YP Manager Report to CBY Assembly - WordPress.com€¦ · Thursday, April 24, 2014 1 . YP Manager Report to CBY Assembly . The summer season is moving along quickly. We have been

Thursday, April 24, 2014

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YP Manager Report to CBY Assembly

The summer season is moving along quickly. We have been fairly busy with engine issues and new services/line extensions. Mr. Dietz and the other gentleman came by and talked for about an hour. The core of his discussion was about distribution construction. I did show him the progress we have made over the years and the long range plans to replace the system. My term on the Alaska Power Association board is up and needs to be renewed. I have been the representative since I began working at YP in 1998. I would be fine with another term, or you can appoint someone else to represent Yakutat Power at the table. This report is rather long and has a lot of information in it. Here is an issue we need to be thinking about though. I have not received any plans from the START grant about the installation of the propane CHP systems around the community. It will be hard to determine how much load these systems will displace until they are operating and we have an analysis of what the effects will be on our loads. It is a good time to discuss the rate that we would be willing to pay for Qualifying Facilities (QF) excess production. Here are the portions of our tariff that pertains to this type of project. For a full copy of the Tariff contact the Borough Clerk. Also while researching I see that the copy that I have has not been updated with the new rates. I will have to check with the Borough Clerk to see if the rates have been updated in the Tariff.

“Qualifying Facility: A cogeneration facility or small production facility as defined in 3 AAC 50.820(11).

4. Service and Safety Standards

4.1 Interconnection with qualified Cogenerators and Small Power Producers

The Company may not interconnect with a qualifying facility unless the following safety standards are met:

(1) The facility must conform to that edition of the National Electrical Code as

adopted under AS 18.60.580.

(2) The facility must provide a means of disconnecting with the provision for padlocking in the open position by the Company. This device, or a supplementary


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device, must be capable of switching under full load conditions and must be clearly labeled and accessible to Company personnel.

(3) The facility must provide overcurrent protection of adequate interrupting capacity

and design, in conformance with the Company’s overcurrent practices for similar feeders and loads, for the feeder serving as the intertie to the utility system. Automatic reclosing by the qualifying facility is prohibited unless the facility has received prior written approval from the utility as not posing a threat to life or property.

(4) The Company will provide overcurrent protection in accordance with the

Company’s overcurrent practices for similar feeders and loads for the feeder extension serving as the intertie to a qualifying facility.

6.13 Interconnection of Customer Owned Alternate Technology and Fossil Fuel Standby

Generation Equipment

Alternate Technology Generation

(l ) The company will permit the interconnection and operation of alternate

technology generation facilities that are determined to be a "qualifying facility" (QF) as prescribed by Section 201 of the Public Utility Regulatory Policies Act upon compliance by the customer with the following provisions:

(a) The customer shall make written application to the company at least 45

days prior to the date on which he would intend to make any connection in any way to electric circuitry common to the Company's integrated distribution system.

(b) The customer shall submit to the Company along with his request for

interconnection complete documentation of the alternate technology generation equipment, including, but not limited to, schematics, wiring diagrams, performance specifications, descriptions of energy storage devices, circuit protection equipment, regulation equipment, automatic disconnect equipment and any other proprietary device provided by the equipment manufacture.

(c) Upon approval of the interconnection by the Company, the customer shall

agree to pay the cost of any special metering equipment or circuit modifications determined by the Company as necessary to accomplish the interconnection.


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(d) See Section 4 of this tariff for safety standards regarding the interconnection of qualifying facilities to the Company's system.

14. Schedule of Rates:

RATES FOR ELECTRIC SERVICE

Applicable to:

All Consumers Except Interruptible:

Character of Service:

Continuous-alternating current 60 HZ + l.5% 120/240 or 120/208 volts single phase. Characteristics depend upon available circuits.

Rate: Per kWh

0 – 1000 kWh $0.267, +Fuel Surcharge 0 – 2500 kWh if over 1000 kWh $0.242, + Fuel Surcharge 0 – Infinity kWh if over 2500 kWh $0.207, + Fuel Surcharge

Minimum Charge:

$25.00 per month per meter unless a higher minimum charge applies.

Power Cost Equalization:

Those accounts eligible for Power Cost Equalization under this rate will receive Power Cost Equalization in an amount per kWh identified by the Regulatory Commission of Alaska.

