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HomeMy WebLinkAboutAgenda Packet 08/10/2010Utility Advisory Committee Jack Pittis Conference Room Port Angeles, WA 98362 August 10, 2010 AGENDA I. Call To Order II. Roll Call III. Approval Of Minutes For July 13, 2010 IV. Late Items V. Discussion Items: A. Stormwater Retrofit and Low Impact Development Grant Application B. Consultant Selection for Communications Plan Services C. Retail Tiered Rate Methodology Study D. Electric Utility 2010 Resource Plan E. Energy Conservation Program Increase VI. Information Only Items: A. Sewer Extension to Rayonier Mount Pleasant Landfill B. Advanced Metering Infrastructure System Project Update VII. Next Meeting Date: September 14, 2010 VIII. Adjournment N. \uac \final \081010 PRINT NAME N. \PWKS LIGHT \CONS CATE SIGNUP.wpd UTILITY ADVISORY COMMITTEE 8�J of i GUEST SIGN iTP SHEET ORGANIZATION I. Call To Order Chairman Di Guilio called the meeting to order at 3:00 p.m. II. Roll Call Councilmembers Present: Chairman Di Guilio, Brooke Nelson Councilmembers Absent: Utility Advisory Committee Members Absent: Utility Advisory Committee Members Present: Staff Present: Others Present: III. Approval Of Minutes Utility Advisory Committee Jack Pittis Conference Room Port Angeles, WA 98362 July 13, 2010 3:00 p.m. Cherie Kidd Paul Elliott Dean Reed Bill Bloor, Glenn Cutler, Mike Puntenney, Larry Dunbar, Steve Sperr, Kathryn Neal, Phil Lusk, Terry Dahlquist, Mike Brockopp, Ernie Klimek, Billy McCurdy, Scott Johns, Bob Kajfasz, Bill Hale, Yvonne Ziomkowski (Arrived at 4:05), Cate Rinehart Shirley Nixon Citizen Chairman Di Guilio asked if there were any corrections to the minutes of June 8, 2010. Dean Reed moved to approve the minutes. Councilmember Nelson seconded the motion, which carried unanimously. IV. Late Items 2010 Bond Issue Summary V. Discussion Items A. Preventative Maintenance Software Presentation Mike Puntenney, Deputy Director of Operations introduced staff who participated in the implementation of the project (Mike Brockopp, Ernie Klimek, Billy McCurdy, and Bill Hale). A demonstration was given along with briefing on the Computerized Maintenance Management System and its use to manage preventive maintenance, maintenance activities, and maintaining the work. There was a brief discussion. Staff was advised to continue the project. B. Consultant Selection For Stormwater Engineering Services Kathryn Neal, Engineering Manager, explained that to implement stormwater system improvements to resolve winter flooding a design needs to be done which will include site explorations and an alternatives analysis. There was a brief discussion. Dean Reed moved to recommend City Council authorize the City Manager to sign an Agreement with PACE Engineers, Inc. for professional services in an amount not to exceed $165,100 and make minor modifications to the Agreement if necessary. Councilmember Nelson seconded the motion, which carried unanimously. C. 2010 Water System Plan Kathryn Neal, Engineering Manager, gave a power point presentation summarizing the updated plan and addressing future issues. A discussion followed. Councilmember Nelson moved to recommend City Council approve the 2010 Water System Plan. Dean Reed seconded the motion, which carried unanimously. D. 2010 Bond Issue Summary Yvonne Ziomkowski, Finance Director, briefly reviewed the bond issues noting that timing was everything A project list was passed out for a short discussion. Information only. No action taken. E. Street Lighting Project Update Bob Kajfasz, Commercial Energy Analyst, distributed a handout and described the various intended fixture replacements noting that a pilot project was currently being done on 8 street from Eunice to Francis. There was a brief discussion. Information only. No action taken. F. Energy Northwest Interlocal Agreement Modification No. 2 For Morse Creek Hydroelectric Project Larry Dunbar, Deputy Director of Power Systems, and Terry Dahlquist, Electrical Engineering Manager, reported that the Supervisory Control and Data Acquisition System needed an upgrade due to the fact the current controls are limited, unreliable, and labor intensive to operate and maintain. A discussion followed. Dean Reed recommended City Council authorize the City Manager to sign Modification No. 2 to the Interlocal Agreement with Energy Northwest in an amount not to exceed $10,435 and make minor modifications to the agreement, if necessary. Councilmember Nelson seconded the motion, which carried unanimously. G. Electric Utility 2010 Resource Plan Phil Lusk, Power Resources Manager, advised that the City's electric utility must comply with an unfunded Washington state mandate to develop a Resource Plan based on typical growth rates and the City's current and anticipated future mix of resources. There was a brief discussion. Councilmember Nelson moved to authorize City Council proceed with a public hearing on the Resource Plan. Dean Reed seconded the motion, which carried unanimously. H. Bonneville Power Administration Cooperative Agreement No. 48475 and Consultant Agreement Amendment No. 2 For Residential Demand Response Program Phil Lusk, Power Resources Manager, distributed a handout