emerald people’s utility district board of ......2016/04/12 · m:\board &...

$: EMERALD PEOPLE’S UTILITY DISTRICT BOARD OF ......2016/04/12 · M:\BOARD & POLICIES\Agendas\2016\2016-4-12 - Business Meeting Agenda.Doc EMERALD PEOPLE’S UTILITY DISTRICT BOARD$
M:\BOARD & POLICIES\Agendas\2016\2016-4-12 - Business Meeting Agenda.Doc

EMERALD PEOPLE’S UTILITY DISTRICT BOARD OF DIRECTORS

MEETING AGENDA

33733 Seavey Loop Meeting Time – 5:30 p.m. TUESDAY, APRIL 12, 2016 Eugene OR 97405

1. CONVENE BUSINESS MEETING - CALL TO ORDER – ROLL CALL – INTRODUCTIONS

2. AGENDA TIMELINE – Requests for Additions or Deletions

3. DEFERRED ITEMS 4. EMPLOYEE RECOGNITION 5. PUBLIC COMMENT

PLEASE NOTE: Statements from the public are limited to 5 minutes per speaker and are a comment period only on utility business, time permitting. The Board will not engage or respond to comments unless it is to correct inaccurate information or statements from the public. Interaction with the Board will be allowed if a member of the public has previously submitted a request to be added to the Agenda.

6. CONVENE NON-PUBLIC EXECUTIVE SESSION – in accordance with ORS 192.660(2)(i) – Personnel 7. ADJOURN EXECUTIVE SESSION AND RECONVENE BOARD BUSINESS MEETING

PRESENTATIONS AND REPORTS 8. AUDIT PRESENTATION – Moss Adams

9. FINANCE/TREASURER REPORT

10. GENERAL MANAGER’S REPORT

11. FINAL YEAR-IN-REVIEW

12. BPA CONTRACT DECISION - Discussion

ITEMS FOR ACTION

Items placed on Consent Agenda are of a routine nature. Board will vote on the Consent Agenda without discussion. Items requested by any Board Member for discussion will be acted on separately. 13. CONSENT AGENDA Minutes of Board Meeting – March 15, 2016 Minutes of Board Executive Session – March 15, 2016 Approval of Claims 14. MOTIONS AND RESOLUTIONS

M:\BOARD & POLICIES\Agendas\2016\2016-4-12 - Business Meeting Agenda.Doc

INFORMATION AND PLANNING ITEMS

15. REVIEW OF MOTIONS

16. PUBLIC COMMENT – Open Comment Period (if time permits)

17. SUGGESTED ITEMS FOR FUTURE MEETINGS

18. UPCOMING MEETINGS/EVENTS Tuesday, April 12 Creswell Chamber ........................................... varies ................................................... Noon Wednesday, April 20 Coburg Chamber ............................................. Countryside Fellowship ...................... Noon Thursday, April 21 Tri-County Chamber ........................................ varies ................................................... Noon Thursday, April 21 Cottage Grove Business After Hours ............... varies ................................................... 5:30 pm Friday, April 16 OPUDA Board Meeting.................................... SDAO - Salem ...................................... 9:30 am-1 pm Tuesday, April 26 EPUD Board Work Session ........................... EPUD ............................................... 5:30 pm Wednesday, May 4 PPC Members Forum ...................................... Sheraton – Portland Airport ............... 3-5:00 pm Thursday, May 5 PPC Executive Committee ............................... Sheraton – Portland Airport ............... 8:00 am-noon Friday, May 6 PNUCC ............................................................. Sheraton – Portland Airport ............... 8:30 am Tuesday, May 10 EPUD Board Business Meeting ..................... EPUD ............................................... 5:30 pm May 15-18 NWPPA National Conference .......................... Tulalip, WA. ......................................... full days Wednesday, June 8 Fern Ridge Chamber ........................................ Our Daily Bread ................................... Noon June 10-15 APPA National Conference .............................. Phoenix, AZ. ........................................ full days 19. DIRECTORS’ CONCLUDING COMMENTS 20. ADJOURN MEETING

