Work Session Minutes - Eugene Water & Electric Board
Work Session Minutes - Eugene Water & Electric Board Work Session Minutes - Eugene Water & Electric Board
Work Session October 2, 2012 Page 2 of 8 Vice President Brown asked if the Board can be confident about these forecasts. General Manager Gray replied that that is a very important question and that there are some assumptions that need to be challenged. Ms. Erben added that the Board should continue to ask these difficult questions so that staff can make the best choices. A brief discussion ensued regarding hydroelectric load forecasts, the liquidity of the power market, etc. Jason Heuser, Legislative Representative, gave the Board a governmental affairs update. With the use of overheads, he reviewed EWEB’s Energy Supplier Assessment (ESA) payments from 2006-2012. Vice President Brown asked how long it will take to reverse and reduce these payments and to fight this issue. Mr. Heuser replied that investor-owned utilities (IOUs), gas distributors and wind farm personnel have formed a coalition to fight this issue (with a “full court press”), and that EWEB has allies in several key legislators, i.e., Senator Betsy Johnson of Scappoose, and Chris Edwards locally. He said the main issue is the necessity for the Oregon Department of Energy (ODOE) to do full transparency. With the use of overheads, Mr. Heuser then reviewed BPA’s hydro efficiency renewable energy credits (RECS) and how EWEB will endeavor to influence the completion of ODOE’s rulemaking process to address these RECS due to the fact that ODOE is in “analysis paralysis.” He added that EWEB is basically adopting a “no REC left behind” philosophy. Commissioner Ernst recalled that last year’s audit addressed the need to show RECS in a different way on EWEB’s books. She asked if there is a different price range for RECs and if there are projections on their rise and fall. Ms. Erben replied that in the longer term, prices are higher, and in-state resources are generally higher (approximately $1/mWhr). Commissioner Ernst then asked for a brief explanation of the University of Oregon’s cogeneration system. Mr. Churchman explained that their cogeneration is with natural gas that they intend to sell to the power market, and that currently EWEB buys energy from them at a favorable price, approximately $2 below market price. He added that the contract with the University is riskless for EWEB and is tagged to the hourly index, as it has been fairly reasonable. Commissioner Ernst then asked why EWEB is buying that additional power. Mr. Churchman replied that it is a marketing mechanism for the University until they are able to arrange a long-term contract, and he added that EWEB is making money on this transaction. Commissioner Cunningham said he would like staff to send the Board a chart that shows all the renewable energy options and their prices. President Simpson concurred, and said it would be helpful to see that chart about three times a year. Ms. Erben noted that a lot of that information is a part of the Integrated Energy Resource Plan (IERP), and that staff will be giving the Board an annual update on it in early 2013.
Work Session October 2, 2012 Page 3 of 8 2013 CUSTOMER GENERATION RATES With the use of overheads, Ms. Erben, Mark Freeman, Customer Services & Energy Management Manager; Sibyl Geiselman, Energy Resource Analyst; and Colleen Wedin, Solar Programs Lead, reviewed the proposed updates for three customer generation rates - the renewable net metered rate, the annual renewable generation purchase rate, and the long-term renewable generation purchase rate - which would go into effect in 2013. Staff sought approval for these updates with adoption of a Resolution later in tonight’s meeting. President Simpson asked about the volatility of natural gas prices. Ms. Erben replied that unless policy changes are made, gas prices could stay low for a long time, even for a decade or more. Commissioner Ernst asked how much a carbon tax would level the playing field. Ms. Erben replied that that would depend on how high the tax is, but she noted that legislative appetite for carbon has fallen off considerably. Commissioner Helgeson asked for confirmation of the parameters for long-term arrangements. Ms. Wedin replied that the size threshold was reduced to 200 KW in April 2012. Commissioner Helgeson then asked if the proposed 5.93 c/kWh long-term renewable generation purchase rate would be applied for 20 years. Ms. Erben replied that it would indeed apply to any customers who signed a contract for that year. Vice President Brown said he feels like there is a mixed message being sent regarding natural gas vs. no natural gas. Ms. Erben explained that EWEB is not facilitating the University’s generation and that it was the University’s decision, and that EWEB provided customer service to assist them for a short period of time, but they will generate regardless of whether or not EWEB assists them. General Manager Gray reminded the Board that EWEB didn’t encourage or discourage the University’s project, and that it is not an economic transaction. Commissioner Ernst recalled that when she first came on the Board, she had said that EWEB should invest in distributed energy. She referenced the 6 th Energy Plan and said that at that time EWEB offered solar photovoltaic at a good price, and then decided to purchase additional energy via the Seneca biomass plant. She added that she is discouraged that EWEB seems to have a negative attitude toward solar, but that she believes that solar does work in the Northwest, and though it is now referred to as lost revenue, she believes it offsets EWEB’s need to purchase power, and in a way that is a savings. She noted that other utilities (even the IOUs) are continuing to invest in photovoltaic.
