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HomeMy WebLinkAboutMinutes 1993W APPROVED ENERGY COMMISSION MEETING OF OCTOBER 27, 1993 •r � AGENDA MEMBERS PRESENT: Barry Crain, David Grumman, Janet Hoffman, Joseph Jaskulski, David Kraft, Gary Michaels, Peter Nichols, James Piepmeier, Mark Rolfes, Roy Warmington MEMBERS ABSENT: Elliot Nesvig STAFF PRESENT: Judith Aiello, Eric Anderson, Dennis Marino SUMMARY Or ACTION The meeting was convened at 7:33 A.M. by Eric Anderson, City Manager, who welcomed the members of the Commission to the first meeting. Mr. Anderson began by suggesting that members and staff provide self introductions. Mr. Anderson next summarized the communications which had been included in the packet and highlighted Ordinance 49-0-93 which created the Commission. Mr Anderson also summarized Resolution 99- R-93 which states that the Commission is to provide the City Council with an appropriate work plan no later than January 25, 1994. The Resolution also directs the Commission to provide a progress report to the City Council every four months and to issue a final recommendation no later than May, 1995. Resolution 99-R-93 also states that after a report is issued by the Commission to City Council, there will be seven months of community education, discussion and debate with consideration given to a referendum on this issue. The goal for a final decision by the City Council is December, 1995. Mr. Anderson stated that the discussion of the role and responsibilities of the Commission and the focus of the Commission will be an ongoing discussion during the initial meetings of the Commission as it develops a work plan. He encouraged members to comment on this topic today and at future meetings. Mr. Anderson added that $80,000 was currently available in the City's 1993-94 budget (March 1 - February 28) to fund the efforts of the Task Force and that an additional $300,000 had been programmed in the City's capital improvement program for possible future expenditures. During 1993, Mr. Anderson commented, the City Council adopted an Ordinance creating the Environment Board which is the successor body to the Environmental Control Board. This Ordinance as well as the Ordinance creating the Energy Commission, called for a joint effort between the Energy Commission and the Environment Board to develop a City Energy Policy. David Kraft stated that he had attended a meeting of a subcommittee which had been formed by the Environment. Board to begin to address this issue with the Commission. James Piepmeier suggested that members discuss the definition of basic terms at the next meeting, especially the definition of energy conservation. David Grumman commented that the term municipalization is perhaps too restrictive and asked if there was flexibility to explore other approaches in addition to the Com Ed franchise and municipalization. Mr. Anderson responded that this was an issue for the Commission to decide and that all options should be considered. Mr. Grumman also commented that the Commission needed to discuss the distinction between energy policy and electric policy. Mr. Grumman added that he would provide a copy of the City of Austin's Energy Policy to be distributed to members and he suggested that City staff identify relevant energy policies developed by other cities. David Kraft requested that the Portland Energy Policy submitted to the Task Force be distributed to Commission members. Mr. Anderson next summarized the City's relationship with Commonwealth Edison, stating that a franchise extension had been approved and that the term of the extension was for a period of seven years retroactive to the expiration of the 1957 franchise in March, 1992. Mr. Anderson commented that members of the Commission had the authority to elect the Chair of the Commission and that this could occur today or at the next meeting. The consensus of members present was to defer this action until the next meeting. 2 Mr. Anderson also encouraged members to develop criteria for staff support as soon as possible. He added that the three staff members present who had been involved in the Energy Alternatives Task Force believed that the Commission needed more substantial technical and engineering expertise than available from current staff. Janet Goelz Hoffman suggested that the Commission needed more time to decide the substance and methods of its work before proceeding to establish criteria for hiring consultants. James Piepmeier proposed that the next meeting occur on Wednesday, November 3, 1993 at 7:00 A.M. Several members suggested agenda topics including: a discussion of fundamental terms, including energy conservation and municipalization; an opportunity for members of the Energy Alternatives Task Force to address the Commission; a review of key documents produced by the Energy Alternatives Task Force; a discussion of subcommittee topics and; criteria for staff and consultant support. The meeting was adjourned at 8:05 A.M. Dennis Marino Economic Development Planner MEMBERS PRESENT: M&MBERS ABSENT: STAFF PRESENT: SUMMARY OF ACTION APPROVED ENERGY COMMISSION MEETING OF NOVEMBER 3, 1993 MINUTES Barry Cain, David Grumman, Janet Hoffman, Joseph Jaskulski, David Kraft, Gary Michaels, Bud Nesvig, James Piepmeier, Marc Rolfes, Roy Warmington Peter Nichols Judith Aiello, Dennis Marino The Meeting was convened at 7:08 A.M. by Dennis Marino, City staff, who requested a motion to approve the minutes of the Meeting of November 3, 1993. James Piepmeier moved for approval; Mark Rolfes provided a second. Two corrections were made by Mr. Grumman and Mr. Piepmeier and the revised minutes were approved 9-0 with one abstention (Mr. Nesvig). Dennis Marino summarized the communications which had been included in the packet for the meeting, including numerous documents produced by the Energy Alternatives Task Force as well as a chronology of activities undertaken by the Task Force. David Kraft provided members with a written critique of the Northwest Municipal Model Franchise which had been developed by the Task Force and submitted to City Council. DISCUSSION WITH ENERGY ALTERNATIVES TASK FORCE Dennis Marino introduced Charles Lippitz and Norm Raedle of the Energy Alternatives Task Force, who along with other members of the Task Force, were invited by the Energy Commission to meet and discuss their past work on electric options available to the City. Mr. Raedle invited David Kraft, who served on the Energy Alternatives Task Force and who now serves on the Commission, to join the discussion. Mr. Raedle stated that the Task Forces mission was to examine the upcoming expiration of the 1957 franchise agreement with Com Ed and to consider the possible creation of a new franchise with Cam Ed and other options available to the City for electric service. 0 Norm Raedle summarized his background in business and he stated that he viewed himself and Chuck Lippitz as representative of five of the members of the Task Force. He encouraged the Commission to speak separately with the other three members: the Co -Chairs, James Suhr and Rosanne Dineen and; State Representative Jan Schakowsky. Referring to the Task Force's critique of the Northwest Model Franchise Agreement, Mr. Raedle stated that the Task Force found it to be seriously flawed. He added that the Task Force did not view this as a model; it was inflexible and biased in one direction. Mr. Raedle stated that the Northwest Model Franchise was submitted by Cam Ed to the City's Negotiating Team and there was little, if any, effort to negotiate beyond this agreement. Mr. Raedle stated that he did not believe that electric service was a significant issue for most residents. In terms of informed residents, there was a realization that there were significant electric service issues to consider. Mr. Raedle stated that the Task Force invested four years in analyzing and learning about issues related to electric service. He added that this was necessary and that the Commission can hopefully build on the Task Force's experience. Chuck Lippitz stated that the Task Force was a very diverse group, but there was unanimous support for pursuing municipalization studies in order to develop a possible alternative to Com Ed and to negotiate effectively with Com Ed. He added that the Task Force did not reach any conclusion on this subject and that he was hopeful that the Commission could conclude this work. David Kraft thanked Dennis Marino for organizing the chronology of Task Force activities since 1989. He highlighted three major activities of the Task Force: the pursuit of the municipalization study, the analysis of the Northwest Municipal Model Franchise and the debate over the proposed franchise agreement. He added that the development of an energy policy was an issue which was addressed late in the life of the Task Force. Mr. Kraft stated that the piecemeal and linear approach to the study of municipalization was a mistake. He added that it would have been more effective to have engaged in all aspects of a municipalization study simultaneously. He also stated that the absence of absolute deadlines also hampered the Task Force's efforts. Mr. Kraft recommended that the Commission include a pubic relations and public education campaign to make certain the citizenry is aware of the issues under consideration. He added that the Task Force was not able to do this. ka i . i 1 11 111ii �li I Igkl �i .'1W, ido11 Jim Piepmeier asked what studies were