UTILITY COMMITTEE
The Utility Committee met on April 27, 2004, at 4:30 p.m. with Chairman Ruane presiding. Members present were Mr. Carey (arrived at 4:43 p.m.), Mr. Ritter (departed at 5:46 p.m.), and Mr. Lambert. Mr. Farling was absent. Councilman Pitts and Councilman-Elect Sadusky were also present.
AGENDA ADDITIONS/DELETIONS
Mr. Lambert moved for approval of the agenda, seconded by Mr. Ritter and unanimously carried.
PROPOSED AMENDMENTS TO THE CITY OF DOVER ELECTRIC SERVICE HANDBOOK - SMALL COMMERCIAL SERVICE
The Electric Service Handbook currently requires some commercial service customers, (depending on service size), to install secondaries to the City of Dover facilities. Mr. DePrima, City Manager, explained that a secondary includes all of the wires from the right-of-way to the actual building. Small commercial services must install the metering and the City of Dover must install secondaries to such point.
In order to maintain formality and to prevent damage to customer-owned equipment, the Electric Department is requesting that all commercial services be the responsibility of the customer and that it also be the customer’s responsibility to install the secondaries. (This will help reduce cost to the City.)
The Electric Department has been experiencing difficulties installing secondaries to small commercial services due to the wide variety of electrical equipment that is lawfully installed. The City’s equipment is designed to be used for the installation of primary cables, which are much larger than secondaries, and it does not adapt well for use with the smaller wires. In areas where the City installs secondaries in conduit for the City’s necessity, specified pulling boxes are used which allow the use of City equipment without damaging materials.
Mr. Les Blakeman, Electric Director, advised members that any damage that occurs to private property during the installation of the secondaries is the responsibility of the City. Responding to Mr. Ritter, Mr. Blakeman stated that there have been enough occurrences of damage to cause concern. He noted that most damage occurs when the wires pull brackets off of buildings or older foundations break when they are drilled. He stated that the City began the practice of installing secondaries to small commercial services in the early 1990's in an attempt to aid those businesses. Mr. Blakeman noted that it is common with many other utilities for commercial services to be the responsibility of the customer. He also noted that residential and medium and large commercial customers are required to install their secondary lines.
Mr. DePrima noted that secondary installation to small commercial customers is a service which is not provided to all rate payers. He noted that staff is looking for ways to become more efficient so that services and staffing do not have to be expanded. Mr. DePrima stated that the time spent installing small commercial secondaries could be used for their traditional work.
Staff proposed amendments to the Electric Service Handbook, with the changes to take effect May 11, 2004, pending Council approval on May 10, 2004.
Mr. Ritter noted that many times the small business owner is barely making ends meet and may not be able to afford the expense of installing electricity. He thought that “small business” should be more clearly defined.
In response to members’ concerns, Mr. Blakeman stated that he would provide examples of businesses where damage has occurred and the amount of time spent and the costs associated with the installation of secondaries for small businesses.
Mr. Carey moved to defer action on the proposed amendments to the City of Dover Electric Service Handbook until the next scheduled Utility Committee Meeting, seconded by Mr. Ritter and unanimously carried.
DISCUSSION - SS1 TO SB161 RENEWABLE ENERGY PORTFOLIO
Members were provided Senate Bill 161 (SB161), which would establish Renewable Energy Portfolio Standards for electricity suppliers in the State of Delaware so that those suppliers, their consumers, and the public at large might realize the benefits of electricity produced from renewable energy resources. These benefits include improved regional and local air quality, improved public health, increased electric supply diversity, increased protection against price volatility and supply disruption, improved transmission and distribution performance, and new economic development opportunities.
The Renewable Energy Portfolio Standards established in the Act require electricity suppliers to supply a percentage of their total annual electricity sales in the State from renewable energy resources. This percentage incrementally increases from 1% in 2006 to 10% by 2018. Eligible renewable energy resources include solar electric power, wind energy, geothermal energy, ocean energy, fuel cells, methane gas, small hydro power, and sustainable biomass.
The Act also establishes a market-based renewable energy credit trading system to all electric supplier’s compliance flexibility by encouraging the regional exchange of electricity from renewable sources. It also establishes an alternative compliance payment based on a per kilowatt-hour fee. The Public Service Commission is charged with administering the Portfolio Standards in harmony with others in the region.
Mr. Ruane advised members that the Bill has been placed on the Senate Ready List and could be put onto the Senate floor at any time.
Mr. DePrima expressed concern with the program being administered by the Delaware Public Service Commission (DPSC) since they do not currently regulate municipal utilities. He noted that the DPSC would determine, verify, and assure compliance with the Renewable Energy Portfolio Standard. Mr. DePrima also noted that the Bill does not differentiate between municipalities, co-ops, or private industries.