1

Board WorkshopBPA Product Selection Overview

Presented:April 12th, 2016

2

Background

• Current BPA contract runs through September 30, 2028• Became effective on October 1, 2011

• Emerald is currently purchasing the Slice/Block product• Been operating with since the beginning of the contract• Other product options include Load Following and Block (with shaping)

• The contract allows for a one-time product change• Notice required by May 31, 2016• Effective October 1, 2019

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BPA Load Following Contract

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BPA Slice/Block Contract

BPA Product Options

Load

Load

BLOCK

SLICE

EPUD decides how to deal with surplus or deficit

4

Slice/Block Product Summary

• BPA supply is broken down as 50% Slice, 50% Block• 50% of Tier 1 provided as proportionate share of Federal System generation• 50% of Tier 1 provided as fixed, constant Blocks each hour• Slice entitlement is to “firm” power (critical water) – should be more on average

• The Block product is a partner product to Slice (BPA requires)• Provides EPUD energy in fixed amounts each hour • Hourly supply changes month to month based on historical load shape

• Block provides certainty in our power supply• Predictable quantity at a known price each hour• Used as a “baseload” resource with a firm level of capacity

Block Summary

5

• The Slice product gives EPUD a piece or “Slice” of BPA system• Slice output may be more or less than EPUD requires to serve load each hour• In either case, EPUD decides (rather than BPA) how to deal with surplus or deficit

• Slice is accounted for through a software interface• Each customer manages its own virtual Federal System• Represents six major Columbia River hydro projects• Software includes hydro routing model to simulate operation of Federal System

• Each customer operates system according to own needs• Decisions include when to store water or draft (generate) in different periods• Customers must stay within a large set of constraints

Slice Product Summary

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7

• Slice provides for enhanced resource flexibility• Within constraints, EPUD can flex hourly Slice up or down (virtual hydro storage)• Storage decisions can differ from what BPA would otherwise do to serve our load• Flexibility makes it easier to integrate other resources (renewables, conservation)

• Slice also allows EPUD to make own risk management decisions• Key risks to address:

• Variable Slice output / hydro conditions• Fluctuation in market prices (too low can be worse than too high!)• Fluctuation in short term load

Slice/Block Benefits

8

• Requirements Slice Output (RSO) test • Emerald has failed multiple times over the years due to load shifts• However, Staff has been able to work with BPA to establish a waiver protocol

• Scheduling and generation penalties• Have the potential to be quite large

• Market Price Exposure• Prices can be volatile in the short-term markets (see February 2014)• Emerald’s risk management team has mitigated through financial hedging

Slice/Block Challenges

9

• Requires staff to engage in active risk management practices• Operating a Financial Risk Management Team with regular meetings• Managing third party relationships and staying current on market intelligence• Implementing trading and financial exposure limits (hedging supply if needed)

• Requires staff to take care with power cost budgeting • Modeling and analyzing range of possible outcomes for Net Power Cost• Setting budget to ensure financial reserves can cover unfavorable periods

• Requires partnering with third-party Scheduling Agent (TEA)• Duties include: Hourly scheduling & trading, day ahead prescheduling, short-term

load forecasting, counter-party credit checks, daily bookkeeping & settlements• TEA’s experience allows us to optimize the Slice resource within constraints

EPUD Slice/Block Management

EPUD Risk Management and Hedging

• Comprehensive program led by internal Risk Management Team• Regular meetings designed to address EPUD’s resource position over 0-36 months• Focus on ensuring compliance with Risk Management Policy and firming budget• Seek to reduce range of power cost outcomes and manage surplus/deficit positions

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Risk Policy Position Limits

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• Alternative BPA purchase option is known as “Load Following”• BPA serves a utility’s loads each hour and charges based on costs it incurs• BPA manages scheduling for generation (water supply) and customer load• BPA handles surplus/deficit energy and makes risk management decisions