completed by the Task Force. Dennis Marino responded that the Preliminary Feasibility Study by Duncan and Allen was completed in 1991. He added that the City had executed a contract with R.W. Heck to conduct a Power Supply Study, but that this was suspended after the City and Com Ed Negotiating Teams reached a proposed agreement to take to their respective governing bodies. Mr. Marino concluded by commenting that additional studies, including an inventory and evaluation of the distribution system and an additional financial analysis had been recommended by Duncan and Allen, but that these had not been initiated. Mr. Nesvig asked if there was an obligation on the part of the City to reopen the contract with R.W. Heck. Dennis Marino and Judith Aiello responded that there was not. Marc Rolfes summarized the issues identified by the Task Force as barriers to success: 1. Public Education and Relations 2. Focusing on Completing Studies 3. Degree to which Electric Service is an Issue Among Citizens 4. Defining a Comprehensive Plan Mr. Rolfes asked if there were other barriers. Norm Raedle responded that the Commission is operating in a political arena and is dependent on the City Council for funding. He added that it was important to keep the Council informed. Mr. Lippitz added :hat Cam Ed is not a neutral party and is not a helpful party. David Kraft stated that the Task Force was bogged down by the Franchise extension debate. He added that this will not -occur with the Commission. Mr. Kraft stated that involving the Evanston citizenry in the electric issue through effective public relations and education is a challenge for the Commission which the Task Force was not able to address. In response to a question from David Grumman asking why the Task Force had recommended that it be dissolved, Mr. Raedle stated that after five years of work, many members of the Task Force were worn out and that it was time for a new group to address issues in a different, but related way. Mr. Grumman asked if more technical experience had been needed by the Task Force and staff. Norm Raedle responded that this would have been necessary if the Task Force had proceeded into more technical studies beyond the Duncan and Allen Study. Chuck Lippitz added that a more technical group is necessary at this stage to pursue detailed studies addressing municipalization and cogeneration. Mr. Raedle highlighted the need to investigate rapidly changing technology, including cogeneration which was implemented in an impressive way by Evanston Township High School. Eunice Collins stated that she would like to more clearly define the essence of a franchise. She added that a franchise between Cam Ed and a municipality is a contract that controls and regulates Cam Ed's use of the streets. It does not give any additional rights or privileges to Cam Ed. A franchise is of very limited scope, but this was never recognized by the Task Force. Ms. Collins added that it was appropriate for Cam Ed to have one standard franchise with all municipalities except Chicago. She aided that Chicago was a different case because it came into the Cam Ed system after being served by an electric company which had a different franchise approach. Ms. Collins urged Commission members to speak with the Northwest Municipal Conference about the reasons it viewed the Northwest Municipal Conference Model Franchise as desirable. Chuck Lippit2 responded that the Task Force did not concur with this view nor did most members of the City Council in early 1993. Gary Michaels asked if Evanston was the only municipality that am opposed the Northwest Agreement. Eunice Collins responded that Evanston abstained from the vote at the Northwest Municipal Conference when the approval of the Model was considered. David Kraft added that oak Park and Sterling as well as other municipalities with special interests and needs had not signed on to the Model Franchise. Gary Michaels asked David Kraft to describe the other issues the Task Force wanted to include in the franchise. Mr. Kraft responded that issues of reliability and energy conservation were two key issues that the Task Force wanted to see addressed in the franchise. Norm Raedle added that the addition of performance standards for Com Ed to the franchise would have been a good idea. Such standards, he stated, could be tied to penalties and/or reopener clauses to insure reliable service. Mr. Raedle concluded by stating that disclosure of information by Cam Ed about the nature and condition of the distribution system was a key issue that should have been addressed in a franchise. David Grumman asked if the Task Force discussed what alternatives sn#tea; existed to improve reliability. David Kraft responded that Cam Ed made general presentations about planned improvements to the -= system, but these were insufficiently detailed. Norm Raedle added that technical expertise to address this issue was needed. 4 11 u ` � I �IyI��IIj'III V�I+1y 1�I1 II, 11 ,. .i ■�1 I I L' a .Y YI � Joseph Jakulski asked what the quality of information was that existed about reliability and the condition of the system, including any time series data that would enable one to assess reliability of service trends. Norm Raedle responded that little information was available from the City and that Com Ed had some information, but it was unclear at what level an outage was counted under the Com Ed system of data collection. David Grumman asked if a referendum was required for municipalization. Juditil Aiello stated that Duncan and Allen advised that the City engage in a referendum before municipalizing. In addition, she stated that C--y Cc%unci= would probably not proceed on this issue without a referendum to test citizen sentiments. Bud Nesvig asked if a referendum was required if the City municipalized without using bond fina.cing. Dennis Marina agreed to investigate this issue. Dennis Marino and several members thanked David Kraft, Chuck Lippitz and Norm Raedle for the perspect'_ve shared with the Commission. Chuck Lippitz thanked the Commission for the opportunity to bring closure to Sze Task Force's work and help provide a transition so that the wcrk of the past five years will not be lost. ELECTION OF CHAIR PERSON AND VICE CHAIR Dennis Marino opened the floor for nominations for Chair after providing an overview of the duties of a Chair. Mr. Marino also described how the Chair and Vice - Chair functioned within the Energy Alternatives Task Force. Bud Nesvig offered to serve as Chair of the Commission to avoid the lack of focus that he stated had exemplified the work of the Task Force. He added that there was a need to make assignments and to be disciplined about completing work. Janet Hoffman concurred and added that she wanted to make certain her time is invested in a way that generates specific and useful results. David Grumman added that the appointment of Subcommittee chairs will be critical. Janet Hoffman nominated Bud Nesvig for Chair and David Grumman for Vice Chair. Marc Rolfes provided a second. All members voted in favor of the motion. CRITERIA FOR STAFF AND CONSULTANT SUPPORT After a brief discussion, members concluded that they would not be _ able to address this issue until they had clarity about the workF plan. The issue was tabled until the next meetin b consensus. Bud 9 Y �s }� Nesvig asked David Grumman to prepare an outline of a staff job description for the next meeting. =-zt 5 11 ..1 u , . ii , L �� ill ICI I Bud Nesvig asked if additional staff would be funded from the $100,000 set aside by the City for municipalization studies. Judith Aiello stated that compensation for consultants and new staff would be financed from the $100,000 appropriated. TOPICS FOR SUBCOMMITTEES After a brief discussion, members agreed to table the discussion of organization of subcommittees until the next meeting to be preceded by a discussion and debate about fundamental key terms and issues upon which the Commission will focus. Jim Piepmeier suggested that Commission members needed to engage each other in a fundamental discussion about key issues and fundamental definitions. He stated that dividing into subcommittees now would preclude such a critical step and compartmentalize issues prematurely. He advised against forming subcommittees before the first meeting in December. Joseph Jaskulski stated that the Commission should focus first on prioritizing the eight tasks included in the Ordinance creating the Energy Commission. He advised that each subcormittee, when formed, should have clearly stated object',ves and not be organized by functional categories alone. David Grumann suggested that members should identify the key issues and problems and not spend time on issues that will not be significant. He suggested that members bring such a list of issues to the next meeting. The meeting was adjourned at 9:08 A.S. Dennis Marino Economic Development Planner .. 