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HomeMy WebLinkAboutAgenda Packet 05/08/2007 Utility Advisory Committee Public Works Conference Room Port Angeles, W A 98362 May 8, 2007 3:00 P.M. AGENDA 1. Call To Order II. Roll Call III. Approval Of Minutes For April 9,2007 IV. Late Items V. Discussion Items A. Stormwater Rate Discussion:Continued B. Benefit Dump Day C. GridWise Project Electric Meter Transfer Agreement D. Electrical Interconnection and Net Metering Standards E. Time Based Metering and Communications F. Western Energy Coordinating Council (WECC) Entity Registration VI. Next Meeting Date: June 12, 2007 VII. Adjournment N :\UAC\Final\050807. wpd Utility Advisory Committee - Special Meeting Public Works Conference Room Port Angeles, W A 98362 April 9, 2007 3:00 P.M. b" "4~,. AGENDA I. Call To Order Chairman Reed called the meeting to order at 3:08 p.m. II. Roll Call Members Present: Chairman Reed, Orville Campbell, Grant Munro, Betsy Wharton, Karen Rogers Members Absent: None Staff Present: Mark Madsen, Bill Bloor, Glenn Cutler, Mike Puntenney, Scott McLain, Gary Kenworthy, Steve Spem, Tom McCabe, Ernie Klimek, Helen Freilich, Cate Rinehart Others Present: Jenny Bailey - Parametrix Brian Gawley (3:48) - Daily News Paul Lamoureux - Citizen Bob Martin - Clallam County Mike Doherty - Clallam County III. Approval Of Minutes: Chairman Reed asked ifthere were any corrections to the minutes of March 13,2007. Councilman Munro moved to approve the minutes. Orville Campbell seconded the motion, which carried unanimously. Chairman Reed asked if there were any corrections to the minutes of March 16, 2007. Orville Campbell moved to approve the minutes. Councilmember Wharton seconded the motion, which carried unanimously. IV. Late Items: None V. Discussion Items: UTILITY ADVISORY COMMITTEE April 9, 2007 A. Comprehensive Solid Waste Management Plan (CSWMP) Update Tom McCabe, Solid Waste Superintendent, introduced Jenny Bailey ofParametrix who gave a presentation highlighting the goals and objectives of the plan guideline. There was a brief discussion. Staff was requested to have a complete copy ofthe plan available in the City Manager's office and to include a copy of the executive summary with the Council memo. Councilmember Wharton moved to recommend City Council adopt the CSWMP. Orville Campbell seconded the motion, which carried unanimously. B. EWTP Easement For The Ebvha Dam Removal Project Steve Sperr, Engineering Manager, noted that the City, as part of the Memorandum of Understanding with the National Park Service, agreed to grant an easement over portions of its properties adjacent to the Elwha River. This easement will allow the National Park Service to construct the Elwha Water Treatment Plant facilities, and operate and maintain the Elwha Water Treatment Plant during the dam removal impact period. There was a brief discussion. Orville Campbell moved to recommend City Council authorize the City Manager to sign an easement and related documents for the construction, operation, maintenance, implementation, repair, and inspection of the Elwha Water Treatment Plant by NPS. Mayor Rogers seconded the motion, which carried unanimously. C. Consumer ConfidencelWater Quality Report For Calendar Year 2006 Glenn Cutler, Director of Public Works and Utilities, introduced Ernie Klimek who replaced retired Bill Beverford as the W ater/W astewater Collection Superintendent. Mr. Klimek reviewed the information in the packet, responded to questions, and provided clarification. It was noted that the Notice To Water System Users About Your Drinking Water public statement required by law had caused some concern by customers. Staff was requested to revise the 2006 report to diffuse the issue. A discussion followed. No action taken. Information only. D. Amendment No.1, Brown And Caldwell Consultant Agreement 06-05 Steve Sperr, Engineering Manager, pointed out that the amendment was needed to finalize technical memos on odor control and a re-rating report for the Wastewater Treatment Plant, complete septage receiving station design work, review specialized equipment that the City