AGENDA MEMORANDUM

 

 

Meeting Date:           November 13, 2007

 

From:                          Paul Kalv, Electric Director

 

Subject:                      Resolution presenting a determination on implementation of the PURPA

                                    Standards contained in the Energy Policy Act of 2005.

 

 

Staff Recommendation:

Staff recommends adoption of the resolution presenting a determination on the implementation of the five new PURPA Standards contained in the Energy Policy Act of 2005.

 

Analysis:

On October 22, 2007 the City Commission held a public hearing to consider implementation of the five additional standards that nonregulated utilities must consider, including (1) net metering; (2) fuel diversity; (3) fossil fuel generation efficiency; (4) time based metering and communications; and (5) interconnection standards for distributed resources.

 

Electric department staff presented facts and recommendations regarding the five new PURPA standards.  Electric consumers and other electric utilities were also given the opportunity to present facts and recommendations for consideration by the Commission and no other attendees spoke during the public hearing.

 

The proposed Resolution presents a determination by the City Commission on the implementation of the five new PURPA Standards that is based on the facts and recommendations presented by Electric Department staff as well as remarks from the City Commissioners during the public hearing.

 

Options:

1.  Adopt the attached resolution.

2.  Such alternative action as the Commission may deem appropriate.

 

Fiscal Impact

Adoption of the proposed Resolution will have no fiscal impact.

 

 


 

 

Submission Date and Time:    11/8/2007 11:46 AM____

 

Department: _______Electric            ___

Prepared by:  ____Connie Lambert______                     

Attachments:         Yes____   No ______

Advertised:   _X_  Not Required ______                     

Dates:   __________________________                     

Attorney Review :       Yes _X__  No ____

                                                 

_________________________________           

Revised 6/10/04

 

Reviewed by: Dept. Head _Paul Kalv 

 

Finance  Dept. __________________                                     

                              

Deputy C.M. ___________________                                                                         

Submitted by:

City Manager ___________________

 

Account No. _________________

 

Project No. ___________________

 

WF No. ______________________

 

Budget  ______________________

 

Available _____________________


RESOLUTION NO. __________

 

 

A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF LEESBURG, FLORIDA, PRESENTING A DETERMINATION ON THE IMPLEMENTATION OF THE PURPA STANDARDS CONTAINED IN THE ENERGY POLICY ACT OF 2005; AND PROVIDING AN EFFECTIVE DATE.

 

            WHEREAS, the Energy Policy Act of 2005 amended the Public Utility Regulatory Policies Act (“PURPA”) by adding five additional standards that nonregulated utilities, such as the City of Leesburg, must consider, including (1) net metering; (2) fuel diversity; (3) fossil fuel generation efficiency; (4) time based metering and communications; and (5) interconnection standards for distributed resources, and

 

            WHEREAS, the City Commission of the City of Leesburg, Florida, must conduct independent proceedings to consider the new standards, and make a determination on their implementation for the City of Leesburg electric utility, and

 

            WHEREAS, PURPA requires that affected electric consumers and other electric utilities be allowed to intervene and participate in each utility’s public hearings on the PURPA standards; and that, in some limited instances, a consumer be compensated for their costs of participation if the City determines that the consumer substantially contributed to the approval of a position advocated by the consumer, and

 

             WHEREAS, the City Commission of the City of Leesburg held a Public Hearing on October 22, 2007, where City of Leesburg electric utility staff presented facts and recommendations regarding the new PURPA standards and affected electric consumers and other electric utilities were given the opportunity to present facts and recommendations for consideration by the Commission, and

 

            WHEREAS, no member of the public, or affected electric consumers, or other electric utilities came forward to present facts and recommendations during the public hearing; and no requests for reimbursement of costs of participation were received;

 

             NOW, THEREFORE, BE IT RESOLVED by the City Commission of the City of Leesburg, Florida that determinations on the five additional PURPA standards and the reasons therefore are made as follows:

 

 Net Metering (Standard 11)

 

The Net Metering Standard 11 would require a utility to offer a metering service that allows for a customer’s excess on-site generation to offset electric consumption during the applicable billing period.  The Net Metering standard is very broad and implementation of the standard as it appears in PURPA is prohibited by the All-Requirements Power Supply Project Contract (the “ARP Contract”) between the City of Leesburg and the Florida Municipal Power Association (“FMPA”).  The ARP Contract provides, “the Project Participant hereby agrees to purchase and receive from FMPA…all electric capacity and energy…which the Project Participant shall require for the operation of its municipal electric system.”  (ARP Contract § 3(a))  However, a Net Metering agreement with a customer would obligate the City of Leesburg to purchase energy from the customer.  Since the PURPA standard would require the City of Leesburg to purchase electricity from “any electric consumer the electric utility serves,” implementation of the standard would mean that every customer could become a supplier to the City, which is prohibited by the ARP Contract.