1 . I Al. id t 4I 1l . , itlkil Ail` I it FYI li��Ili�4idik i6ll ♦♦ i APPROVED ENERGY COMMISSION MINUTES OF MEETING OF NOVEMBER 11, 1993 MEMBERS PRESENT: CAIN, GOELZ HOFFMAN, GRUMMAN, KRAFT, MICHAELS, NESVIG, NICHOLS, PIEPMEIER, WARMINGTON MEMBERS ABSENT: JASKULSKI, ROLFES STAFF PRESENT: AIELLO, MARINO PRESIDING OFFICIAL: BUD NESVIG, CHAIR SUMMARY OF ACTION The Meeting was called to order at 7:19 A.M. by Chairman Bud Nesvig. The minutes of the Meeting of November 3, 1993 were deferred for consideration until the next meeting of the Commission. COMMUNICATIONS Dennis Marino summarized the schedule of meetings which had been included in members' packets. Bud Nesvig stated that Marc Rolfes was willing to serve as Secretary to the Commission. Janet Hoffman requested information about the procedure for the Commission to secure approval for the expenditure of funds. She also asked if the Commission had a special liaison with one or more members of the City Council. Dennis Marino responded that the Administration and Public Works Committee of the City Council, which includes all nine Aldermen, is the entity to whom the Energy Commission reports and makes recommendations, including expenditure of funds. The Administration and Public Works Committee will then make recommendations to the City Council. Bud Nesvig stated that he had requested that Janet Hoffman investigate three issues: (1) the wheeling of power by a third party via Com Ed's transmission system; (2) the procedure for requesting quotations from third party electric suppliers who purchase the distribution system and (3) whether a referendum is required to municipalize the electric system. I1 I`III11I` �I{ 1ry` I i 11 1 1 i 1 W � II i VI I I �111 I I liy l� � 1lY�I i Y Several members distributed memoranda they had prepared in response to the Chairman's request at the conclusion of the November 3, 1993 Meeting to list priorities for the Commission to address. DISCUSSION OF WORK PLAN PRIORITIES Bud Nesvig distributed a copy of the eight tasks which had been stated as duties of the Energy Commission in the Ordinance which created the Commission. Mr. Nesvig stated that he intended to develop assignments today for members to begin examining issues. Mr. Nesvig began the discussion by asking if any members believed that cogeneration, which was one of the eight duties listed, should be examined by the Commission. Jim Piepmeier responded that it was too early to answer this question. He added that the Commission needs to address the enormous information gaps that exist on all the issues and identify the most important tasks to be included in the work plan before January 15, 1994. David Grumman stated that he did not envision cogeneration as a critical issue for public buildings in Evanston unless parties were identified who would use the City's heat generated through a cogeneration process. Jim Piepmeier responded that ETHS has demonstrated how this can be done and other cities have considered local area energy networks. Gary Michaels suggested that feasibility analysis of cogeneration potential could be part of the overall analysis of the feasibility of municipalization. David Kraft concurred and added that cogeneration at the City's water plant was the focus of the City's interest in cogeneration. Dennis Marino added that the current City budget included an expenditure of approximately $860,000 in electric service payment for the water pumping function of the City's water utility. Janet Hoffman acknowledged that this was a considerable expenditure worthy of additional investigation. Roy Warmington added that the use of gas powered engines may be one method of reducing expense in this area. Judith Aiello stated that the City had been working with Stanley Consultants to address issues raised by the Energy Alternatives Task Force. In response to an Aldermanic request, concerning the feasibility of cogeneration at the water plant, the City has retained Stanley to address this issue on a very preliminary basis. She added that the preliminary report would be submitted to the Commission when it is received from the consultant. 2 David Kraft suggested that the following issues could be addressed with help from entities outside the Energy Commission: (1) Legislative and regulatory monitoring: City's legislative liaison in Springfield. (2) Public education and public relations: Contract with outside professional. (3) Assessment of energy savings potential of the City: City's Engineering Department. (4) Monitoring technology: outside consultants. (5) Monitoring of Com Ed performance in Evanston: unclear due to lack of data. (6) Monitoring of franchise issues in other municipalities: Northwest Municipal Conference. David Grumman cautioned members that the willingness of an entity to engage in energy savings investments is often driven by a two or three year payback requirement which is difficult to achieve. David Kraft stated that he hoped that programs could be delivered to the community which could address this concern, especially involving industrial and commercial users. Jim Piepmeier commented that there are structural impediments to energy savings because of the overemphasis in the industry on generation issues and limited attention given to downstream issues at the meter. He added that there is a need for more capital intensive measures at the meter such as new boilers and chillers. He suggested that the Commission not preclude the issue of energy savings because of 2-3 year payback emphasis. Mr. Piepmeier concluded that this could be addressed in different ways including the use of an intermediate end use energy utility that could be part of a future franchise. Gary Michaels asked what was intended by the phrase "completion" of municipalization studies. Dennis Marino summarized the issues addressed by the Duncan and Allen Preliminary Feasibility Study and presented the current status of the R.W. Beck study which had been suspended at the time an agreement concerning the franchise extension had occurred between the two negotiating teams. David Grumman stated that the issues of disagreement with Com Ed should be the focus of one or more subcommittees. 3 I i i Y H i. l n .. i 1 1 .1 a Ili. ills I. I III 11 1 4 I& I AI i i III i I d I l i , ill Barry Cain questioned what City Council's position was concerning Cam Ed. He stated that there was a need to determine what would be required for City Council to be convinced that an extended relationship with Cam Ed might not be a good idea. Gary Michaels questioned whether it had been determined that Evanston could secure a better arrangement elsewhere. David Grumman stated that Council wants definitive answers concerning the City's options and no one has definitive answers. He added that the Commission should not issue recommendations which involve areas of uncertainty. Jim Piepmeier stated that the discussion was focusing on outcomes too prematurely. He added that there was a need to place parameters around inadequately defined discussions concerning reliability and cost. Such parameters might address reliability relative to other communities, the need to generate data on the electric system in Evanston, and the range of alternatives to be examined beyond the narrow choices of either Cam Ed or municipalization. He concluded by stating that the Commission should identify the range of solutions to these issues and be cautious about polarizing the discussion. After additional discussion, the Commission agreed to establish the following subcommittees with the membership as indicated below to investigate the priority tasks to be included in the Commission's work plan. Mr. Nesvig requested that members of each subcommittee present an outline to be discussed during the Meeting of November 19, 1993. 1. Inventory and Evaluation of Electric and Gas Transmission and Distribution Systems: Jim Piepmeier, Roy Warmington, Peter Nichols 2. Energy Savings and Liaison with Large Electric Users: David Grumman and Barry Cain 3. Evaluation of Past Studies and Consultants: Gary Michaels 4. Legal Issues: Janet Hoffman 5. Environment Board Subcommittee: David Kraft 4 0 David Kraft announced that there will be a meeting of the Environment Board and the members of the Energy Commission who are interested in working on a City Energy Policy. The meeting will occur on Thursday, November 18th at 6:30 P.M. Bud Nesvig agreed to attend with Mr. Kraft. The meeting was adjourned at 8:56 A.M. D e n n s Marino Economic Development Planner APPROVED ENERGY COMMISSION MINUTES OF MEETING OF NOVEMBER 19, 1993 MEMBERS PRESENT: GOELZ HOFFMAN, GRUMMAN, JASKULSKI, KRAFT, MICHAELS, NESVIG, PIEPMEIER, ROLFES, WAR.MINGTON MEMBERS ABSENT: CAIN, NICHOLS PRESIDING OFFICIAL: BUD NESVIG, CHAIR STAFF PRESENT: AIELLO, MARINO SUMMARY OF ACTION The Meeting was called to order by Bud Nesvig at 7:19 A.M. David Grumman moved for approval of the minutes of November 3, 1993. Marc Rolfes provided a second. The minutes of November 3rd were approved unanimously without additions or corrections. Roy Warmington moved for approval of the minutes of the Meeting of November 11, 1993. David Grumman provided a second. After accepting two corrections proposed by Roy Warmington, the minutes of November llth were approved unanimously. Bud Nesvig asked members who were not present at the November 11th Meeting, when subcommittee assignments were made, to volunteer for subcommittee service. Mr. Nesvig noted that Barry Cain had volunteered for the Subcommittee working on energy savings and large electric users. Marc Rolfes volunteered to serve on the Legal and Regulatory Subcommittee and Joseph Jaskulski offered to serve on the Subcommittee investigating procedures for conducting an inventory and evaluation of the electric and gas transmission and distribution systems. Mr. Jaskulski stated that he hoped that the Subcommittee would not restrict its analysis to the feasibility of acquiring the existing electric distribution system. Jim Piepmeier reported that he had initially