HomeMy WebLinkAboutMinutes - August 18, 2015 SSLODI CITY COUNCIL
SHIRTSLEEVE SESSION
CARNEGIE FORUM, 305 WEST PINE STREET
TUESDAY, AUGUST 18, 2015
A. Roll Call by City Clerk
An Informal Informational Meeting ("Shirtsleeve" Session) of the Lodi City Council was held
Tuesday, August 18, 2015, commencing at 7:00 a.m.
Present: Council Member Kuehne, Council Member Nakanishi, Mayor Pro Tempore Chandler,
and Mayor Johnson
Absent: Council Member Mounce
Also Present: City Manager Schwabauer, City Attorney Magdich, and City Clerk Ferraiolo
B. Topic(s)
B-1 Receive Presentation from Northern California Power Agency Regarding the State
Mandated Public Benefits Program (EU)
Jonathan Changus of the Northern California Power Agency (NCPA) provided a PowerPoint
presentation regarding the State -mandated Public Benefits Program. Specific topics of discussion
included an overview of the Public Goods Charge (PGC); AB 1890; energy efficiency and
conservation; new investment in renewable energy resources; research, development and
demonstration programs; service for low-income customers; and key considerations.
Council Member Nakanishi questioned if the PGC rate of 2.85 percent could increase, to which
Mr. Changus responded that most utilities adopted the set 2.85 percent level, while the rare few
have opted to establish a higher percentage.
Council Member Kuehne questioned if PGC funding would be available for testing electric meters
to ensure they are reading accurately, to which City Manager Schwabauer replied that this
funding is not available for that service because there are no energy efficiency consequences
associated with reading meters. In the case of a failed meter, customers are not charged for the
service. Electric Utility Director Elizabeth Kirkley added that the meters are incapable of providing
erroneous readings; the meters either work or fail. She further pointed out that PGC funding can
be used to expand services to customers for education, outreach, and energy audits, stating that
energy audits are most effective in addressing customer concerns. Mr. Schwabauer agreed,
stating that many customers are using significant amounts of power because of antiquated
mechanical systems or systems that are too large for their homes and that energy audits can
educate customers on ways to reduce their energy costs. In further response to Council Member
Kuehne, Ms. Kirkley stated that staff is currently working to implement a program to offer energy
audits. Business Development Manager Adam Brucker added that the service is currently being
provided on a limited basis and that the City's consultant is researching the matter, as well as
costs, to determine if such a program is feasible. Council Member Kuehne suggested that
information regarding water usage and conservation be incorporated into the program.
Mr. Brucker stated that another program under consideration is a direct install program, whereby
the City makes recommendations on equipment and contractors, that would be offered jointly
through Electric Utility and Public Works. Mr. Changus stated that combination audit programs for
energy and water are fairly common in the industry, adding that there may be State funding
through the California Energy Commission to support those activities.
In response to Mayor Pro Tempore Chandler, Mr. Changus stated that investor-owned utilities
had a sunset date of 2011 for its PGC, but it continues through Governor Brown as a regulation
instead of as legislation.
In response to Council Member Kuehne, Mr. Changus explained that a smart grid is an advanced
smart meter and meter data management software geared toward advanced energy services,
such as monitoring real-time usage and sending alerts to customers.
In response to Council Member Nakanishi, Mr. Changus stated there has been some legislation
movement for investor-owned utilities on smart grids relating to distribution generation, electric
vehicle charging, and requiring information on system operations be available, but it has been
less focused on public -owned utilities.
In response to Council Member Nakanishi, Ms. Kirkley stated that a portion of the low-income
subsidies comes from the public benefits program fund. Mr. Schwabauer confirmed that Lodi's
program provides relief to low-income individuals against a certain percentage of their utility bill;
however, it does not completely forgive payment of the bill. Individuals who qualify for the
assistance must complete an application to receive the discount, which is applied prospectively.