• Load Following utilities have challenges of their own• Subject to fixed amount of Tier 1 just like all customers• Subject to complex demand rates and load shaping charges• Difficult for any utility to be a passive manager of its power supply anymore

• BPA has designed the products to be cost equivalent over time• The main cost difference is in timing!• With Slice/Block, we see impact of changing conditions immediately (good or bad)• As a Load Follower, BPA absorbs the impact for you and will “true up” every 2 years

Slice/Block vs. Load Following

13

Example Load Following Bill

14

Quantitative Product Analysis

15

• Staff has been tracking product costs since 2011• Utilized models from BPA to evaluate hypothetical Load Following scenarios

• In 2015, staff engaged BPA to review model assumptions• Used 2014 as a base case and agreed upon all major variables• Have since used this model to evaluate 2011-2015 and future years

• Also in 2015, staff took part in a Slice customer user group • Goal was to review analysis assumptions• An effort to determine if we were looking at the products in the same way

Quantitative Analysis Process

16

Quantitative Analysis Summary

Slice/Block Load Following Variance

FY 2012 $15,668,016 $16,132,414 ($464,398)

FY 2013 $16,033,179 $15,656,566 $376,613

FY 2014 $17,540,837 $17,619,824 ($78,986)

FY 2015 $17,310,045 $17,244,340 $65,706

Net Power Cost

17

Qualitative Product Analysis

18

• Business Energy Rate Incentive (BERI) program• Encourages local growth and increases customer goodwill

• Cascade Pacific Pulp (Halsey mill) power sales agreement• Enables significant transmissions savings ($100-$200K per year)

• Wind integration and resource flexibility• Allows us to take White Creek to load without RSS purchases from BPA ($18/MWh)

Slice/Block Non-Financial Results in Practice

19

Product Selection Summary

20

• First four years of Slice/Block have brought positive results• Costs slightly below the average BPA Tier 1 rate and Load Following scenarios• Greater flexibility around resources and customer programs (BERI, CPP contract).

• Looking forward, Slice appears to have continued advantages• Expected costs at or below that of Load Following scenario• Allow much easier and less expensive integration of White Creek Wind• Enables major aspects of Emerald’s strategic plan

Slice and Emerald’s Strategic Plan

21

• Slice will also enable major aspects of Emerald’s strategic plan

• Partnering with customers on:• Distributed Energy Resources

• Demand Response• Home Storage• Customer Generation

• Time of Use Rate Design• Enhanced Energy Management

• Slice allows us to take full advantage of these initiatives• Flexible resource integration allow us to optimize short-term portfolio• Access to hourly wholesale markets provides clear price signals

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Appendix

Slice/Block vs. Load Following (FY 2012)

24

Slice/Block Load Following VarianceFY2012 FY2012

Purchased Power - BPA 16,549,400 15,994,888 554,512 BPA POWER DETAILNon-Slice (1,571,952) (3,197,028) 1,625,076 Load Shaping (157,568) (172,942) 15,374 Demand Charge - 1,125,909 (1,125,909) Reg and Frequency Response 10,981 - 10,981 Composite 16,589,545 16,589,545 - Halsey Offsets (98,503) (69,620) (28,883) BPA TRANSMISSION DETAILNT Base Charge 1,010,995 1,010,995 - NT Load Shaping 281,659 281,659 - Reg and Frequency Response 46,089 46,089 - Operating Reserves - Spinning 113,390 113,390 - Operating Reserves - Supplemental 96,378 96,378 - Energy Imbalance UAI 57,873 - 57,873 PTP - - Ratchet 2,696 2,696 - SCD Long Term Firm 167,817 167,817 - Purchased Power - Small Gen 89,565 89,565 - Halsey Purchased Power - (4030, 4031, 4032) 413,337 - 413,337 Halsey Revenue (9890, 9895, 9896) (447,614) - (447,614) Purchased Power - PP&L 13,060 13,060 - TEA Scheduling & Risk Management 662,163 175,000 487,163 Green Power 172 172 - Purchased Power - White Creek 1,668,420 1,668,420 - BPA Billing Credits (1,281,359) (1,281,359) - CREDIT DETAILREP Refund (656,687) (656,687) - LDD (624,672) (624,672) -