believed that the Commission could conduct most of the work needed to evaluate the electric distribution system, but after examining available data he now believed a consultant was necessary. I Mr. Piepmeier moved to enter Executive Session to discuss negotiations. David Kraft provided a second. At 7:35 A.M., the Commission entered Executive Session after a unanimous roll call vote. The Commission reconvened into Open Session at 8:08 A.M. Janet Goelz Hoffman reported that she had not yet completed her preliminary research to identify key legal issues as requested by Bud Nesvig. However, she did have preliminary comments concerning Mr. Nesvig memorandum of November 5, 1993 which raised the following two questions: (1) the wheeling of electric power supplied by third parties and; (2) the possibility of electric power suppliers purchasing the distribution system from Com Ed, supplying power to Evanston, and eventually transferring ownership of the distribution system to Evanston. Ms. Hoffman stated that wheeling of power through the Com Ed system as suggested by Mr. Nesvig was possible. She added that the rights to do this are more generous at the end of a franchise agreement instead of in the middle of the term of a franchise agreement when a municipality could be viewed as abrogating a franchise agreement. Ms. Hoffman stated that this was based on the relatively new Federal Energy Act. Mr. Jaskulski reported that a franchise had been reported by Com Ed's representative to be restricted to the use of the City's streets and alleys. Mr. Nesvig stated that he had asked Eunice Collins to put in writing her statement about the rights involved in a franchise being restricted to the use of pubic streets. He added that he had not received this from Ms. Collins. He suggested that Ms. Goelz Hoffman give Ms. Collins a call to determine if this is possible. Mr. Jaskulski stated that it appears a franchise agreement affects the ability to wheel power from a third party through the Com Ed transmission system to Evanston. Ms. Hoffman stated that this was a consequence of the new Federal Energy Act and not the Com Ed franchise agreement. Jim Piepmeier stated that the Federal Energy Regulatory Commission (FERC) ruled on October 27, 1993 that the Florida Power and Light Company must provide wheeling access to the Florida Municipal Electric Association. He asked if this ruling might have an impact on wheeling rights throughout the nation. Ms. Goelz Hoffman responded that it could have an impact, adding that the Energy Act is so recent that new interpretations of the legislation surface frequently. She concluded by stating that she intended to do additional research in this area. 2 David Grumman asked what Com Ed could charge for wheeling. Me. Goelz Hoffman responded that this would be regulated by existing FERC tariffs concerning wheeling. David Kraft reported that Com Ed once responded to a question raised by the Task Force concerning wheeling by suggesting that it might not have the transmission capacity to wheel from the North. Mr. Kraft added that power could also be wheeled from Northwest Indiana via the Chicago transmission system. Joseph Jaskulski explained that wheeling involved Cam Ed receiving power from another power supplier at the entry port into their system equal to the power delivered to the Evanston system. He added that this was a commodity or bookkeeping transaction between Com Ed and the third party supplier. Technically, there is really not a need for an interconnection between the third party supplier and Evanston because the power supplied by the third party to the Com Ed system never really reaches Evanston. Concerning the second issue Mr. Nesvig asked hex to address, Ms. Goelz Hoffman stated that Com Ed can be forced to sell the distribution system to the City of Evanston through eminent domain, but it cannot be forced to sell to or negotiate with a third party which desires to purchase the system. She added that Illinois law does not state clearly how a distribution system would be valued. The third issue addressed by Me. Goelz Hoffman concerned the issue of whether a referendum was required before the City of Evanston municipalized the electric system. She stated that, based on preliminary research, that a referendum did not appear to be a legal requirement under Illinois law given the strength of local home rule powers. She concluded by stating that she would conduct additional investigation of this issue. David Grumman stated that even if a referendum is not a legal requirement, City Council may insist upon a referendum before deciding whether to municipalize the electric system. Roy Warmington stated that he had contacted Northern Illinois Gas Company concerning the Commission's ability to secure information concerning the gas distribution system in Evanston. Mr. Warmington reported that NIGAS was willing to make appropriate maps available if they are requested. In addition, more detailed drawings would be available in the offices of NIGAS. Bud Nesvig asked Mr. Warmington to inquire with his NI GAS contact about the company's interest in possibilities for conversion from electric power to gas power for facilities like the City's water pumping facility. Mr. Nesvig added that he believed that NI GAS should consider covering the cost of the new equipment involved in K such conversions. He asked Mr. Warmington to inquire about the possibility of such incentives from the gas company. David Grumman stated that his recent experience had been that NIGAS would not cover equipment costs in this type of transaction. David Kraft asked Mr. Warmington to ascertain as to whether any regulatory requirements exist which impose disclosure obligation upon NIGAS which may also apply to Com Ed. Mr. Nesvig asked Dennis Marino to determine how the City buys gas. Members next discussed the ability to secure information from Com Ed concerning the electrical distribution system in Evanston. David Kraft stated that the Task Force had a difficulty securing any useful information from Com Ed. Joseph Jaskulski agreed to draft a letter to Com Ed for the Commission's review concerning a request for information. Dennis Marino agreed to supply Mr. Jaskulski with background information concerning the Task Force's efforts to secure information from Cam Ed. David Grumman reported that the Subcommittee on Energy Savings and Large Electric Users intended to contact Northwestern University and Evanston Hospital during the next four weeks. Bud Nesvig requested that Dennis Marino determine if the City has any data on the largest electric users in Evanston. He also asked that the City make a request of Com Ed to determine which electric users are the largest payers of municipal electric tax. Gary Michaels reported that he had initiated a'review of the existing studies commissioned by the City, but that he required more time before reporting to the Commission. David Kraft reported that he, Bud Nesvig and David Grumman met jointly with a delegation from the Environment Board to discuss plans for development of a City Energy Policy. David Grumman stated that there was a need for the group to focus upon what it wanted to accomplish by the creation of an Energy Policy and then to proceed with its work on a focused basis. David Kraft encouraged members to view a videotape and read the minutes of a presentation of Scott Bernstein of the Center for Neighborhood Technology before the Energy Alternatives Task Force concerning the need to develop an Energy Policy. Mr. Kraft requested that the minutes of this presentation be made available to members. 4 Mi Bud Nesvig commented that Marc Rolfes had offered to be the Secretary of the Commission. He asked Mr. Rolfes if he would be willing to begin to draft an outline of the Commission's report to the City Council which is scheduled to be discussed on January 24th by the Administration and Public Works Committee of the City Council. Mr. Rolfes responded that he would be willing to undertake this assignment and he recommended that the Commission discuss a statement of purpose and fundamental definitions as soon as possible. David Kraft distributed articles concerning cogeneration activities by the Kohler Company and offered members a flyer describing an = upcoming conference to be sponsored by the Center for Neighborhood Technology on December 3rd. The meeting was adjourned at 8:54 A.M. Dennis Marino Economic Development Planner APPROVED ENERGY COMMISSION MINUTES OF MEETING OF NOVEMBER 29, 1993 MEMBERS PRESENT: CAIN, GOELZ HOFFMAN, JASKULSKI, KRAFT, MICHAELS, NESVIG, PIEPMEIER, ROLFES, WARMINGTON MEMBERS ABSENT: GRUMMAN, NICHOLS PRESIDING OFFICIAL: BUD NESVIG, CHAIR STAFF PRESENT: MARINO SUMMARY OF ACTION Bud Nesvig called the Meeting to order at 7:18 A.M. Marc Rolfes moved for approval of the Minutes of the Meeting of November 19, 1993. David Kraft provided a second to the motion. Mr. Kraft asked that the Minutes be amended to include his request t� Roy Warmington that NIGAS be asked if it has peen required by ,Mate statute or regulation to disclose information about its distribution system, and whether such requirement would also apply to Com Ed. Members present voted unanimously to approve the minutes with the addition of Mr„ Kraft's request. Mr. Nesvig called attention to Mr. Jaskulski's comments concerning Com Ed's wheeling capacity as stated in the Minutes of November 19th. He commented that this appeared to contradict what had