RATES FOR INTERRUPTIBILE

Commercial Consumers who have their own power producing capability, and purchase an average minimum of 10,000 kWh/Month in any given 12 month period.

Service: requires that the consumer's generation Equipment is maintained and available to serve the requirements in the event of interruption ailment of power supply, for any reason, from Power. The company retains the right to disconnect service at any time for any reason deemed necessary by the company.

Rate per kWh

0 – infinity kWh $0.19 per kWh, + fuel surcharge


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Rate is subject to the Cost of Power fuel adjustment per month, per meter.

RATES FOR RESTDENTIAL, COMMERCIAL, LARGE COMMERCIAL SERVICE

SPECIAL PROVISION:

Three Phase Service

Three-phase service is available with installed capacity of 50 KVA or more. Three-phase service is required for motors with rated capacity in excess of 10 horsepower.

Voltage Starters on Large Motors

Motors with rated capacity of 25 horsepower and over shall be equipped with reduced voltage starters if required by the Company. Motors of this size must be reported to the Company before being connected.

Seasonal Service

When a consumer desires service for six months or less of a year, service will be supplied under this rate schedule for the six-month minimum billing period. Power Cost Equalization: Those accounts eligible for Power Cost Equalization under this rate will receive Power Cost Equalization in an amount per kWh identified, by the Regulatory Commission of Alaska. The amount of Power Cost Equalization for any individual customer, except local community facilities, is limited to the customer's actual consumption up to 500 kWh per month. The Power Cost Equalization to local community facilities is limited to the facility's actual consumption; in addition, such equalization is limited in aggregate for each community served up to 50 kWh per month for each resident of the community. Power Cost Equalization rates are adjusted periodically and current rates are shown on Tariff Sheet lOl A.

POWER COST EQUILAZATION NOTICE APPLICATION

The Company will give notice to all customers eligible for equalization under the Power Cost Equalization Program for each period in which equalization is received. The notice will be in the following form:


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NOTICE TO CUSTOMER

For the current billing period, the Utility will be paid under the State of Alaska's power cost equalization program (As 42.45.100) to assist the Utility and its customers in reducing the high coat of generation of electrical energy.

Your total electrical service cost Less Sate Equalization Your Charge

Cost of Power Adjustment

A surcharge or credit may be applied to each billing for service rendered under the aforementioned rates to reflect increases or decreases in the cost of fuel compared to the base cost of fuel in an amount per kWh as stated on periodic filings with the Alaska Public Utilities Commission identified as Tariff sheet No.104. Rate Schedule for Purchase of Non-Firm Power from Qualified Facilities with

a Design capacity Of 100 KVA or Less

The rate reflected below is based on the cost of energy that the Company will avoid by virtue of interconnection with qualified facilities. The Company's avoided costs are calculated using the following formula: Current price of fuel x fuel consumed previous twelve months kWh sold during the previous twelve months The Company will recalculate the avoided costs each time it updates its fuel cost rate adjustment and power cost equalization levels.”

It took a while to find (see attached report), but referencing 18 C.F.R. (Code of Federal Regulations) Part 292 § 292.304 Rates for purchases. (b) 3

(3) A rate for purchases (other than from new capacity) may be less than the avoided cost if the State regulatory authority (with respect to any electric utility over which it has ratemaking authority) or the nonregulated electric utility determines that a lower rate is consistent with paragraph (a) of this section, and is sufficient to encourage cogeneration and small power production.

We are considered a nonregulated utility so you as the Assembly are the regulatory agency for rate making. With the addition of QF’s that want to sell power back to the Utility we need to look at the rate we will be willing to pay. The issue is that when the small QF’s begin feeding power back into the system it doesn’t mean that we can shut an engine off or switch to a smaller more efficient unit at any given time. In fact at most times it will make the unit we are operating be less efficient in its fuel curve. We will have to look at this issue every time an alternative QF wants to sell power to the system. Even with the bigger projects like Ocean Energy and Biomass it becomes an issue. There have been projects (wind mostly) that have made the diesel systems so


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inefficient that the rates actually had to increase. But on the other hand if a QF is large enough to allow us to run a smaller unit or be more efficient in some way we will displace all of the avoided cost or basically the fuel cost. The formula that is referenced in the tariff is the same formula we use to determine the fuel surcharge. I would like to recommend that we do offer customers some incentive to try and become more efficient but not at the expense of other customers or the stability of the Utility. We still have to operate the Diesel Plant and keep up on all of the O&M of running the Utility. My recommendations are;

1. Require any QF that wants to sell power back to the utility produce a feasibility report that explains what effects their contribution of energy to the system will have on engine efficiencies, rates and O&M budget of the Utility.

