Loading...
HomeMy WebLinkAboutAgenda Packet 11/10/2009Utility Advisory Committee Public Works Conference Room Port Angeles, WA 98362 November 10, 2009 AGENDA I. Call to Order II. Roll Call III. Approval Of Minutes For October 13, 2009 IV. Late Items V. Discussion Items A. Proposed Medic 1 Utility Rate Adjustments E. Department of Energy Smart Grid Investment Grant Application VI. Next Meeting Date: December 8, 2009 VII. Adjournment N• \uac \final \111009 B. Pretreatment Program Update (Memo to be provided by noon, Monday, November 9, 2009) C. Morse Creek Waterline Customers D. Public Utilities Regulatory Policy Act Mandatory Standards Consideration PRINT NAME 4a/ EUU7077 N: \ PWKS \ LIGHT \ CONS \ CATE \ SIGNUP.wpd UTILITY ADVISORY COMMITTEE GUEST SIGN UP SHEET ORGANIZATION Councilmembers Absent: Utility Advisory Committee Members Present: Staff Present: Others Present: III. Approval Of Minutes City Council Special Meeting/Utility Advisory Committee Public Works Conference Room Port Angeles, WA 98362 October 13, 2009 3:00 p.m. I. Call To Order Chairman Reed called the meeting to order at 3:00 p.m. II. Roll Call Councilmembers Present: Deputy Mayor Betsy Wharton, Karen Rogers, Don Perry (Alternate For Dan Di Guilio), Cherie Kidd (Observing Only) Dan Di Guilio Chairman Reed, Orville Campbell Kent Myers, Bill Bloor, Yvonne Ziomkowski, Nathan West joined the meeting at 3:54, Mike Puntenney, Larry Dunbar, Phil Lusk, Terry Dahlquist, Cate Rinehart Paul Elliott — Nippon Paper Industries USA Co., LTD Harry Bell — Citizen Shirley Nixon — Citizen Shannon Greene — Bonneville Power Administration Tom Callis — Peninsula Daily News Norma Turner — Citizen Chairman Reed asked if there were any corrections to the minutes of September 8, 2009. Councilmember Rogers moved to approve the minutes. Councilmember Wharton seconded the motion, which carried unanimously with Councilmember Perry abstaining. IV. Late Items: None V. Discussion Items: A. Bonneville Power Administration Notice For Tier 2 Power Supply Larry Dunbar, Deputy Director of Power Systems, introduced Shannon Greene of the Bonneville Power Administration. Ms. Greene distributed a handout and together they reviewed the information. There was a lengthy discussion. Councilmember Rogers moved to recommend city Council authorize the Director of Public Works and Utilities to notify the Bonneville Power Administration in accordance with Section 2.4.1.1 of Exhibit C of the Power Sales Agreement that the City selects the Tier 2 Short -Term rate Alternative for the period of October 2011 through September 2014 for 100% of its above High Water Mark load greater than 1 average megawatt. Councilmember Wharton seconded the motion, which carried unanimously. B. Energy Northwest Interlocal Agreement For The Morse Creek Hydroelectric Project Terry Dahlquist, Electrical Engineering Manager, pointed out that Energy Northwest possesses expertise that can be used to upgrade the Supervisory Control and Data Acquisition (SCADA) System for the Morse Creek Hydroelectnc Project. The upgrade will fulfill FERC licensing requirements and will increase generation and reduce operating costs. There was a brief discussion. Councilmember Wharton moved to recommend City Council authorize the Mayor to sign an interlocal agreement with Energy Northwest in an amount not to exceed $45,000, and authorize the City Manager to make minor modifications to the agreement, if necessary. Councilmember Perry seconded the motion, which carried unanimously. C. Western Public Agencies Group Direct Load Control Feasibility Study Larry Dunbar, Deputy Director of Power Systems, explained that City received a proposal from the Western Public Agencies Group (WPAG) for a peak demand management study. There was a brief discussion. Councilmember Rogers moved to recommend City Council authorize the City Manager to sign an agreement with EES Consulting, Inc., and Marsh Mundorf Pratt Sullivan and McKenzie in an amount not to exceed $5,000 for a Direct Load Control Feasibility Study. Orville Campbell seconded the motion, which carried unanimously. D. Compact Fluorescent Lamp Markdown Promotion Agreement Phil Lusk, Power Resources Manager, advised that the City had was offered a new agreement for the "Change a Light, Change the World" with Portland Energy Conservation, Inc. and that all expenses would be eligible for reimbursement. There was a brief discussion. Councilmember Wharton moved to recommend City Council authorize the Public Works and Utilities Director to sign