Referring to the requirement that annual sales of retail energy shall include a minimum percentage of electrical energy sales with Eligible Energy Resources, Mr. DePrima advised members that 1%, as required by the year 2006, would be 1.7 mw based on demand. He noted that the Bill allows utilities to either buy or produce “green energy” to meet the requirement. Mr. DePrima, noting that methane gas energy would qualify, stated that the City has had discussions with the Delaware Solid Waste Authority, who is considering installation of a plant at the Sandtown landfill to capture methane to generate energy. He advised members that multiple credits would be given for solar, fuel cell, and offshore wind energy under certain conditions. Mr. DePrima noted that, in lieu of standard means of compliance, the City could pay $50 for each megawatt-hour required. He stated that the cost for 1.7 mw would be approximately $500,000, which would be placed in a pool for the funding of alternative energy sources. It was Mr. DePrima’s opinion that $50 per mw was high and should be negotiated. The Bill also includes a provision for “trading” energy. Mr. DePrima stated that the three (3) areas of concern regarding the Bill are the buyout cost, the required percentages, and being controlled by the DPSC.
Mr. DePrima reminded members that the City is a member of Delaware Municipal Electric Corporation (DEMEC) and stated that he has been discussing this Bill with Mr. Patrick McCullar of DEMEC. He noted that they have two (2) paid lobbyists watching this Bill on their behalf.
Mr. DePrima stated that, according to Mr. McCullar, there is an agreement with the sponsor of the Bill, Senator McDowell, that, should this Bill move forward, there would be a “friendly amendment” that would provide for municipalities being handled separately so that they would not fall under regulation by the DPSC. He noted that DEMEC would be a “self regulating” organization which would have all of the responsibilities given to the DPSC. They would monitor municipalities for compliance and purchase alternative energy from the pool of funds. Mr. DePrima stated that Mr. McCullar believes that the passage of this Bill is eventually inevitable due to strong advocacy and the trend nationwide.
Although members agreed that there was a need for renewable energy, they concurred with Mr. DePrima’s concerns regarding regulation by the DPSC, the ambitious compliance schedule proposed, and the $50 payment in lieu of standard compliance fee. Mr. DePrima stated that the Mayor could be involved in making the City’s legislative team aware of DEMEC’s position.
Mr. Lambert moved to recognize the need for renewable energy and provide support for the concept of Senate Bill 161; however, concerns should be expressed regarding regulation by the DPSC, the ambitious compliance schedule proposed, and the payment in lieu of standard compliance rate of $50 per mw. The motion was seconded by Mr. Ritter and unanimously carried.
UPDATES
Brown Water Plan Implementation Update
Mr. Scott Koenig, Public Works Director, provided a 10-point update on the Brown Water 90-Day Plan of Action (Attachment #1).
Mr. Ruane commended Mr. Koenig for his thoroughness and attention to the brown water issue.
Master Water Plan
Mr. Koenig provided an update on the Master Water Plan (Attachment #2). He advised members that Whitman, Requardt and Associates worked with the City’s Information Technology Department and have obtained the billing data from calendar year 2003 to use in an interface with the modeling software. Mr. Koenig explained that this will allow them to use actual consumption figures in their calculations.
Mr. Koenig stated that he anticipates the modeling returns in June with the end of the program occurring at the end of August. He noted that they would like to calibrate the model during the summer months when the system is under stress in order to get a more accurate picture of the system.
Persimmon Park Place - Right-of-Way and Street Dedication
Mr. DePrima advised members that he received an opinion from the City Solicitor, Mr. Nicholas Rodriguez, that the neighborhood-wide tax re-evaluation would be legal. He stated that Mr. Gardner, the attorney for Persimmon Park Place, provided a lengthy opinion stating that the condominium association had the sole authority to transfer the streets to the City of Dover. Mr. DePrima stated that he had not received certification from Mr. Rodriguez that he concurred with Mr. Gardner’s opinion.
Mr. DePrima stated that ballots, along with a cover letter would be sent to each property owner by the end of May. He advised members that the letter would include their current and proposed taxes. Once the results have been received, a public hearing will be scheduled to discuss the dedication.
Electric Rate Study Implementation Plan
Mr. DePrima stated that they would begin meeting with representative customer groups who may be impacted by increases in May and will provide responses by June. He noted that the project had been delayed due to work on the budget. Mr. DePrima stated that the new power cost adjustment calculation, as recommended by the study, was used to prepare this budget.
Mr. Ruane suggested that the civilian Utility Committee members be invited to attend the budget meetings.
Mr. Carey moved for adjournment, seconded by Mr. Lambert and unanimously carried.
Meeting Adjourned at 6:10 P.M.
Respectfully submitted,
Eugene B. Ruane
Chairman
EBR/tam
S:ClerksOfficeAgendas&MinutesCommittee-Minutes20044-27-2004-Utility.wpd
Attachment
Attachment #1 - Brown Water Plan Implementation Update
Attachment #2 - Master Water Plan