been previously stated by Com Ed. Mr. Jaskulski added that there may be technical complications in wheeling power into Evanston, but they should not be insurmountable. Mr. Nesvig reported that he had reviewed the 1992-1993 City of Evanston Budget and found that the total budget was $47 million and that the property tax collected is $23.5 million. He added that the Commission should be aware of these facts because Com Ed pays Chicago $80 million in franchise fees while Evanston receives $400,000 in free electricity. If Evanston received a pro rata share of franchise fees comparable to Chicago, it would receive $2 million annually. Mr. Nesvig added that $2 million would equal 8-9% of the annual property taxes the City of Evanston receives. He added that $400,000 in free electricity should be valued at only $150,000 cash. .4 7 Joe Jaskulski stated that half of the eight tasks listed in the Ordinance address Cam Ed and half address other issues. He cautioned members to focus on immediate issues involving the Cam Ed relationship which has a focal point and a deadline for consideration. David Kraft stated that the essence of the issue for the Commission is to determine if the City should stay with Cam Ed and if not Cam Ed, then what entity or entities should or could supply electricity. Marc Rolfes suggested that maybe the focus should be what the City wants and needs and whether Com Ed will conform to* this need.. Mr. Kraft stated that Cam Ed has already stated that its position is the Northwest Municipal Franchise Agreement. Jim Piepmeier indicated that the Commission should not focus on fighting the last war or debating an outdated issue: Cam Ed or not Cam Ed. He added that Cam Ed will probably be a very different company in five years and it will be a totally different company in 50 years if it even exists at that time. Mr. Piepmeier stated that there will not be a single supplier of electricity to Evanston in five years, it will be a combination of suppliers with groups of customers banding together working with various suppliers. He encouraged members not to become bogged down in planning based on today's supply structure. He commented that if the Commission tries to focus on what ought to be done, we will be outfoxed by market forces. According to Mr. Piepmeier, the Commission should focus on what it wants to happen and to encourage innovation in the delivery of electrical power by a newly emerging system. He concluded by stating that if the Commission makes a recommendation within five years of either Cam Ed or a municipal system, it runs the danger of that recommendation becoming irrelevant very quickly. Mr. Nesvig asked Mr. Piepmeier if he would recommend that the City not sign a franchise for fifty years. Mr Piepmeier responded that if the Commission does its work properly, the idea of a fifty year franchise will be irrelevant. Mr. Piepmeier explained that franchises were developed in the 1920's to insure sufficient demand for the power generation by large central power generation plants. Since 1968, Mr Piepmeier added, there has been no economy of scale in central station power generation. He stated that the economics of power generation changed radically, but the political and regulatory mindsets on both sides of the table did not change with the economic shifts, so everyone continues to debate franchises which is like fighting the last war. Mr. Piepmeier concluded by stating that of course utilities would like fifty year franchises because this is linked to the mindset of the life expectancy of a power plant. Mr. Nesvig requested that members digest the material presented,by Mr. Rolfes and present written statements at the next meeting in response to items 1, 2 and 4 under "Process to Develop Plan". Joe ki APPROVED ENERGY COMMISSION MINUTES OF MEETING OF NOVEMBER 29, 1993 MEMBERS PRESENT: CAIN, GOELZ HOFFMAN, JASKULSKI, KRAFT, MICHAELS, NESVIG, PIEPMEIER, ROLFES, WARMINGTON MEMBERS ABSENT: GRUMMAN, NICHOLS PRESIDING OFFICIAL: BUD NESVIG, CHAIR STAFF PRESENT: MARINO SUMMARY OF ACTION Bud Nesvig called the Meeting to order at 7:18 A.M. Marc Rolfes moved for approval of the Minutes of the Meeting of November 19, 1993. David Kraft provided a second to the motion. Mr. Kraft asked that the Minutes be amended to include his request to Roy Warmington that NIGAS be asked if it has peen required by state statute or regulation to disclose information about its distribution system, and whether such requirement would also apply to Com Ed. Members present voted unanimously to approve the minutes with the addition of Mr., Kraft's request. Mr. Nesvig called attention to Mr. Jaskulski's comments concerning Com Ed's wheeling capacity as stated in the Minutes of November 19th. He commented that this appeared to contradict what had been previously stated by Com Ed. Mr. Jaskulski added that there may be technical complications in wheeling power into Evanston, but they should not be insurmountable. Mr. Nesvig reported that he had reviewed the 1992-1993 City of Evanston Budget and found that the total budget was $47 million and that the property tax collected is $23.5 million. He added that the Commission should be aware of these facts because Com Ed pays Chicago $80 million in franchise fees while Evanston receives $400, 000 in free electricity. If Evanston received a pro rata share of franchise fees comparable to Chicago, it would receive $2 million annually. Mr. Nesvig added that $2 million would equal 8-91 of the annual property taxes the City of Evanston receives. He added that $400,000 in free electricity should be valued at only $150,000 cash. SUBCOMMITTEE REPORTS David Kraft reported that the Environment Board is expecting that the Energy Commission will delegate a subcommittee of three people to work with the Environment Board Subcommittee to develop an Energy Policy. Joseph Jaskulski and Gary Michaels volunteered to• join Mr. Kraft on this subcommittee. Bud Nesvig indicated he would attend meetings when possible. Marc Rolfes distributed an outline of a process for developing the Commission's work plan. Mr. Rolfes stated that he viewed the primary purpose of the Energy Commission was to assess the possibility and wisdom of constructive change. He asked that members today discuss the content of the plan and the process for developing it as well as the structure, not the content, of final recommendations, especially the topics to be addressed by the Commission's recommendations. Mr. Rolfes stated that he had developed a list of possible attributes of the plan for discussion. He recommended that there be two components of the plan: an Executive Summary and a detailed working plan. He also recommended that the plan include a best guess cost estimate for each individual task as well as a responsible party for completion (e.g. Commission member, staff, consultant). In conclusion, Mr. Rolfes recommended that the Commission distill the final recommended plan into an appropriate, but brief presentation before the Cite Council and appropriate Committees. David Kraft expressed support for Mr. Rolfes approach, especially the itemization of the cost of each task. Mr. Rolfes stated that the final recommendations should be based on specific standards such as to what level should reliability be enhanced. Mr. Nesvig asked Mr. Rolfes what he viewed as the Commission's charge from the City Council. Mr. Rolfes responded that he considered the eight duties listed in the Ordinance creating the Commission as a point of departure for the discussion of a work plan. He added that each duty listed in the Ordinance is intertwined with other unstated issues as well as several of the other duties listed in the Ordinance. He suggested the Commission analyze what are the interconnections between these issues. Mr. Nesvig stated that the Energy Policy the other duties listed in the Ordinance, the Energy Policy which will address the policy. 2 is intertwined with all of especially that aspect of City's electrical energy 0 Joe Jaskulski stated that half of the eight tasks listed in the Ordinance address Cam Ed and half address other issues. He cautioned members to focus on immediate issues involving the Com Ed relationship which has a focal point and a deadline for consideration. David Kraft stated that the essence of the issue for the Commission is to determine if the City should stay with Com Ed and if not Com Ed, then what entity or entities should or could supply electricity. Marc Rolfes suggested that maybe the focus should be what the City wants and needs and whether Cam Ed will conform to this need. Mr. Kraft stated that Com Ed has already stated that its position is the Northwest Municipal Franchise Agreement. Jim Piepmeier indicated that the Commission should not focus on fighting the last war or debating an outdated issue: Cam Ed or not Com Ed. He added that Cam Ed will probably be a very different company in five years and it will be a totally different company in 50 years if it even exists at that time. Mr. Piepmeier stated that there will not be a single supplier of electricity to Evanston in five years, it will be a combination of suppliers with groups of customers banding together working with various suppliers. He encouraged members not to become bogged down in planning based on today's supply structure. He commented that if the Commission tries to focus on what ought to be done, we will be outfoxed by market forces. According to Mr. Piepmeier, the Commission