the agreement and any subsequent amendments to the CFL Markdown Promotion Agreement. Councilmember Perry seconded the motion, which carried unanimously. E. Utility Advisory Committee Industrial Customer Member Resignation Larry Dunbar, Deputy Director of Power Systems, requested guidance on how to address the upcoming Industrial Customer member vacancy on the Utility Advisory Committee. A number of suggestions were considered. Staff was advised to send a letter to Nippon requesting they designate a representative that would submit an application to serve on the committee. Information only. No action taken. F. Utility Retail Rate And Fee Adjustments Larry Dunbar, Deputy Director of Power Systems, distributed information regarding the issued and reviewed the contents. There was a lengthy discussion. Councilmember Perry moved to recommend City Council proceed with the proposed rate and fee adjustments for the Electric, Water, Wastewater, Solid Waste Collection, and Transfer Station Utilities minus the Economic Development fund. Councilmember Rogers seconded the motion, which carried with Councilmember Wharton abstaining. G. Industrial Customer Power Sales Agreement Larry Dunbar, Deputy Director of Power Systems, advised that a Power Sales Agreement was being negotiated with the City's Industrial customer. A discussion followed. Councilmember Wharton moved to recommend City Council authorize the Mayor to sign a Power Sales Agreement with Nippon Paper Industries USA CO., and authorize the City Manager to make minor modifications to the agreement, if necessary. Councilmember Perry seconded the motion, which carried with Chairman Reed abstaining. H. Conservation Loan Deduction Phil Lusk, Power Resources Manager, pointed out that the City had assumed ownership of the balance of the Bonneville Power Administration legacy conservation loan agreements and explained why staff is interested in recovering the outstanding loan balances. There was a brief discussion. Orville Campbell moved to recommend City Council authorize the Director of Public Works and Utilities to make a one time offer of a 40% discount on conservation loans that are paid off within a nine month period beginning January 2010. Councilmember Wharton seconded the motion, which carried unanimously. VI. Information Only Items A. U.S. Department Of Energy Advanced Waterpower Grant Application Information only. No discussion or action taken. B. Northwest Power And conservation Council's Draft Sixth Northwest Power Plan Information only. No discussion or action taken. C. Energy Independence Security Act of 2007 Mandatory Consideration Of Standards Information only. No discussion or action taken. D. Network Needs Assessment And Public Safety Considerations Update Information only. No discussion or action taken. VII. Next Meeting Date: November 10, 2009 VIII. Adjournment: i Gary Braun, Mayor N. \pwks \light \cons \cate \oct 13 meet Dean Reed, Chair Utility Advisory Committee 5:08 p.m. Janessa Hurd, City Clerk Cate Rinehart, Admin. Spec. II J P ORTANGELES W A S H I N G T O N , U.S.A. Utility Advisory Committee Memo Date: November 10, 2009 To: Utility Advisory Committee From: Ernie Klimek, Water Superintendent Subject: Morse Creek Waterline Customers Summary: This is a follow up report on the presentation given at the May 12, 2009 Utility Advisory Committee meeting concerning backflow and consumption issues with the Morse Creek waterline customers. Recommendation: For information only, no action requested Background /Analysis: During the May 12, 2009 presentation to the Utility Advisory Committee, staff shared information concerning backflow and consumption issues as observed through field survey on our Morse Creek waterline customers. To date, all of the customers that were served with backflow deficiency notices are now in compliance with our backflow ordinance by the installation of approved devices or air gaps. Also, four customers asked to be removed from the waterline rather than pay a monthly utility bill, and have returned to the use of their existing well water. Three new meters were installed to account for existing usage and five customers were added to flat rate charges. We also shared consumption information for Customer LID 111634 (our 3 highest Water Utility customer). Since their installation of a backflow device, removal of illegal taps, and repairs of the line, consumption has been reduced from 142,000 cubic feet per month to 7,000 cubic feet per month. This represents approximately $44,500 annually of equivalent residential Water Utility charges within the City. We will continue to monitor the Morse Creek waterline through the Supervisory Control and Data Acquisition (SCADA) system and our annual backflow survey. N: \UAC\Final\Morse Creek Customers Update.doc Jul -07 Aug -07 Sep -07 Oct -07 Nov -07 Dec -07 Jan -08 Feb -08 Mar -08 Apr -08 r Mays -08 0 Jun -Q8 rn Jul -08 0 Aug-08 0 > Sep -08 a Oct -08 rn Nov -08 v Dec -08 Jan -09 Feb -09 Mar -09 Apr -09 May-09 Jun -09 Jul-09 Aug -09 Sep -09 Oct-09 01 O O Average Gallons/Day O O N U9 W W O U1 O O O 0 0 P 0RT A NGS W A S H I N G T O N , U.S.A. Utility Advisory Committee Memo Date: November 10, 2009 To: Utility Advisory Committee From: Dan McKeen, Fire Chief Subject: Proposed Medic 1 Rate Adjustments Summary: Staff recently completed a comprehensive Cost of Service Study for the City's Medic 1 (ambulance) utility. Based upon the results of the study, staff is proposing a $0.08 annual residential rate adjustment and a $1.19 annual commercial/business rate adjustment for 2010. Additionally, staff is proposing a 2011 adjustment equal to the CPI -U — June 2010. Recommendation: Forward a favorable recommendation to the City Council to approve the proposed Medic 1 Utility rate adjustments effective January 1, 2010. Background /Analysis: The City of Port Angeles' Medic 1 program is structured as a utility — supported by transport charges, a monthly utility charge, and a General Fund contribution. The Medic 1 Utility rates are based upon a Cost of Service Study, which: • Assigns costs to customer classes based on a rate that reflects the cost incurred for the availability and delivery of services, • Ensures that rates charged are equitable across the customer classes, and • Ensures that rates are based on the cost of actually providing the services. The Fire Department, along with the Finance Department, recently completed a comprehensive Medic 1 Cost of Service Study for 2010. Based on this study, the annual residential customer rate would increase from $52.12 to $52.20 in 2010, a nominal increase, and the commercial/business annual rate would increase from $53.74 to $54.93, or approximately $0.10 per month. The high demand user classifications, such as nursing homes and assisted living facilities, will see both an increase and a decrease, depending upon the user classification. In addition, the study proposes a 2011 rate adjustment equal to the CPI -U — June 2010. Attached is a copy of the study's executive summary. The entire 2010 Cost of Service Study can be viewed on -line at httns:// www .citvofna.us /firedent.htm #m1. If you have any questions regarding the Cost of Service Study prior to the meeting, I can be reached at 417 -4651 or by email at dmckeen(ddcitvofna.us. 2010 Medic I Utility Cost of Service Study Executive Summary The City of Port Angeles' Medic 1 program is structured as a utility — supported through an Enterprise (Medic I) Fund using transport charges, a monthly utility charge, and a General Fund contribution. The Medic I Fund is structured around a cost of service approach, with the first cost of service study completed in 2005. Since that time, the ambulance utility rate that partially supports the Enterprise Fund has had two increases. It is the purpose of this study to identify Medic l's cost of providing ambulance and EMS service to its customers and to propose rate adjustments that more closely reflect the utility's present cost structure. There are some guiding principles that should be considered when setting utility rates. First, a utility aggregates its expenses for a period of time to determine the revenue required. Once the costs are known, and the total revenue requirement has been quantified, this requirement is allocated to the users of the service in a manner that reflects the costs incurred for the availability and delivery (demand) of the services. Finally, once the costs for availability and demand are determined and the revenue requirement is known, the rate to be charged can be set. The rate charged may include some consideration based upon the customer's ability to pay. The Medic 1 Utility Cost of Service Study concluded that the availability cost associated with providing the Medic I utility in Port Angeles is currently 40.3% of the total cost of providing the service, less General Fund support and miscellaneous revenue. The remaining 59.7% of the costs is attributed to demand. As part of this study, the Fire Department conducted a retrospective