Net Market Purchases and Sales (1,999,128) (527,331) (1,471,797)

Net Power Cost 15,668,016 16,132,414 (464,398)


Purchased Power - BPA 16,405,683 15,431,471 974,212 BPA POWER DETAILNon-Slice (1,571,952) (3,203,460) 1,631,508 Load Shaping 3,234 (404,776) 408,010 Demand Charge - 789,397 (789,397) Reg and Frequency Response 19,262 - 19,262 Composite 16,420,673 16,585,392 (164,719) Halsey Offsets (146,560) (71,952) (74,608) BPA TRANSMISSION DETAILNT Base Charge 1,005,271 1,005,271 - NT Load Shaping 287,626 287,626 - Reg and Frequency Response 45,624 45,624 - Operating Reserves - Spinning 126,312 126,312 - Operating Reserves - Supplemental 107,361 107,361 - Energy Imbalance UAI (55,844) - (55,844) PTP - - - Ratchet 2,114 2,114 - SCD Long Term Firm 162,562 162,562 - Purchased Power - Small Gen 102,270 102,270 - Halsey Purchased Power - (4030, 4031, 4032) 142,709 - 142,709 Halsey Revenue (9890, 9895, 9896) (142,709) - (142,709) Purchased Power - PP&L 16,212 16,212 - TEA Scheduling & Risk Management 672,568 175,000 497,568 Green Power 9,202 9,202 - Purchased Power - White Creek 2,133,577 2,133,577 - BPA Billing Credits (1,307,226) (1,307,226) - CREDIT DETAILREP Refund (659,652) (659,652) - LDD (647,574) (647,574) -

Net Market Purchases and Sales (1,999,108) (903,941) (1,095,167)

Net Power Cost 16,033,179 15,656,566 376,613


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Purchased Power - BPA 16,348,546 17,333,885 (985,339) BPA POWER DETAILNon-Slice (1,169,352) (2,509,944) 1,340,592 Load Shaping (41,219) 127,066 (168,285) Demand Charge - 1,429,728 (1,429,728) Reg and Frequency Response 10,207 - 10,207 Composite 15,884,353 16,320,122 (435,769) Halsey Offsets (155,438) (71,112) (84,326) BPA TRANSMISSION DETAILNT Base Charge 1,459,939 1,459,939 - NT Load Shaping - - - Reg and Frequency Response 43,794 43,794 - Operating Reserves - Spinning 142,124 142,124 - Operating Reserves - Supplemental 130,218 130,218 - Energy Imbalance UAI (218,030) - (218,030) PTP - - Ratchet 4,221 4,221 - SCD Long Term Firm 257,729 257,729 - Purchased Power - Small Gen 95,580 95,580 - Halsey Purchased Power - (4030, 4031, 4032) 3,263,238 - 3,263,238 Halsey Revenue (9890, 9895, 9896) (3,263,743) - (3,263,743) Purchased Power - PP&L 17,859 17,859 - TEA Scheduling & Risk Management 702,381 175,000 527,381 Green Power 20,218 20,218 - Purchased Power - White Creek 2,286,602 2,286,602 - BPA Billing Credits (1,293,440) (1,293,440) - CREDIT DETAILREP Refund (639,192) (639,192) - LDD (654,248) (654,248) -

Net Market Purchases and Sales (636,404) (1,015,881) 379,477

Net Power Cost 17,540,837 17,619,824 (78,986)