will be installing, and provide construction support services for the East Urban Growth Area sewer extension contract. There was a brief discussion. Councilmember Wharton moved to recommend City Council authorize the Mayor to sign UTILITY ADVISORY COMMITTEE April 9, 2007 Amendment No.1 to Agreement 06-05 with Brown and Caldwell, increasing the maximum compensation amount under the agreement by $187,000, from $850,000 to $1,037,000. Orville Campbell seconded the motion, which carried unanimously. E. Public Works Trust Fund Loan Application For CSO Phase 1 Projects Steve Sperr, Engineering Manager, confirmed that the City was pursuing two additional Washington State Public Works Tmst Fund loans to assist in funding $19 million in Combined Sewer Overflow Phase 1 Projects. Applications for both loans are due on or before May 7,2007. There was a lengthy discussion. Staff was advised to modify their original recommendation and to revisit the issued should either or both loans be approved. Councilman Munro moved to recommend City Council authorize the Mayor to sign a PWTF Pre-Construction Loan Application certification, in an amount not to exceed $885,000, and sign a PWTF Construction Loan Application certification, in an amount not to exceed $10,000,000. Councilmember Wharton seconded the motion, which carried unanimously. F. Detailed Design Of Phase 1 CSO Projects, Brown And Caldwell Consultant Agreement Amendment No.2, Project 06-01 Steve Sperr, Engineering Manager, reported that the pre-design effort for Phase 1 had been 'completed and detailed design of the Phase 1 CSO Projects needed to begin to meet DOE compliance schedules. Various tasks were reviewed and discussed. Councilman Munro moved to recommend City Council authorize the Mayor to sign Amendment No.2 to the Agreement with Brown and Caldwell for the detailed design of Phase 1 CSO Projects, increasing the maximum compensation amount under the agreement by $1,320,000, from $425,000 to $1,745,000. Councilmember Wharton seconded the motion, which carried unanimously. VI. Executive Session Adjourn to executive session - 4:45 p.m. Executive session under RCW 42.30.110(1)(c) to discuss with legal counsel potential litigation, (i) to consider the terms on which real estate will be offered for sale, and (d) contract negotiation. Mayor Rogers left at 5:35 p.m. Executive session concluded at 5:48 p.m. Meeting resumed in regular session. G. 2007 Consultant Agreement With Parametrix, Inc. For Engineering Services Gary Kenworthy, City Engineer, confirmed that Parametrix had been selected to continue to provide engineering services related to the Solid Waste Utility and Landfill including directed UTILITY ADVISORY COMMITTEE April 9, 2007 services. Major tasks for 2007 include operations support, final closure design and construction support, and shoreline stabilization construction support. There was a brief discussion. Councilmember Wharton moved to recommend City Council approve and authorize the Mayor to sign an agreement with Parametrix for 2007 Engineering Services for an amount not to exceed $694,491, which includes $50,000 for directed services that can only be used with staff's prior approval. Orville Campbell seconded the motion, which carried unanimously. H. Stornnvater Rate Discllssion Delayed to a later meeting. VIL Next Meeting Date: May 8, 2007 VIIL Adjollrnment: The meeting was adjoumed at 5:45 p.m. Chairman Reed Cate Rinehart, Admin Spec II N :\PWKS\LIGHT\CONS\CA TE\apriI09meet. wpd ~ORTANGELES WAS H I N G TON, U. S. A. Utility Advisory Committee Memo Date: Apri19,2007 To: Utility Advisory Committee From: Gary W. Kenworthy P.E., Deputy Director of Public Works/City Engineer Subject: Stormwater Utility Rates Continued, Additional Requested Information Summary: This is a continuation of discussions started in May 2006 regarding the need for added funding for the Stonnwater Utility. Recommendation: Continue the discussion regarding the funding needs, capital program, and rate options and provide direction to staff for future action. Background/Analysis: At the March 13,2007 only limited time was available for discussion