noting that demand response is a practice that cycles of shuts down customer equipment during peak electricity utility demand events. A discussion followed. Dean Reed moved to recommend City Council authorize the City Manager to: 1)sign Cooperative Agreement No. 48475 with the Bonneville Power Administration for a $367,000 award for the City's Advanced Metering Infrastructure Residential Demand response Pilot Project, 2) sign Amendment No. 2 to the Consulting Services Agreement with EES Consulting for an amount not to exceed $80,560, and 3) make minor modifications to the Cooperative Agreement and Consulting Services Agreement, if necessary. Councilmember Nelson seconded the motion, which carried unanimously. I. Consultant Agreement Amendment No. 3 For Commercial And Industrial Demand Response Grant Program Larry Dunbar, Deputy Director of Power Systems, pointed out that a request for proposals had recently been issued with an added scope of work, schedule, and pricing. There was a brief discussion. Councilmember Nelson moved to recommend City Council authorize the City Manager to 1)sign Amendment No. 3 to the consulting services agreement with EES Consulting in an amount not to exceed $12,300, and 2) make minor modifications to the agreement if necessary. Dean Reed seconded the motion, which carried unanimously. J. Wireless Mobile Data System Grant Application Update Larry Dunbar, Deputy Director of Power Systems, noted that the City was not in the first group but still in the running. Information only. No action taken. K. Industrial Supply Water Meter Glenn Cutler, Director of Public Works and Utilities, summarized the interaction between the City and the National Park Service mentioning that a response should be due within 30 to 45 days. Information only. No action taken. VI. Information Only Items A. Enron Settlement Agreement Update Information only. No discussion or action taken. B. Advanced Metering Infrastructure System Project Update Information only. No discussion or action taken. C. Utility Rate Studies Calendar Information only. No discussion or action taken. VII. Next Meeting Date: August 10, 2010 VIII. Adjournment: 5:49 p.m. Dan Di Guilio, Chair Cate Rinehart, Administrative Specialist II pORTNGELES W A S H I N G T O N U.S.A. Utility Advisory Committee Memo Date: August 10, 2010 To: Utility Advisory Committee From: Terri Partch, P.E., Stormwater Engineer Subject: Stormwater Retrofit and Low Impact Development Grant Application Summary: The Department of Ecology has approximately $23.5 million available which they are offering through a competitive grant program to National Pollutant Discharge Elimination System Phase I and Phase II jurisdictions. Staff intends to apply for funding for the anticipated Low Impact Development elements of the 4 Street Stormwater Improvements Project under this grant. Recommendation: Forward a favorable recommendation to City Council to authorize the City Manager to sign and submit a grant application to the Department of Ecology under the Stormwater Retrofit and Low Impact Development Competitive Grants Program in an amount up to $1,000,000 for the 4 Street Stormwater Improvements Project. Background /Analysis: The 2010 Washington State Legislature appropriated $23.5 million to the Department of Ecology (DOE) for a Stormwater Retrofit And Low Impact Development (LID) Grants Program. The program provides funds for National Pollutant Discharge Elimination System (NPDES) Phase I and II municipal stormwater permittees to plan, design, and implement stormwater retrofit or LID projects to improve water quality. Staff intends to apply for grant funding for the anticipated LID elements of the 4 Street Stormwater Improvements Project (DR03 -2009) which is included in the Capital Facilities Plan. These LID elements may include rain gardens or deep infiltration wells. Both of these alternatives, along with a traditional hard pipe solution are being evaluated during the alternatives design phase of the project. A consultant agreement with PACE Engineers, to do the design, was authorized by City Council at its July 20, 2010 meeting. The grants will be awarded on a competitive basis and a 25% match is required of the City. The application must be submitted not later than August 31, 2010. It is recommended that the Utility Advisory Committee forward a favorable recommendation to the City Council to authorize the City Manager to sign and submit a grant application to the DOE under the Stormwater Retrofit and LID Competitive Grants Program in an amount up to $1,000,000 for the 4th Street Stormwater Improvements Project. N: \UAC\Final \Stormwater Retrofit and LID Grant Application.doc P ORT A NGEIS W A S H I N G T O N U.S.A. Utility Advisory Committee Memo Date: August 10, 2010 To: Utility Advisory Committee From: Phil Lusk, Power Resources Manager Subject: Consultant Selection for Communications Plan Services Summary: The City advertised and negotiated a proposal for consulting services in support of the Advanced Metering Infrastructure System and Demand Response projects. ParkerLePla has the necessary qualifications and their proposal was within the price range anticipated for the scope of work. Recommendation: Forward a favorable recommendation to City Council to authorize the City Manager to sign an agreement with ParkerLePla in an amount not to exceed $70,526, and make minor modifications to the agreement, if necessary. Background /Analysis: Qualified consultants were invited to submit a proposal to perform necessary services to create a Communications Plan for the City's Advanced Metering Infrastructure System (AMI) and the Bonneville Power Administration (BPA) Residential Demand Response (DR) projects. The Communications Plan will include the development of customer (external) and staff (internal) education programs including informational messages that need to be shared prior to, during, and after the project. The Communications Plan is a part the AMI, DR and Retail Tiered Rate Methodology Study projects and is crucial for overall success. There have been several utilities that have deployed AMI projects along with rate design changes without a communications plan that have resulted in customer pushback. The customer pushback is due to a lack of understanding which can be alleviated by adequate and timely communications. Utilities that have deployed successful AMI projects with communications plans have resulted in 95% customer satisfaction. The City advertised a Request for Proposals (RFP) for consulting services on May 10, 2010 in the Daily Journal of Commerce and one the City's website. A total of ten local and regional consultants that staff thought might be qualified were invited to participate. A total of three consultants registered with the City, however no consulting proposals were received by the July 2, 2010 deadline. N• \UAC\Final \Communications Plan Consultant Agreement doc Consultant Selection for Communications Plan Services August 10, 2010 Page 2 Unlike engineering or architectural services which must follow a procurement process in accordance with State law, consulting services for the Communications Plan may be procured using best business practices. After re- contacting all registered consultants, staff requested ParkerLePla to complete its response to the RFP. Staff evaluated ParkerLePla's qualifications and prior performance, project understanding, resumes, availability, project management expertise, references, and work samples. Staff found that ParkerLePla has the qualifications sought for the Communications Plan and negotiated a $46,467 fee for the Communications Plan and up to $24,059 for media materials for a total amount not to exceed $70,526, which is within the range anticipated for this project. The electric utility budget includes $75,000 for the Communications Plan. Grant funding in the amount of $25,000 will be provided by the BPA for the Demand Response portion of the communications plan and media materials. The Communications Plan will be completed in October 2010 and the media materials will be prepared based on the implementation schedule and continuing through calendar year 2011. The cost of media advertisements is not included in the scope of work and $36,000 will be proposed as part of the City's 2011 budget process for utility billing inserts, print and radio advertisements. The table below summarizes the proposed scope of work and fee for consulting services. Communications Plan Scope of Work Cost Phase I Research Analysis $5,877 Phase II Communications Plan 29,040 Top -Line Messages And Public Service Announcements 2,000 Demand Response Website and Surveys 9,550 Communications Plan Subtotal $46,467 Media Materials Scope of Work Cost Multi- purpose print advertisement (3 $1,862 each) 5,586 Utility billing advertisement insert (3 $1,862 each) 5,586 Utility billing newsletter insert (2 $4,150 each) 8,300 Cardboard easel -type advertisement (1 $4,587 each) 4,587 Media Materials Not To Exceed Subtotal 24,059 Total $70,526 Staff recommends that the Utility Advisory Committee forward a favorable recommendation to City Council to authorize the City Manager to sign an agreement with ParkerLePla in an amount not to exceed $70,526, and make minor modifications to the agreement, if necessary. PORTANGEL W A S H I N G T O N U.S.A. Utility Advisory Committee Memo Date: August 10, 2010 To: Utility Advisory Committee From: Phil Lusk, Power Resources Manager Subject: Retail Tiered Rate Methodology Study Summary: EES Consulting recently completed the Retail Tiered Rate Methodology Study for the City's electric utility. A presentation will be made at today's meeting that summarizes the consultant's findings and recommendations. Recommendation: Forward a favorable recommendation to City Council to approve the Retail Tiered Rate Methodology Study findings and recommendations. Background /Analysis: In preparing for the shift to the Bonneville Power Administration (BPA) Tiered Rate Methodology (TRM) for wholesale power purchases effective October 1, 2011, the City independently assessed and evaluated retail rate design options for each Electric Utility rate class. The most advantageous retail rate design option developed by this Retail TRM study will be incorporated into the Advanced Metering Infrastructure project. The City's consultant, EES Consulting, recommended that the City proceed with a seasonal time -of- use rate with demand for all Electric Utility retail rate classes. The recommended rate design is similar to the current rate design for the municipal water pump and optional time -of -use rates currently available to all rate classes. The recommended rate design includes the following metered components with a winter and summer rate in addition to a base charge: Heavy load hour energy consumption Light load hour energy consumption Peak demand consumption The City's actual retail rates for each metered component will be considered in September of 2011 and would be effective on January 1, 2012. Following a staff presentation that will also summarize the comments received at the August 4, 2010 public meetings, it is recommended that the Utility Advisory Committee forward a favorable recommendation to City Council to approve the Retail Tiered Rate Methodology Study findings and recommendations. N \UAC\Final\Retail TRM Study doc DISCLSSION DR 417 Electric Utility Retail Tiered Rate Methodology Study Choices must be made to ensure a reliable low -cost energy supply Agenda Philip D. Lusk Power Resources Manager Public Works Utilities City of Port Angeles E Study Objectives Wholesale Tiered Rate Methodology (TRM) E Retail TRM Rate Design Options E Questions Answers 2 1 Retail TRM Study Objectives Develop retail rate design NOT rates Bonneville Power Administration (BPA) New BPA power sales agreement "Tier 1" rate for low -cost federal power resources "Tier 2" rate for new load growth Charges the incremental cost for new power plants that are much more expensive to build and operate 3 4 9 BPA Tiered Rates Begin October 1, 2011 The City is responsible for choosing how to provide for its future electrical energy growth New resources and technology, and additional conservation are needed The choices made must ensure a reliable low -cost electric energy supply 3 Shaping Critical FBS to Load Following Product Oct Jan Apr Excess Amounts Resold by BPA Wholesale Power Bill Elements July Current wholesale power bill with melded rates Four elements: demand, peak energy, off -peak energy and load variance Future wholesale power bill using TRM 18 elements: composite charge and 17 others 4--- Load Shape 11 4 Retail Rate Design Challenges BPA is shifting revenue risk to its utility customers under TRM Power contracts are "take or don't take, but pay" Higher fixed /lower variable costs under TRM Automated Metering Infrastructure system and Customer Information System (CIS) must be compatible with any new rate design Hourly monthly based rate schedules not considered Rate Design Goals The City of Port Angeles is committed to cost -based rates Wholesale power costs Distribution system overhead Keep retail electric power costs as close to the wholesale cost of power as possible 13 14 5 Rate Design Objectives Understandable Provide revenue stability Recovers costs Affordable Cost -of- Service based Equitable across rate classes Defendable Easy to administer Legal Competitive with neighboring utilities Promote conservation and demand response Retail Rate Design Options Existing melded rate structure Base charge, flat energy charge and applicable demand charge Inclining block rates w/o demand Base charge and applicable demand charge Energy rates increase with increasing consumption blocks Seasonal Time of Use (TOU) w/o demand Base charge and applicable demand charge Peak and off-peak energy charge Seasonal TOU with demand rates Base charge Demand charge based on each customer's monthly peak load Peak and off -peak energy charge Retail TRM rate Mimic BPA's wholesale TRM rate structure with base charge recovering up to 90% of revenues, load shaping charges /credits, marginal demand rates and Tier 2 rates at market prices 15 16 6 Retail Rate Design Options Evaluation Revenue Risk from Fixed Charges Impacts which Customers Adversely? Encourages Conservation Encourages Demand Response Encourages Shifting Loads to Off -Peak Periods' ticitin Inclimng'Blockk Ti ;:14-f of-Use.' Time -of -Us Melded w` w /oDeman Demand w %Qeman Highest Risk Variable Risk Variable Risk Variable Risk Lowest Risk NA High consumption High consumption High consumption Low consumption customers customers customers customers Yes Yes Yes Yes No No No No Yes Yes No No Yes Yes Yes Retail Rate Design Options Evaluation Added Rate Administration Low Complexity Encourages Medium RataDes_igmGo 9' Inctinirg ra Time,df -Use s- ',;.Timeof -Us Melded w/o Demand w w /o Demand sr. >w /pemani Medium Medium 17 Very High Economic Neutral Neutral Neutral Neutral Very Negative Development 18 7 1 Retail Rate Design Recommendation Seasonal Time -of -Use with a demand charge is the recommended rate design for all customer classes Winter and summer seasons Customer base charge Peak and off -peak energy charge Inclining block demand rate Similar to City's current Municipal Water Pump rate design Sends correct price signal without too much complexity Complies with Public Utility Regulatory Policy Act (PURPA) Encourages customers to Shift loads to Tower -priced off-peak hours Reduce peak demand and winter energy consumption Peak and off -peak periods should reflect BPA's time of use periods Demand may be modified