evaluation of the calls Medic I responded to during 2008. Medic I's calls for service originated from residential, commercial/business, assisted living facilities, 24 -hour nursing facilities, group homes, adult family homes, jail facilities, schools, and city public areas. The Medic I Utility is funded partially by a monthly charge to the nine user classifications identified above. The fees are comprised of an availability charge and a demand charge. To meet the utility's current budget obligations, the Cost of Service Study identified that the combined charge requires rate adjustments amongst each user classification. The proposed residential customer annual rate would increase from $52.12 to $52.20 — a nominal increase. The commercial/business annual rate would increase from $53.74 to $54.93, or approximately $0.10 per month. The high demand user classifications will see both an increase and a decrease, depending upon the user classification. The following table outlines the utility's current rates along with the rates proposed by the Cost of Service Study. A table showing each user classification, current annual rates, and proposed annual rates is on the following page. 2010 Medic I Utility Cost of Service Study Executive Summary User Classifications Residential Adult Family Homes Assisted Living Facilities 24 -Hour Nursing Facilities Group Homes Jail Facilities Schools Commercial /Business City Public Areas Current Annual Rates $52.12 $372 per classification 1 $7,191 per classification $1,353 per classification $825 per classification 1 $1,266 per classification $2,636 per classification $53.74 $16,326 per classification 1 1 1 Proposed Annual Rates $52.20 $406 per classification 1 $9,408 per classification 1 $2,475 per classification 1 $876 per classification 1 $1,292 per classification 1 $2,061 per classification 1 $54.93 $12,971 per classification 1 'Rates for individual units vary based upon their percentage of use within that classification and are adjusted for allowable exemptions. PORTANGELES W A S H I N G T O N , U.S.A. Utility Advisory Committee Memo Date: November 10, 2009 To: Utility Advisory Committee From: Larry Dunbar, Deputy Director of Power Systems Subject: Utility Advisory Committee Industrial Customer Representative Application Summary: The Utility Advisory Committee's industrial customer representative announced his resignation after today's meeting. An application for appointment to the committee was requested and received from Nippon Paper Industries USA CO., LTD for review, interview, and consideration by the Utility Advisory Committee. Recommendation: After reviewing the application and conducting an interview, consider forwarding a favorable recommendation to City Council to appoint Mr. Paul Elliot as the Industrial Customer representative on the Utility Advisory Committee. Background /Analysis: On October 13, 2009, staff advised the Utility Advisory Committee that Mr. Dean Reed with Nippon Paper Industries USA CO., LTD will conclude his appointment on the Utility Advisory Committee at the end of 2009. Since then staff learned that Mr. Reed will conclude his appointment on the Utility Advisory Committee after today's meeting. Based on the direction provided by the Utility Advisory Committee last month, the City Manager requested an application from an employee of Nippon Paper Industries USA CO., LTD. Mr. Harold Norlund, Resident Mill Manager, submitted an application for Mr. Paul Elliot to serve on the Utility Advisory Committee. A letter from the City Manager and the application from Mr. Elliot are attached for review. Mr. Elliot was invited and is anticipated to attend today's meeting. According to the City Council Rules of Procedure, the Utility Advisory Committee needs to interview the candidate in open public session. After the interview staff recommends that the Utility Advisory Committee consider forwarding a favorable recommendation to City Council to appoint Mr. Paul Elliot as the Industrial Customer representative on the Utility Advisory Committee. Attachments: Letter from the City Manager to Mr. Harold Norlund dated October 19, 2009 Application for appointment from Mr. Paul Elliot to serve on the committee N \UAC\Final \ UAC Membership Vacancy doc pORTANGE.LES W A S H I N G T O N , U.S.A. Public Works & Utilities Department October 19, 2009 Mr. Harold Norlund Resident Mill Manager Nippon Paper Industries USA CO., LTD P.O. Box 271 Port Angeles, WA 98363 Dear Mr. Norlund: Please accept our sincere appreciation for