| || |
Sound and Stable Utilities
FY 2017-18 Council Goal: Sound and Stable Utilities
Having well-run, reliable, and low-cost City-owned utilities has proven to be a significant economic advantage to the city and its businesses over the years. As a full-service city, Roseville owns and operates its own electric, water, wastewater, and solid waste utilities through Roseville Electric Utility and Environmental Utilities (EU). Key utility decisions are under the control of a single entity, which makes the planning, development and operation of utility services more efficient, synergistic, and reliable. This benefits customers with rates among the lowest in the region, the highest levels of reliability and quality with a relentless focus on planned expansion, and proactive renewal or replacement of utility assets.
To ensure fiscal soundness—one of the City Council’s priorities—all utilities have implemented strategies to increase their economic reserves to stabilize rates, address long-term infrastructure needs, and limit exposure to costs and regulations outside our control. In addition, as changes in technology and regulations impact the business model used to determine rates, utilities will remain vigilant about ensuring that rates accurately reflect usage by avoiding situations in which certain customer groups inadvertently subsidize other groups of customers.
Legislation and Regulation
While the City owns and operates a number of diverse utility services, the one aspect all City utilities have in common is external regulation. Each of our utility services are highly regulated by state and federal agencies and routinely subject to legislative and judicial orders which are expensive and sometimes interfere with local control. The City deals with this reality strategically on two fronts:
1) The City develops and drives a comprehensive legislative and regulatory platform, which promotes balanced and pragmatic approaches. We work hard to understand the issues, develop relationships, and advance or protect our customer’s interests accordingly. The City is a leader of several legislative advocacy alliances on the regional, state, and federal level that combine the strength of their unified voice to advocate for utility customers.
2) While new regulations can be challenging and costly to implement, the City actively looks for opportunities that derive increased value from regulations to further benefit our customers. Because our utilities operate as integrated businesses, we can sometimes turn what might look like a daunting regulatory mandate into a synergistic business opportunity. An example of this is our organic food waste to biogas energy program currently under development that will leverage our need to divert organic solid waste against our ability to convert this waste to energy at our wastewater treatment plants.
Highlights of each utility’s focus areas for FY2017-18 are listed below.
Roseville Electric Utility
- Advanced Metering Infrastructure (AMI) or "Smart Meters"—Most of California’s homes and businesses have smart meters to measure multiple aspects of electricity and natural gas usage at any time of the day or night. Smart meters can measure the time of day that energy is used, send messages to customers with information about their usage, and allow customers to check usage during the month, instead of after the fact when they receive their bill. In 2017, the Utility will continue its proposed multi-year plan to modernize customers’ meters with the selection of a smart-meter vendor. Following the implementation of a robust outreach plan with customers, and with City Council approval, customer meters will be upgraded in 2018.
- Sierra Vista Specific Plan Substation—As the Roseville community grows, so must the Utility’s electric distribution system. Following approval of the Sierra Vista Specific Plan, plans were put in place to expand the distribution system to accommodate new construction in this area. The Utility will begin final design of the new substation within the Sierra Vista Specific Plan Area in 2017. It is anticipated that construction will be completed in 2019. Developer fees will be used to fund construction. This will be the first new substation built since 2007.
- Electric Rate Plans— Consistent with the City Council’s priority for sound and stable utilities, the Utility prepares financial and energy forecasts annually and reviews the need for rate changes every two years. In 2017, the Utility will complete its review to ensure that adequate revenue is available to maintain Roseville’s highly reliable electric system and services. If rate changes are needed, the proposed rate changes will be presented to the City Council for approval in late 2017.
- Hydro-Electric Surcharge—Because of above-average precipitation levels near the City’s hydroelectric power plants again this year, the Utility does not expect to implement the hydroelectric surcharge. The ordinance allowing an electric hydroelectric surcharge was adopted in 2009 as a way to partially fund the purchase of replacement electricity that was not provided from hydroelectric resources due to lower-than-average precipitation.
- Community-Solar Pilot Project— Roseville residents will have an opportunity to participate in Roseville’s first community-solar pilot project, tentatively scheduled to go live within the next year. The project will also help to meet renewable-energy requirements for the Utility. Upon City Council approval, the selected vendor will construct the solar project and customers will be able to participate on a voluntary basis.
- Electric Vehicles— As State and Federal initiatives continue to advance the electrification of transportation, staff has initiated a research project to better understand distribution system impacts and guide the development of electric vehicle programs and services. Research and development began in 2017 and the results and findings will assist with electric vehicle related efforts in the future.
Environmental Utilities: Water, Wastewater, Solid Waste
- Rate Plans —Consistent with the City Council’s priority for sound and stable utilities, Environmental Utilities (EU) prepares financial, supply, and demand forecasts annually and reviews the need for rate changes every two years. In 2017, EU is proposing utility rate increases for water, wastewater and solid waste services. The rate increases will help maintain financial resiliency, offset infrastructure maintenance and rehabilitation costs, and comply with current and future unfunded mandates—all of which ensure high levels of customer service and reliable utility services. Proposed rate adjustments would generate a total monthly utility bill increase of about $5.09 per household effective July 1, 2017 and $5.42 beginning July 1, 2018. This is an average 5.4 percent increase for all three utilities in the first 12 months, and an additional 5.5 percent the following year.
- Water Utility
- Long Term Goals
- Effectively manage statewide drought regulations and develop water-use measures appropriate for Roseville water customers in light of local water-supply availability.
- Continue water-reliability planning efforts including the Ophir Water Treatment Plant and the RiverArc project with Placer County Water Agency and others.
- Comprehensively evolve our capacity-fee program to include recycled water and water reliability projects for the future. Begin preparing for the next cycle of utility rate adjustments as needed ensuring stability across long-term financial plan and key fiscal policies.
