THE CORPORATION OF THE CITY OF NELSON Committee of the Whole AGENDA

Transcription

1 THE CORPORATION OF THE CITY OF NELSON Committee of the Whole AGENDA Wednesday, January 11th, 2012 at 9:00 a.m. in Council Chambers, City Hall 2nd Floor, 310 Ward Street, Nelson, B.C. (Acting Mayor takes the Chair) Page 1. Call to Order 2. Introduction of Late Items (a) Mayors List (b) Councillors List (c) City Manager's Additions 3. Adoption of Agenda (a) Adopt Agenda 4. Presentations (a) Nelson Hydro Operations 2011 [Addenda] 5. Business Items (a) Proposed Hydro Rates Budget [Addenda] 6. Resolution to Adjourn Page 1 of 68

2 #4(a) - Nelson Hydro Operations 2011 Page 2 of Review January 11, 2012

3 #4(a) - Nelson Hydro Operations 2011 Page 3 of 68 Nelson Hydro in operation since February 1, Nearly 9,900 customers System load approximately 171,000 MWh per year. Bonnington falls generating facility 4 operating generators 2011 the plant produced 86,000 MWh of energy.

4 #4(a) - Nelson Hydro Operations 2011 Page 4 of 68 CAO General Manager Line Manager Operations Manager Administration Manager (50%) Power Line Tech Sub Foreman Customer Service Tech Power Line Tech Sub Foreman Meter Service Power Line Tech Electrician Power Line Tech Electrician Power Line Tech Millwright Grounds man Reception (50%) Reception (50%)

5 #4(a) - Nelson Hydro Operations 2011 Page 5 of ,000, ,000, ,000, ,000, ,000,000 75,000,000 50,000,000 25,000, Nelson Hydro Utility Load (kwh) F A

6 #4(a) - Nelson Hydro Operations 2011 Page 6 of 68 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5, Nelson Hydro Purchased Demand (kva) A F

7 #4(a) - Nelson Hydro Operations 2011 Page 7 of 68 Staff Levels One retirement in the Line Department We were effectively fully staffed throughout 2011, Sick Time was up non work related issues. System Reliability 2010 reliability improvement over 2009 was maintained, This is attributed to: System upgrades and maintenance continued, & Generally favourable weather conditions.

8 #4(a) - Nelson Hydro Operations 2011 Page 8 of 68 College Dorm Heating Project System was commissioned and placed in service: Has been operating since Sep 2011 Due to the mild weather the system has not yet run anywhere near maximum capacity. Street Light Maintenance Over the course of 2010 the average time to repair a streetlight problem was cut in half. In 2011 the repair time was further reduced.

9 #4(a) - Nelson Hydro Operations 2011 Page 9 of 68 Customer Service (New Connections) Success in reducing the time to complete customer service connections This is cyclical dependent weather, construction season, and economic conditions. Downtown Conversion System installed and energized in 2011 Large load customers switched over to new system. Remaining construction work and customer transfers to complete in 2012

10 #4(a) - Nelson Hydro Operations 2011 Page 10 of Review January 11, 2012

11 #4(a) - Nelson Hydro Operations 2011 Page 11 of 68 Focus Areas in 2011 Pole Stabilizing 145 poles throughout the distribution system have been reinforced with steel stubs. Extends the life of the pole assets Reduces liability risks Job Site Safety Emphasized Job Site Safety New Safety procedures Rubber Glove Procedures refreshed

12 #4(a) - Nelson Hydro Operations 2011 Page 12 of 68 Focus Areas in 2011 System Upgrades Several priority jobs completed this year Air Break switch installation Easement issues resolved Work Procedures Rubber Glove work procedures renewed

13 #4(a) - Nelson Hydro Operations 2011 Page 13 of 68 Transmission system: Line Maintenance 60 KV line patrols Line maintenance upgrades: Cross Arm Changes, Poles reinforced with steel stubs, Pole Change outs Vegetation Management Priority Corridors brushed out Hazard trees removed. Insect damaged trees removed The south end of Nelson Hydro s transmission system was quite heavily impacted by forest health issues.

14 #4(a) - Nelson Hydro Operations 2011 Page 14 of 68 Distribution System: Line Maintenance Cross-arm changes. Hazard trees. Pole replacements. Mt Nelson line. Vegetation Management Planned Vegetation management completed. Further to scheduled trimming several critical areas were also addressed.