2. Set the purchase rate at 10% of the avoidable costs if the QF has a certified interconnection system and an annual inspection system to protect the employees and equipment of the Utility.

3. If the QF can justify the increase in efficiency to the system with their study, the purchase rates can be negotiated up to the avoided costs. The rate of the purchased power may not surpass the avoided costs during the term of the contract.

The language will have to be refined by legal counsel but this is the protection that we will need in our tariff at this time. Right now the avoided cost is $0.3114/kwh. 10% is $0.03114/kWh.

I had a discussion with the AEA and they are planning on sending a lineman this month to finish the project at School and close out the funds left in that grant. The engineer and contractors from the VEEP grant were in to inspect the School Buildings, Public Safety Building, Power Plant and the Heat Recovery System. After this visit they will be able to give a good estimate on the cost to finish the designated tasks. We have been involved in efforts to make Yakutat one of the most efficient communities in the State. Our loads are still dropping and we are still trying to improve efficiencies on both the generation side and the demand side. Along with the VEEP upgrades we are still working on a Biomass heating project and the Wave Energy project. Engine Status: All of our engines are up and running. We have had the 3512B unit #1 rebuilt and had some issues with it after 10 hours of run time. NC Anchorage had to be called in to repair the unit and it is back up and running. Unit #3 is having some issues with its cooling system and we are in the process of bringing in a technician to trouble shoot the problem. Operators are running the cooling fans in a manual mode to keep the operating temperature in the correct parameters. The touch screen panel that operates the electronics of the engine on unit 1 failed and had to be replaced. We contacted the AEA and replaced it with the screen out of unit 4 until a new screen could be ordered programed and sent to us. I assisted one of the Operators to replace the screen with the help of the AEA technician on the phone. It was a good learning experience and reminded us of how dependent on technology we are becoming.

436,157.00 509,869.00 517,488.00 539,169.00 506,787.00 425,504.00 372,966.00 396,123.00 398,016.00 425,581.00 526,674.00 409,983.00 5,464,317.00 kWh sold

208,337.75$ 250,579.79$ 253,741.93$ 265,542.13$ 252,338.41$ 212,468.10$ 185,208.38$ 196,863.73$ 200,873.25$ 204,134.86$ 263,767.48$ 206,511.45$ 2,700,367.26$ Charged

33,770.00 36,999.00 40,014.60 42,228.00 33,555.10 32,368.50 32,466.00 29,925.70 30,724.00 35,526.00 37,456.00 33,204.00 418,236.90 Gals Fuel

Current Price of Fuel-$.8273 4.0680$ (0.8273)$ 3.2407$

Average # of kWh sold per gal of = = 13.0651

Fuel consumed during last 12 Months 5464317

418236.9

Fuel Surcharge 0.2480$ per kWh

Note: $.8273 is the cost per gallon of fuel when new rates were established.

