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HomeMy WebLinkAbout2007-08-07 RMLD Green Power Subcommittee MinutesReading Municipal Light Board of Commissioners Green Power Subcommittee LU August 7, 2007 C L E t Start Time: 8:05 a.m. End Time: 9:35 a.m. ~2r°n 1 P 3: 5S Attendees: Commissioners: Mr. Hahn and Ms. O'Neill RMLD Staff: Messrs. Cameron and Seldon Citizens' Advisory Board: Mr. Vale Mission Statement Mr. Hahn called the meeting to order at 8:05 a.m. Mr. Hahn started the meeting by explaining the mission statement, which he had drafted and circulated at the previous meeting. Mr. Vale commented that he thought the mission statement was too long. Mr. Cameron echoed Mr. Vales' concern. Mr. Cameron said that perhaps a paragraph or two for the mission of the Green Power Subcommittee including the items that were underlined in the statement without the explanation would work. Mr. Cameron said that the mission statement would give the General Manager and Staff direction on what they believe the direction of the RMLD should be with respect to Green Power. Mr. Hahn said that he would send an electronic copy of the draft mission statement so that he could receive comments. Rate Decoupling Mr. Hahn and Mr. Vale then discussed the concept of rate decoupling with respect to demand side management programs. They were unsure if the incentives for demand side management are the same for municipals as they are for the investor owned utilities. Russell Bio Mass Project Mr. Seldon updated the Subcommittee on the activities of the Russell Bio Mass Project. The pricing of the project had been changed from about $.064/kWh to $.075/kWh due to increased development costs. The construction estimate increased from $140 million to $170 million, which translates to a unit construction costs $2,850/kW to $3,300/kW. Mr. Cameron commented that the Letter of Intent (LOI) the Subcommittee said to pursue at the last meeting has not made progress. The LOI given to the RMLD by Russell Bio Mass was deemed unacceptable by legal counsel (John Coyle of Duncan and Allen). Mr. Cameron directed Mr. Coyle to stop work on a new LOI until he could get a better idea if the Russell Bio Mass project was still a viable option for the RMLD. Mr. Hahn asked where do we go from here? Mr. Cameron said that the RMLD is still looking at the project, but does not feel confident that the RMLD will be involved in the future if the pricing increases. Mr. Vale said that there is risk with any of these projects; you have to define the risk as you go along. Mr. Seldon then updated the Subcommittee on the Tamarack project, one of which is a 30 MW trash burning generating plant in Watertown, Connecticut and the other is a 50 MW wood burning generating unit targeted to be built in Springfield, Massachusetts. Green Power Subcommittee Minutes 2 August 7, 2007 Russell Bio Mass-Project Mr. Seldon said that the RMLD has received information on this project, which had been e-mailed to the Subcommittee. The Connecticut unit has pledged seven months of the output of the plant to the State so there is only five months of available output, which occur during the shoulder months. Therefore, the RMLD is focusing on the plant that is being developed in Springfield, MA. Mr. Hahn asked if the Springfield wood burning plant would compete for the wood supply that the Russell Bio Mass Plant? Mr. Seldon responded that the wood for the Tamarack unit is strictly cutting and the wood for the Russell Bic, Mass Plant will burn woodcuttings and construction wood. Ms. O'Neill asked how much wood it takes to fuel a 50 MW burning generating unit and Mr. Hahn replied that he estimated around one-half million tons of wood. Smith Energy Mr. Seldon then updated the Subcommittee on the Smith Energy Project, which is a company looking for about 10 acres to develop a combined wind, photovoltaic, battery installation. He went on to say that a test site could be one half acre. Ms. O'Neill asked if the RMLD had any land available for this application and Mr. Seldon relied that we had land at the North Reading Sub Station (NRSS). Ms. O'Neill asked if this land could be used for a site and Mr. Cameron said that the RMLD has about three to four acres open at the NRSS but it is in North Reading and the Town of North reading would have top contacted. Mr. Vale commented that test site such as these are not as temporary as one would think. It could last for ten years or more to get a usable amount of data. Beaver Ridge Wind Power Mr. Seldon gave the Subcommittee and update on the Beaver Ridge Wind Power Project which is located in Freedom, Maine that has planned three 1.5 MW wind turbines. The project is estimated to put out about 13 million kWh annually and its permitting is going along. Mr. Seldon talked about conversation that Energy Services have had with Constellation and Florida Power and Light (FPL). Energy Service is trying to determine if power suppliers are proposing any green power offering, which could be purchased. Discussion then went to the disposition of Renewable Energy Credits (RECs) and whether a project is still considered green power if the RECs are not purchased along with the output of the plant. Mr. Cameron said that the RMLD might not to buy RECs that come with a renewable project if the alternative is to sell them in the market. The number of RECs that come with 5 MWs of the Russell Bio Mass Plant are a lot more than what the RMLD need to satisfy the RMLD's Green Choice Program. Mr. Vale said that what the RMLD's needs is a Global Warming Mitigation Product. Mr. Cameron said that a nuclear plant was such a product because it was not only a base energy unit capable of high capacity factor and the emission was steam. Discussion ensued as to what FPL was offering in Green Power and Mr. Seldon replied a trash burner and some hydro. The conversation turned to hydropower and if they received Massachusetts RECS. Forward Capacity Market Mr. Seldon said that the RMLD might go out for bid for capacity in order to see what the market is currently. Green Power Subcommittee Minutes 3 August 7, 2007 ,i Forward Capacity Market Mr. Cameron also said that the RMLD received information for the ISO that the NEMA and Connecticut load zones may not be congested in the future. This may point toward lower that anticipated auction prices in 2010 and beyond. Mr.. Hahn asked why congestion prices would indicate anything about forward capacity prices. Mr. Cameron said that when load zones become uncongested that means there is either adequate generation or transmission in the load zone and which mean there is less required generation to be spread around. Mr. Cameron also said that by going out for capacity bids the RMLD could benchmark the capacity bids against green power developer costs. Energy Market Mr. Seldon explained that he included in the package for the Subcommittee Energy Services most recent indication of energy prices. These prices are used to compare green power offering to the present market. Risk Management Incorporated (RMI) Mr. Seldon said that he and Ms. Parenteau held a conference call last week with RMI to discuss the report that RMI will perform for the RMLD with respect to a gas hedging strategy. Finally, Mr. Seldon discussed that progress that GDS has made on the Technical Potential Study they are performing for the RMLD. He said that the RMLD has supplied GDS with all the information requested from the RMLD. Mr. Hahn asked when the GDS report would be sent to the RMLD. Mr. Seldon said that the draft report would be received in late 2007 and the final report would arrive in early 2008. Ms. O'Neill said that completing the mission statement should be a priority. Motion to Adjourn At 9:35 a.m. Ms. O'Neill made a motion seconded by Mr. Hahn to adjourn the Regular Session. Motion carried 2:0:0.