15 #4(a) - Nelson Hydro Operations 2011 Page 15 of 68

16 #4(a) - Nelson Hydro Operations 2011 Page 16 of 68 Distribution System: North Shore Improvements Re-Closer design work completed Cross arm and pole changes Submarine Cable crossing design work 3 new Air Brake switches installed Coffee Creek Long beach Rd Kokanee Creek

17 #4(a) - Nelson Hydro Operations 2011 Page 17 of Review January 11, 2012

18 #4(a) - Nelson Hydro Operations 2011 Page 18 of 68 Why is Nelson Hydro involved in Regulatory Hearings? Who participates in the hearings? What are the processes in a hearing?

19 #4(a) - Nelson Hydro Operations 2011 Page 19 of 68 FortisBC Residential Inclining Block Rate Application What is RIB? Intended to promote energy conservation. What is Nelson Hydro s interest in this?

20 #4(a) - Nelson Hydro Operations 2011 Page 20 of 68 FortisBC Revenue Requirements and Review of 2012 Integrated System Plan Application Revenue Requirements Application 2012 Integrated System Plan

21 #4(a) - Nelson Hydro Operations 2011 Page 21 of 68 In summary: FortisBC presents to the Commission information that substantiates its application for a rate increase. Oral Hearing Scheduled to take place March 05 th Expected outcome by July of An interim rate increase of 4.0% has been approved by the Commission.

22 #4(a) - Nelson Hydro Operations 2011 Page 22 of 68 Media Releases Power Plant Pamphlet Going Green Alexander Carrie Recognition

23 #4(a) - Nelson Hydro Operations 2011 Page 23 of 68 Power Sense Programs Clothesline Blitz FLIP Program Fire Department Initiative

24 #4(a) - Nelson Hydro Operations 2011 Page 24 of Review January 11, 2012

25 #4(a) - Nelson Hydro Operations 2011 Page 25 of 68 Generator #1 Retired Generator #2 Maintenance Shaft Distortion Generator #3 Maintenance Full time operation Generator #4 Maintenance Winding Failure Generator #5 Maintenance Full time operation

26 #4(a) - Nelson Hydro Operations 2011 Page 26 of 68 Power Plant Fore Bay Trash Removal October Trash rack cleaning Power Purchase 2011 power purchase costs are about on-track with the budget amount, $5.5 million. Metering Customer calls about RF emissions.

27 #4(a) - Nelson Hydro Operations 2011 Page 27 of 68 Maintenance is conducted on a planned cycle: 2011 Planned Maintenance included Testing of Power Transformers, Testing of Voltage regulators, & Re-Closer maintenance, A three-year station maintenance contract (2011, 2012 & 2013) was awarded to Wismer & Rawlings.

28 #4(a) - Nelson Hydro Operations 2011 Page 28 of 68 Downtown Voltage Conversion Project In 2011, all underground infrastructure installation was completed, Major downtown customers were transferred over to the new 25kV supply, Remaining work for 2012 includes Transfer of remaining customers to new overhead system, Removal of old structures, and New lane lighting.

29 #4(a) - Nelson Hydro Operations 2011 Page 29 of 68

30 #4(a) - Nelson Hydro Operations 2011 Page 30 of 68 Rosemont Substation Rebuild Project Specification Completion Circuit Breaker Steel structures Control Building Power Transformer 36MVA power transformer was purchased 2010 Factory inspection completed in 2011 Transformer is ready to ship for delivery in Q2, Expected completion of the new station is Q3, 2012.

31 #4(a) - Nelson Hydro Operations 2011 Page 31 of 68 G4 Rewind Unit has been in service 60 years Winding failure July 23, 2011 Minimal damage to stator iron Ainsworth retained to rewind the unit Unit disassembled in 2011 Should be back in service April 2012

32 #4(a) - Nelson Hydro Operations 2011 Page 32 of 68 Hazardous Waste Program Environment Canada Inspection Favourable report received Competencies maintained: Emergency Response and Contingency Plan Annual beginning Mar 2008 Transportation of Dangerous Goods Every three years beginning Aug 2008 Hazardous Materials Handling Every three years beginning Mar 2009

33 #4(a) - Nelson Hydro Operations 2011 Page 33 of 68 A Good Year for the Utility: Process improvements have resulted in: Better customer service, Improved reliability, Substantive progress on completion of infrastructure upgrades: Downtown Conversion Rosemont Substation, Distribution Upgrades G4 Rewind is underway: Able to accommodate an unplanned failure event.