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Purchased Power - BPA 16,801,834 17,145,048 (343,214) BPA POWER DETAILNon-Slice (1,210,644) (2,551,224) 1,340,580 Load Shaping 200,927 (267,669) 468,596 Demand Charge - 1,335,732 (1,335,732) Reg and Frequency Response 11,919 - 11,919 Composite 16,014,326 16,586,755 (572,429) Halsey Offsets (150,435) (77,940) (72,495) BPA TRANSMISSION DETAILNT Base Charge 1,533,236 1,533,236 - NT Load Shaping - - - Reg and Frequency Response 41,782 41,782 - Operating Reserves - Spinning 144,657 144,657 - Operating Reserves - Supplemental 134,041 134,041 - Energy Imbalance UAI (183,653) - (183,653) PTP - - - Ratchet 1,982 1,982 - SCD Long Term Firm 263,697 263,697 - Purchased Power - Small Gen 61,152 61,152 - Halsey Purchased Power - (4030, 4031, 4032) 4,128,973 - 4,128,973 Halsey Revenue (9890, 9895, 9896) (4,111,205) - (4,111,205) Purchased Power - PP&L 18,136 18,136 - TEA Scheduling & Risk Management 702,578 175,000 527,578 Green Power 49,743 49,743 - Purchased Power - White Creek 2,066,977 2,066,977 - BPA Billing Credits (1,464,828) (1,464,828) - CREDIT DETAILREP Refund (655,500) (655,500) - LDD (809,328) (809,328) -

Net Market Purchases and Sales (943,315) (806,889) (136,426)

Net Power Cost 17,310,045 17,244,340 65,706


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1

Board WorkshopPower Resources Review - 2015

Presented:April 12th, 2016

2

• Cost of Power Review • BPA power supply• Short Mountain• White Creek Wind

• Energy Services Review• Energy efficiency and conservation• Solar electric program

Agenda

Category $/MWh

BPA Slice/Block $33.11

Short Mountain $48.11

White Creek Wind (Gross) $55.00 ‐ $65.00

White Creek Wind (Net) $41.94

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2015 Cost of Power Results

Preliminary / Unaudited

• We pay BPA a fixed monthly cost for our Slice energy

• Block energy is also a largely fixed cost (w/some adjustments)

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Slice/Block Billing Procedures

Entitles us to fixed hourly blocks of power equal to ~50% of our load

Entitles us to 0.371% of the actual Federal System output. Roughly 50% of our load at critical water.

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• We also pay TEA a fixed cost for Scheduling/Risk Mgmt services

• TEA performs our market purchases/sales and settles monthly

Slice/Block Billing Procedures cont’d

Allows us to schedule energy, transact in the market, and hedge our supply

Net sales revenue goes to offset our other power costs. Hedging revenue is settled directly and not included in these numbers.

6

• The components of our Slice/Block power cost then become:

Slice/Block Financial Components

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Slice/Block Financial Results - 2015


Category 2015 Total

BPA Power Costs (Slice and Block) $13,584,991 Market Purchases (via TEA) $1,568,150 Scheduling & Risk Management (TEA) $704,918 Total Power Costs $15,858,059

Market Sales (via TEA) $1,369,999

Net Power Cost (NPC) ‐ BPA Supply $14,488,060 Net Purchased MWh 437,634

NPC ($ per MWh) $33.11

BPA Average Tier 1 Rate $33.75

Excludes impact of Halsey mill customer

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Historical BPA Power Costs ($/MWh)

$30.17

$31.50 $31.50

$33.75

$30.14

$31.89

$30.88

$33.11

$20.00

$22.00

$24.00

$26.00

$28.00

$30.00

$32.00

$34.00

$36.00

2012 2013 2014 2015

BPA Average "Tier 1" Rate Emerald Slice/Block Cost

9

Short Mountain Cost of Power

Category 2015 Total

Royalty and Well Maintenance $99,311 Generation Maintenance $458,402 Interest $8,682 Depreciation $183,906 Property Tax on Generating Plant $28,271 Total Generating Cost $778,572

Generated MWh 16,184

Generating Cost ($ per MWh) $48.11

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Short Mountain Cost of Power - 2015


Category 2015 Total




11

Short Mountain Cost of Power - 2015

Total expenses in line with 3-year average ($769,740).

