2015 Spring Customer Meeting

Transcription

1 2015 Spring Customer Meeting May 1, 2015

2 Agenda Welcome and Overview Energy Planning and Operations Water Planning and Operations Budget and Rates Forecast Customer Question and Answer Wrap-up

3 2014 Recap Southern Delivery System Drake fire restoration Emissions control: Drake and Nixon Flat sales, reduced water revenue Reduced expenditures by $24 million Strong performance o Rates, reliability, credit rating, customer service

4 2015 Focus and Challenges Flat energy and water sales Continued large capital investments Water and energy planning Gas meter replacement and repair Reservoir and dam improvements Water main replacements Wastewater collection system improvements

5 Organizational Evolution Sustainable cost reductions Internal core team Sub teams: fleet, IT, facilities, labor Position reductions through attrition Improve efficiencies in asset management, project delivery, sourcing, cost of service

6 Governance Review Can a change in governance benefit citizen-owners and customers? Extensive public process Identify potential governance structures and processes Facilitation from the American Public Power Association Public meetings, 1 p.m., last Friday of each month

7 Our Role in Economic Development Utilities Policy Advisory Committee assignment Reviewing peer utilities best practices Receiving stakeholder input Considering opportunities for partnerships, tools for prospects, streamlining processes, infill versus green field, etc. High level recommendations to Board in May Detailed recommendations in September

8 Energy Services Update Eric Tharp Chief Energy Services Officer

9 Outline Energy outlook Energy efficiency & conservation opportunities Reducing emissions at our coal plants Electric Integrated Resource Plan

10 Energy Outlook All generating units should be available this summer; we have sufficient reserves Natural gas prices continue to be lower than anticipated Load growth is very moderate

11 Business Energy Efficiency and Renewable Energy Solutions Energy Efficiency Rebates Lighting rebate program Custom rebate program Showerhead rebate program High Efficiency Air Conditioning rebate program Motors, Belts and Pulleys rebate program Window Replacement rebate program Builder Incentive program Renewable Energy Rebate Photovoltaic's (PV) Solar Thermal Heating Systems Community Solar Garden Program

12 Business Custom Rebate $60/kW saved $0.09/kWh of first savings Preapproval required For energy savings measures not covered by other rebate programs Measurement & Verification (pre and post energy savings) may be required

13 Renewable Energy Solutions Wind Power Program 5,433 blocks (100 kwh) available Prices range from $ $2.31/block depending on rate class Customer retains RECs PV Solar Roof Top $1.00/watt (until 6/30/2015 then $0.50/watt) Rebate capped at 25 kw System size limited to 120% of annual usage Renewable Energy Certificates $0.034/100kWh block CSU retires RECs on customer behalf Solar Thermal (hot water) Rebate 35% of installed cost up to $15,0000 Community Solar Gardens Pilot program (1.5 MW) Open only to educational and residential customers $ bill credit New program (2 MW) Bill credit based on rate class $0.0425/kWh performance based incentive (PBI)

14 Emissions Background History of Stewardship Controlling emissions Evolution of Regulations Planning and executing Technology Options Each facility is unique Best value solutions 14

15 SO2 Control Projects Nixon Power Plant Drake Power Plant 15

16 Coal Unit NOx Emissions ~ 65% decrease over period Low NOx Burners Ultra Low NOx Burners Over-Fire Air Ports

17 Coal Unit SO2 Emissions ~ 40% decrease over period Low Sulfur Coal

18 Compliance / Implementation Drake 5, 6, 7 and Nixon 1 PM Compliance Drake 7 NOx Compliance Drake 5 or Drake 6 NOx Compliance Drake 5 or Drake 6 NOx Compliance Nixon 1 NOx Compliance Drake 5, 6, 7 and Nixon 1 SO 2 Compliance Drake 6 and Drake 7 ULNB/OFA 2014 Drake 6 SO 2 Scrubber 2016 Drake 5, 6, 7 and Nixon 1 PM Compliance Demonstration 2013 Drake 7 SO 2 Scrubber 2015 Nixon 1 ULNB and SO 2 Scrubber 2017 Drake 5 NOx and SO 2 controls options included in EIRP evaluation