should focus on what it wants to happen and to encourage innovation in the delivery of electrical power by a newly emerging system. He concluded by stating that if the Commission makes a recommendation within five years of either Com Ed or a municipal system, it runs the danger of that recommendation becoming irrelevant very quickly. Mr. Nesvig asked Mr. Piepmeier if he would recommend that the City not sign a franchise for fifty years. Mr Piepmeier responded that if the Commission does its work properly, the idea of a fifty year franchise will be irrelevant. Mr. Piepmeier explained that franchises were developed in the 1920's to insure sufficient demand for the power generation by large central power generation plants. Since 1968, Mr Piepmeier added, there has been no economy of scale in central station power generation. He stated that the economics of power generation changed radically, but the political and regulatory mindsets on both sides of the table did not change with the economic shifts, so everyone continues to debate franchises which is like fighting the last war. Mr. Piepmeier concluded by stating that of course utilities would like fifty year franchises because this is linked to the mindset of the life expectancy of a power plant. Mr. Nesvig requested that members digest the material presented'by Mr. Rolfes and present written statements at the next meeting in response to items 1, 2 and 4 under "Process to Develop Plan". Joe 3 Jaskulski encouraged members to review the eight tasks included as Commission duties in the Ordinance creating the Commission . He also suggested that written documents presented at one meeting be discussed during the subsequent meeting. Jim Piepmeier reported that he had no report to present concerning the Subcommittee addressing inventory and evaluation of the electrical distribution system. He encouraged members to review the article in the Electricity Journal he had co-authored. The article is entitled "Reclaiming Edison's Richer Vision." Janet Goelz Hoffman stated that she was continuing to research certain legal issues as part of the work of the Subcommittee on Legal and regulatory issues. She added that she needed to discuss certain issues with Commission staff and with Marc Rolfes before proceeding. Reporting for the Subcommittee charged with evaluating previous studies undertaken by the Energy Alternatives Task Force, Gary Michaels summarized the findings of the Duncan and Allen Report. A copy of his written presentation is attached to the minutes. Joseph Jaskulski suggested that the study needed to be updated by using 1991 and 1992 usage data in addition to the 1990 data that were used as the basis for the study. Gary Michaels stated that the rate projections for Com Ed were based on an ICC ruling that has since been overturned by the Courts and restructured. David Kraft commented that the Duncan and Allen represented a "best conservative projection" of the rates of a municipal utility compared to the assumed rate structure for Com Ed projected for thirteen years. Joseph Jaskulski presented a list of information to be obtained from Com Ed based on data that had been provided to him by Dennis Marino concerning previous data requests of Com Ed and responses received by Energy Alternatives Task Force or the City's consultants. Mr. Jaskulski stated that he would draft a letter for the next meeting incorporating three of the five informational items listed in a document he distributed. Bud Nesvig stated that this discussion would-be continued at the next meeting once a draft letter is presented. The Meeting was adjourned at 8:57 A.M. Dennis Marino Economic Development Planner 4 APPROVED ENERGY COMMISSION MINUTES OF MEETING OF DECEMBER 7, 1993 MEMBERS PRESENT: CAIN, GRUMMAN, HOFFMAN, JASKULSKI, NESVIG, PIEPMEIER, ROLFES, WARMINGTON MEMBERS ABSENT: MICHAELS, NICHOLS, KRAFT PRESIDING OFFICIAL: BUD NESVIG, CHAIR STAFF PRESENT: MARINO SUMMARY OF ACTION Bud Nesvig called the Meeting to order at 7:18 A.M. Marc Rolfes moved for approval of the Minutes of the Meeting of November 29, 1993. Janet Hoffman provided a second to the motion. The Minutes, with three corrections, were approved by unanimous vote. Mr. Grumman abstained. COMMUNICATIONS Bud Nesvig asked for communications from Dennis Marino. Mr. Marino introduced Joan Farquharson who will be working along with him in preparation of packets, meeting minutes, etc. approximately one day per week. The day will vary each week, and contact with Joan will be through Dennis Marino. Dennis Marino requested that members be prepared to discuss a 1994 meeting schedule at the next meeting. He will need a schedule that provides for a regularly scheduled meeting one day per month, 12 months in advance. More meetings may be scheduled, but the City Clerk needs the 12 months regular meeting schedule for publication. Dennis Marino next informed the Commission members of the receipt by the Mayor of a letter of resignation by Peter Nichols, a member of the Energy Commission. Mr. Nichols stated in his letter that although he fully supports the goals of the Commission, he finds he is unable to commit the time and resources necessary to participate, and apologizes for any inconvenience his resignation causes. Outlining the procedure to appoint another member, Mr. Marino explained that the Mayor would nominate someone to replace Mr. Nichols. The nomination would be introduced to City Council at one meeting, voted on at the next meeting. Mr. Grumman asked if there is a backlog of applicants. Mr. Marino agreed to check on the number of applications that had not been acted upon. He added that the earliest the City Council will address this issue will be in January. Bud Nesvig suggested that someone with an electrical engineering background or an accounting/finance background should be identified. Mr. Jaskulski felt the Commission was lacking expertise in electrical distribution. He also acknowledged that this kind of expertise will likely be found with a Commonwealth Edison employee or an electrical distribution consultant. In response to a question from Mr. Grumman, Dennis Marina noted that the requirements for Commission membership do not include residency in Evanston. All current members of the Commission now are either Evanston residents or are employed in Evanston. Dennis Marino also clarified the internal and external distribution of packets as requested at the last meeting. Internal distribution includes the City Manager, Eric Anderson, and Asst. City Manager, Judith Aiello. City Clerk Kris Davis receives approved minutes and is the primary dissemination point for public requests. The Mayor and Aldermen receive approved minutes on a monthly basis. Other parties who have requested packet information are Eunice Collins of Com Ed and Jake Arnov, a citizen who had been present often at Energy Alternatives Task Force Meetings. Members of the public may request non -confidential copies of the minutes and packet materials. Bud Nesvig reported that at the 12 month period ending Sept. 30, 1993, Com Ed had earnings of $2.24 per share as opposed to last year they had a loss of $.44 per share. Mr. Nesvig also presented the wind tower aero-electric power plant concept, primarily to take note of alternative energy sources, not to endorse this particular source. David Grumman submitted several articles for distribution to members at the next meeting. He also submitted a copy of Com Ed's proposed rate schedule that provides for negotiated contracts for existing large general service customers, which provides an option for volume discounts. Janet Hoffman referred to an article in the Ill. Bar Assoc. Local Gov. Law Newsletter concerning the ability of municipalities to use utility revenues for general corporate purposes. Home rule entities have somewhat broader powers, but are still restrained by state statutes. Members may receive a copy of this article from Dennis Marino. Marc Rolfes suggested that a subcommittee be created to filter out pertinent material from newspapers, magazines and professional journals, Bud Nesvig asked for a volunteer to filter this information. Roy Warmington volunteered to perform this task. David Grumman suggested that the Commission establish some criteria to guide Mr. Warmington and staff in selecting articles. 