Generation down from 17,036 MWh in 2014 and 19,146 MWh in 2013. Driven by low precip. in Lane County.


21,455

19,146

17,036 16,184 $37.21 $38.08

$45.89 $48.11

$0.00

$10.00

$20.00

$30.00

$40.00

$50.00

$60.00

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2012 2013 2014 2015

Generation (MWh) Production Cost ($/MWh)

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Short Mountain Historical Performance


Category 2015 Total




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Short Mountain Cost – Average Production


Assumes average level of production (5-year)

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White Creek Wind Cost of Power

Category 2015 Total

White Creek Energy Cost $2,084,545 White Creek Transmission Cost $21,619 White Creek Wind Other Cost $929 White Creek Total Cost $2,107,093

White Creek Resale Revenue $642,787

White Creek Net Cost $1,464,306

White Creek Net Cost (loss) per MWh $41.94

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White Creek Wind Cost of Power - 2015


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White Creek Wind Production Trend (MWh)

44,477

39,315 38,793

43,785

37,647 37,270 38,912

34,917

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30,000

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2008 2009 2010 2011 2012 2013 2014 2015

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Energy Efficiency

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Energy Services Review

Category 2015 Total

Appliance Upgrades 97 Heat Pump Installations 154 Homes Weatherized 133 Commercial Projects 18 Industrial Projects 6 Low‐Income Projects 33 Solar Electric Projects 16

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Category 2015 Total


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Category 2015 Total


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Category 2015 Total


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Category 2015 Total


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Category 2015 Total


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Category 2015 Total


Including complete overhaul of a 30-unit apartment complex for the elderly and disabled

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Category 2015 Total


Added 96 kW in capacity at an incentive cost of $46.45/MWh for Emerald

EMERALD PEOPLE'S UTILITY DISTRICT Board of Directors' Meeting March 15, 2016 Minutes Convene President Schacht convened the meeting at 5:30 pm at the Emerald offices, 33733

Seavey Loop Road in Eugene. Attendance and Introductions

Directors: Ron Davis (by telephone), Lee Kelley, Kevin Parrish, and Katherine Schacht. Penny Jordan was absent from the meeting. Staff: Alicia Burgess, Sara Cline, Scott Coe, Rob Currier, Ron Dubbs, Brian Johnson, Kyle Roadman, Alice Schroeder, and Beth Matthews. Doug Barab arrived later in the meeting. Guests: Bob Russell, ratepayer and appearing on behalf of the Citizen’s Advisory Committee on Rates; Bob McKuhn, ratepayer.

Agenda Timeline There were no deletions from the agenda. An Action Item related to a customer

issue will be added as item #9a.

Deferred Items None.

Public Comment McKuhn spoke briefly about the smart meter movement, as a follow up to the

discussion held at the last Board meeting. As a long-term possibility, McKuhn

wondered if these could be installed on a voluntary basis.

Rate Committee

Presentation

Russell gave his presentation to the Board as Chair of the Rate Committee,

reading from his prepared statement. Director Parrish said Russell had mentioned

in his statement that one sub-group is paying more. Russell said HE thinks low

income should receive some sort of consideration, although that may not be a

sentiment of the committee as a whole. He understands it's complicated. One

suggestion from a ratepayer was if someone is receiving food stamps, they could

qualify for a lower rate. Russell said he thinks the Rate Committee could study

that when the COSA comes out this summer.

Director Davis said it seems to him that we should have a higher basic charge than

SUB, for instance, because we are more spread out. We have more expenses for

tree trimming, poles, and lines. He also expressed concern about our average,

comparing us to California utilities.

Coe said he had kicked off the Rate Committee meeting with opening comments.

He thought we should wait for the COSA to look more in-depth into the topics

related to rates - either to energy rates or the electric system charge (previously

referred to as the basic charge). Following that, we could dig into equity related

to rate classes. The Board and Russell concurred with that. Director Parrish

commented that we should hear what our ratepayers say about this.