Avoided cost = 0.3114$


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At one point this month we were down to one engine operating and the load was at a fairly high level. This is one example of why need to have our triple redundancy built into the generation system. As of now we have all of our units operating. We were getting conflicting opinions from different NC mechanics so I contact Anchorage NC and had them send their best tech down to give us a report on the health of the plant and any suggestions on how it can be improved. I will forward that when it comes in. If you remember we still have one of our units de-rated for air emissions and it is only operated in an emergency situation. Discussions are still going on with the AEA but no solution other than replacing the engine has been presented yet. Switchgear: We are still learning all of the functions that are available with the new system. Even after all of the training we receive on the operation of the gear, running it and gaining experience is still the best way to retain the operation of it. Like most sophisticated control systems there are multiple ways to achieve the same results. With the last outage when the automated system tried to reset the feeders it responded to quickly and would not allow the generation unit to stabilize before closing the next feeder, as that happened the frequency and voltage would drop below the parameters and shut the system down. With only one engine available the Operator was able to use the new controls to close the feeders safely and slowly to restore power. Some of these issues are inherent to operating IC engines at load 24/7. I have found that it is more cost effective to have 24 hr. staffing at the power plant and have a real person available to deal with problems as they arise. With our schedule of engine logs and readings our operators are able to identify problems before they occur and save some major failures. They also monitor the efficiencies and loads to make sure there are no issues on the distribution system. They serve as dispatch to any emergency issues that happen to the distribution system. This this is an important safety function for our customers and system. As we enjoy some of the most reliable and low cost energy for diesel generated power in the state. Line Work: The Line crew has been busy with new construction and maintenance projects. We participated in the 4th of July parade with our bucket trucks so the public could see them. We have ordered materials for the Boat Harbor/Leonard’s Landing Road project and will be moving that ahead when the hardware arrives. Temporary power was restored to the new building at the boat harbor after the water lines were installed. We have been busy with ROW maintenance, locates, trouble calls and new services. One new residential service in ASHA and the project for a new service for a cell tower at the Airport area this month. New construction is happening at the US Forest Service compound, Ridge Road area and in the West addition area also. We are lucky to have a diversified group of linemen that can handle many of the issues that come up with our system. They are one of the many reasons we have some of the lowest outage ratios and lowest rates for diesel generated power. Training: Our training is still mostly in house on the job. We do have videos and some online and print materials that are being utilized more by the employees. We still would like to get a program set up where each employee goes to at least one training session out of town annually. I recently had a discussion with the AEA about their circuit rider training program and how we can utilize it. We are on the list for assistance this year and I have asked them to see what we can do to develop an online or correspondence course to certify our employees. When I explained that we don’t have the resources to send operators to the AVTEC Trade School and all of our operators have many years of experience already they understood why we are reluctant to participate. I will keep looking into some type of certification for our employees.


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In this field there is always something else to learn and all of the employees give their best effort to be well informed. We have one of the best trained set of employees for a plant this size in the State. The experience level is high and they are all competent in what they do. They are defiantly the best asset that Yakutat Power has and we are all thankful for the jobs they do.

Temp. Hires: Our temporary employees have been filling in when needed and are gaining valuable experience. It is always difficult to have people when the season is in full swing and we are grateful to the people that give up their other duties to come and fill in when needed. Alternative Energy: I had a teleconference with Ian and Rhonda discussing the alternative energy projects. We had a good discussion about the wave energy project and the data that is being collected. The Bathymetry will be started when Resolute has the funds available. Here is a portion of the proposal for the scope of work and the deliverables.


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I cannot say it enough that we have some of the best and brightest individuals in the community operating our infrastructure and administering the operations of the local Government. Many of them work for wages that are below other communities in our class yet they still have great work ethics and skills. They are the heartbeat of our community. Customers: I would like to remind everyone that you own this Power Company as residents of the City and Borough of Yakutat. Without your involvement and financial support, this system would not survive. Thanks to all of the Commercial businesses, Federal and State agencies, Local governments and Residential customers that help make this one of the best Rural Power Plants in the State. Please be careful with your electric power and use it as safely and efficiently as possible.


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In closing I will insert a couple of charts so you can see where the Yakutat Power audits have led over the years.

And the strategic planning that I have started on last year, all of the strike through projects have been completed.

YAKUTAT POWER Mission: Provide Safe, Reliable Power at the Best Rate Possible for our Customers Immediate Goals

Implement Condition based maintenance program.

Install and collect data on fuel additives, oil filtration, and real-time oil monitoring and

extended oil changes.

Have the Landfill line extension completed and begin the town side of the distribution

upgrade.

Clean up the construction project from the new plant.

Find a way to dispose of the surplus equipment around the plant.

Replace our Bucket Truck and Pickup trucks.

Install some new lighting in the community.

Total Billed

Non Fuel Costs

Fuel Costs

Fuel Surcharge

Fuel used

kWh Generated

kWh Sold

Total Billed

Fuel Cost

Fuel Surcharge


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Get some type of formal training in place for our employees. (Linemen completed advanced

transformer class from NWPPA)

Try to get the assembly to allow a rate increase to cover inflation. (10% base rate increase)

Try to get the assembly to allow us to show revenue on our income statement for the heat

that is supplied.

5-10 year Goals

Have all of our equipment upgraded and on a repair and replacement schedule.

Have rates that will allow for repair and replacement schedule.

Have a $500,000 R&R fund and a $100,000 reserve cash fund.

Have employees available to help other communities troubleshoot problems and present

solutions.

Have the lowest rates possible for our location and size.

Be a model Power Plant for other small communities to model their Power Companies after.

