEES PAID $97,070
SUCCESS RATE (Grants Awarded / Grants Applied For) 64%
SUCCESS RATE (Grants Awarded / Total Grant Bid) 58%
FUNDING LEVERAGE (Grants Awarded / City Cost - Share) $1.75
CONSULTANT LEVERAGE (Grants Awarded / Consulting Fees) $37.74
11/5/2010 N \UAC \Final \Grant Summary Report