19 Rendering of Drake Scrubber Project (FLY PICS IN/OUT) 19

20 Customer Input EIRP Process/Schedule Public/U B Mtg Develop Inputs Resources and Assumptions May January 2015 Supply Side: Existing/Future Resources: Coal, Gas, Combined Cycle, IGCC Demand Side/Renewables: Energy Efficiency, Demand Response, Hydro, Wind, Solar, Biomass Energy Vision: Percentage or Renewables, DSM, Demand Reduction, Distributed Generation Environmental Regulations: SCR, CO2, Emission Portfolio Standards Public/U B Mtg Analysis Scenarios 2015 High, Medium, Low: Plant Decommissioning: Run Capacity Expansion Model Compile Resource Portfolios February April Coal, Gas, Market Prices : Environmental Regulations : RPS and DSM Levels Drake, Birdsall Public/U B Mtg Evaluation Selected Portfolios 2015 Planning and Risk: Stochastic Risk Analysis Rate Model Weighted Decision Analysis: Rank Intangible Considerations May July Public/U B Mtg Decision Final Selection 2015 Recommendation Utility Board Presentation Utility Board Decision August October Public involvement occurs throughout the process and includes input from the EIRP Advisory Group and the general public.

21 EIRP Public Meetings Public Open Houses: December (4 th ) Resources & Assumptions April (9th) Scenario Review June (tentative) Portfolio Development August (tentative) Review final draft portfolio

22 Water Services Update Gary Bostrom Chief Water Services Officer Presented by Leah Ash

23 Outline Water Outlook Conservation Southern Delivery System (SDS) Integrated Water Resource Plan (IWRP)

24 Situation Outlook Summary The Drought Monitor shows the development of moderate drought conditions in western Colorado Long range forecasts suggest a potential for a wetter than average winter Currently have 2.6 years of demand in storage We are monitoring snowpack and storage to assess the water supply situation going into 2015

25 Snowpack Summary

26 Snowpack Summary

27 Why Does Utilities Promote Water Use Efficiency? Utilities recognizes the finite, constrained, and unpredictable nature of water supply, therefore educates and encourages customers to save water for resource, economic and community benefits, as well as regulatory compliance. Measures used to promote water conservation: Education Water audits Rates Incentives (rebates and give-aways) Regulatory measures

28 Irrigation Equipment Rebates High-efficiency matched precipitation nozzle (up to $4 per unit, up to $800) Pressure-regulating sprinkler head with check valve (up to $15 per unit, up to $2,000) Conversion of overhead to drip irrigation (save on qualifying drip equipment up to $1,000) WaterSense TM certified smart irrigation controller (half the purchase price, up to $400)

29 Commercial Landscape Incentive Program (CLIP) Provides incentives to customers who significantly reduce irrigation water use through landscape changes and/or irrigation upgrades. Customers with successful proposals can receive $50 per 1,000 cubic feet of water saved for three years. Work together to analyze existing site conditions and help develop a water savings plan and estimate. Estimated annual water savings must be 25,000 cubic feet or greater annually. Space is limited- please contact us if you are interested! Eric Becker Lisa Pace

30 SDS: Regional Project Benefits Southern Colorado Pueblo West Fountain Security Colorado Springs Long-term solution: Regional economic vitality depends on it Growing Communities System Reliability Water Supply Shortages

31 SDS: Phase I and Future Components Phase I miles underground pipeline 3 pump stations Water treatment plant Phase Two reservoirs Expanded capacity at water treatment plant SECURITY CITY OF CITY OF FOUNTAIN FOUNTAIN Treated-water Pipeline Water Treatment Plant Raw water pipeline Upper Williams Creek Reservoir Bradley Pump Station Williams Creek Reservoir Williams Creek Pump Station Juniper Pump Station Raw water pipeline PUEBLO WEST CITY OF PUEBLO Pueblo Dam

32 SDS: Progress Overview Dam connection Dam connection complete More than 49 miles of pipeline installed final section complete by April Treatment plant and three pump stations under construction One-mile tunnel under I-25, Fountain Creek, RR tracks complete On track for operation in early 2016 Nearly $150M under budget lower costs and interest rates combined with rigorous project management Benefitting local businesses Pipeline nearly complete New water treatment plant

33 Boost to Regional Economy Emphasis on local business involvement Nearly 400 businesses in Colorado have helped plan/construct SDS $514 million has stayed in Colorado $249+ million to El Paso County businesses Tom Neppl, Springs Fabrication Colorado Springs Joe Welte, Summit Brick Pueblo SDS spending through Dec. 2014

34 IWRP Purpose When the well is dry, we know the worth of water. Ben Franklin Roadmap for the future Long-range plan 50+ years Examines water supply, water demand, water quality, infrastructure, energy, regulatory and legal issues, public opinion

