Board Members present: Susie Smith, Jeff Osanka, Mike Dyer, Sandra Bishop, and Dorothy Anderson.
Others present: Randy Berggren, Gale Banry, Manda Bednarczyck, Ken Beeson, Cathy Bloom, Tom Buckhouse, Marty Douglass, Bert Dunn, Dale Kessinger, Mike Logan, Roseanna McArthur, John Mitchell, Mark Oberle, Jim Origliosso, Scott Spettel, Dick Varner, and Krista Hince of the EWEB staff; Derek Jaros, member of the public; and Kim Kunkel, Minutes Recorder.
President Smith called the meeting to order and determined there was consensus to amend the agenda such that the Telecommunication Project item followed the President's Annual Message.
MINUTES
The Commissioners reviewed the minutes of the January 6, 1998, Work Session and Regular Board Meeting.
Referring to paragraph 6 on page 2 of the Work Session minutes, Vice President Osanka requested that sentence 1 be amended to read "Commissioner Osanka inquired, based on Mr. Cardwell's experience, what are organizations' level of success in meeting established goals?"
Referring to the final paragraph on page 2 of the Work Session minutes, Vice President Osanka requested that sentence 2 be amended to read "Mr. Cardwell responded that between three and five goals, with five as the suggested maximum, is the guideline and only the highly prioritized goals of an organization should be used as triggers for incentive pay."
Referring to paragraph 3 on page 3 of the Work Session minutes, Commissioner Dyer requested that sentence 3 be amended to read "He suggested a scenario in which base pay may be x-amount minus one, but with incentive pay is x-amount plus two."
Referring to paragraph 7 on page 2 of the Regular Board Meeting minutes, Commissioner Bishop requested that sentence 1 be amended to read "Commissioner Bishop said that because EWEB is a public entity, she is concerned that the legal counsel contracts have not be opened for review and consideration of alternative legal services in many years."
Referring to the bottom of page 2 of the Regular Board Meeting minutes, Commissioner Bishop requested that the motion be amended to read "Commissioner Osanka moved, seconded by Commissioner Bishop, to ratify the recommended Board consultants for 1998, with the understanding that the legal consultant contracts would be reviewed. The motion passed unanimously."
Referring to paragraph 5 on page 4 of the Regular Board Meeting minutes, Commissioner Anderson requested that sentence 2 be amended to read "Mr. Kessinger responded that EWEB may determine that it is in the utility's best interest to become a member of an independent grid operating (IGO) such as INDIGO, in which case the IGO would maintain a tariff for its participants."
Commissioner Anderson moved, seconded by Commissioner Dyer, to approve the minutes of the January 6, 1998, Work Session and Regular Board Meeting, as amended. The motion passed, 3:1, with Vice President Osanka opposed, and President Smith abstaining.
CORRESPONDENCE
General Manager Randy Berggren reminded Commissioners that Board retreats are scheduled for March 13 and 14 and May 1 and 2.
Mr. Berggren noted that a memorandum concerning the lawsuit against FERC was included in the meeting agenda packet.
Mr. Berggren reviewed draft agendas for the February 17 Work Session and Board Meeting.
Commissioner Bishop requested an update on the petroleum clean-up project. Mr. Varner agreed to provide Commissioners with a status report.
PRESIDENT'S ANNUAL MESSAGE
President Smith recited her annual message, focusing on the many successes and challenges EWEB experienced during 1997 and what lies ahead in 1998. President Smith expressed appreciation to EWEB staff members for their excellent work throughout 1997 which has positioned EWEB well for the upcoming year and beyond.
TELECOMMUNICATION PROJECT
Referring to a memorandum included in the meeting agenda packet, Energy Resource Projects Manager Ken Beeson requested authorization to execute an engineering services agreement with MFS Network Technologies allowing for completion of a final construction design and cost estimate (price) for Phase I of the proposed system. Noting that the agreement contains a provision that EWEB's cost for this service will not exceed $330,000, Mr. Beeson said that based on discussions with MFS, he estimates that the design work will take approximately two months to complete.
Vice President Osanka moved, seconded by Commissioner Dyer, to authorize the General Manager to execute an engineering services agreement with MFS Network Technologies allowing for completion of the final design, construction specifications, and cost estimate for Phase I of the proposed EWEB telecommunications system. The motion passed unanimously.
EWEB SURPLUS PROPERTY
Referring to a memorandum included in the meeting agenda packet and a series of slides, Real Property Specialist Mark Oberle said the purpose of this presentation was to initiate discussion with the Board regarding the disposal of EWEB property, costs associated with disposing and retaining property, and the value of indirect utility uses. Mr. Oberle presented a brief overview of EWEB property uses, types of EWEB property, and property maintenance issues.
Mr. Oberle said that in the past, the Board has expressed interest in disposing of EWEB's surplus property for the purpose of utilizing revenue from the sale(s) to support other activities. In 1993, the Board approved policies which guide the disposal process and to date the only parcels declared surplus have been four partial parcels which were requested by a customer. He explained that the following portion of the policy (III(A)(2)), which provides examples of present and future needs for parcels under review, tends to impede staff recommendations for property disposal: Land use and environmental considerations such as preservation and enhancement of water quality, increased utility setbacks or buffer strips for sight, sound and safety, trees and drainages, e.g. wildlife habitat and wetlands where consistent with the utility's mission.