Mr. Brucker added that the City contracts with the Lodi Salvation Army and sets aside $50,000
toward its CARE Program, which is used to assist qualifying individuals with emergency grant
money.
In response to Council Member Nakanishi, Mr. Brucker stated that the public benefits program
budget is roughly $1.9 million, and there is likely a fair amount remaining in the account as the
new budget year began only a short while ago.
In response to Mayor Pro Tempore Chandler, Mr. Changus stated that, after the solar legislation
sunsets in 2016, the per -watt incentive portion will be eliminated while the net metering law is
indefinite and that the 2.85 percent PGC will continue until legislators vote otherwise, which
triggers a 2/3 vote requirement, thereby making it unlikely to change.
In response to Council Member Nakanishi, Mr. Schwabauer reaffirmed that solar customers can
sell their excess energy back to the City; however, the City does not permit residents to construct
solar systems that would generate more power than they need because the City must buy back
the power at the retail rate, which is a poor business model. In further response, Mr. Schwabauer
stated he could not estimate the percentage of solar households it would take to eventually cause
harm to the utility rates, but there is harm caused by the fact that some customers are paying full
costs while others are not. Mr. Changus stated that, typically, 15 percent or more of excess
generators or net meter solar customers on a feeder line can create potential operational issues
that may require transformer upgrades. In further reply, Mr. Changus stated that efforts are being
made in Sacramento to ensure legislation includes stronger requirements for solar systems,
including requiring energy audits or replacement of antiquated systems prior to installing solar
systems and restrictions on the size of systems, in order to address the increase in excess
generators.
In response to Council Member Nakanishi, Mr. Brucker confirmed that solar rebate funds have
been exhausted for the remainder of this year, adding that $560,000 was designated for the
program and those funds were committed quickly. Mr. Changus added that, because the federal
tax credits will sunset next year, there has been a significant push from solar companies to
encourage customers to install solar systems while the benefit and rebates still exist.
In response to Mayor Johnson, Mr. Changus stated that it is realistic to anticipate an attempt to
extend or redefine the solar legislation that could mean minimal to modest increases that public -
owned utilities would be expected to provide under the net metering law. He added that a number
of utilities are pursuing community -operated systems where they can control locations and
address other issues, as well as offering solar to renters and businesses.
In response to Council Member Kuehne, Mr. Schwabauer confirmed that the City has seven
electric vehicle charging stations at five different locations; there is no cost to charge electric
vehicles; and Council discussed options for charging vehicles, but determined to leave it at no
cost due to the fact that the required infrastructure would be more costly than what the City could
recover over ten years. In further response regarding charging stations at retail centers,
Mr. Schwabauer stated staff is trying to get private infrastructure incentivized and is working with
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the developer to install stations at Reynolds Ranch. Mr. Brucker stated that there is a possibility a
transformer would need to be upgraded in order to install a charging station at Reynolds Ranch
and it is questionable at this time that it will happen. Mr. Changus informed Council that NCPA is
exploring potential public funding via grants to install charging stations near freeways and that
some utilities fund stations with greenhouse gas monies.
C. Comments by Public on Non -Agenda Items
None.
D. Adjournment
No action was taken by the City Council. The meeting was adjourned at 7:51 a.m.
ATTEST:
Jennifer M. Ferraiolo
City Clerk
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AGENDA ITEM
&J& CITY OF LODI
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AGENDA TITLE: Receive a Presentation from the Northern California Power Agency Regarding the
State Mandated Public Benefits Program
MEETING DATE: August 18, 2015
PREPARED BY: Business Development Manager
RECOMMENDED ACTION: Receive a presentation from the Northern California Power Agency
Regarding the state mandated Public Benefits Program.
BACKGROUND INFORMATION: As part of the restructuring of California's electric utility industry, as
implemented by AB 1890 (1996), requirements were added
directing publicly owned utilities (POUs) to collect a separate
surcharge to be used for "public benefits" programs in four categories: (1) cost-effective demand-side
management services to promote energy efficiency and energy conservation; (2) new investment in
renewable energy resources; (3) research, development and demonstration projects; and (4) services
provided for low-income electricity customers.