Mr. Dean Reed's service on the Utility Advisory Convnittee. Mr. Reed's ideas, input, enthusiasm, and leadership have helped guide the City's electric, telecommunications, water, wastewater, solid waste, and stormwater utilities on policy and operational issues during the last ten years. Staff sincerely appreciates his service to the committee and expertise on electric power, industrial water, and Elwha water mitigation. On behalf of the City, I invite you to nominate a representative of your company to succeed Mr. Reed as the Industrial Customer Representative on the Utility Advisory Committee. The term of office is four years and would start on January 1, 2010. The Utility Advisory Committee has its regular meeting on the second Tuesday of each month. The appointment to the Utility Advisory Committee will follow the City Council's Rules of Procedure. The first step in the process is to select an employee of your preference and have that individual submit the enclosed application to the City no later than November 2, 2009. The second step in the appointment process will include an interview by the Utility Advisory Committee at its November 10, 2009 meeting, including their favorable recommendation to City Council. The last step in the process is City Council consideration of the appointment at its November 17, 2009 meeting. Please contact me if you have any questions about the appointment process. We look forward to continuing to have an Industrial Customer Representative on the Utility Advisory Committee. Sincerely, Kent M ers City Ma agtr Enclosure: Application for Appointment to Board, Commission or Committee Phone: 360 - 417 -4805 / Fax: 360- 417 -4542 Website. www.cityofpa.us / Email. publicworks @cityofpa.us 321 East Fifth Street - P.O. Box 1150 / Port Angeles, WA 98362 -0217 BFCE\ E0 ` )ORT NGELES 4 \10\1 g 2009 , `-� WASHINGTON, U s A. DF pp1 T AEI tS PU,0_1G 1'�tS APPLICATION FOR APPOINTMENT TO BOARD, COMMISSION CITY OR COMMITTEE Board, Commission or Committee to which you are seeking appointment: Applicant Nanie and General Information ::_ _ _- 4/C. le / 11 2O77 Fiist MI Last 210 /1 ivi S-74 Home Street Address Mer d ev, 0'362 City State Zip 452 t d9d 995 702/ 4 7 7Z C'I Home phone Work phone Cell phone P4u0 EIS WI7 NO is4 e cvfri-7 E- mail address Date of Birth (to be completed only by applicants for Public Safety Advisory Board for purposes of criminal history check to ensure compliance with Port Angeles Municipal Code 2.26.020) Certification and Location Information (circle one) y Are you employed by the City of Port Angeles? Are you a citizen of the United States? Are you a City resident? ( //r- If so, how lone C ViAas Do you own/manage a business in the City? Do you hold any professional licenses, registrations or certificates in any field? If so, please list: 1 i Yes Yes No No Yes Are you aware of any conflict of interest which might arise by your service on a City Board or Commission? If so, please explain: Work Experience - List most recent experience first, or attach a resume Employer Title From (M/Y) To (M/Y) 7/2c --. l'afe/0-- Brief jobs description 76 'C' r C3 l// J L/t — 7/2 V � v� / y Title Fr om (M/Y) T ( MiY) Emp Brief job description C( VS Y Brief job description 0/".4,11/1/1 5/M 9 ^ i2/e� Title From (M/Y) To (M/Y) Education - List most recent (;&) nt eexpenenc e first rstt �j / // 4/ f ili 1�3i7y � /ffi! ' $ �� f e, Yes: No institution /Location 4 ` Degree eamed/Major area of study raduated? Yes No Institution/Location Degree eamed/Malor area of study Graduated? Yes No Institution/Location Degree earned/Major area of study Graduated' Charitable. Social and Civic Activities and Memberships - List major activities you have participated in dufing the-last r-.� _.�._r. - - - - - - _ - - - - 30 # of members 4.5,E 5ccw7_S' Organization/Location Group'ss p /objective Brief descnption of your participation: at? �G" Z /I e� o I c.0417/41 ivi/ece O4 t'2 Pic/CC 76 9(6. Organization/Location r Group's purpose/objective Brief description of your participation: � C [/7 Cr9.1 2i 2 �(1 # of members Questions Why are you interested in serving on th particular Board or Commission? /i .ZS 4 l #7 ,),, /27Y iiC 4 / '1 tov '7/'v7 What in your background or experience do you think would help you in serving on this Board? _ X24 6 C ' aid//a) h.X %; 'ice( Z Gbry /01 'f7di9 -? i RC,6 oee S Y.C7,�:r✓S f � 20 � What is your understanding of the responsibilities of this particular Board or Commission? 19 7 let 7` //ft® ✓ / C�l�/.�lac;� /I/! 