2 a d Mark Rolfes reported that he had seen and has available a video tape that discusses Evanston's Electric Franchise Options, dated March, 1992 which had been taped by David Kraft. He shared two impressions of the videotape: (1) It describes in detail the electric franchise negotiations between Com Ed and the City of Chicago and; (2) the Energy Alternatives Task Force had undertaken considerable work from which the Commission may benefit. Dennis Marino reported that Charles Klosterman of the Environment Board, who also serves on the joint subcommittee with the Energy Commission, had contacted him to indicate that he plans to submit' a memorandum jointly drafted with David Kraft (Energy Commission member) which will transmit a copy of the document "Energy Plan for the 19801s" to the City Council. Mr. Klosterman stated that he was concerned that most Aldermen are not familiar with this official City document and plan. Discussion ensued regarding the utility of the plan referred to by Mr. Klosterman. David Grumman stated that although the document is dated (1982), it is a good policy nonetheless. Mr. Rolfes encouraged that as much information be shared as soon as possible given that not starting the education process soon enough was one of the major problems for the City of Chicago. Mr. Piepmeier referred to the energy plan document as a good example of what not to do and that the Commission should be more focused upon a set of policies that are market driven, not a plan that may be too specific and can become irrelevant. Bud Nesvig requested that the draft memorandum be included in the Commission's next packet. DISCUSSION OF PROPOSED WORK PLAN Mr. Nesvig next referred to the request during the last meeting that members individually prepare major items to be included in the proposed work plan of the Commission. Members had agreed during the previous meeting that documents would be distributed during one meeting and discussed and acted upon at the next meeting. Documents were distributed. INFORMATION REQUEST OF COM ED The Commission next addressed a draft letter to Com Ed prepared by Joseph Jaskulski. The letter was discussed and changes were made with the 3rd paragraph deleted. Mr. Jaskulski moved to adopt and forward the revised letter, with Mr. Rolfes seconding. The Commission voted unanimously to approve the letter as revised. Members agreed that the letter should be signed by Bud Nesvig, the Chair of the Energy Commission. Roy Warmington also requested that a copy of the letter be sent to the Director of Public Works who will be the recipient of data required of Com Ed as part of the Franchise which will be effective in 1999. 3 r Joseph Jaskulski suggested a general strategy to deal with companies like Com Ed. He described it as "Pushing On the Elephant". Pushing from the side is the only way to change direction a little. Pushing any other way - you can't stop it. Moral of the story is don't fight them, they have infinite resources and will wear you out. He added that the Commission should instead try to adopt a cooperative attitude with them, not developing an antagonistic or adversarial approach. Mr. Jaskulski commented that Com Ed is changing and that the Commission should observe the company and try to work with it. He concluded by stating that Cam Ed could help the Commission by designating Evanston as a test site for certain research and technological innovations. STAFF/ CONSULTANT JOB DESCRIPTION Bud Nesvig asked David Grumman to summarize the work he had conducted on this topic. Mr. Grumman referred to a task list for services to the Commission he had distributed to members. Mr. Grumman requested that this draft be shared with the City's Department of Human Resources for advisory comment. Members agreed by consensus to defer additional discussion of this topic until the Commission's work plan has been completed. Dennis Marino described a Work Study Program which had been developed by Northwestern University with funding from the State of Illinois.The program will provide students over the summer to work in engineering, science and educational related positions with 50V funding. The sponsoring employer is responsible for 50% of the summer employyee's wages. Mr. Marino suggested that an engineering student could be used for items #1 and #2 on David Grumman's list, and as a supplementary resource to the Commission's regular staff. Bud Nesvig suggested that a group of students under this arrangement could map out and count the whole distribution system. Joseph Jaskulski added that there is no need to count the system if we want to know the cost for it new. An engineering firm could calculate the cost of serving the City of Evanston with a new distribution system from their offices, with reasonable accuracy. Dennis Marino indicated that Northwestern University needs a commitment by December loth from summer employers. David Grumman moved that the Commission recommend that the City Manager commit to hire one student in June. Janet Hoffman seconded the motion. All members present voted unanimously for the motion. 4 I 5 OTHER BUSINESS Bud Nesvig reiterated that each of the Commission members has the assignment, before the December 17, 1993 Meeting, to review the documents provided by Commission members today which indicate the proposed major tasks for the draft work plan. Mark Rolfes commented upon the goals for electric service published by the Energy Alternatives Task Force. He indicated that the essence of these goals involved reliability, low cost, conservation and environmental sensitivity, and flexibility. Mr. Rolfes stated that traditionally there are four segments involved in examining an electric utility: the generational segment, the distribution segment, the transmission segment, and the end use segment. He added that the Commission needs to determine which of these segments must be addressed to achieve stated goals. For example, he added, is ownership of the distribution system a perquisite to having flexibility ? Janet Hoffman requested information from Dennis Marino as to what kind of indemnification the City provides to Commission members. Dennis Marino agreed to ask the Corporation Counsel of the City to respond to Ms. Hoffman's request. Bud Nesvig asked for additional Subcommittee reports. Roy Warmington reported on possible NIGAS financial assistance regarding direct payment for buying equipment that uses gas. His source at NIGAS indicated this was not possible. Mr. Grumman suggested he contact a NIGAS representative in Naperville, and Mr. Warmington agreed to do so and obtain additional clarification. Mr. Warmington also reported that NIGAS will pay for co -generation feasibility studies. He added that NIGAS also provides special low rates for gas air conditioners. Mr. Warmington then reported on the availability of data from NIGAS. He stated that the atlas pages, which describe the locations of gas mains and vaults, can be made available for Commission use. The disclosure of this information, he added, is not required by ordinance or code. In answer to a question Bud Nesvig raised during a previous meeting concerning NIGAS willingness to finance equipment purchases, Mr. Warmington stated that NIGAS would not help the City of Evanston by providing pumps free of charge for the water plant if the City shifted from electric -powered to gas -powered equipment. Joseph Jaskulski requested that a new subcommittee be formed for talking to Com. Ed. regarding working cooperatively with them and exploring what the Company is willing to do without being coerced. Mr. Grumman indicated that he would like to be involved in such a subcommittee. Mr. Grumman, Mr. Jaskulski and Mr. Cain agreed to form a subcommittee to work on this issue. 5 The meeting adjourned at 9:06 A.M. Joan / trquhars Temporary Secretary ENERGY COMMISSION MINUTES OF MEETING OF DECEMBER 17, 1993 MEMBERS PRESENT: CAIN, GRUMMAN, JASKULSKI, KRAFT, MICHAELS, NESVIG, PIEPMEIER, ROLFES, WARMINGTON MEMBERS ABSENT: HOFFMAN PRESIDING OFFICIAL: BUD NESVIG, CHAIR STAFF PRESENT: MARINO, FARQUHARSON SUMMARY OF ACTION Bud Nesvig called the Meeting to order at 7:20 A.M. Marc Rolfes moved for approval of the Minutes of the Meeting of December 7, 1993. Mr. Jaskulski provided a second to the motion. Members present voted unanimously to approve the minutes with the two corrections. COMMUNICATIONS Mr. Nesvig called for comments on articles submitted in the packet for this meeting. Mr. Rolfes inquired about the Illinois Bar Association's Newsletter article Janet Hoffman referred to at the last meeting, concerning the ability of municipalities to use utility revenues for general corporate purposes. Dennis Marino explained that the article focused on water utilities and that copies will be included in the next packet to Commission Members. Mr. Grumman clarified that accompanying the article about Com Ed's proposed negotiated rates with large customers, is a copy of the actual filing of the proposed new tariff with the Illinois Commerce Commission. Mr. Nesvig asked whether this is what Com Ed has been doing all along with large customers. Mr. Grumman reported that to his knowledge, Com Ed has offered a special rate on various occasions to individual customers. Mr. Nesvig asked David Kraft to report on the draft communication from Mr. Kraft of the Energy Commission and Charles Klosterman of the Environment Board to the City Council. Providing the background on this communication, ❑ennis Marino explained that Mr. Klosterman had reported that several current aldermen were not aware of the Energy Plan for the Bole document that had been drafted by an Energy Conservation Committee in the early 19801e. Mr. Klosterman had asked Mr. Marino if the document could be communicated to the City Council with the memorandum from Mr. Kraft and Mr. Klosterman included in the Commission's packet for this meeting. W I + , If Y i III iV IiI'� e r David Kraft added that he and Mr. Klosterman both felt that the energy plan needed to be in the hands of the aldermen, and that the memorandum needed to be from both the Energy Commission and the Environment Board. Mr. Marino clarified that the communication had not yet been transmitted to City Council since it needed to be reviewed by the Energy Commission. James Piepmeier asked that if by sending this document, do we in any way imply endorsement of the Energy Plan. He stated that those who drafted the document, which is a good document, asked the wrong questions and therefore did the wrong research. As Mr. Piepmeier had mentioned at a previous meeting, the Plan was off by a factor of three in its