 

In addition, the Florida Public Service Commission (the “FPSC”) is in the process of developing net metering rules for the State of Florida.  The application of these rules to municipal electric utilities is unclear at this time.  However, as part of this rulemaking process, the Florida Municipal Electric Association (“FMEA”), together with FMPA, is currently drafting a suggested interconnection agreement and net metering rules for municipal electric utilities.

 

For these reasons the City Commission of the City of Leesburg, Florida has determined that it is not in the best interest of the electric customers to adopt PURPA Standard 11.  However, City staff will continue to work with FMEA and FMPA to draft a workable solution to net metering that will not violate the ARP Contract.

 

Fuel Sources (Standard 12)

 

The Fuel Sources standard would require each electric utility to develop a plan to minimize dependence on one fuel source and to ensure that the electric energy it sells to consumers is generated using a diverse range of fuels and technologies, including renewable technologies.

 

As an ARP Participant, the City relies on a portfolio of shared resources through the City’s power provider, FMPA.  Through the ARP, the City has contractually agreed to purchase, and FMPA has agreed to provide, all of the City’s power supply needs.  To accomplish this, FMPA has developed a generation portfolio that consists of a diversified mix of FMPA-owned generation resources (including wholly owned and jointly owned resources), member-owned generation resources that have been dedicated to the Project, as well as wholesale power purchases.  In addition, the City receives power from three nuclear fuel generators.

 

In addition, the FPSC is in the process of developing a renewable portfolio standard (“RPS”) for the State of Florida.  The application of the RPS to the City is unclear at this time.  As part of this rulemaking process, FMEA, together with FMPA, has developed a Green Energy Portfolio Standard for municipal electric utilities, emphasizing the increased reliance and renewable energy sources and conservation efforts.

 

For these reasons the City Commission of the City of Leesburg, Florida has determined that it is not in the best interest of the electric customers to adopt PURPA Standard 12.

 

Fossil Fuel Generation Efficiency (Standard 13)

 

This standard promotes efficiency of the fossil fuel generation facilities owned or operated by a utility.  The City of Leesburg does not own or operate fossil fuel generating resources and there is no opportunity to improve the efficiency of a fossil fuel facility. 

 

For these reasons the City Commission of the City of Leesburg, Florida has determined that it is not in the best interest of the electric customers to adopt PURPA Standard 13.

 

Smart Metering (Standard 14)

 

The Smart Metering standard would require each utility to offer each of its customer classes, and provide individual customers upon request, a time based rate schedule under which the rate charged by the utility varies during different time periods and reflects the variance, if any, in the utility’s costs of generating and purchasing electricity at the wholesale level.

 

The City of Leesburg’s power supply costs do not reflect the variance of costs of generating or purchasing electricity on a time-of-day basis.  The lack of a time-differentiated price signal from the provider, therefore, greatly diminishes the likelihood of implementing cost-effective time-based rates by the City for retail customers.  These options, along with conservation and demand management will be considered at a later date.

 

For these reasons the City Commission of the City of Leesburg, Florida has determined that it is not in the best interest of the electric customers to adopt PURPA Standard 14.

 

Interconnection (Standard 15)

 

This Interconnection Standard would require the utility to make interconnection services available, on request, to any consumer with on-site generation desiring connection to the local distribution system and specifies adherence to existing and future amended Institute of Electrical and Electronic Engineering (IEEE) standard 1547.  While the City of Leesburg does accept the IEEE 1547 Standard and will consider interconnection based on the merits of each request, differences in the capability of the distribution system at different locations throughout the system must be considered before an interconnection can be allowed.

 

In addition, as part of the FPSC’s net metering rule making process, FMEA, together with FMPA, is currently drafting a suggested interconnection agreement for municipal electric utilities that would incorporate IEEE Standard 1547.

 

For these reasons the City Commission of the City of Leesburg, Florida has determined that it is not in the best interest of the electric customers to adopt PURPA Standard 15.  However, City staff will continue to work with FMEA and FMPA in developing an interconnection agreement in conjunction with the FPSC’s rulemaking process.

 

Reimbursement of Costs

 

No member of the public, or affected electric consumers, or other electric utilities came forward to present facts and recommendations during the public hearing that contributed to the determinations made by the City Commission of the City of Leesburg and no reimbursement of costs is authorized.

 

PASSED AND ADOPTED by the City Commission of the City of Leesburg, Florida, at a regular meeting held on the 13th day of November, 2007.

 

 

 

                                                                        __________________________________________

                                                                        Mayor

ATTEST:

 

_____________________________________

City Clerk