of the Stormwater Utility rates. It was decided to continue the discussion at the next regular UAC meeting and it was requested that additional information be provided regarding: 1. When the rates need to be set in time to be included in the 2008 tax mailing; 2. Possible Mitigation Credits; 3. Proposed 2 year budget for the Stormwater Utility; and 4. Develop a model to allow investigation of various rate options. The deadline for the 2008 tax mailing is November 2007. A rate analysis model has been developed to allow UAC members the opportunity to investigate revenue impacts of various combinations of base rates, cap limits, and impervious area changes. Weare preparing a proposed two year budget and investigating rate adjustments for stormwater runoff mitigation measures installed by property owners. These will be distributed at the meeting if requested information from other municipalities regarding these items are received in time. Additional copies ofthe March 13, 2007 UAC memo on Stormwater Utility Rates will be available at the meeting. Stormwater Rates 2007 March 13,2007 Page 2/3 Stormwater Revenue Calculator Model Current Residential Customers 6,589 6,589 Non-Residential Customers 1,546 1,546 Monthly Rate per Res. ERU $3 $3 Monthly Rate per Non-ResERU $3 $3 Impervious ERU area (s.t.) 4,000 4,000 ~otal Residential Impervious Area 14,455,923 38% 14,455,923 38% otal Non-Residential Impervious Area 23,417,675 62% 23,417,675 62% trotallmpervious Areas 37,873,599 100% 37,873,599 100% HH! """".,,!J.,rea ER!J CE1'O 1n 10 Estimated Annual Residential Revenue $237,204 61% $234,842 65% Estimated Annual Non-Residential Revenue $149,684 39% $125,238 35% Total Estimated Annual Revenues $386,888 100% $360,080 100% Less Utility(8%) & Proc.(1 %) $34,820 $32,407 Net Revenue '$ :'iPf~'i...OrJO $327,673 Sample Model Runs $3 $4 $5 $6 $3 $3 $4 $4 $4 $<1 $4 $4 $3 $4 $5 $1[; $3 $3 $4 $4 $4 $4 $4 $4 4,000 4,000 4,000 4,000 3,000 2,000 2,000 2,000 2,000 2,000 2,500 3,000 38% 38% 38% 38% 38% 38% 38% 38% 38% 38% 38% 38% 62% 62% 62% 62% 62% 62% 62% 62% 62% 62% 62% 62% 10 10 10 10 10 10 10 20 50 1,000 1,000 1,000 61% 61% 61% 61% 57% 51% 51% 46% 42% 36% 41% 45% 39% 39% 39% 39% 43% 49% 49% 54% 58% 64% 59% 55% I~')&:::') .- 1..__- iF '", A"'''' ,017 1lt~r.>A ....."',0'14 ~~A;, "Q~ IfU4,TJl N:\UAC\UAC2007\UAC040907\Stormwater Rates 2007-] ,doc Stormwater Rates 2007 March 13, 2007 Page 3/3 Stormwater Utility Budgets, Current, 2007 Proposed Revision, and 2008. Stormwater Utility Budgets Table Description Current 2007 Proposed 2008 Personnel $0 $100,000 $200,000 Services $18,756 $30,000 $50,000 Intergovernmental $98,900 $98,900 $50,000 Construction $280,000 $280,000 $400,000 Totals $397,656 $508,900 $700,000 The increases shown for 2007 reflect the Council authorized engineering position to assist in the implementation of the NPDES Phase II Stonnwater requirements. In 2008 the increases reflect anticipated additional personnel efforts required in planning and street maintenance. In addition we will need to show added efforts in construction towards water quality at stream and marine outfalls. N :\UAC\UAC2007\UAC040907\Stormwater Rates 2007 -I.doc FORTANGELES WAS H I N G TON, U. S. A. Utility Advisory Committee Memo Date: March 13, 2007 To: Utility Advisory Committee From: Gary W. Kenworthy P.E., Deputy Director of Public Works/City Engineer Subject: Stormwater Utility Rates Summary: This is a continuation of discussions started in May 2006 regarding the need for added funding for the Stormwater Utility. Further discussions were delayed in view of the pending DOE decision on the inclusion of Port Angeles in the Phase II Municipal Stormwater pennit. Now that the City has been included in Phase II an additional engineering position has been approved by Council to support the City's implementation efforts. Recommendation: Review the funding needs, capital program, and rate options and provide direction to staff for future action. Background/Analysis: The Stormwater Utility and associated rates were established in November 2003. The initial direction from Council was to focus on capital and small works