to reflect City's requirements Retail Rate Design Recommendation 19 Ramp up conservation efforts Seasonal rate means that energy is priced correctly in the winter months Higher winter energy rate sends an appropriate rate signal Reinforces conservation program efforts in areas such as insulation and heat pumps Demand response projects for all customer classes Avoid exceeding contract demand quantity, maintain similar load shape to BPA, and mitigate critical peak periods 20 Fl 150 100 0 50 I Street 1201 Feeder February 2010 Average Home Demand I Street 1201 Feeder 22 February 2010 Average Home Demand 12 50009 1 23 45 67 89 111 133 155 177 199 221 243 265 287 309 331 353 375 397 419 441 463 485 507 529 551 573 595 617 639 661 000 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 9 Retail Rate Design Recommendation Consider increasing residential monthly base charge Model suggests base charge is too low Base charge of $11.00 unchanged since 1993; CPI adjusted value equals $16.61 in current 2010 dollars Discount Customer impact considerations R'esiden`tia''I Custome,r'Monthly Base Charge'Compa,rison Mason ^'Tacoma Port Clallam Mason„? „Gra Pentnsufa 1 PUD” .,P uget,y 'A n gales: PUD r Z�3,PUD ''•'Hp ti f'�, l r': Light sea We- $16,60 -'37 25- I, S5.50 l �'S11�00�'i =5:1 00•. i.'5.15 00 I 31 00, I 30' ''`1I-;$3 50 1 Proposed Timeline August 2010 o Consideration and approval of rate design by City Council September 2010 o Incorporate rate design into AMI system agreement October 2010 o Internal and external communication plan activities begin June 2011 AMI System and residential DR installation complete w/ new rate design embedded Fall 2011 BPA Wholesale TRM becomes effective New retail rates set by City Council January 2012 o New retail rates become effective 23 24 10 Recommendation Forward a favorable recommendation to City Council to approve the Retail TRM Study findings and recommendations Questions? Phil Lusk Power Resources Manager Public Works Utilities Department plusk @cityofpa.us 360.417.4703 http: /www.cityofpa.us 25 26 1 CITY OF PORTANGELES W A S H I N G T O N U.S.A. Utility Advisory Committee Memo Date: August 10, 2010 To: Utility Advisory Committee From: Phil Lusk, Power Resources Manager Subject: Electric Utility 2010 Resource Plan Summary: The City's Electric Utility must comply with a Washington State mandate to update its Resource Plan. A component of the enabling legislation is that consumer participation in the development of the Resource Plan is encouraged. Further, the governing body of a consumer -owned utility must approve the 2010 Resource Plan after it has provided public notice and hearing. Recommendation: Forward a favorable recommendation to City Council to approve the Electric Utility 2010 Resource Plan. Background/Analysis: As previously presented to the Utility Advisory Committee on July 13, 2010, the electric utility is required by RCW 19.280.030 to update its 2008 Resource Plan (Plan) which must be submitted to the Washington Department of Community, Trade and Economic Development (CTED) by September 1, 2010. The Plan's purpose is to assure that our future resources are adequate to meet our projected loads especially as the Bonneville Power Administration (BPA) makes major changes in its energy charges. While the proposed Plan is not a legally binding document, it provides a description of current as well as estimated power loads and resources for 2015 and 2020 time periods. The proposed Plan is available to the public from the City's website. Staff will present the proposed Plan that recommends that the City continue to purchase the majority of its power from the BPA and give serious consideration to increase the level of energy efficiency to postpone Tier 2 power supply purchases. Staff will also summarize the comments received at the August 3, 2010 City Council public hearing. The City's energy future is essential to our community's economic health. The City has long benefited from having access to low -cost electricity from the federally based system. However, as the world and the energy industry change, the City faces a potentially serious threat to its economy in the form of rising electricity costs. For Port Angeles, 67% of the money spent on retail power immediately leaves our local economy. With minimal downside risk, developing a Plan that will increase energy efficiency will help to protect the economy from rising energy costs, keep more dollars circulating in the region and in turn, may increase the number of jobs that stay in our community. N \UAC\Final\Electnc Utility 2010 Resource Plan doc Proposed Electric Utility 2010 Resource Plan City of Port Angeles Utility Advisory Committee Meeting August 10, 2010 Agenda Philip D. Lusk Power Resources Manager Background Current Loads and Resources Future Loads and Resources Forecast Future Considerations What is Next? 1 Resource Plan Components The Plan must: 1. Describe current power Toads and resources 2. Estimate power loads and resources for 2015 and 2020 Consider conservation and renewable energy 3. Be approved by the City after public notice and hearing 4. Be submitted to Washington Department of Commerce by September 1, 2010 5. Be