Emerald PUD Minutes – March 15, 2016

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Finance/ Treasurer’s Report

The Accounts Payable Check Register for the period from February 1-29, 2016 was reviewed and discussed. Staff clarified several expenditures for the Board. Director Schacht inquired as to whether the OPUDA membership dues have increased. She also inquired about some underground work which had been done. Coe said he would look into both items and get back to Director Schacht.

General Manager’s Report

Coe distributed his General Manager’s Report to the Board and staff. He discussed a variety of items including the recent loss of several employees due to two resignations and one retirement. He mentioned the current job posting for Senior Project Manager which closes on April 4. Coe reminded the Board that this position is part of the Strategic Plan and overall infrastructure that we'll be putting in place. The Board had a few questions related to the position, including salary and job responsibilities. Coe mentioned the NISC capital credits check issued in the amount of $3,588.36. Focus 2028 continues to be one of Emerald’s high priority involvement areas, said Coe. He and Roadman and Currier will attend a meeting with BPA staff at a “listening session” regarding EE funding. Coe said that our basic message is to give us the freedom to control our needs with our money. Coe included a letter he had written to BPA on Tier 2 purchases. This deals with some of the non-Slice customers who bought a product at a market rate that is not competitive. It would cost nothing for them to get out of the contract and it doesn't mean a cost shift. Coe said that we wanted to support that action. Coe said he had received an invitation to speak to all of the Bonneville managers at their meeting on May 4. Coe said we are changing our fuel supply to R99 fuel, which is an all renewables based fuel, for our diesel vehicles. He said it is a fully renewable product, made from animal renderings and plant parts. Coe said he hopes to bring in a sample at the next Board meeting to show the difference between the two fuels. R99 doesn't clog up the engines as much. It was tested out on two trucks for a while and will now be tried out on the rest of the fleet. There is a small cost difference between products, but R99 will provide better air for our crews as they work around an idling rig for hours, and will also be better for our customers and neighbors.

Public Hearing on Rate Increase

The Public Hearing on the rate increase was open to public comment at 6:00 pm. There were no additional customers, staff or Board present other than those named earlier in the meeting. McKuhn stated that he is opposed to a 4% rate increase. He said he doesn't believe it's justified, given EPUD currently has such a large cash reserve. He stated that Emerald is supposed to be a customer-owned utility with a dividend of lower rates for the users. He said it doesn't seem to him that has been happening in the last number of years. Director Parrish said he also did not want the rate increase but his opposition had to do with the fact that $600,000 was allocated


Page 3

toward salaries. Russell said he would like to see a tighter accounting of expenses during the time of petroleum prices down in the gutter and BPA rates being very low. He said he would like to see more justification for the 4% rate increase. The Rate Committee had no say on the rate increase, only on how to implement. The Public Hearing was adjourned at 6:04 pm.

Action Item 16-05 / Resolution 2016-03 – 2016 Budgeted Rate Increase Motion Vote

Director Parrish/Director Kelley moved to approve Action Item 16-05/Resolution 2016-03 to adjust the electric system charge up $3 per month to $23 per month. Yes: Directors Kelley, Parrish, and Schacht. Abstain: Director Davis, who said he felt there needs to be more information available on this. He would like to have a discussion about the cash reserves set aside. He said he agreed that this is not sustainable and that we need to come up with another option.

General Manager’s Report (continued)