Have at least one alternative energy source in operation. (other than Diesel)

Have the highest standards of air-quality possible.

Have a well-informed customer base that understands the challenges we face and how we

address them.

Develop innovative ways to expand our services.

Be active in encouraging economic development for the community.

Keep our long term debt under control and well managed.

Looking 10 years out, what are the Yakutat Power major maintenance and capital (including

equipment) needs?

Infrastructure/Assets Department is

Responsible For

Deferred Maintenance

Need

Improvements/Upgrades Est. Remaining Life of

Infrastructure Significant Improvement

or Upgrade Needed When

Needed? Est. Cost

1. Generation Plant Ground work/ Comm.

Re-grade and finish area, Install communication infrastructure

ASAP $40,000 50 yr.

2. Old Plant with

Offices and Shops Repair building

New siding and roof on part of building ($50K), Bay Doors ($20K), Heating system, Set up a diesel fueling station from the old system ($20K)

ASAP $90,000 20 yr.

3. Managers House Repairs and upgrades

New roof, Paint, Windows, Doors, Appliances, general repairs.

ASAP $30,000 20 yr.

4. Distribution system Repairs and upgrades

Move to underground system, standardize voltage, extensions.

Three phased project to replace overhead power lines with buried transmission lines.

ASAP $5-8 Million

50 yr.


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Equipment purchase and deferred maintenance needs for standard power system operations.

5. Rolling Stock all of

our equipment and

vehicles.

Upgrade and replace

Bucket truck ($75K), Boom/auger Truck ($75K), Backhoe ($40K), loader forklift ($50K), trailers, pickup trucks.

On-going some are needed right now

$250,000 5-10 yr.

6. Heat recovery

System Expansion Plumb in Old Plant Now $15,000 20 yr.

7. Property upkeep

and snow removal

Plan and Equipment

Make a parking and snow removal Plan, Storage of equipment, Snow Blower, Loader/backhoe

Now $50,000 5 yr.

Plant issues

Finish cleanup of the old engine room and shop.

Develop a plan for surplus equipment disposal

Finish sewer hookup for new plant

Finish communication hookup for entire area

Finish dressing out the ground work around the compound (started)

Come up with a heating/upgrade plan for the old building

Distribution Projects

Set up training and certification program for employees

Setup clear job description and duties that can be benchmarked for review

Landfill extension ( scheduled for this year)

Fuel dock services (Scheduled for this year)

F&G Extension

Repair cross arms (Two completed one left)

Repair broken load break cabinets

Reset trouble poles (two completed two left)

Clear trouble trees out of line

Replace the Leonard’s landing feed (Material Ordered)

Lighting projects (plans to replace lights this year)

Finish FAA demobilization of pole line

Locate funds for the distribution upgrades described in the power project

Operations Projects

Set up the condition based maintenance program

o By-pass oil filtration


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o Real-time oil monitoring

o Better quality lube oil (Still testing new Oil)

o Oil testing standards

o Lube oil additive system

o Fuel additive system

o Emissions monitoring

Set up training and certification program for employees

Setup clear job description and duties that can be benchmarked for review

Install lube oil filling system

Work on automating the reporting system

Upgrade heat recovery system at the schools (AEA rebuilt exchangers at the school, VEEP

Grant working on finishing upgrades)

Install a thermostat control at the Public Safety Building heat system(VEEP grant working

on it)

Install Tsunami warning system

Upgrade cameras and site control

Administration and Customer Service

Have the billing accounting and operation production numbers all handled by the same

department for reconciliation, data retention and reporting purposes.

Improve the asset and inventory reporting accuracy.

Be more active in customer education about conservation and actual costs of service.

Be more active with the governing bodies and CBY management.

Have a more stringent reporting system for mandated reporting. (PCE, DEC, EPA, EIA, etc.)

Have a well-defined strategic plan that can be updated and followed.

Keep active with State and Federal organizations and issues.

The Power Company is Open 24/7 365, if anyone gets a chance stop by and see us or visit with the operator on

duty after hours. Please feel free to contact me with any questions, or suggestions about the Power Company,

I will do my best to respond to them.

Thank you,

Scott Newlun

General Manager, Yakutat Power

(907) 784-3242

Documents

YP Manager Report to CBY Assembly - WordPress.com€¦ · Thursday, April 24, 2014 1 . YP Manager Report to CBY Assembly . The summer season is moving along quickly. We have been