4 11Fc'iv ?lam ;1/2351 leW 6 S j(117 #c1 7D /let - 7 / ,',( i Please feel free to add any additional comments you wish to make regarding your application. Applicant Signature Date Submit completed forms to: OFFICE OF THE CITY MANAGER City of Port Angeles 321 E. 5 Street PO Box 1150 Port Angeles, WA 98362 In compliance with the Amencans with Disabilities Act, of you need special accommodations because of a physical limitation, please contact the City Manager's Office at 417.4500 so appropriate arrangements can be made. 3 4/_5ftr), PORTANGuES W A S H I N G T O N , U.S.A. Utility Advisory Committee Memo Date: November 10, 2009 To: Utility Advisory Committee From: Phil Lusk, Power Resources Manager Subject: Public Utilities Regulatory Policy Act Mandatory Standards Consideration Summary: The City is required by the Energy Independence Security Act of 2007 to consider four new Electric Utility standards embodied in the Public Utilities Regulatory Policy Act. The first step in the process was to formally commence the Consideration, which the City Council authorized on November 18, 2008. Recommendation: For information only, no action requested. Background/Analysis: In accordance with the Public Utility Regulatory Policies Act (PURPA) as amended by Section 1307 of the Energy Independence Security Act of 2007 (EISA), all electric utilities in the United States of America must consider four new standards. The new standards that must be considered include: 1) an investment in a qualified "Smart Grid" system, 2) providing Smart Grid information to electric customers, 3) should the City conduct integrated resource planning, and 4) rate design modifications that promote energy efficiency. Although PURPA mandates the City must consider the standards, it allows the City Council to make a determination if it is appropriate to implement or decline each standard. The City commenced its consideration of the four standards upon the approval of City Council on November 18, 2008. As part of this commencement, a public notice was published in the Peninsula Daily News and the notice was posted on the City's website A staff evaluation of each standard, including draft findings and conclusions, follows as the attached "Exhibit A ". City Council will be requested to open a public hearing to receive written comments and to receive testimony by staff and the public at its November 17, 2009 meeting. Staff will then return to the UAC on December 8, 2009 to make its final report on the four PURPA standards and ask for a recommendation to City Council. At the December 15, 2009 meeting, City Council will be asked to continue /close the public hearing, and consider final testimony by staff and the public and then make a determination on whether or not each standard is appropriate for adoption by the Electric Utility on behalf of its customers. 1 http• / /www cityofpa us/PDFs /PWorks/PURPANotice pdf N• \UAC \Onginal\PURPA Commencement doc EXHIBIT "A ": STAFF FINDINGS OF FACT The Energy Independence and Security Act of 2007 amended the Public Utility Regulatory Policies Act (PURPA), requiring public utilities with annual sales greater than 500 Million kWh to consider four new standards, including Integrated Resource Planning, Rate Design Modifications to Promote Energy Efficiency Investments, Consideration of "Smart Grid" Investments and Smart Grid Information; and 1) With regard to the Integrated Resource Planning standard; a) Port Angeles currently integrates energy efficiency resources into' -its plans, and has adopted policies establishing cost - effective energy efficiency as a priority resource. Energy efficiency resources are currently obtained by providing incentives to retail consumers for the installation of energy efficient equipment. f, b) Port Angeles must update its Resource Plan on a regular basis at minimum intervals of every two years as required by RCW 19.280.030. c) Port Angeles must submit an Electric„, Resource Plan to the Washington Department of Community, Trade and Economic Development by September 1, 2010 as _ required by RCW 19.280.030, which will incorporate cost- effective energy efficiency measures as a priority resource.