updated every two years Current Loads and Resources 120 100 80 60 40 20 Port Angeles Electric Utility Background Principal load centers Nippon Paper Industries (NPI) "Industrial Transmission" Distribution system Everyone else City of Port Angles Monthly Power Loads January 2001 June 2010 0 .1" ';814q814484 4 Pe I g 814 4 1 244 loDistnbution •Inclustnal Trarsm ission 10 Residential 10 Street Lights General Service Non -Profit 9 2% City of Port Angeles 2009 Electricity Consumption by Rate Class 20 7% 25 3% 58 8% O GS Demand O Yard Lights 5 3% 10 4% 3 8% r -0 3% r 02% 0 4% 0 0% O Pnmary i Municipal Water Pumpmgl Industrial Transmission City of Port Angeles 2009 Electricity Consumption by Distribution Customer Rate Class 50 3% 12 8% 10 Residential General Service 0 GS Demand 0 Primary O Municipal Water Pumping 0 Street Lights CI Non-Profit 0 Yard Lights 1 A 82 87% City of Port Angeles 2009 Resource Mix I®Coal O were ©Natural Gas ['Nuclear DOther Future Loads and Resources 5 60 3 40 30 I 20 Port Angeles Electric Utility Forecast NPI forecast partly based on customer- provided data NPI responsible for all Tier 2 power purchases Distribution system forecast used two Toad growth rate scenarios Baseline (Status Quo) Assumed historic 1.15% Compound Annual Growth Rate Tier 2 power purchases projected to start in 2016 Enhanced Conservation Alternate Assumed 0.77% Compound Annual Growth Rate Roughly equals the goals of the Northwest Power and Conservation Council's Sixth Northwest Conservation and Electric Power Plan Tier 2 power purchases projected to start in 2020 50 10 City of Port Angeles Industrial Transmission Baseline Annual Power Requirement Forecast IQ IT aM W T■r 1 Power SuooIv 6 60 50 F 40 60 50 City of Port Angeles Distribution Utility Baseline Annual Power Requirement Forecast City of Port Angeles Distribution Utility Enhanced Conservation Annual Power Requirement Forecast RifVf t 4 4 1 5 eeeee 5 5 5 1P 19 99' P if 19 Cistributcn ID Tier 1 .ower Supoiy 0 ,p°*b ,5FP e "0- 19 ne 1, .19 ^P 10 Distribution DI Tier 1 Power Supply 7 Future Considerations Reduce "Gap" with Two Priorities? Seek all cost effective conservation as the favored resource for meeting future Toads Least risk and most cost effective Continue City support Seek BPA funding to accelerate the energy savings Pursue renewable energy cogeneration Preference for resources located within City limits Priorities to be confirmed in next BPA Tier 2 Commitment in September 2011 R Strengths, Weaknesses, Opportunities, Threats Strengths Conservation reduced City's 2009 power purchases by 2.1%, directly_ saved customers $869,000 and created a net economic benefit of more than $2 million Weaknesses Limited current generation resources on the Peninsula Opportunities o Automated infrastructure, enhanced conservation and new renewable choices within City's service territory Threats o Strong potential for significant increases in wholesale power costs and decreases in the BPA "Tier 1" power system Notice and Public Hearings Public Hearing notice published by City Clerk on July 27th via City website and on July 30th via newspaper Proposed Plan presented at August 3rd Council meeting and published on City website Public Hearing on August 3rd Three comments received What is the size of the proposed NPI biomass cogeneration system compared to the Elwha dams? What is the current status of the Juan de Fuca cable project? Why does more conservation only seem to cause electric rates to increase? P What is Next? Continue public hearing at August 17th City Council meeting Staff will seek City Council approval of the proposed Plan on August 17th Submit Plan to Department of Commerce by September 1st Recommendation Forward a favorable recommendation to City Council to approve the Electric Utility 2010 Resource Plan In RESOLUTION NO. A RESOLUTION of the City Council of the City of Port Angeles, Washington, approving the 2010 Electric Utility Resource Plan. WHEREAS, the City strives to ensure that its citizens have reliable access to electricity resources adequate to meet their projected loads; and WHEREAS, the City must submit an Electric Utility Resource Plan to the Washington Department of Commerce by September 1, 2010 as required by RCW 19.280.030; and WHEREAS, the 2010 Electnc Utility Resource Plan is consistent with the City's existing energy conservation programs operated in cooperation with the Bonneville Power Administration, and Electric Power Plan adopted by the Northwest Power and Conservation Council; and WHEREAS, as a result of the June 2009 Northwest Public Power Association's Tier 2 power supply workshop, on February 7, 2010 the City Council of the City of Port Angeles adopted Ordinance No. 3391 to create a Conservation and Renewable Energy Program fund for fiscal administration and accounting of monies received or appropriated by the City Council in addition to funding received from the Bonneville Power Administration. The Conservation and Renewable Energy Program fund is for acquiring cost effective energy conservation measures, renewable energy systems, and distributed generating resources; and WHEREAS, the City Council of the City of Port Angeles will re- consider the 2010 Electric Utility Resource Plan in its upcoming deliberations for purchasing Tier 2 power from the Bonneville Power Administration for the October 1, 2014 to September 20, 2019 time period, which must be made by September 30, 2011; and WHEREAS, the City must update its Electric Utility Resource Plan on a regular basis at minimum intervals of every two years as required by RCW 19.280.030; and WHEREAS, the City Council of the City of Port Angeles Washington, being the governing body of the said consumer -owned electric utility did, after public notice, hold public hearings on the 3rd of August 2010 and the 17 of August 2010 to provide the opportunity for consumers and the public to participate and comment on the 2010 Electric Utility Resource Plan. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Port Angeles Washington that the 2010 Electric Utility Resource Plan as prepared by the Director of Public Works and Utilities attached hereto as Exhibit A be approved; and BE IT FURTHER RESOLVED that the 2010 Electric Utility Resource Plan, together with this Resolution, shall be electronically filed through the Internet with the Department of Commerce of the State of Washington no later than the Is` of September 2010 and also be published and made available to the public through the City of Port Angeles website. PASSED by the City Council of the City of Port Angeles at a regular meeting of said Council held on the 17` day of August 2010. Dan Di Guilio, Mayor PORTANGELES W A S H I N G T O N U.S.A. Utility Advisory Committee Memo Date: August 10, 2010 To: Utility Advisory Committee From: 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 75 -100% administrative reimbursement. An increase to City staff is recommended in January 2011 to 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 70 -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 utilize 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 expand the conservation program to postpone future Tier 2 power supply purchases. N. \UAC\Final\Energy Conservation Program Increase.doc Conservation Program Increase August 10, 2010 Page 2 As part of the 2010 budget City Council approved a $300,000 increase in conservation activities which is 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 utilize the BPA credit available through September 2011 by the end of this year. 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 change depending on such factors as any reductions to the federal based system or the addition or curtailment of one or more large customer loads. The 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 programs to its Electric Utility customers. The dramatic increase to BPA conservation program funding is anticipated to begin October of 2011 and should continue for five- years. The 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. 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. Recognizing the local economy and anticipated City budget issues for 2011, staff requests guidance from the Utility Advisory Committee. If the Utility Advisory Committee supports staff's 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. W A S H I N G T O N U.S.A. Utility Advisory Committee Memo Date: August 10, 2010 To: Utility Advisory Committee From: Phil Lusk, Power Resources Manager Subject: Bonneville Power Administration Cooperative Agreement No. 48475 Amendment #1 Summary: The Bonneville Power Administration has offered the City additional funding for a residential demand response pilot project that will be run in conjunction residential demand response pilot project. Recommendation: Forward a favorable recommendation to City Council to authorize the City Manager to: sign Amendment #1 to Cooperative Agreement No. 48475 with the Bonneville Power Administration for the additional thermal storage devices. Background /Analysis: As a result of the City's Demand Response (DR) proposal, the Bonneville Power Administration (BPA) become aware of an emerging technology from Steffes Corporation that provides transmission grid interactive electric storage space and water heating equipment, and associated communications, data collection, fittings, and incidental installation consultations. The BPA DR team believes that this technology could enable the region to learn the costs, impacts, benefits, and implementation and marketing issues, associated with using thermal energy storage technology to improve the ability of the power system to integrate additional large quantities of wind energy into the regional transmission grid. In addition, the Steffes technology would enable BPA and its utility power customers to learn how this technology can be used to further reduce and shift peak energy loads. BPA has asked if the City of Port Angeles be willing to host a minimum of 8 -10 grid- interactive water heater control tests from Steffes Corporation. The BPA has also asked if the City would be interested in hosting an additional 8 -10 thermal energy storage room heaters in addition to the thermal storage units already planned for deployment. If the City decides to move forward with this, the units would be shipped in late September for use in winter 2010 -2011. The BPA would pay for the