Jonathan Changus, Member Services Manager & Regulatory Affairs, with NCPA will provide an overview
of the State's regulatory requirements for Public Benefit programs, including use of funds and annual
reporting.
FISCAL IMPACT: Not applicable.
FUNDING AVAILABLE: Not applicable.
A am Brucker
Business Development Manager
AB
APPROVED:
Stephen Sc auer, City Manager
Overview of the
Public Goods Charge
Jonathan Changus
Member Services Manager & Regulatory Affairs
August 18, 2015 — City of Lodi
AB 1890 (1996)
Public Goods Charge (PGC) established as at least 2.85% of retail sales.
• Four categories of programs are eligible to be funded through the PGC:
1. Cost-effective demand-side management services to promote
energy efficiency and energy conservation
2. New investment in renewable energy resources and
technologies
3. Research, development and demonstration programs for the
public interest to advance science or technology which is not
adequately provided by competitive and regulated markets.
4. Services provided for low-income customers, including energy
efficiency, education, weatherization, and rate discounts.
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1. Energy Efficiency & Conservation
The focus is on actions taken on the customer side of the meter.
o "Demand-side management' (DSM) is not defined in statute but is
generally understood to refer to actions taken by customers.
o Examples of eligible activities for funding include education &
outreach, financial incentives (rebates), market specific programs ,
and planning, measurement & evaluation.
• RELATED LEGISLATION:
o SB 1037 (2005): requires publicly owned utilities (POUs) to report
annually on their investments in energy efficiency and demand
reduction programs.
o AB 2021 (2006): states Legislature's intent that utilities reduce
forecasted consumption by 10% over 10 years (1% annually)
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2. New Investment in Renewable Energy Resources
POUs have used PGC funds for distributed generation incentive programs
AND improvements at large scale renewable projects.
o New injection wells at the Geysers geothermal plant and member -
specific power purchase agreements.
o Solar PV rebates for customers
RELATED LEGISLATION:
o SB 1 (2006): codifies the California Solar Initiative, which includes a
requirement for POUs to provide rebates to customers for the
installation of solar PV. SUNSETS at the end of 2016***
o SBx1 2 (2011): requires POUs to serve 33% of their retail sales
with generation from renewable resources by 2020.
o AB 920 (2009): allows customers to sell excess electricity they
produce over the course of a year to their utility.
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3. RD&D
• POUs use PGC funds to leverage grant funds from other organizations:
o American Recovery & Reinvestment Act (ARRA, 2009) California
Energy Commission, American Public Power Association DEED
• PGC RD&D funds can also be used for membership dues:
o APPA DEED, Consortium for Energy Efficiency, Solar Electric Power
Association.
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4. Services for Low -Income Customers
Additional requirements adopted during the Energy Crisis direct POUs to
provide programs for low-income customers, including but not limited to
targeted energy efficiency services, education, and weatherization.
RELATED LEGISLATION:
o SB 1939 (2000): Directed POUs that did not have low-income
assistance programs as of 2000 to establish them.
o SB x2 2 (2001): Requires POUs to streamline enrollment for low
income programs, including rate assistance programs.
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Key Considerations
The statutory parameters and requirements of the Public Goods Charge
can be found in Section 385 of the Public Utilities Code.
Within these four categories, POUs have broad discretion on how to
collect, manage, and use funds:
o On what year(s) is the 2.85% of retail sales based? 1994? 1996?
The preceding budget year?
o No expenditure level requirements
There is no annual report requirement that POUs on their PGC budgets:
o However, POUs have been asked to provide this data to
policymakers in the past and the information is all public.
The current Legislature is focused on providing access `disadvantaged
communities' with access to clean energy incentive programs.
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