projects and provide training of field crews in proper maintenance procedures to meet regulatory requirements. The basic rates established to fund the utility were $3.00 per month for single family and duplex properties, and $3.00 per month per 4000 sq. ft of impervious area ($30.00 max.) for non-residential properties. Two major projects have been completed since establishment of the utility, the Crown Park Drainage Improvements Project and the Lincoln Avenue Stonnwater Separation Project. In addition, Stormwater utility funds have been used to assist funding of street and sidewalk projects with stormwater facilities. Street crews have attended classes on proper maintenance to meet requirements of the Environmental Species Act (ESA) and Department of Ecology (DOE) best management practices. Since the establishment of the Stormwater Utility new unfunded mandate requirements have been imposed on the City by DOE. In addition, rising material and construction costs have effectively reduced the construction program. To meet these challenges, additional staff and funding are needed. Last May and August, presentations were made to the UAC regarding the need to adjust the Stormwater Utility Rates. In view of the uncertainty as to whether the City would be designated by DOE as requiring a Phase II Municipal Stormwater permit, it was recommended in August to delay action and revisit the issue in March 2007. Subsequently, the City has been designated by DOE as a municipality requiring a Phase II Municipal Stormwater permit. The City has joined other designated Cities in appealing some of the permit conditions. The City is also submitting a petition to DOE to include the surrounding UGA and other Clallam County area to be covered by the permit. The City is not challenging being included under Phase II and has submitted the Notice ofIntent (NOI), as required by DOE, to be covered by the permit. Council recently approved the hiring of an additional Stonnwater Rates 2007 March 13,2007 Page 2/3 full time engineering position in Public Works to assist in implementation of the Phase II requirements. The estimated annual cost for this position is $100,000. The original projection ofthe rates in 2003 was estimated to produce a net annual revenue for projects in the amount of $225,000 per year. The Engineering News Record (ENR) Construction Cost Index for Seattle in 2003 was 7713. The current ENR index is 8621. This construction cost change since 2003 effectively requires $26,500 more now ($251,500 annually) to continue to fund the Stormwater capital project program at the same levels as 2003. Each $1 of base rate adjustment produces approximately $108,000 in net revenue. The estimated Stormwater Utility base rate adjustment required to fund the new engineering position ($100,000) and maintain a level construction program ($26,500) in the amount of $126,500 annually is $1.20. This would result in a base rate of $4.20 under the current rate structure. This rate will not cover the added efforts that will be required by Community and Economic Development for public involvement, education, training, and permitting, nor will it cover any added work required by the Utilities, Parks, and Street crews. Any added efforts which may be required of engineering beyond the one authorize position are also not included. Beyond the above staffing and adjustments for inflation discussion, the CFP for 2007 thru 2012 includes non-programmatic capital projects totaling $5,420,000 or $900,000 per year. To raise an additional $650,000 per year beyond the $250,000 proposed above would require adding $6.00 to the base rate for a total of $1 0.20 per month. This is not acceptable or affordable at this time for the ratepayers. Additional funding for general area stormwater improvements will need to be provided by developers, by formation of Local Improvement Districts, or by loans and grants when available. If Stormwater Utility rates are adjusted, a review of the commercial (35%) and residential (65%) contributions to the overall revenues may be needed. Based on impervious areas for commercial (52%) and residential (48%) customers, an adjustment may be needed to make the rates more equitable. Currently, monthly contributions from contiguous commercial properties are capped at 10 equivalent residential units (ERU) or $30.00. Adjusting or removing the cap limits and/or modifying the ERU impervious area from 4000 s.