Agendas and Minutes

City Council (View All)

Study Session

Monday, August 15, 2016

Monday, August 15, 2016
Siskiyou Room, 51 Winburn Way
Mayor Stromberg called the meeting to order at 5:32 p.m. in the Siskiyou Room. 
Councilor Morris, Rosenthal, Seffinger, Marsh, and Voisin were present.  Councilor Lemhouse was absent.
  1. Public Input
Louise Shawkat/870 Cambridge Street/Commented and made points on the Council Communication and attachment to agenda item #3. Discussion on the future of the Electric Utility.  She explained natural gas was not a clean energy due to the fugitive emissions of methane and the topic should be included in the Ashland utility discussion.
Jeff Sharpe/553 Fordyce Street/Explained 95% of the energy produced was not renewable. Every electron Ashland produced renewably displaced one coming from coal or other generation plants and further reduced the need for coal-fired electricity.  He would forward Council information showing every power plant in the northwest power region, what each produced, and an overlay.
Joseph Kauth/482 Walker Street/Microwaves were still an unproven science and an unknown on how it affected someone’s ability to function.  Photons combined with microwaves could affect a person’s functionality as well.  He thought the effects of the Ashland Forest Resiliency (AFR) project were unknown and had caused climate change on Mt. Ashland.
Huelz Gutcheon/2253 Hwy 99/Energy efficiency involved people using less. People would reduce only 10% before it affected their quality of life and they stopped.  He suggested a carbon tax priced to change behavior and referred to other countries that had the tax as an example.
James Stephens/640 Oak Street/The northwest was composed of a large grid interconnected in seven states.  Statistically, Ashland purchased energy through Bonneville Power Administration (BPA) and generated 3% through the City.  He wanted the City to generate more local energy using solar.  Ashland needed a local resource for emergency backup power.
2.   Look Ahead review
City Administrator Dave Kanner reviewed items on the Look Ahead.
3.   Discussion of the future of the Electric Utility
IT/Electric Utility Director Mark Holden explained they were projecting what would occur to the electric utility over the next 20-30 years.  Every utility in the country was looking at how to integrate renewable resources and maintain low cost reliable energy sources.  The City’s utility was a power delivery system from the substation to the distribution lines to the customer.  The main power supplier was Bonneville Power Administration (BPA) and they dealt with generation, transmission, and integrated power sources from all over the region.  BPA operated most of the resources they distributed.  The Bureau of Reclamation (BOR) and the Army Corp of Engineers owned those resources.
In 2015, the BPA mix included 83.6% hydro, 9.9% nuclear, and 6.5% mixed resources that consisted of 4.8% non-specified purchases, 0.9% small hydro, 0.6% wind, 0.1% Biomass, and 0.1% Natural Gas.
The drive behind renewable energy started in 1978 when the federal government established the Public Utility Regulatory Policies Act (PURPA).  The Obama administration’s Clean Power Plan to enforce all states to pursue renewable energy was currently in litigation.  Oregon passed Senate Bill (SB) 1547 spring 2016.  SB 5147 was similar to California’s model and required all coal production in Oregon to cease by 2022.  Oregon also had the Renewable Portfolio Standard (RPS). 
Other trends supporting the move were conservation efforts.  Energy efficiency was one of the premier resources along with demand response initiatives that lowered capacity requirements.   BPA measured peak every minute in five-minute intervals.  Ashland tended to peak between 5:00 p.m. and 8:00 p.m.  Shifting time of use contributed to conservation.
The City had a full requirements contract with BPA. This meant BPA fulfilled all demand and supply with the exception of the hydro plan.  Rooftop solar reduced what the City received from BPA.  As long as rooftop solar stayed under 200 kilowatts (KW) per installation, BPA did not mind.  This was a take and pay contract with BPA that would renew in 2028.  Ashland had not exceeded Tier 1 due to energy efficiency and local solar.  He went on to describe changes to Tier 2 that would allow municipalities to generate their own power if they reached Tier 2 rates.  Contract negotiations with BPA would start two years prior to the end of the contract. 
Renewable energy had created a new curve called the duck curve.  The California Independent System Operator (CISO) brought together disparate generators and transmission companies to produce a unified energy market.  Currently, BPA did not belong but Pacific Power was integrating with CISO.  The downside to CISO was learning to negotiate a California priority for a regional independent system operator to integrate resources from around the region.  The advantage is that it was easier to integrate renewables.  The issue with renewables was that it was intermittent.  The duck curve showed the effect of renewable energy, particularly solar, on the production of energy sources and the ability to meet demand.  Storage was the solution to intermittency and currently pumped hydro was the biggest storable energy.  The industry was working on battery storage but that would not be commercially viable until 2022 to 2024.