``! ~ 4 d) Port Angeles would not benefit from the increased complexity and cost of conducting an integrated resource planning based on the eity historically low growth rates. N \UAC \Final\PURPA Exhibit A doc 2) With regard to the Rate Design Modifications to Promote Energy Efficiency Investments; a) Port Angeles currently provides utility incentives for the delivery of cost - effective energy - efficiency, and prori ones energy efficiency investments to its customers. b) Port Angeles currentlyooperates an energy conservation program in cooperation with the Bonneville Power Administration, which in turn develops it energy conservation program with the input from the Power Plans that are developed by the Northwest Power and Conservation Council. c) Port Angeles is planning to double its energy conservation program during the 2010 -2014 time period. d) Port Angeles will be conducting a study in 2010 for electric utility retail rate design alternatives, and may consider modifications to further promote energy efficiency in the future. e) Port Angeles offers time -of -use rates to all of its retail electric customers. f) Port Angeles is committed to cost -based rates and intends to keep the retail cost of electric power as close to the wholesale cost of power as possible. 3) With regard to the Consideration of "Smart Grid" Investments; a) Port Angeles has evaluated both Advanced Meter Reading (AMR) and Advanced Metering Infrastructure (AMI) technologies since 2006. i) This evaluation has been based on a number of factors, including: 1)Total costs, 2) Cost - effectiveness, 3) Improved reliability, 4) Security, 5) System performance, and 6) Societal benefit. b) Port Angeles included an AMI project in its current Capital Facilities Plan for the City's electric, water and wastewater utilities commencing in2010. i) This project will replace all existing non - advanced revenue meters now being used by the City's distribution system customers. c) Port Angeles does not currently receive any Smart'Grid,services or incentives to reduce its power costs under it present wholesale power sales or wholesale transmission agreements with the Bonneville Power Administration (B'I'A). d) Port Angeles cannot evaluate the costs and benefits of this proposed standard until such time that Smart Grid services are available on its wholesale power and transmission purchases from the BPA. 4) With regard to the Smart Grid Information; a) Port Angeles now provides consumer information through reasonable means other than a smart grid infrastruct reZ such as bye= ail, the City's web site, information printed on the bill, and bill inserts. PostlAngeles is interested in exploring the technological capabilities of a smart grid system and will carefully manage the cost of such a system should it ever become a practical method of delivering information concerning time - based wholesale electricity prices along with available retail rates data to its customers. b) Port Angeles now provides its customers with access to the data concerning the sources of power provided by the electric utility, including greenhouse gas emissions associated with each type of generation. This information is provided by means such as by e-mail, the City's web site, information printed on the bill, and bill inserts. c) Port Angeles cannot provide retail Smart Grid information to its electricity customers until after it completes the proposed AMI project in 2010. d) Port Angeles cannot provide wholesale Smart Grid information to its customers until such a time as those services are provided to the City by the BPA. N. \UAC \Flnal\PURPA Exhibit A doc e) Port Angeles has already deployed a fiber optic network that links all of its electric utility substations, enabling future Smart Grid services to its customers when they become available. Based on the foregoing Findings, Staff makes the following Conclusions: 1. The City of Port Angeles should not adopt the Integrated Resource Planning standard because the increased cost and complexity of compliance with such 'a standard would exceed any benefits that would be derived from it use. 2. The City of Port Angeles should not adopt additional Rate DesignModifications to Promote Energy Efficiency Investments standard at this time, but shouldreconsider the standard in 2010. 