{ are alternate methods to bring the commercial and residential rates to equity. Removing the cap would provide an estimated additional 2600 ERUs or $90,000 in annual revenues at the current $3.00 ERU rate. Reducing the per ERU area from 4,000 s.f. to 3,500 s.f. would not increase the residential revenues but would raise the commercial revenues by $142,200 with cap or $290,000 without cap at the current $3.00 ERU rate. These options are shown in the following table: o tion Descri tion Residential Commercial Total 1 No Change (Current) $232,500, 65% $124,500,35% $357,000, 100% 2 Remove ERU cap $232,500, 52% $214,500, 48% $447,000, 100% 3 Reduce ERU to 3500 S.F. with $232,500,47% $266,700,53% $499,200, 100% ERU cap 4 Reduce ERU to 3500 S.F. $232,500, 36% $414,500,64% $647,000, 100% without ERU cap Measured Impervious areas 48% 52% 100% N:\UAC\UAC2007\UAC040907\Stonnwater 3-13-07 UAC Memo.doc Stormwater Rates 2007 March 13,2007 Page 3/3 These proposals are presented here to enable discussion with the UAC on Stormwater Utility Rate adjustments needed to meet the CFP program as well as pending NPDES Phase II unfunded requirements. For comparison the following table has been prepared showing the stormwater utility rates charged by similar sized cities and how they have changed (Highlighted) since 2004 to meet the ever increasing requirements: Monthly System Monthly System City Residential Development Residential Development Rate Char e Rate Char e 2004 2006 Port Angeles $3.00 None $3.00 None Anacortes $3.00 $1,126.00 $3.00 $1,126.00 Blaine $4.00 $200.00 $4.00 $200.00 The rates and system development charges shown in the table above are based on A WC 2004 and 2006 Surveys. The statewide average for all reporting cities is $9.00 per month. The following is a summary of the non-programmatic Stormwater Utility capital projects in the approved 2006 CFP (dollars in thousands): Priority Project 2007 2008 2009 2010 2011 2012 Total 1 10th & N $50 $250 $300 2 Stream Outfalls $50 $50 $50 $50 $50 $50 $300 3 Campbell/Porter $50 $200 $250 $500 4 Lincoln Culvert $100 $100 5 Canyon Edge/ Ahlve $50 $200 $250 $500 6 Lincoln Park/Big Bo $30 $270 $300 7 Bluff Outfalls $70 $120 $120 $120 $120 $120 $670 8 C St. Extension $50 $200 $250 $500 9 Rose/Thistle $50 $200 $250 $500 10 Laurel/1 0 1 $50 $200 $250 $500 11 Upper Golf Course $50 $200 $250 $500 12 Milwaukee $50 $150 $500 $700 13 First Street $50 $50 Totals $300 $920 $990 $570 $1,170 $1,470 $5,420 N:\UAC\UAC2007\UAC040907\Stormwater 3-13-07 UAC Memo.doc ~ORTANGELES WAS H I N G TON, U. S. A. Utility Advisory Committee Memo DATE: May 8, 2007 To: UTILITY ADVISORY COMMITTEE FROM: Tom McCabe, Superintendent, Solid Waste Division SUBJECT: Benefit Dump Day Report Summary: The City of Port Angeles sponsors an annual Benefit Dump Day for all Clallam County residents. This year's event was April 15, from 9:00 am to 3:00 pm with the same restrictions on dumping as in previous years. Participants donated $4,304 to the Port Angeles Food Bank, 713 vehicles participated, and 223 tons were received at the event. Of the total tonnage, 36% was diverted to recycling. Recommendation: For information only Background/Analysis: The City of Port Angeles sponsors an annual Benefit Dump Day for all Clallam County residents. This was the first year for this event at the new transfer station. Lines developed before 9 am at the gate, by noon the wait was 20 minutes, and by 1 pm there was no wait. The event closed at 3 pm. Dumping was restricted to one load per household with vehicle sizes up to a 3/4 ton pick-up truck or a trailer measuring 5 ft. x 8 ft. There is also a maximum limit of four tires and four appliances per customer. Commercial haulers are not allowed. Large appliances, metals, and tires are collected for recycling. A total of 40 staff and volunteers assisted with