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HomeMy WebLinkAboutMIN 09.22.2008 CC-WThe City Council of the City of Georgetown, Texas, met in Regular Session on the above date with Mayor George Garver presiding. Council resent: Council Absent: Patty Eason, Gabe Sansing, Keith Brainard, Pat Bill Sattler Berryman, Dale Ross, Ben Oliver Staff Present: Paul E. Brandenburg, City Manager; Tom Yantis, Assistant City Manager; Jim Briggs, Assistant City Manager for Utility Operations; Jessica Hamilton, Assistant City Secretary; Micki Rundell, Director of Finance and Administration; Kathy Ragsdale, Utility Office Manager; Keith Hutchinson, Public Information'; Officer • ! • •Ir -VITT MYTTIOM• • r • • 1 1 • A Presentation regarding the City of Georgetown Power Supply and Fuels for Power Generation -- Jim Briggs, Assistant City Manager With a PowerPoint presentation, Briggs spoke about the impact of fuel types on Georgetown Utility System Electric Generation. He spoke about how a City deals with those elements that are used to generate power. He noted the price of energy is increasing and added the price will continue to increase based on the cost of drilling, mining, and the price of building facilities like power plants. He listed other costs associated with power generation. He said emission costs were once fairly low, but they are now very large and contain huge risks. He noted the costs of dealing with carbon emissions going into the atmosphere are going to increase. He said Congress will have legislation that deals with air quality standards. He noted the United States is receiving pressure from other countries to take the lead in controlling air quality. He added a lot of this legislation will begin to take effect in 2020. He said clean air comes with a price and the users of that commodity will be the ones that pay for cleaning the air and getting to the emmission standards set by Congress. He said the bottom line is we are going to have to reduce carbon emmissions in order to clean the air and reduce greenhouse gas.Briggs noted most experts recommend that cities begin to plan, put measures in place, and look for investments in low carbon generating technology. He spoke about strategies being evaluated for how to reduce greenhouse gasses. He said the recommendation is to develop a plan, execute the plan, and manage risk. He noted the bond rating agencies will evaluate the City's decisions at the local level with regards to how well this issue is dealt with. Briggs reviewed the current United States natural gas usage. He noted no one expected the cost of gas to go up to $14 and drive the price of energy through the roof. He said the production of natural gas has not substantially increased since 1998. Mayor asked and Briggs said there is enough production of natural gas in Texas but the problem lies with the transmission system and being able to lay down pipelines in order to get the gas from point A to point B. He added that, in the natural gas market, the price has not acted normal with regards to storage, volume, and production. He said the price has been driven by speculators and investors coming into the market for commodities. He noted this is why the price is going up and down. He spoke about different options for renewable energy and current natural gas options. Briggs said the electric resource mix is using more gas. He noted 20% of electric supply is now coming from natural gas and the other fuel usage is stable. He showed Council several graphs displaying projections of resource mix and gas burn in 2036. He noted, that nuclear and renewables begin to increase, and coal stays the same. He spoke about gasification of coal. City Council Meeting Minutes/ Page 1 of 3 Pages Berryman asked and Briggs said nuclear power is growing but it depends on Lf ie time it takes to build a nuclear facility, the planning, regulatory permitting, getting it on the ground, and getting it generated. He noted the lead time and the review process is very long. Brainard asked and Briggs said the last nuclear power plant was completed in the early 1990s in south Texas. Ross asked and Briggs said the permitting and approval for authorization to build a nuclear power plant is a 10-12 year process. Briggs added this process is what holds up the construction. He noted nuclear energy is probably the cheapest energy out there right now and it is also not subject to fluctuations or greenhouse gas legislation. He added the City should also not put their eggs in one basket. Briggs spoke about the future of fuels. He said there is going to be high demand, high prices, high price volatility, lots of drilling, new pipelines, and storage. He noted the changes in fuel usage will be determined by the market and regulation. He described the options for fuels going forward. He showed Council the staff and Board recommendations for the