34 #5(a) - Proposed Hydro Rates Budget Page 34 of Business Plan January 11, 2012

35 #5(a) - Proposed Hydro Rates Budget Page 35 of 68 January 11, 2012

36 #5(a) - Proposed Hydro Rates Budget Page 36 of 68 Energy audit complete for the Civic Centre Major retrofits completed at City Hall and the Police/Library building Implementation of biodiesel in the fleet Raising of staff awareness Estimated yearly energy savings of $30,000 Projected Greenhouse Gas emission reductions 50 tonnes CO2e = 4% reduction

37 #5(a) - Proposed Hydro Rates Budget Page 37 of 68 Plan incorporates recommendations from 2011 energy audit on the Civic Centre Plan includes energy audit for the Wastewater Treatment Plan and lighting design for City Hall Focus on building retrofits at Civic Centre and user practices within fleet operations Included a budget to allow for implementation of smaller projects

38 #5(a) - Proposed Hydro Rates Budget Page 38 of 68 Facility Capital Cost ($) GHG Reduction (tco2e) % Reduction Admin $ 67,500 NA NA City Hall $ 185, % Civic Centre $ 83, % Other Buildings $ 97, % Fleet $ 10,000 NA NA TOTAL $ 443, % Note: 6% GHG emission reduction is approximately 1/4 of the 2015 GHG target (25%)

39 #5(a) - Proposed Hydro Rates Budget Page 39 of Business Plan January 11, 2012

40 #5(a) - Proposed Hydro Rates Budget Page 40 of 68 Overview of Program Branding Needed Residential and Small Business sector Energy audits/retrofits/rebates and Incentives On-bill financing

41 #5(a) - Proposed Hydro Rates Budget Page 41 of 68 Program Schedule First Quarter Research and Development Stage Second Quarter Program launch Third Quarter On-going energy assessments and retrofits Ongoing marketing for the program (as necessary) Assistance to the participants (as necessary) Fourth Quarter Fall information session Energy assessments and retrofits Evaluation of 2012

42 #5(a) - Proposed Hydro Rates Budget Page 42 of 68 Case Studies These are an examples of successful programs that Nelson is interested in: Rossland Uses 36% more electricity than average Rossland s Energy Diet - 20% uptake in initial energy audits Currently gathering data from participants Program will be ending mid April 2012

43 #5(a) - Proposed Hydro Rates Budget Page 43 of 68 Manitoba Hydro Program since 2001 On-bill financing 1 to 2 % customer base participate every year Oregon On-bill financing Pilot program started in Portland Clean Energy Works Oregon was created Currently a state-wide program Nelson will have its own unique program, but we will not have to re-invent the wheel.

44 #5(a) - Proposed Hydro Rates Budget Page 44 of 68 Visibility in the Community Taking action on Climate Change: Stimulating the local economy Hiring local contractors Supporting local retailers Home and small business owners can Save money Increase comfort Add value to their homes and businesses Contribute to a sustainable community and environment Nelson will be among the leaders in this emerging trend.

45 #5(a) - Proposed Hydro Rates Budget Page 45 of Business Plan January 11, 2012

46 #5(a) - Proposed Hydro Rates Budget Page 46 of Priorities Develop a 5 Year T&D Plan System Upgrades Voltage Conversion completion Vegetation Management Fleet Review Team Development Sub Foreman roles Third Party relationships

47 #5(a) - Proposed Hydro Rates Budget Page 47 of Key Projects Submarine Cable Crossing Re-Closer Installations Balfour cable crossing Redfish Creek Single Phase Units 5 Locations 60L3 Hwy Crossing

48 #5(a) - Proposed Hydro Rates Budget Page 48 of Business Plan January 11, 2012

49 #5(a) - Proposed Hydro Rates Budget Page 49 of O&M Priorities Station Maintenance (contracted) Generator annual maintenance (our staff) Transformer Oil Sampling for PCBs Infrared Scan Utility wide

50 #5(a) - Proposed Hydro Rates Budget Page 50 of 68 Rosemont Substation Existing station is 60 years old Reuse the same site 3 x Increase in capacity Completion Q Estimated cost $2,500k

51 #5(a) - Proposed Hydro Rates Budget Page 51 of 68

52 #5(a) - Proposed Hydro Rates Budget Page 52 of 68 Downtown Conversion About 70% Complete Remaining Work Install Overhead Lane Distribution Transfer Balance of Customers Remove Old Structures Install new Lane lighting and Heritage Structures

53 #5(a) - Proposed Hydro Rates Budget Page 53 of 68

54 #5(a) - Proposed Hydro Rates Budget Page 54 of 68 G4 Rewind 60 Year Old Unit 2014 Planned rewind advanced to 2011 Rewind is underway Unit will be up-rated Project cost $1,500k

55 #5(a) - Proposed Hydro Rates Budget Page 55 of 68 Metering Program Program started in 2004 Completion Q Reduced reading time Manual reads took 40 days Radio Reads take 1 week Total project cost $1,200k These meters are not Smart Meters Some customers expressing concern about RF levels