this 6-hour event. City staff checked vehicle loads, managed the metal pile, and weighed vehicles at the scales. Police volunteers helped with vehicle checking and traffic control. Two Food Bank staff collected donations. A total of20 Waste Connection staff directed traffic and helped unload vehicles at the Transfer Station. The City of Sequim held a collection event on April 19th , 20t\ and 21 st, from 8 :00- 3 pm at the Public Works Utility Yard. Waste was accepted from City residents only. The total brought to the Transfer Station was 71.86 tons. The City ofSequim is paying $40/ton for disposal per an agreement with the City of Port Angeles. N:\UAC\FinaJ\Benefit Dump Day.doc Benefit Dump Day Report May 8, 2007 Page 2 Summary Statistics for Past Events Year Vehicle Solid Cash Food (Ibs) Trips Waste Contribution Contribution Tons 2002 1,444 567 $2,800 5,500 2003 1,400 581 $3,259 5,840 2004 706 251 $1,960 2,440 2005 841 300 $1,998 Not available 2006 677 234 $3,664 Not collected 2007 713 223 $4,304 Not collected Demographic of Users Location 2006 Vehicles 2007 Vehicles 2006 Tons 2007 Tons City of P .A. 267 286 81.43 83.98 SeQuim 73 20 27.05 6.49 Forks 4 1 1.81 .74 East County 192 248 66.14 82.76 West County 141 158 57.47 48.92 Totals 677 713 233.9 222.89 2007 Transfer Station Total: 141.475 tons Event Costs 2007 Expenditure Cost Employees (City) $2,000 Advertising -Peninsula Daily News $400 Sani-Can Rental (2) $220 Freon Removal 84 units @ $15/unit $1,260 Tire Recycling (415 tires) 5.19 tons @ $90/ton $467.10 Hauling and Disposal Fee 141.48 tons @$47.52/ton $6,723.13 Total $ 11,070.23 ~ORTANGELES WAS H -I N G TON, U. S. A. Utility Advisory Committee Memo Date: May 8, 2007 To: Utility Advisory Committee From: Larry Dunbar, Power Resources Manager Subject: GridWise™ Project Electric Meter Transfer Agreement Summary: The City participated in the U.S. Department of Energy's Olympic Peninsula GridWise™ Appliances Demonstration Project. As part ofthe project advanced metering equipment was provided. Now that the project is complete, it is proposed that ownership of the advanced meters is transferred from the federal government to the City. Recommendation: Forward a favorable recommendation to City Council to accept the agreement to transfer ownership of advanced meters to the City. Background/Analysis: The City and forty-seven of its electric customers participated in the U.S. Department of Energy's Olympic Peninsula GridWise™ Appliances Demonstration Project. The City's role in the demonstration project was limited to that of a host utility, we provided the Department of Energy's research contractor, the Pacific Northwest National Laboratory, with a residential customer base to conduct their experiment on and provided our customers the opportunity to participate in an experiment of national significance. The final project report is anticipated within the next few months. Now that the project is complete, the U.S. Department of Energy is offering to transfer ownership ofthe advanced metering equipment to the City. A1tho~gh the City is not likely to use the advanced features of the metering equipment at this time, the meters can continue to be used to record energy consumption for utility billing purposes. N:\UAC\Original\GridWise Meter Transfer Agreement.doc Date: To: From: Subject: ~ORTANGELES WAS H I N G TON, U. S. A. Utility Advisory Committee Memo May 8, 2007 Utility Advisory Committee Scott McLain, Deputy Director of Power Systems Electrical Interconnection and Net Metering Standards Summary: In accordance with the Public Utility Regulatory Policies Act as amended by the Energy Policy Act of2005, the City is required to conduct an investigation on interconnection and net metering standards, and detemline if it is appropriate for the electric utility. Staff is in the process of completing an evaluation and will present its findings at the June 2007 Utility Advisory Committee meeting. Recommendation: Information Only. Background/Analysis: The Public Utility Regulatory Policies Act of 1978 was amended by the Energy Policy Act of 2005, which requires the City to complete an