Title
Public Utilities Regulatory Policy Act (PURPA) Requirements (B)
On December 18, 2008, staff presented the federally required schedule and public participation procedure for consideration of four standards of the Public Utility Regulatory Policies Act of 1978 as amended by The Energy Independence Security Act (EISA) of 2007. At that time, the City Commission adopted the schedule for PURPA proceedings as recommended. The presentation today will provide a brief overview to the City Commission before final determination is rendered at the end of the presentation.
Explanation
The Public Utility Regulatory Policies Act of 1978 (PURPA) was initially enacted as part of the National Energy Act by President Jimmy Carter. The Energy Independence Security Act (EISA) of 2007 adds four additional PURPA standards that state commissions and non-regulated utilities must consider. These include (1) Integrated Resource Planning; (2) Rate Design to Promote Energy Efficiency Investments; (3) Smart Grid Investments; and (4) Smart Grid Information.
By action taken December 18, 2008, the City Commission met the deadline requirements to begin consideration of Rate Design to Promote Energy Efficiency Investments and Smart Grid Information. There is no timeline imposed for the Integrated Resource Planning Standard or the Smart Grid Investment Standard, but it is staff's recommendation that all four standards be addressed at this time due to their related issues and to aid in budget planning.
The PURPA Integrated Resource Planning (IRP) Standard requires that each electric utility shall 1) integrate energy efficiency as a resource into capacity plans, State and regional plans; and 2) adopt policies establishing cost-effective energy efficiency as a priority resource.
Staff's recommendation is to not adopt this standard, as there already is an equivalent policy in place: 1) GRU adopted IRP as a planning standard in the early 1990s; and 2) City Commission adopted TRC (Total Resource Cost Test) which expanded the energy efficiency/conservation programs that would be offered by the utility
The PURPA Rate Design Modifications to Promote Energy Efficiency Investments Standard states that the rates allowed to be charged by any utility shall 1) align utility incentives with the delivery of cost-effective energy efficiency; and 2) promote energy efficiency investments.
Staff's recommendation is to not implement this standard as: 1) Capitalizing expenditures for recovery and rate of return is related to IOUs; 2) GRU's costs are recovered in base rates; 3) Energy efficiency impacts have been considered in rate design; 4) Increasing block and time-of-use rates are in place; and 5) Energy efficiency programs and education are strong focus of utility
The standard for Consideration of Smart Grid Investments states that prior to undertaking investments in non-advanced grid technologies, an electric utility must consider investment in a qualified smart grid system based on appropriate factors.
Staff's recommendation is to not adopt this standard for the following reasons: 1) GRU already considers the six factors in evaluation of capital projects as prudent utility practice; 2) Subsections B & C are not relevant for GRU, as GRU's rates are set by policy of city commission and do not require state consideration for recovery; and 3) Formal analysis of Smart Grid options and cost of deployment of such a system is complicated by rapidly changing costs and technologies
The standard for Smart Grid Information, states that all electricity purchasers shall be provided direct access to information from their electricity provider regarding prices, usage, intervals and projections and sources.
Staff's recommendation is to not adopt this standard, as: 1) Implementation would cause rate pressure for all customers, while not all customers may be able to use this service; 2) Staff is continually looking for ways to provide cost-effective information to our customers; and 3) AMI options are reviewed regularly as technology and operational needs change.
The following timeline was adopted by the City Commission on December 18, 2008:
January 30, 2009 - GRU staff's preliminary recommendation whether to consider adopting these standards will be released and available at the Office of the General Manager at 301 SE 4th Avenue, Gainesville, Florida 32614-7117, or by telephone at 352-393-1000. The GRU staff recommendation will also be available at the Office of the Clerk of the Commission at 200 East University Avenue, Gainesville Florida 32602-0490, or by telephone at 352-334-5015. The Notice (attached) of Hearing will be published in the Gainesville Sun.
On, or before February 5, 2009 - members of the general public planning to participate in the hearing must file a Notice of Intent to Participate in Hearing (attached) and may file written testimony and any other information in support of or in opposition to the adoption of the GRU staff recommendation. Notice of Intent may be filed at the meeting.
February 5, 2009 - public hearing shall be held at the City Commission meeting, after 6 pm.
March 5, 2009 - The General Manager shall issue a final Recommended Decision for Gainesville City Commission consideration
March 19, 2009 - The Gainesville City Commission shall issue their decision adopting, modifying or rejecting the Recommended Decision regarding the implementation of the standards discussed above.
PURPA requires that all consideration and determination on implementation be completed by December 19, 2009.
Recommendations
The City Commission receive a presentation reviewing the amended Standards related to (1) Integrated Resource Planning; (2) Rate Design to Promote Energy Efficiency Investments; (3) Smart Grid Investments; and (4) Smart Grid Information and issue a determination finding that adopting any of the four standards is not necessary at this time.
Fiscal Note
The estimated cost for consideration and determination of PURPA requirements is included in the FY 2009-10 Budget.
Drafter
Prepared by Ed Regan, P. E. AGM of Strategic Planning
Submitted by Robert E. Hunzinger, General Manager