usage of different fuel types. He noted he still sees the price of natural gas as being volatile for a long while. He added the goal percentage for renewable energy is very high, but achievable. He said the City will have to adopt a plan in order to achieve these proposed percentages by 2030. Berryman asked and Briggs said the GUS Board wanted to see less exposure to coal and more investment in renewables and nuclear energy. Sansing said the City needs to be moving away from anything that is carbon -based. He added the City needs to be on the cutting edge and not the trailing edge. Brainard asked and Briggs confirmed this is a recommendation from the GUS Board and it was unanimous. Sansing suggested and Briggs agreed that, if the City is looking for new contracts, they should look for ones that already meet the federal and state regulations. There was much discussion. Eason said, in speaking for the GUS Board, these numbers were based on what might be available now, but the Board was giving the authority to Briggs and staff to tweak the percentages as necessary. Oliver asked and Briggs said the current percentage estimate of electric generation is 60 percent coal and 35 percent is natural gas. Oliver said the transition to these proposed future goal percentages will take time. Ross asked and Briggs spoke about wind or solar power options. Ross asked and Briggs said he could envision the City having wind generators. Sansing said and Briggs agreed, once this is adopted, the City will start to move toward the new percentages. Mayor asked and Briggs said price is a driver of this transition because, although residents are interested in renewables and other sources, they are price sensitive as well. He noted electric demand is continuing to exceed electric generation which makes is harder and harder for utilities to keep up. Briggs said people are seeing legislation, environmental groups, and others who drive public policy which, in turn, affect the price of these resources. He continued to outline various fuel costs. Mayor asked and Briggs said, if Council wanted to take action, he can bring it back as a specific item on a later City Council agenda. Mayor asked and Briggs agreed staff can decide the best time to bring this item back to Council. Oliver asked and Briggs said staff is content with the GUS Board recommendation and percentage points. Briggs reviewed how the City would achieve their goal. 5:00p.m. -- recessed to Executive Session Executive Session In compliance with the Open Meetings Act, Chapter 551, Government Code, Vernon's Texas Codes, Annotated, the items listed below will be discussed in closed session and are subject to action in the regular session that follows. B Sec.551.071: Consultation with Attorney - Advice from attorney about pending or contemplated litigation and other matters on which the attorney has a duty to advise the City Council, including agenda items - Discussion related to the City of Georgetown's power supply contract with LCRA - Georgetown Village PID discussion of status and legal issues related to same. - Development Agreement with San Gabriel Partners, Ltd. regarding the development of the River Place Project. - City of Georgetown, Texas v. Georgetown Railroad Company, Inc., et a/.; Civil Action No. A08CA 453 SS; In the United States District Court for the Western District of Texas, Austin Division - MarkShelton v. City of Georgetown, et al; Cause No. A07CA063; in the United States District Court for the Western District of Texas, Austin Division - Pending, threatened, and contemplated litigation arising from incident in October 2007 involving former police officer Fennell - First Citizens Bank & Trust Company v. City of Georgetown, Cause No. D -1 -GN -08-02325, 53rd Judicial District, Travis County, Texas - Potential litigation regarding LCRA Wholesale Power Agreement - Discussion of legal issues related to payment obligations for the Public Utility Improvements under the "Development Agreement with Forestville Associates, a Maryland General Partnership, regarding development of Wolf Ranch" dated September 11, 2003 - Discussion of legal issues related to the ABG Development Agreement - Berry Creek Partners v. City of Georgetown , Cause No. 08-767-C277, in the District Court of Williamson County, 277th Judicial District. C Sec 551.072: Deliberations about Real Property Consideration and possible action regarding purchase of property in the Williams Drive Gateway for future right-of-way. - Purchase options for Gateway. D Sec.551.086: Competitive Matters City Council Meeting Minutes/ Page 2 of 3 Pages - Discussion related to the City yr Georgetown Power Supply Approve :1' Mayor GeorgePGarver City Council Meeting Minutes/ Page 3 of 3 Pages 7:55p.m. -- returned to Open Session and adjourned The meeting was adjourned at 07:55 PM. Attest: * rq5:1 E Ci Secret y J sjca Hamilton