HomeMy WebLinkAbout04/01/2013 Work SessionCity of Springfield
Work Session Meeting
MINUTES OF THE WORK SESSION MEETING OF
THE SPRINGFIELD CITY COUNCIL HELD
MONDAY. APRIL 1, 2013
The City of Springfield Council met in a work session in the Jesse Maine Meetma Room, 225 Fifth
Street, Springfield, Oregon, on Monday, April 1, 2013 at 6:30 p.m., with Mayor Lundberg presiding.
ATTENDANCE
Present were Mayor Lundberg and Councilors VanGordon, Wylie, Moore, Ralston and Woodrow.
Also present were City Manager Gino Grimaldi, Assistant City Manager Jeff Towery, City Attorney
Mary Bridget Smith, City Recorder Amy Sowa and members of the staff.
Councilor Brew was absent (excused).
1. Springfield Utility Board Electric Service.
City Manager Gino Grimaldi presented the staff report on this item. The supply and distribution of
electricity was essential to Springfield citizens and played a key role in the future growth and
development of the community. Mr. Grimaldi introduced Jeff Nelson, General Manager of the
Springfield Utility Board (SUB), who was present to provide an overview of Springfield Utility
Board's electric service. Virginia Lauritsen, SUB Board Chair, was also in attendance.
Mr. Nelson distributed a power point presentation for tonight's discussion. He thanked the Council for
the support for SUB and the hard work done by City staff for the Metro Plan Boundary change. SUB
was also working behind the scenes to get the applications in place. His presentation tonight was to
talk about current Board policies that drove their decision making.
Mr. Nelson said SUB was established in 1949 and had a five member Board. Each Board member
served a four -year term. They served approximately 25 square miles, just over 31,000 electric
customers and about 20,000 water customers. They had overhead and underground facilities as well
as nine substations. Their annual average load was about 100 average megawatts compared to Eugene
Water and Electric Board (EWEB) at 275 average megawatts, the City of Portland at over 2000
average megawatts and the City of Drain at 2 average megawatts.
Mr. Nelson referred to demographics in the Eugene /Springfield area, the State of Oregon, the State of
California and the United States. SUB looked at the cost to provide their services and the median
income of families in Springfield. He noted the figure of people living below poverty level and his
belief that the student (college) population in Eugene affected that figure. The college population was
more of a transitional poverty as compared to longer term family poverty. He referred to other figures
on the demographics chart and discussed those figures.
Mr. Nelson discussed the customer mix of commercial/industrial and residential between EPUD,
EWEB and SUB. He reviewed the figures related to SUB and noted that usage varied throughout the
year. SUB provided a variety of services including: no -cost weatherization audits; zero interest
loans /incentives for qualified measures for energy efficiency; no -cost, low income weatherization;
appliance rebates /duct seal; and commercial and industrial efficiency programs. From 2003 -2012,
SUB provided about $7,732,000 in energy efficiency incentives to customers. They also provided
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Council Work Session Minutes
April 1, 2013
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hydrant testing, donated fiber to the City and Springfield Public Schools, participated in Project Share,
provided funding for Housing and Community Services Agency (HASCA), were involved in the
school grant, etc.
Mayor Lundberg said there was a recent story about EWEB discontinuing their program that provided
higher efficiency equipment in Eugene. She asked if SUB was part of a similar program and if it was
still in place.
Mr. Nelson said SUB still had the program. He explained some of the funding for the program and
why Eugene may have suspended the program. SUB did suspend the program in 2000 due to financial
difficulties, but it was currently in place.
A chart showing comparisons of average customer bills among numerous other agencies was shown
and discussed. SUBs electric rate was considerably lower. Mr. Nelson explained the next slide of a
simple chart showing how electricity got from the electric generating facility to homes and businesses.
Councilor Moore asked if increasing the amount of electricity used by industry would affect rates.
Mr. Nelson said he had some information later in his presentation that would answer that question.
Councilor Ralston said he had properties up the river that were serviced by Lane Electric. He asked if
the rates were actually double that of SUB.
Mr. Nelson said SUBS rate was between 5.5 and 6.1 cents per kilowatt hour for a typical home,
depending on usage.
Ms. Lauritsen said there were a number of reasons for the cost differentials. Some of those other
agencies were running rural wires and SUB was all within city limits. When SUB ran one mile of line,
they could pick up 200 customers. The other agencies could run 20 -30 miles and not pick up any
customers. Those lines still needed to be maintained so their operations costs were much higher.
Councilor Ralston said SUBS low rates were something to be proud of and could be used when
marketing Springfield.
Mr. Nelson said SUB had a l 0 -year plan which was updated annually with their Budget Committee.
The 2011 plan included $25,340,207 in planned capital investment from 2012 -2021. The 2012 plan
increased that amount to $34,377,962. SUB was reinvesting in their system through these plans. He
referred to Glenwood and the intergovernmental agreement (IGA) between SUB and the City for that
area. The IGA emphasized underground utilities in the main corridors along Franklin Boulevard and
the McVey Highway and limited substation locations. SUB had revised their short, intermediate and
Iona, term planning in Glenwood based on existing customer needs as well as identifying how future
customers would be served based on the IGA.
