HomeMy WebLinkAboutAgenda Packet 01/08/2013Utility Advisory Committee
Council Chambers
Port Angeles, WA 98362
January 8, 2013 @ia 3:00 PM
AGENDA
I. Call To Order
II. Roll Call
III. Approval Of Minutes For December 11, 2012
IV. Late Items
V. Discussion Items:
A. BPA FY14 -FY15 Transmission Rates Initial Proposal (information only)
B. BPA Technology Innovation Grant Award
C. Location of UAC Monthly Meetings
VI. Information Only Items:
A. City of Port Angeles Ethics Policy Update (verbal report only)
B. Biennial Electric Utility Power Supply Strategy Workshop (pick date)
C. Utility Discount Update (verbal report only)
VII. Next Meeting Date: January 29, 2013 5 :00 PM City Council/UAC
Work Session with special briefing on Landfill Bluff
Stabilization Project Alternatives (note new date)
VIII. Adjournment
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February 12, 2013 Regular Meeting
I. Call To Order
Chairman Dan DiGuilio called the meeting to order at 3:00 p.m.
IL Roll Call
UAC Assigned
Councilmembers Present:
Other Councilmembers
Present: Patrick Downie (3:50)
Other Councilmembers
Absent: Brad Collins, Brooke Nelson, Max Mania
Utility Advisory
Committee Members
Present:
Utility Advisory
Committee Members
Absent:
Staff Present:
Others Present:
III. Approval of Minutes
Dean Reed
Utility Advisory Committee
Council Chambers
Port Angeles, WA 98362
December 11, 2012
3:00 p.m.
Dan Di Guilio, Cherie Kidd, Sissi Bruch
Paul Elliott, Murven Sears H, Michael Jacobs
Dan McKeen, Glenn Cutler, Bill Bloor, Sondya Wray, Phil Lusk, Therese
Agesson
Craig Johnson CPI
Charles "Doc" Beaudette OlyPen (3:02)
Jeremy Shwartz PDN (3:06)
Chairman Dan Di Guilio asked if there were any corrections to the minutes of November 13, 2012, Sissi
Bruch moved to approve the minutes. Cherie Kid seconded the motion, which carried unanimously.
IV.. Late Items:
Fire Protection Liability Security Draft Legislation Information Only
Y. Discussion Items:
A. Industrial Transmission Wholesale Power Rate Ordinance Modification
Phil Lusk, Interim Deputy Director of Power and Telecommunications Systems, discussed the Industrial
Transmission Wholesale Power Rate Ordinance Modification. An update of the ordinance is needed because
the Tier 1 Cost Allocator basis (TOCA) provided by the Bonneville Power Administration increased from
1.15889% to 1.16219 A lengthy discussion followed.
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Dean Reed moved to recommend City Council that a public hearing be conducted at their December
18, 2012 meeting, That City Council continue and then close the public hearing at their January 2,
2013 meeting, and then adopt the proposed rate ordinance modification. Sissi Bruch seconded the
motion, which carried unanimously
VI Information Only Items:
A.Fire Protection Liability Security Draft Legislation (verbal report only)
Information only. No action taken.
B. Information Technology Grant Award (verbal report only)
A Bonneville Power Administration Technology Innovation grant award has been received, and it is
anticipated this item will be on the UAC agenda next month. Information only item, and no action was taken.
C. Wireless Mobile Data System Update (verbal report only)
A presentation on the current status of the Wireless Mobile Data System was given by Craig Johnson from
Capacity Provisioning Inc and Charles "Doc Beaudette from OlyPen. This was an information only
update, and no action was taken.
D. Utility Discount Ordinance Update (verbal report only)
Based on initial information provided by the Finance Department, 61 applications have been processed and
85 more applications are waiting to be processed. A more detailed report will be provided at the January
2013 meeting. Information only item, and no action was taken.
VII. Next Meeting Date: January 8, 2013
January 22, 2013 City CounciUUAC Work
Session with special briefing on Landfill Bluff
Stabilization Project Alternatives.
VIII.
Adjournment: 4:10 p.m.
Cherie Kidd, Mayor Sondya Wray, Administrative Specialist
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ORTANGELES
W A S H I N G T O N U.S.A.
Utility Advisory Committee Memo
Date: January 8, 2013
To: Utility Advisory Committee
From: Phil Lusk, Interim Deputy Director of Power and Telecommunications Systems
Subject: BPA Transmission Rates Initial Proposal
Summary: The Bonneville Power Administration released an Initial Proposal for proposed FY14-
FY15 transmission rates, which estimates the region will see an increase in transmission costs that
averages 11.2 The City may be facing a substantially larger increase.
Recommendation: Forward a favorable recommendation for the City Council to request the
City Manager assist the Western Public Agencies Group in the upcoming Bonneville Power
Administration rate proceeding, and to also identify any additional action items, if any, that may
be warranted to be brought to the City Council or the Utility Advisory Committee for
consideration and action.