56 #5(a) - Proposed Hydro Rates Budget Page 56 of Business Plan January 11, 2012

57 #5(a) - Proposed Hydro Rates Budget Page 57 of Priorities FortisBC Revenue Requirements and Integrated System Plan Hearing (March 2012) Outage Tracking Hydro Outage Telephone Line Street Light Data Base PowerSense Process Improvements

58 #5(a) - Proposed Hydro Rates Budget Page 58 of Business Plan January 11, 2012

59 #5(a) - Proposed Hydro Rates Budget Page 59 of ,000, ,000, ,000, ,000, ,000,000 75,000,000 50,000,000 25,000, Nelson Hydro Utilty Load (kwh) F A

60 #5(a) - Proposed Hydro Rates Budget Page 60 of ,000, ,000,000 80,000,000 60,000,000 40,000,000 20,000, Nelson Hydro Purchased Energy (kwh) F A

61 #5(a) - Proposed Hydro Rates Budget Page 61 of 68 Infrastructure Upgrades Upgrading the Distribution System Downtown Conversion Completion of this key project. Submarine Cable lake crossing and Re-Closer installations on the North Shore to maintain rural reliability. Substations Rosemont Substation 2012 construction and completion will substantially increase our 25 kv supply capacity Power Plant Upgrades Completion of the G4 Rewind Installation of Vibration monitoring on Generators

62 #5(a) - Proposed Hydro Rates Budget Page 62 of 68 District Energy Business Plan Biomass availability was assessed in Dorm Geothermal commenced operation in to complete DES business plan Corporate GHG Reduction plan Implementation is well under way 2012 to continue with implementation and is on track to meet the 2015 reduction target. Energy Retrofit Program Implementation been started Will assist the City with meeting Community GHG reduction goals The Path to 2040 plan.

63 #5(a) - Proposed Hydro Rates Budget Page 63 of 68 Large Capital Plan: Downtown Conversion ($500k) Rosemont Substation ($2,500k) G4 Rewind ($1,500k) Operating Budget 1 year peak due to: Transformer Oil test program Bad Order Cut-Out replacements Other Operating Expenditures Status Quo budget most areas Some with operating cost reductions

64 #5(a) - Proposed Hydro Rates Budget Page 64 of 68 Dividend to City Increased from $2,225,000 to $2,275,000 Energy Retrofits program funded by Hydro Capital Reserve Transfer to reserve forecast at $1,110,000 Comparable to 2010& 2011 Will continue to draw down the reserve Borrowing required Contributions to reserve will continue to be strengthened over next 5 years Rates and Reserve Transfers Under final revisions

65 #5(a) - Proposed Hydro Rates Budget Page 65 of 68 Sales 2010 Sales were lower than average 2011 Sales about average forecast revenue from rates:$14,300k Based on 0.7% Load Growth, & 5.8% Apr 01 Rate Increase ~ 4% effective for the year Power Purchase costs: 1.4% Volume increase 4.0% Rate Increase 2012 forecast power purchase costs $6,122k

66 #5(a) - Proposed Hydro Rates Budget Page 66 of and 2011 Commercial block discounts were reduced Block 2 discount was reduced from 43 to 35 and then to 22%. Expectation was for reduced commercial consumption especially in block 2. Analysis of the 2009 / 2010 consumption shows that any reduction in block 2 consumption is not measurable other factors caused bigger changes Commercial block flattening Recommend further block flattening by reducing the discount from 22% to 10%. Assuming no change in customer behavior there would be no change to the revenues recovered from this rate class of customer The additional revenue from the block 2 would be returned as a discount in block 1to keep the rate class whole If customers do conserve energy then their power consumption and bills will be reduced from status quo.

67 #5(a) - Proposed Hydro Rates Budget Page 67 of 68 Nelson Hydro Rates are among the lowest in BC Nelson Hydro BC Hydro FortisBC Grand Forks Residential Rate Dec 31, 2011 ( /kwh) / % of Nelson Hydro Rate 84% / 121% 114% 113% 2011 Rate Increase Est. 5.8% 5.6% 4.0% 4.0% Residential Rate Dec 31, 2011 Fcst. ( /kwh) / % of Nelson Hydro Rate 84% / 121% 112% 112%

68 #5(a) - Proposed Hydro Rates Budget Page 68 of 68 Rate Setting Process Jan 23 rd Rate recommendation to Council February 06 th Council adoption of Rates February BCUC approval of rates March Final Council adoption of approved rates