3. The City of Port Angeles should not adopt the Consideration of "Smart Grid" Investments standard at this time ,'but should reconsider the standard after the Bonneville Power Administration provides wholesale Smart Grid services to the City. 4. The City of Port Angeles should not ado the Smartrid Information standard at this time, but should reconsider the standard after the proposed Advanced Metering Infrastructure project is completed. N \UAC \Flnal\PURPA Exhibit A doc p ORT A NGELES W A S H I N G T O N , U.S.A. Utility Advisory Committee Memo Date: November 10, 2009 To: Utility Advisory Committee From: Phil Lusk, Power Resources Manager Subject: Department of Energy Smart Grid Investment Grant Application Summary: The City applied for a U.S. Department of Energy Smart Grid Investment Grant in August that could have provided a grant of up to 50% of the cost of qualifying technologies. On October 27, notice was received that the City's application was not selected for an award. Recommendation: For information purposes; no action requested. Background /Analysis: In July, the U.S. Department of Energy (DOE) announced a competitive Funding Opportunity Announcement (FOA) for Smart Grid Investment Grant (SGIG) Program applications. The FOA provided grants of up to 50% of the cost of qualifying Smart Grid devices and related technologies, and the City applied for support of its Advanced Metering Infrastructure project. The total application was for $2.8 million, for which the City would have been responsible for providing the 50% cost - share. In its rejection letter to the City, the DOE wrote the negative result represented the level of competition rather than a reflection of the City's application. With an available budget of around $3.4 billion, it was reported that the DOE received more than 400 applications with the amount of requested funding exceeding $14.4 billion. In the FOA, the DOE wrote that "Approximately 40% of SGIG funding will be allocated for smaller projects, while approximately 60% will be allocated for larger projects." However, in its selections, staff estimates that the DOE provided only about 19% of the available funding for smaller projects to a total 74 applicants. More than 60% of the funding was provided to only 13 applicants receiving awards of greater than $100,000,000. While the DOE also wrote that it reserved the right to revise these allocations depending on the quantity and quality of the applications received, there is reason to speculate that the DOE exhibited a strong bias towards larger projects. As an example, while the average award was slightly more than $34 million, the mode was $200 million /award. Staff will be requesting an explanation of the specific reasons for the DOE's change in its stated allocation formula, a change that removed more than $700 million in funding for smaller SGIG projects such as the City's. Given the average award size for the smaller projects, another 80 projects could have possibly been implemented had the funding allocation not been adjusted. N \UAC \Flnal\DOE Smart Grid Grant Application doc Department of Energy Washington, DC 20585 October 27, 2009 Kent Myers City of Port Angeles 321 East Fifth St. Port Angeles, WA 98326 Via Electronic Mail: kmyers @cityofpa.us Subiect: Notification of Selection for Smart Grid Investment Grant - Funding Opportunity Announcement (FOA) DE -FOA- 0000058, Control #:09 -0265, Project Title: Partnership for the Next Generation Electric Smart Grid., Topic Area: Advanced Metenng Infrastructure Dear Kent Myers, The Department of Energy has completed its review of your application submitted in response to the Smart Grid Investment Grant FOA. I regret to inform you that your application was not selected for award. This result represents the level of competition rather than a reflection on your application. The Office of Electricity Delivery and Energy Reliability (OE) received nearly 400 applications conforming to the requirements of the solicitation. Selection was based on the evaluation criteria stated in the FOA. A multi -level review process occurred over the past three months. There were over 200 subject matter experts reviewing the applications from within the Federal Government, National Laboratones, academia, and industry. The Smart Grid Investment Grant Ment Review Committee (MRC), consisting of senior federal staff within OE, further assessed the applications, reviewed experts' comments, and considered program policy factors before making their final recommendations to me for selection. A letter will be provided in the near future with more details on the results of the merit review of your application. Thank you for your time and effort in preparing a proposal. Although not selected under this FOA, I hope you continue to participate m future activities and programs with the Department of Energy. Good luck in your future endeavors. rip r er • Sincerely, a ,GV Patricia A. Hoffman Acting Assistant Secretary Office of Electricity Delivery and Energy Reliability Printed with soy ink on recycled paper