investigation and issue a decision by August 8, 2007 on whether or not it is appropriate to adopt interconnection and net metering standards. Interconnection standards apply generation facilities that are connected to the City's distribution facilities. Net metering standards apply to offsetting a customer's total energy consumption by the energy generated on-site for utility billing purposes. As part of the investigation, PURP A requires the consideration and determination to be made after public notice and a public hearing. A Council determination must be in writing, available to the public, and be based upon evaluation findings and evidence presented at the hearings. The proposed schedule is as follows: June 5, 2007 June 12,2007 June 19,2007 City Council public hearing to receive evidence; continue public hearing to June 19,2007. Staff seeks recommendations from the Utility Advisory Committee to City Council. City Council continues and closes public hearing. Consider, then determine if an interconnection and net metering standard is appropriate for the electric utility. N: \U A C\Final\Interconnection Standards. doc Date: To: From: Subject: ~ORTAN ELES WAS H I N G TON, U. S. A. Utility Advisory Committee Memo May 8, 2007 Utility Advisory Committee Larry Dunbar, Power Resources Manager Time-Based Metering and Communications Summary: In accordance with the Public Utility Regulatory Policies Act as amended by the Energy Policy Act of2005, the City is required to conduct an investigation on time-based metering and communications, and determine if it is appropriate for the electric utility. Staff is in the process of completing an evaluation and will present its findings at the June 2007 Utility Advisory Committee meeting. Recommendation: Information Only. Background/Analysis: The Public Utility Regulatory Policies Act of 1978 was amended by the Energy Policy Act of 2005 to require the City to complete an investigation and issue a decision by A~lgust 8, 2007 on whether or not it is appropriate to provide and install time-based meters and communications devices for each electric customer. As part of the investigation, PURP A requires the consideration and determination to be made after public notice and a public hearing. A Council determination must be in writing, available to the public, and be based upon evaluation findings and evidence presented at the hearings. The proposed schedule is as follows: June 5, 2007 June 12,2007 June 19,2007 City Council public hearing to receive evidence; continue public hearing to June 19,2007. Staff seeks recommendations from the Utility Advisory Committee to City Council. City Council continues and closes public hearing. Consider, then determine if time-based metering and communications is appropriate and mandatory for all customers the electric utility. N:\UAC\Final\Time-Based Metering and Communications.doc ~ORTANGELES WAS H I N G TON, U. S. A. Utility Advisory Committee Memo Date: May 8, 2007 To: Utility Advisory Committee From: Scott McLain, Deputy Director for Power Systems Subject: NERC/WECC Entity Registration Summary: New regulations contained in the Energy Policy Act of2005 will require the City of Port Angeles to register as a responsible entity as a "distribution provider" (DP), and a "load serving entity" (LSE), and comply with requirements set forth by the North American Electric Reliability Corporation (NERC). Recommendation: Information Only. Background/Analysis: On August 14,2003, a major blackout on the east coast precipitated language in the Energy Policy Act of 2005 that mandated increased reliability and accountability of the bulk power system, to be overseen by the Federal Energy Regulatory Commission (FERC). NERC was certified as the "Electric Reliability Organization" (ERO) by FERC in July of2006. NERC is in the process of developing reliability standards for various operators and users of the bulk power system. After the blackout, NERC began a standards process that converted existing policies and planning standarcis into an organized set of enforceable standards in 14 functional areas. Providers of various functions