Mr. Nelson discussed the Downtown secondary voltage conversion. Downtown Springfield was
originally a 120/240V overhead system which was later undergrounded to 120/240V requiring two or
more transformers on one pad. Common underground voltages were 120/208V or 277/480V. if they
had changed the voltage when it was undergrounded, they would only need one transformer per pad.
SUB would like to transition to different voltage for the downtown service, but needed customers to
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Council Work Session Minutes
April 1, 2013
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also make a change on their end. They were looking at ways to do outreach and provide incentives to
assist in that effort.
Mr. Nelson said currently SUB bought all of their power from the Bonneville Power Administration
(BPA). In 2014; wholesale power and transmission costs were forecasted to account for approximately
66% of SUBS electric utility costs. In the past, BPA met all preference customer load growth and
charged the same per unit price (except for growth for new large single loads). BPA customers signed
contracts with BPA through 2028 that set a limit to the amount of power they could access at the low
cost (Tier 1). Anything above that amount would be charged at a higher (Tier 2) cost. SUB was
projecting that we would be above our Tier 1 mark in 2016 so were taking steps to secure a,portion of
their forecasted Tier 2 requirements for purchase from BPA. The Oregon's Renewable Portfolio
Standard (RPS) required utilities of SUBS size to have 10% of its load met through qualifying
renewable (or renewable energy certificates) starting in 2025. SUB periodically reviewed their
integrated resource plan the best way to move forward with recommendations.
Councilor VanGordon asked what the cost difference was between Tier 1 and 2.
Mr. Nelson said the Tier 1 cost on the wholesale side was $32 /megawatt hour. Some prices shown for
Tier 2 were between $45 - $49 /me2awatt hour. For wind, and the services required for that resource,
the cost was closer to $50 /megawatt hour.
Ms. Nelson said the BPA defined a New Large Single Load as a retail load of greater than 10
megawatts of demand. Because of the new era of Tier 1 and 2; staff had recommended to the SUB
Board to put in place their own threshold of 5 average megawatts. For those reaching that threshold;
SUB could look at ways of serving them with a blend of Tier 1 power and an additional cost to
insulate other customers from the larger load cost impact. The Board requested that staff view larger
loads on a case by case basis using criteria such as jobs created compared to power consumption. Thev
had not yet received any serious inquiries from large load customers.
Councilor Moore said she would assume Tier 1 and Tier 2 would also impact the other suppliers. so
SUB would still be at a lower rate in comparison.
Ms. Lauritsen said that was correct.
Councilor Moore said that graph showing the comparison of rates was still viable to share with anyone
wanting to come to Springfield. Even if the rates increased; they would be comparably lower.
Councilor VanGordon asked for a sample of a new large load.
Mr. Nelson said it would be a company such as Rosboro (6 megawatts) or Sierra Pine (6 megawatts).
He noted that PeaceHealth at RiverBend used about 3 average megawatts and McKenzie Forest used
about 1.5 average megawatts.
Mr. Nelson spoke regarding development charges. New customers paid the interconnection costs to
serve their power requirements through development charges. Larger users often had higher power
quality requirements and/or a desire for multiple distribution sources. Both requirements had a cost.
Individual loads greater than 3 to 5 megawatts pointed toward a need for additional transmission and
substation infrastructure, depending on location. He reviewed some of the issues related to electricity
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which included: load growth; new connections; transmission infrastructure; distribution infrastructure:
meter reading. payment options; and cyber security.
Councilor Ralston asked why they would emphasize higher cost renewables.
Mr. Nelson said they were required to have 10% of their load met by renewables by 2025 by the
Oregon Renewable Portfolio Standards.
Councilor Ralston asked why EWEB had such high rates since they also serviced a more compact
area. He asked if all of their renewables increased their cost.
Ms. Lauritsen said they had a large debt
Mr. Nelson said in the mid 1990s. EWEB and SUB had about the same rates. Citizens in Eugene
wanted to invest in resources and authorized EWEB to issue $LOOM in bonds for renewables and
authorized debt for a community broadband program. Some of the customer driven policies had long-
term impacts on the rates.
Councilor Ralston said if Springfield had an extra supply of electricity, we could we sell to others.
Mr. Nelson said we used to have extra but not anymore.
Councilor Moore said SUB had not looked at solar panels on residential homes for incentives.
Mr. Nelson said SUB didn't have direct incentives. They had about 13 customers that had installed
solar who received credit on their bill. There were many reasons for not doing incentives; primarily
due to administrative costs.
Councilor Moore asked if they planned on incentives in the future since they would be required to
have more renewable,
Ms. Lauritsen said there were a number of renewables to choose from so they would likely look at
those that cost the least.
Mr. Nelson said if net metered facilities could be counted towards the RPS requirements, they would
look at it closer. Currently, thev did not.
Mayor Lundberg said the City was looking at expanding the UGB and adding more commercial and
industrial space. She asked how an increase in industry would correlate with electric rates in certain
locations. She asked if they could provide information at a later date with some thoughts about what it
would mean if they brought in a large company that used a lot of electricity and if there was a potential
of affecting the rate payers.
Mr. Grimaldi said they could incorporate that information into the next discussion of the UGB. either
through a memo or with Mr. Nelson at that meeting.
Mayor Lundberg thanked them for coming and providing the presentation
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Council Work Session Minutes
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The meeting was adjourned at 7:05 p.m
Minutes Recorder — Amy Sowa
Christine L. Lundberg
Mayor
Attest:
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Amy So a
City Recorder