35 Why Start the IWRP Now? Main recommendations of the 1996 Water Resources Plan have been completed SDS Phase 1 nearing completion Water Conservation Plan 2014 Planning is continuous, building on past successes Implementation of major projects is lengthy Increased uncertainty in water supplies in the West need to be prepared Distribution of sources of new supply recommended in 1996 Plan

36 Key Factors Affecting Colorado Springs Water Resources

37 Rate Update Bill Cherrier Chief Planning Financial Officer

38 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Forecasted Natural Gas Prices $/Dth $5.50 As of April 3, 2015 $5.00 $4.50 $4.00 Heating Season $3.50 $3.00 $2.50 $2.00 $1.50 Forecast Version Februa ry Foreca st Ma rch Foreca st April Foreca st

39 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Millions Electric Fuel Cost (ECA) Projections Collected Balance $15.0 $10.0 As of April: Possible July 2015 Decrease $ Res (2.2%) Com = (3.0%) Ind = (3.2%) $ Res (5.3%) Com = (7.3%) Ind = (7.9%) $(0.0005) Res = (0.9%) Com = (1.4%) Ind = (1.5%) $(0.0015) Res = (0.8%) Com = (1.2%) Ind = (1.2%) $/kwh $0.045 $0.030 $5.0 $2.7 $3.0 $4.6 $5.4 $5.0 $2.3 $0.015 $- $(0.2) $(0.0) $0.000 $(2.4) $(5.0) $(5.6) $(0.015) $(10.0) $(0.030) ECA Collected Balance Supply Rate Incl ECA ECA Cost/Unit Meet Expectations Improvement Nessesary Margins from off-system sales are included in actual results when realized but excluded from forecasted revenues

40 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Millions Gas Fuel Cost (GCA) Projections As of April: Possible October 2015 Decrease Collected Balance $20.0 $15.0 $(0.1265) Res = 3.7% Com = 4.9% Ind = 5.0% $(0.2460) Res = (14.3%) Com =(18.6%) Ind = (19.1%) $(0.2846) Res = (5.4%) Com =(7.4%) Ind = (7.6%) $/Ccf $0.700 $0.500 $10.0 $7.1 $8.1 $5.0 $5.6 $5.5 $5.2 $5.1 $0.300 $0.0 $1.7 $2.5 $0.100 ($5.0) $(1.8) ($0.100) ($10.0) $(7.6) ($0.300) ($15.0) ($0.500) GCA Collected Balance Supply Rate Incl GCA GCA Cost/Unit Meet Expectations Improvement Nessesary Margins from off-system sales are included in actual results when realized but are excluded from forecasted revenues

41 Potential 2016 Rate Activity Line No. Typical Industrial Bill Industrial Current Rates Typical Bill at 4/1/15 Potential Increase % Change of Total Bill (a) (b) (c) (d) (e) (f) 1 Electric Non-Fuel (Base) (E8T at 400,000 kwh and 1,000 kw) 2 Access and Facilities Charge (per day) $ Demand Charge Secondary On Peak (per kw, per day) $ $ 21,734 5% - 7% 2.5% - 3.5% 4 Demand Charge Secondary Off Peak (per kw, per day) $ Capacity (per kwh) $ Natural Gas Non-Fuel (Base) (G1CL at 12,400 Ccf) $ / 7 Access Charge (per day, per Ccf) 1, % 0.0% $ Water (WC at 50,000 cf) 2, % 0.0% 9 Wastewater (SC at 50,000 cf) 1, % 0.0% 10 Electric Fuel 11 Electric Cost Adjustment - ECA (per kwh) $ (0.0005) 12 Supply Charge On Peak (per kwh) $ , Supply Charge Off Peak (per kwh) $ Natural Gas Fuel 15 Gas Cost Adjustment - GCA (per Ccf) $ (0.2460) 4, Gas Supply (per Ccf) $ Total $ 42,427 $43,487 - $43,896 41

42 Potential 2016 Rate Activity Fuel Cost Recovery Fuel Costs currently recovered from two different rates ECA and On/Off Peak Supply Charge GCA and Gas Cost Investigating proposal to recover from ECA/GCA only Objective is transparency with net rate impact to bill neutral Natural Gas Fuel example: Natural Gas Fuel Gas Cost Adjustment - GCA (per Ccf) $ (0.2460) $ Gas Supply (per Ccf) $ N/A Total Gas Fuel $ $

43 Q&A - Forum