are called "responsible entities" and are required to register with NERC. NERC also created a functional model with three main sections including standards and compliance, reliability service functions, and planning and operating functions. Port Angeles has been identified in the last category as both a "load serving entity" (LSE), and a "distribution provider" (DP). NERC has passed responsibility for entity registration and compliance to the regional reliability coordinators, which for western North America is the "Western Electricity Coordinating Council" (WECC). WECC will be responsible for the compliance program and assessing any penalties associated with non-compliance. N:\UAC\Final\WECC summary.doc NERC/WECC Entity Registration May 8, 2007 Page 2 Because many of the functions required under the LSE and DP designation are currently being provided by BP A, we will be working with BP A to develop a delegation agreement, where Bonneville will continue to perform the requirements and be responsible for any non-compliance Issues. June 4 is the deadline for compliance or the submittal of a mitigation plan. No utilities, including BP A, will be fully compliant by that date. We will be working with Bonneville, and with the assistance of WP AG, PPC, and NWPP A to formulate our mitigation plan and to become compliant with the requirements we are ultimately responsible for. Public Power Council 825 NE Multnomah, Suite 1225 Portland, OR 97232 503.595.9770 Fax .503;239.5959 Public Power Council Talking Points Ninth Circuit Court of Appeals Ruling on IOU Settlement Agreements May 2007 · In two long-awaited and major decisions the Ninth Circuit Court of Appeals ruled May 3rd on key disputes with the Bonneville Power Administration (BP A) related to the Residential Exchange Settlement Agreements the agency entered into with the Investor-Owned Utilities (lOUs) in 2000. · The Court ruled that BP A's authority to "settle" contracts and disagreements is limited by its other legal obligations, and that the 2000 Residential Exchange Settlements violated provisions of the law establishing the method for calculating IOU benefits and the "rate ceiling" for service to public power systems. These rulings can be found in Golden Northwest Aluminum v. BPA at 4909-10 and in Portland General Electric v. BP A at 4872. · We recognize the intent of Congress in the Northwest Power Act that residential customers in the region be eligible for federal benefits. However, the Act created a balance that needs to be respected in any proposed settlements. · Congress stipulated that the costs ofthe residential exchange program should not create rate impacts to public power systems that would not have occurred in the absence ofthe Northwest Power Act. In strong terms, in both of the cases decided May 3rd, the Court cited clear violations of section S(c) and sections 7(b )(2) and (3) of the Northwest Power Act. · The Court noted that although Congress may have provided BP A the ability to sign contracts and to settle claims, that authority is specifically limited. The Court found that "BP A proceeded from a flawed legal premise about its settlement authority," and that BP A is "insisting on greater flexibility in designing a [residential exchange] program than Congress was willing to give it." . PPC is pleased that the Court affirmed our interpretation of the statute. The Settlement and subsequent rate case distorted congressional intent, and created instances where many public power systems were left paying money to neighboring IOUs that have lower rates. . The steps needed to implement these decisions are not yet clear. But, regardless of the implications here, parties in the region will need to continue to work together in the Regional Dialogue to define the basic roles and responsibilities for BP A and its customers with respect to future power supply and transmission. . PPC will constructively engage with BP A and the other parties in the ensuing process to ensure that electric consumers of Northwest public power systems are treated fairly and that the requirements of the Northwest Power Act are respected.