The future of the electric utility was integrated energy.  Staff was monitoring community solar and timing. The Northwest Power and Conservation Council developed a plan that ensured the reliability, availability, and affordability along with the conservation and green power aspects of the Northwest system. 
Advanced metering infrastructure (AMI) allowed the utility and the individual to have a granular look at their energy use so they can adjust their own behavior by tracking usage demand and hourly consumption.  AMI could reduce power usage 15%-25%.
Mr. Holden thought storage would be developed and available 12 years or sooner.  Technology changed quickly and the industry was developing grid level storage.  A projected decrease in the price of solar would occur 2022-2024 and would most likely not decrease afterwards.  Technology needed to match reliability.  The City should advocate conservation for the next 5-10 year interim until solar and storage technology had advanced.
4.   Update from AFN Governance Structure ad hoc Committee
Councilor Marsh explained the Committee formed in May 2015 and identified strengths and weaknesses the committee’s charge, and AFN organizational models.  The Committee determined through the list of models that many would not work for AFN.  The utility model was susceptible to legal challenge.  State law preempted models requiring significant subcontracting.  The Committee contracted with an outside attorney to see the feasibility of moving to a single internet service provider (ISP) or having no ISP but there were legal and financial obstacles that made it impossible. 
The Committee was looking into three issues.  One was creating an AFN Commission to guide AFN operations.  The second was conflict regarding AFN serving as a wholesaler and retailer.  Third was the challenge of marketing internet services to the community with an organizational structure that lacked cohesion and clarity.  AFN engaged Susan Unger who was working on a marketing plan.  Councilor Rosenthal added having more time provided an opportunity to determine the effectiveness of an earlier strategy regarding wholesale and retail, assessing the upgrade, and reviewing the marketing plan.
City Administrator Dave Kanner explained the City paid $1,150,000 in debt service a year with $408,000 coming from AFN.  The City refinanced the debt in the past.  There were eight more years of debt service until the debt was paid.   
Commercial customers were more profitable than residential.  However, there were more residential customers in Ashland than business customers.  AFN needed a unified marketing scheme to be competitive.  Currently Charter had 60% and AFN had 40% of approximately 9,000 services.  Marketing funds had increased from $26,000 to $45,000 per year.  To date, there had not been a joint effort between the ISPs and the City to market the product.  AFN will measure success on the number of customers.   
City Attorney Dave Lohman noted Council was analyzing this as business proposition. The City initially got involved to attract and provide support for businesses in Ashland.  Council may need to take that into account as well as the business dynamics when considering the future. 
Councilor Rosenthal had read minutes from the 1990s that stated one rationale for AFN was smart metering.  AFN was still a major opportunity for the community.  The debt was a present problem but it was still a great asset to address other issues.  Councilor Marsh added one of the Committee’s goals was keeping AFN functioning through the years to pay off the debt but also become a viable system that moved into the future once the debt was retired.    
5.  Review space in front of City Recorder’s Office
Council further discussed a decision made at the August 1, 2016 Study Session meeting that would allow Martolli’s Hand-tossed Pizza to set up chairs and tables outside the City Recorder’s office.  The City would install a railing to differentiate the borders of the sidewalk dining with a small rail behind the planters to deter people from storing their belongings or sleeping.  City Recorder Barbara Christensen had expressed concern it would be distracting. 
Council decided to move forward with the project for a one-year trial.  Other Council comment did not think a railing behind the planters would be an effective deterrent. 
Meeting adjourned at 7:48 p.m.
Respectfully submitted,                                                                                                          
Dana Smith
Assistant to the City Recorder

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