City of Aspen to address financial impacts of energy efficiency
The Aspen Times
While energy consumption has fallen in Aspen, so has revenue for the city’s Utility Department.
Since 2008 — aided by energy-rebate programs — Aspen has seen an annual decrease of 3.4 percent in overall energy use. That may not seem like a large loss, but take into account the fact that Aspen is paying 12.8 percent more in 2014 than in 2013 for coal- and gas-fired power, and you have a utility department struggling to break even.
Lee Ledesma, Aspen’s utilities finance manager, said it’s a trend she is seeing throughout the U.S.: While communities are achieving better energy efficiency, antiquated rate structures create an unbalanced checkbook. In order to cover expenses, she said the Utility Department will need to address the issue with the Aspen City Council in the near future.
On March 25, Ledesma will visit the University of Colorado Law School in Boulder, where she will meet with fellow utility managers and discuss new budget-balancing strategies. She’s hoping that by this summer, she will have data to present to the council.
Also in the works is a water-efficiency plan for the Roaring Fork Valley, a collaboration among Aspen, Snowmass, Basalt, Carbondale and Glenwood Springs. The five-city watershed plan is scheduled for completion in December, when it will be presented to Gov. John Hickenlooper, whose office is drawing up a comprehensive state plan. Aspen’s Community Office for Resource Efficiency received about $93,000 in grants for the effort, while contributing another $10,000 in city funds.
What has been absent mostly in all the plans, Ledesma said, is discussion on financial impacts of energy efficiency. During a January kickoff meeting, she raised the issue because “you can’t discuss water efficiency in a bubble without addressing the revenue piece of it.”
She and fellow officials were assured it would be part of the conversation, although the consultants hired for the project are not financial experts. Ledesma expects additional resources will be added to the project.
“I think what we are doing is wonderful, but since I am the utilities financial manager, I can’t ignore the stress it’s creating on the other side of operations,” she said.
She noted that the city puts tens of thousands of dollars into its energy-efficiency program each year, offering 25 percent rebates of up to $5,000 on utility bills for energy upgrades to lighting, refrigeration, heating, ventilation and air-conditioning systems. Recently, the program’s focus has shifted from residential to commercial customers. In 2013, Aspen Electric represented about 1,900 residential accounts and 1,000 commercial accounts.
Ledesma said Aspenites have been very willing to participate in the programs. As Councilman Adam Frisch said in October, the ultimate aim is to drive down energy use as much as possible; revenue impacts can be balanced elsewhere.
“If you have people that really want to save water and are paying attention, they should not see a significant change in the bills in the future,” Ledesma said, adding that there might be other customers targeted: About 65 percent of water customers are second, third and fourth homeowners.
“Maybe that group will see more of a change in their bills,” she said.
As the city gathers information for a fee-structure study, Ledesma said she hopes they will find proven philosophies that have worked for larger municipalities. Ledesma, who manages budgets for both utilities, said that while water strategies are important, the electrical side is a larger issue and will likely end up before the council first.
“Because we have a smaller customer base and our purchase power costs have been going up quite a bit in the last three years, I think it’s a little more crucial on the electrical side to be perfectly honest than it is on the water,” she said. “We are just reaching that nexus where our expenses are going up a lot faster than we projected and our revenue is not meeting our target.”
Because of city water rights, Aspen does not have to purchase water shares and in turn, avoids third-party control. On the electrical side, the city purchases wind, coal and gas power through Municipal Energy Agency of Nebraska. Wind makes up 28 percent of all power purchases through Municipal Energy Agency of Nebraska, while schedule M (coal and gas-fired) makes up 22 percent.
Given the United States is in the throes of a constitutional crisis, now isn’t the time for debates over who’s pictured on American currency and who’s memorialized with a statue on public property, two prominent historians told an audience in Aspen on Saturday night.
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