forecast, which is comparable to most projections. He added that is a lesson for the Commission not to forecast, but to draw a distinction between a forecast and a policy, so that it will not make the same mistakes as the previous energy plan. Discussion ensued regarding how the document should be introduced to City Council, what direction should accompany it, and whether it should be presented as a part of the Energy Commission's Work Plan submittal. Mr. Jaskulski moved to consider the document for inclusion in our Work Plan as an exhibit or attachment. Mr. Piepmeier seconded the motion, which was approved unanimously. The Commission then considered the letter from Bud Nesvig to Eunice Collins of Com Ed. Mr. Grumman moved to approve the letter as drafted, with Mr. Jaskulski providing a second to the motion. All members present voted unanimously to send the letter. Mr. Marino indicated that he will fax the letter to Com Ed. today. Mr. Nesvig referred to the Committee formed at the last meeting, consisting of members Cain, Grumann and Jaskulski, which has been charged with responsibility of communicating with Cam Ed and encouraging a cooperative working relationship. Mr. Grumman asked for input regarding when the Committee should initiate contact with Com Ed, After discussion by members, Mr. Grumman agreed to attempt to schedule up a meeting with Eunice Collins, Director of Public Affairs and Mr. Petkus, Executive Vice President of Com Ed. during the last week of December. DISCUSSION OF PROCESS FOR DEVELOPING THE COMMISSION'S WORK PLAN AND PRESENTING IT TO CITY COUNCIL Marc Rolfes stated.that the process he has developed for creating a work plan for the Commission serves the following purposes: (1) It will present and effectively sell what the Commission is attempting to do. (2) It will keep the Commission focused on a clear path for completing its assignment. (3) It will also allow the Commission members to communicate cn an individual basis, to explain why we may not be considering certain issues or approaches (4) It will provide the Commission with the opportunity to document its work and plans. - 2 - Y Mr. Rolfes then used the chalkboard to illustrate how this technique could be used for the Electric Service Task Plan. He stated that the process begins without any initial assumptions except for the four goals as stated by the Energy Alternatives Task Force: reliability, cost, efficiency/conservation and flexibility. He added that these goals may also be challenged and altered as part of the level 0 discussion. Mr. Rolfes stated that he proposes using six levels of analysis or six levels of mapping, 0 to 5, to complete the development of the Work Plan. Mr. Rolfes described the level 0 process as the most global, where goals will be addressed and the relationship between the goals and major issues, such as generation, transmission, distribution and end use will be explored. He explained that the level 0 map is something we can always refer to, as it sets the basis for where we are headed for each one of the other maps. The prime effort that we use in a level 0 is how our goals are dependent upon this large process. Mr. Piepmeier asked if we are going to confine ourselves just to electricity or is the substantive presentation only for illustrative purposes? Mr. Rolfes responded that members should concern themselves with the process, not the content. Drawing attention to page 7 of the handout distributed to members, ANIM Mr. Rolfes explained how a level 0 map would be used to incorporate goals. What he called the impact scenario will be addressed at this level. He explained that this is important because in examining the reliability aspect one might measure the impact in = the end use category as to whether, for example, toast comes out to the correct doneness, or whether or not your light bulb turns on. _ The other component of this analysis is "Who has control of all these things7" Currently Com Ed owns and controls everything from generation through to the end use. The homeowner or business, _ however, takes responsibiiicy For the internal wiring and replacing of light bulbs, toasters, etc. V-5. Under scenario 2, Mr. Rolfes explained, the Commission may decide that for reliability, it will only assess improving the goal from the distribution standpoint. If there were to be a focus upon the end use category, then perhaps there wou:j be an assessment of what type of insurance policy could be offerer o replace the toaster or refrigerator when it faired. This would 4e similar to the old days of AT&T when we rented our phones - the operation of the phone was AT&T's problem. Under reliability, the Commission might consider (hypothetically) improving the reliability of the distribution of electricity in Evanston by doing the following: give Com Ed a half million dollars to go fix the substation, because Com Ed was unwilling to do it with its own funds, for example. Under the cost goal, the Commission may decide to examine distribution and end use. - 3 - t Conservation concerns might focus on reducing the amount of electricity, regardless of the rate or cost of that electricity. This may involve demand side management, more efficient appliances, etc. Mr. Rolfes then described the process to develop level 1 which begins with brainstorming everything that Commission members can possibly think should be investigated regarding reliability of the distribution system. Building upon this, Mr. Rolfes added, the Commission would identify where the grouping of issues occur and where there is overlap. The brainstorming process was described as - generating perhaps 50 ideas on the reliability of the distribution system, in terms of where we have to go, what we have to investigate. Then the Commission would condense this list down to maybe 4 to 10 major questions. The Commission will have to decide on what level of detail we want in the level 1 map and be consistent. So, in this case we would have four level 1 maps, for each of the 4 goals, concluding with maybe 5 major questions. Mr Rolfes described the Level 2 process as an intermediate step, involving identification of where the linkages are. Within this level of analysis, Mr. Rolfes proposes combining the 4 goals into one map in this step. Level 3 is what we would use fcr the Commission's executive summary plan. The analysis completed at this stage can be developed into a presentable document. This is also the level in which the Commission analyzes. the consistency of detail throughout the proposed work plan and considers any issues which may not have been included. Examples for illustration purposes might be: (1) What are the lessons learned from the City of Chicago's franchise agreement? (2) What is the likely reaction from Cam Ed. The Commission needs to be able to answer the questions Council may ask and describe its = _ procedures for addressing these situations. - r Mr. Rolfes then suggested that at this point, the Commission may secure an outside review of its propose) work plan. He added that the final step of the Level 3 map is to condense it and decide how to present it to the City Council. The Level 4 map, according t-- Mr. Rol:-s, would add details and additional tasks. The Level 5 map, he added, wo.dld add who will conduct such tasks } and present an estimate of the time involved. The Commission will also address at this level what tasks w-1 be addressed internally and externally as well as how much fund,ng is available.ti=__ Commission members next commenced on the technique presented by Mr.3 Rolfes. Mr. Grumman felt that this approach would address the - 4 - w interrelationship of issues to be addressed by the Commission. Mr. Jaskulski added that he would be in favor of this approach and sees that it will provide focus to the Commission., Mr Nesvig stated that his only objection was calling the technique a mapping process; it seems more like a flow chart. Mr. Rolfes indicated that the term map would not even be used in the level 3 presentation to City Council Members next discussed how and when to make a presentation to City Council. Dennis Marino explained that typically City Council receives a 2 to 5 page memorandum covering an executive summary of• a Work Plan and the actual work Plan. Dennis Marino was asked about the January 24th deadline for presenting the Work Plan to City Council. He responded that the Resolution passed by City Council asking for a work Plan established a January 24th date for presentation of a Work Plan before the Administration and Public Works Committee. He added thaz� the discussion may involve one or two meetings with the Committee. Commission members discussed asking the City Council for an extension of the deadline to March 7, 1994 in order to present the actual Work Plan. Bud Nesvig moved to request an extension, with Joe jaskulski providing a second. The motion passed with 8 ayes and 1 nay by David Kraft. In view of the time needed to develop this plan, the Commission adopted by consensus, a new work schedule leading up to the presentation to the Administration and Public Works Committee on March 7th, as well as a 1994 meeting schedule, with the option to schedule additional meetings as needed. Mr. Kraft suggested a procedural adjustment for the upcoming Commission meetings, that r.he meeting minutes, review and Committee reports be suspended to the meeting of February 7, 1994. The meeting was adjourned at 9:20 A.M. Joan rquhar n, Temporary Secretary - 5 -