equipment, its installation and for the data collection hardware and all control modules, fittings, sensors, etc. The City would have a minor exposure of staff time to perform the consumer coordination and marketing, and assist with system integration and perhaps some data collection. These units would be configured to test BPA wind integration- related dispatchable DR. Staff requests that the Utility Advisory Committee forward -a favorable recommendation to City Council to authorize the City Manager to sign Amendment #1 to Cooperative Agreement No. 48475 with the Bonneville Power Administration for the additional thermal storage devices. N \UAC \Ongmal \BPA DR Cooperative Agreement Amendment 41 doc PORTANGELES W A S H I N G T O N U.S.A. Utility Advisory Committee Memo Date: August 10, 2010 To: Utility Advisory Committee From: Stephen Sperr, P.E., City Engineer Subject: Sewer Extension to Rayonier Mount Pleasant Landfill Summary: Rayonier approached the City with a proposal to extend the City's Sanitary Sewer Collection System in the East Urban Growth Area to their Mt. Pleasant Landfill, located about 1 /2 mile up Mt. Pleasant Road from Highway US 101. The purpose would be to allow leachate from their landfill to be discharged directly into the collection system, instead of trucking it to the City's Wastewater Treatment Plant on a frequent basis as it does now. Recommendation: For information only, no action requested. Background /Analysis: Rayonier's proposal includes the installation, at their cost, of sanitary sewer main from the City's current sewer main (in the Kemp St. /Mt. Pleasant Rd. area) south to their landfill. While the exact alignment of the sewer main has not been determined yet, they will be designed consistent with City standards, and approved by the City in advance of construction. The facilities would then be conveyed to the City after construction and acceptance. The rate at which Rayonier will be charged for their leachate will be $0.02 /gallon, per PAMC 3.70.110F9. This assumes that the leachate will meet all the Industrial Wastewater Pretreatment (IWP) requirements in PAMC 13.06, for which an IWP will be issued. N: \UAC\Final \Sewer Extension to Rayonier Mount Pleasant Landfill.doc ORTANGELES W A S H I N G T O N U.S.A. Utility Advisory Committee Memo Date: August 10, 2010 To: Utility Advisory Committee From: Larry Dunbar, Deputy Director of Power Systems Subject: Advanced Metering Infrastructure System Project Update Summary: Several activities are underway in support of the Advanced Metering Infrastructure System project. Due to the scope of the project it is anticipated to be an agenda item for the Utility Advisory Committee through October of this year. Recommendation: For information only, no action requested. Background /Analysis: A commercial and industrial grant application is being prepared to submit to the Bonneville Power Administration (BPA) on or before September 30, 2010 for a Demand Response (DR) project that would be integrated into the AMI System. A breakfast meeting with City commercial and industrial customers that are currently charged for demand is being held on August 12, 2010 at the Red Lion. The purpose of the meeting is to provide information on retail rate design and the DR grant opportunity. Interested customers will be offered site visits to explore the feasibility of DR and will be conducted by BPA's consultant (Global Energy Partners, LLC) on August 23 -24, 2010. The grant application is due September 30, 2010. A consulting agreement for the Communications Plan will be considered by the Utility Advisory Committee today. Public presentations on the Retail Tiered Rate Methodology Study were made on August 4, 2010 and will also be made at today's meeting. The AMI System Request for Proposals (RFP) deadline was August 6, 2010. Anticipating vendor evaluations and negotiation goes smoothly, staff could be requesting the Utility Advisory Committee's recommendation to City Council on the AMI System Agreement as early as September 2010. Additional information about the AMI System RFP is available on the City's File Transfer Protocol website at http: /olypen.com/copa under the "AMI System RFP" folder. 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 August 10, 2010 Page 2 Milestones Advertisement 1 Proposal Deadline 1 UAC Consideration City Council Consideration Milestones UAC Consideration City Council Consideration UAC Consideration City Council Consideration AMI 12/11/2011 Request for Proposals Summary AMI System Residential Phase I Construction 3/8/2011 9/18/2011 3/15/2011 BPA DR Projects Commercial Communications System Residential Industrial Plan TRM Study 5/10/2010 2/18/2010 6/10/2010 8/6/2010 1 4/19/2010 1 9/30/2010 1 9/14/2010 1 7/13/2010 1 11/9/2010' 1 9/21 /2010 7/20/2010 11/16/2010 Scope of Work Summary BPA DR Projects Phase II Construction Commercial Industrial 12/11/2011 9/18/2011 Retail 5/10/2010 1/25/2010 7/2/2010 1 3/5/2010 1 8/10/2010 1 4/13/2010 1 8/17/2010 4/20/2010 Communications Retail Plan TRM Study Consultant Report 10/12/2010 8/10/2010 10/19/2010 9/7/2010 'Dates are uncertain; the Commercial Industrial DR project grant application is being prepared at this time.