Background /Analysis: The Bonneville Power Administration (BPA) released an Initial Power
and Transmission Rate Proposal for FY14 -FY15 on November 9, 2012. For the FY14 -FY15 time frame
(October 1, 2013 September 30, 2015), the BPA is estimating that the region will see an average
11.2% increase in transmission costs.
The BPA is proposing new cost allocation and billing determinant methodologies for transmission
services that the BPA suggests are more in line with the Tiered Rate Methodology. Both methodologies
use a non coincident peak, which, in the case of the billing determinant, is the customer's highest
transmission peak in a month. This is a different number than the coincident peak methodology
(customer peak when the BPA system peaks) that is currently used. To the extent that a customer's non
coincident peak for generation is larger than its coincident peak for transmission, it will see an increase
in transmission costs.
With such changes, some electric utilities have been disproportionately impacted compared to BPA's
projected regional averages. This appears to be the case for the City. Based on the City's peak loads, the
Western Public Agencies Group (WPAG) is estimating that City's transmission rates could increase by
55 -60% compared to the 11.2% regional average.
Transmission costs typically compose about 10% of the total monthly BPA wholesale power and
transmission bill. The proposed increase will impact all of our customers. However, this information is
very preliminary, and BPA's proposed methodology may change during the rate proceeding.
N \UAC \DepDu\BPA Transmission Rates Initial Proposal.doex
BPA Transmission Rates Initial Proposal
January_ 8, 2013
Page 2
The City's BPA transmission account executive has been asked to provide an overview of theproposed
transmission rates, and WPAG team will be presenting their perspectives as well. The attached memo
from WPAG's EES Consulting evaluates the BPA Initial Proposal, comparing the proposed rates with
current rates for the City's electric utility on a standalone basis.
Staff requests that the Utility Advisory Committee forward a favorable recommendation for the City
Council to request the City Manager assist the Western Public Agencies Group in the upcoming
Bonneville Power Administration rate proceeding, and to also identify any additional action items, if
any, that may be warranted to be brought to the City Council or the Utility Advisory Committee for
consideration and action.
Attachment: EES Billing Deteaninant Memo Port Angeles
PORTANGELES
W A S H I N G T O N U.S.A.
Utility Advisory Committee Memo
Date: January 8, 2013
To: Utility Advisory Committee
From: Phil Lusk, Power Resources Manager
Subject: Bonneville Power Administration Technology Innovation Demand Response Grant
Acceptance
Summary: A proposal was submitted in May 2012 to the Bonneville Power Administration for a
Demand Response Demonstration Market Project, The city was selected and has negotiated the terms
and conditions for this demonstration project. An award in an amount not to exceed $498,960 has been
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 $498,960 for
the Demand Response Demonstration Market 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 lOpm 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, since 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.
In 2010, 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 eventually issued
an award agreement to the City. In this recently completed pilot project, City staff recruited and
engaged commercial and industrial end -user participants, evaluated automated demand response
technologies, implemented end -use customer load control strategies (including technical coordination
with outside technology vendors), and dispatched and managed DR events. The project included nine
customers spanning a variety of end -uses, including retail, health care, commercial, and industrial
verticals, including Nippon Paper Industries USA, LLC (NPI). With the assistance of the BPA, the City
succeeded in meeting the project's technical objectives.
N• \UAC\DepDii\BPA TI DR Grant Acceptance docx
BPA Technology Innovation Demand Response Grant Agreement
January 8, 2013
Page 2
The technical accomplishments of the C &I DR pilot project set the stage for the current market
demonstration project, in which the City will act as a DR aggregator. The project's goal is to leverage
the DR C &I DR pilot projects further towards a realistic DR market by working out the remaining
financial and institutional issues that must be addressed for the BPA and its customers to operate a
meaningful DR effort. In this project, the City will operate a DR market for INCs and DECs in order to
meet the following objectives:
Reduce or shift the City's peak demand;
Provide regional balancing reserves;
Delay or eliminate regional transmission system upgrades;
Determine the market values for load decreases (INCs) and load increases (DECs) and develop a
commercial ancillary services market using non generation assets.
While the exact amount of funding may ultimately be reduced by the BPA, the City's proposal has a
budgeted total of $498,960 from the BPA, all of which is currently programmed for customer incentives.
Staff and the BPA are still reviewing the final details of the Cooperative Agreement that will be used as
the contracting instrument for the award, which will then be provided to the City Attorney for his review
prior to requesting Council authorization.
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
$498,960 for the Demand Response Demonstration Market Project, and make minor modifications to
the agreement, if necessary.
Attachments: Demand Response Demonstration Market Project Proposal
BPA C &I DR Pilot Final Report