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<strong>Work</strong> <strong>Session</strong><br />
October 2, 2012<br />
Page 2 of 8<br />
Vice President Brown asked if the <strong>Board</strong> can be confident about these forecasts. General<br />
Manager Gray replied that that is a very important question and that there are some assumptions<br />
that need to be challenged. Ms. Erben added that the <strong>Board</strong> should continue to ask these difficult<br />
questions so that staff can make the best choices. A brief discussion ensued regarding<br />
hydroelectric load forecasts, the liquidity of the power market, etc.<br />
Jason Heuser, Legislative Representative, gave the <strong>Board</strong> a governmental affairs update.<br />
With the use of overheads, he reviewed EWEB’s Energy Supplier Assessment (ESA) payments<br />
from 2006-2012.<br />
Vice President Brown asked how long it will take to reverse and reduce these payments<br />
and to fight this issue. Mr. Heuser replied that investor-owned utilities (IOUs), gas distributors<br />
and wind farm personnel have formed a coalition to fight this issue (with a “full court press”),<br />
and that EWEB has allies in several key legislators, i.e., Senator Betsy Johnson of Scappoose,<br />
and Chris Edwards locally. He said the main issue is the necessity for the Oregon Department of<br />
Energy (ODOE) to do full transparency.<br />
With the use of overheads, Mr. Heuser then reviewed BPA’s hydro efficiency renewable<br />
energy credits (RECS) and how EWEB will endeavor to influence the completion of ODOE’s<br />
rulemaking process to address these RECS due to the fact that ODOE is in “analysis paralysis.”<br />
He added that EWEB is basically adopting a “no REC left behind” philosophy.<br />
Commissioner Ernst recalled that last year’s audit addressed the need to show RECS in a<br />
different way on EWEB’s books. She asked if there is a different price range for RECs and if<br />
there are projections on their rise and fall. Ms. Erben replied that in the longer term, prices are<br />
higher, and in-state resources are generally higher (approximately $1/mWhr).<br />
Commissioner Ernst then asked for a brief explanation of the University of Oregon’s<br />
cogeneration system. Mr. Churchman explained that their cogeneration is with natural gas that<br />
they intend to sell to the power market, and that currently EWEB buys energy from them at a<br />
favorable price, approximately $2 below market price. He added that the contract with the<br />
University is riskless for EWEB and is tagged to the hourly index, as it has been fairly<br />
reasonable.<br />
Commissioner Ernst then asked why EWEB is buying that additional power. Mr.<br />
Churchman replied that it is a marketing mechanism for the University until they are able to<br />
arrange a long-term contract, and he added that EWEB is making money on this transaction.<br />
Commissioner Cunningham said he would like staff to send the <strong>Board</strong> a chart that shows<br />
all the renewable energy options and their prices. President Simpson concurred, and said it<br />
would be helpful to see that chart about three times a year.<br />
Ms. Erben noted that a lot of that information is a part of the Integrated Energy Resource<br />
Plan (IERP), and that staff will be giving the <strong>Board</strong> an annual update on it in early 2013.
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