- Stay in front of external movements, including California Water Fix, long-term water-use efficiency policy, and the State Water Resources Control Board’s tributary flow proceedings, to protect the interests of the City and the region while forging new partnerships and alliances to advance Northern California’s water reliability.
Water Reliability—As California emerges from prolonged drought, policy attention is needed to address California’s ongoing water-supply challenges. Staff is developing a long-term, integrated resource plan to ensure Roseville’s continued water-supply reliability, focusing on regulatory change and needed water-infrastructure partnerships and investments. These partnerships include collaboration with other water agency partners and the Regional Water Authority on a regional water-supply reliability plan and a communications and advocacy strategy that will chart the course for water-supply development over the next 30 years. Special emphasis will be on development of an infrastructure plan to increase access to water from Placer County Water Agency. A high certainty level in future water supplies is a key factor to continued investment in our region. This will increase economic vitality, attract more high-paying and diverse jobs, and raise the region’s standard of living. Roseville continues to proactively address water-supply issues, and protect the interests of rate payers and the community. Although an adequate supply of surface water for the coming year is expected, some conservation measures are expected to continue.
Capacity-Fee Program—Roseville has a long standing policy that growth pays its own way and brings new water supplies to benefit the entire City, not just the proposed development. In addressing the issue of paying for regional water reliability, the City continues to use a combination of developer-paid fees (through capacity fees and/or community facilities districts) and water-user rates. EU is currently in the planning process to review the next generation of capacity fees to address water reliability and recycled water. To accomplish this, EU will propose a variety of approaches and options, both internally and externally, for meeting current and future needs. EU expects extensive outreach and education efforts as fees in general are sensitive, and capacity fees can be difficult to understand.
Groundwater—The Sustainable Groundwater Management Act (SGMA), passed in 2014, requires the formation of a Groundwater Sustainability Agency (GSA) to define and better protect California’s groundwater aquifers. This includes the development of a Groundwater Sustainability Plan (GSP) by 2022. Several steps are required under SGMA, the first of which is forming a GSA to manage the local groundwater basin. The City and partners in western Placer County have been active in groundwater management for the last decade and are well-positioned to meet newly adopted state requirements. After formation of the GSA in mid-2017, the West Placer Groundwater Sustainability Agency, including Roseville and its partners overlying the North American groundwater subbasin, will begin efforts in FY2017-18 to prepare a comprehensive regional groundwater sustainability plan.
Site Reservoir JPA—The City of Roseville and the Placer County Water Agency joined the Sites Reservoir Joint Powers Authority (JPA) in January 2017. When the proposed 1.8 million acre-feet Sites Reservoir project is completed in 2029, the JPA efforts will help ensure operations are well coordinated and will allow Folsom Reservoir to retain higher levels of water storage. These efforts will benefit the Bay-Delta environment and the citizens of Placer County.
- Treatment Plant Improvements — The Pleasant Grove Wastewater Treatment Plant (WWTP) is in the design phase for planned expansion to serve the growing needs of South Placer County. Delayed by the recent economic downturn, this expansion includes improvements that expand treatment capacity and reduce odors. The Dry Creek WWTP is similarly undergoing plant-process changes to better meet NPDES discharge-permit requirements. Lastly, both treatment plants are being equipped with biogas systems to capture produced methane and in turn use that energy for compressed natural gas (CNG) offsetting fleet fuel costs and electric power demands. The City is also in the initial stages of investigating advanced recycled water treatment technologies and exploring ways to better use and store recycled water that is treated to even higher standards in the future.
- Recycled Water—In the upcoming fiscal year, EU will further initiate its effort to develop a long-term strategy to transition recycled water from the wastewater utility to the water utility. Since its inception in the 1990s, we have learned that incentivized rates for recycled water are no longer required because demand for recycled water exceeds supply, and recycled-water service is now depended upon and planned like other utilities. The strategy will support recycled-water service plans that include rehabilitation funding and the development of a construction fund for building major transmission, storage, and pumping infrastructure—much like how the other utilities operate.
Solid Waste Utility
- Diversion of Organic Materials from Landfills—In 2014, the California State Legislature passed AB 1826, which required the diversion of organic materials from landfills. In FY2016-17, EU’s solid waste division initiated a program to handle this waste stream to comply with these regulations, with the goal to increase program participation over time. In the next fiscal year, EU will continue to expand the program based on regulatory requirements. Because of the program, EU recycles approximately 20 tons of food waste weekly, and that number is expected to increase exponentially as the program includes more food waste generators in the city this year and beyond.
Anaerobic Digesters — On a parallel track, the long-planned expansion of the Pleasant Grove WWTP is through the design phase, and it features infrastructure to better process biosolids, including anaerobic digesters. Anaerobic digestion processes can be improved by 30 percent by adding organic food waste and fats, oils and grease (FOG), while also increasing methane gas production. The methane gas will be converted to electricity (to meet or offset power needs) or compressed natural gas (CNG). The available CNG will benefit the utility as the solid waste division is in the process of converting its truck fleet to renewable CNG to meet AB 32 carbon-emission regulations.
Roseville Utility Exploration Center
Located in the same building as the Martha Riley Library—the City’s first LEED Gold Certified green building—the Roseville Utility Exploration Center is a one-of-a-kind environmental learning center funded by Roseville Electric Utility and Environmental Utilities. It provides information on protecting natural resources in a fun and engaging way through hands-on exhibits, activities, school tours, presentations, and workshops. In FY2017-18, the Utility Exploration Center will update its five-year strategic plan to shape and influence the renewal of interior exhibits and development of the outdoor, interpretive garden to benefit public engagement with the Utilities. The plan will include an operations and funding forecast and will ensure educational messaging is aligned with Roseville Electric Utility and Environmental Utilities programs and services.