Coe continued his General Manager's Report. He discussed the controls installed on Engine 1 at Short Mountain. We now have two full months of data on this. Although it is hard to compare from year to year based on the amount of moisture in the ground, the attached chart shows the production output and how much smoother it is now. He said that we are very happy with the investment. We're now moving forward to install the controls on the other three engines. Director Schacht asked to go back to the fuel item and asked how we can move back and forth between products. Director Parrish commented on how it adds 15 cents per gallon and wondered why this is a good idea now. Coe said we tried it out and have spoken to other utilities which have been using the R99 product. Cherry Point in Anacortes, Washington indicated that the product would start being produced in the United States rather than tanking it in from overseas if the demand is there. Russell asked what the difference is between Sequential across the street vs. this product. Director Parrish said he wants to make sure we're making a business decision and not a political decision, trying to be politically correct. Coe said he trusts Shop Foreman Mike Terry's research with other utilities. He feels we'll save money on repairs. Coe said we're trying to do something that makes sense. Dubbs spoke about how EWEB, SUB and Lane County are now using this fuel as well. Coe briefly discussed the grant funding lined up for the Community Solar project. We are issuing an RFP to secure a provider to build it. Coe said we will want to bring it back in to the Board as more of a complete package--probably in April for further discussion. Coe indicated he had a meeting with County Commissioners Bozievich and Stewart to talk about Short Mountain as well as our strategic plan. At the Tri-


Page 4

County Chamber meeting on March 17, Coe said there was discussion about the changing utility world and Emerald’s Strategic Plan. On March 28, Coe said he provide testimony to the Joint Interim Committee on ODOE Oversight. He attached the agenda for the meeting to his General Manager’s Report for the Board’s information. Also attached to the General Manager’s Report is a summary Coe prepared on the APPA Legislative Rally. He indicated they had some pretty good meetings with our Oregon congressional staff although the messages were brief. Coe indicated he had also attended the PMA Task Force meeting on the last day he was in Washington DC. Update on upcoming Board meetings: with meetings scheduled in back-to-back weeks, it was decided that the March 22 Board Work Session will be canceled. Topics for the April 12 Board meeting will include the auditors’ report, final year-in-review, BPA contract presentation/decision, and Community Solar. The agenda will also include an Executive Session. The Board requested that the attorney be here in person and not participating by phone.

Adjournment and Reconvene

Director Schacht adjourned the Board meeting at 6:24 pm to take a brief break prior to convening an Executive Session at 6:34 pm pursuant to ORS 192.660 (2)(f) – Information or records exempt from public inspection. Bob Russell and Bob McKuhn left the meeting while all staff remained. The Executive Session was adjourned at 6:52 pm and the Board meeting was reconvened.

Action Item 16-04 – Business Expansion Rate Incentive (BERI) Motion Vote

Director Parrish/Director Kelley moved to adopt Action Item 16-04 – Business Expansion Rate Incentive (BERI). Unanimously approved.

Consent Agenda Motion Vote

Director Parrish/Director Kelley moved to approve the Consent Agenda. Unanimously approved.

Review of Motions The motions made during the meeting were reviewed for accuracy.

Public Comment None.

Suggested Items for Future Meetings

None, other than those discussed during the meeting.


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Upcoming Meetings/Events

The list of upcoming meetings and events were listed on the agenda for the Board’s review.

Directors’ Concluding Comments

None.

Adjournment

President Schacht adjourned the Board meeting at 6:56 pm. Minutes prepared by Beth Matthews, Executive Assistant.

EMERALD PEOPLE'S UTILITY DISTRICT Board of Directors' Executive Session March 15, 2016 Minutes Convene At 6:34 pm pm, President Schahct convened the Executive Session pursuant to

ORS 192.660 (2)(f) at the Emerald office, 33733 Seavey Loop Road in Eugene. Attendance Directors: Ron Davis (by telephone), Lee Kelley, Kevin Parrish, and Katherine

Schacht. Penny Jordan was absent. Staff: Doug Barab, Alicia Burgess, Sara Cline, Scott Coe, Rob Currier, Ron Dubbs, Brian Johnson, Kyle Roadman, Alice Schroeder, and Beth Matthews.

The Executive Session was convened pursuant to ORS 192.660(2)(f) –

Information or records exempt from public inspection. The Board met to discuss a current customer situation and potential rate assistance options.

Adjournment At 6:52 pm pm, President Schacht adjourned the Executive Session.

Minutes prepared by Beth Matthews, Executive Assistant to the GM/Board

emerald people’s utility district board of ......2016/04/12 · m:\board &...

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