Commissioner Dyer said it seems that any parcel could be disqualified from disposal based on policy III(A)(3) which includes among present and future needs for a parcel "Uses that may otherwise assist the Board in implementing measures consistent with the utility's key result areas." Stressing his opinion that there is a liability associated with any vacant property due to the possibility that an individual may be injured on the premises, Commissioner Dyer said EWEB should dispose of and utilize the revenue gained through the sale of property it will clearly never use. Mr. Oberle assured the Board that staff is deferring its decision concerning three parcels until the completion of the Water Resources Plan.
Vice President Osanka expressed his opinion that because land appreciates in value, EWEB risks little in retaining the property it owns. He said that in terms of planning for EWEB's long-term future, retaining parcels of land may be prudent considering the growing cost of finite land.
Commissioner Bishop requested that staff contact the Lane County Fair Board to ensure EWEB's involvement in the Amazon Slough relocation design plan which may impact EWEB's substation.
OPEN ACCESS TRANSMISSION TARIFF
Referring to a series of overhead displays, Senior Financial/Rate Analyst Dale Kessinger presented a brief overview of the origin, purposes, and key elements of the proposed Open Access Transmission Tariff, as follows:
Referring to the definition of "EWEB" on page four of the resolution, Commissioner Bishop expressed opposition to defining EWEB as a utility owned by the City of Eugene. Mr. Kessinger said he would amend the definition to reflect the traditional "by and through" language used by EWEB in official documents.
PUBLIC HEARING ON OPEN ACCESS TRANSMISSION TARIFF
President Smith opened the public hearing on the proposed Open Access Transmission Tariff.
Having determined there was no one present who wished to speak, President Smith closed the public hearing.
OPEN ACCESS TRANSMISSION TARIFF
Vice President Osanka moved, seconded by Commissioner Bishop, that the Board approve a resolution authorizing the General Manager to file EWEB's Open Access Transmission Tariff with the Northwest Regional Transmission Association and the Western Regional Transmission Association for use by their members, as amended to include on page four, under the definition of "EWEB," the traditional "by and through" language used by the utility in formal documents; and on page nine a reference to EWEB's regulatory authority. The motion passed unanimously.
RESOLUTION ON BANK SIGNATURE CARDS
Referring to a memorandum and attached resolutions included in the meeting agenda packet, Assistant Treasurer Cathy Bloom requested Board approval of six resolutions setting forth signatory and transfer authorizations relating to EWEB's banking activities. She said such resolutions are necessary each time the officers of the Board are changed. The resolutions are necessary at this time due to the recent change in President and Vice President.
Vice President Osanka moved, seconded by Commissioner Anderson, to approve the six resolutions attached to the January 27 memorandum entitled Banking Resolutions. The motion passed unanimously.
RESOLUTION ON BOND ISSUE
Referring to a memorandum and attached resolution included in the meeting agenda packet, EWEB Treasurer Jim Origliosso requested Board approval of a supplemental bond resolution authorizing the issuance of Electric Utility System Revenue Refunding Bonds in an amount not to exceed $35,000,000.
Vice President Osanka moved, seconded by Commissioner Dyer, to approve the supplemental bond resolution as stated in the January 28 memorandum entitled Refunding Bonds. The motion passed unanimously.
OURCA POST 2000 NEGOTIATIONS
Referring to a memorandum included in the meeting agenda packet and a series of overhead displays, Energy Resource Planning Manager Scott Spettel requested Board direction concerning a potential purchase of power from Bonneville Power Administration (BPA) for OURCA members. He said this transaction may represent the first truly cooperative power purchase of the OURCA group, and may lead to additional power management opportunities for EWEB on behalf of OURCA.
Power Resource and Planning Manger Scott Spettel explained that EWEB has indicated an interest in a 25-50 MW block that would begin in 2001 (after EWEB's current BPA Power Sales Contract expires) and end in 2006. He said this purchase is not anticipated to represent all of the power EWEB would purchase from BPA beyond the expiration of its existing contracts, but only the first step in developing a diverse portfolio of purchases for the post-2001 time period. The remainder of the portfolio would be considered as part of EWEB's Integrated Energy Resource Planning process.
Power Resource Analyst Bert Dunn reported that the OURCA negotiating team has completed the negotiations process, with the following product alternatives being offered by BPA:
Product One: Index Priced Power
This is firm power delivered to EWEB's system with spot market prices.
Prices would be based on the independent Dow Jones Mid-Columbia Daily Index plus an adder, currently quoted at one mill.
Product Two: Fixed Price Power
This is firm power delivered to EWEB's system with a fixed price quoted at 22.45 mills.
Product Three: Collar Priced Power
This is also firm power delivered to EWEB's system. A fixed price would be determined in the future based upon the new Priority Firm rate to be established for the post 2001 period. The price would be set equal to the future PF rate within a range defined by a ceiling and a floor around a quoted reference price of 22.51 mills. Currently, staff believes that the collar product offers the greatest value.
Mr. Spettel said the major issues to be aware of in considering the alternatives are
He said that if Commissioners indicate general support for the purchase, staff will likely return to the Board within 30 days and request Board approval to move forward with the purchase of Product Three: Collar PricedPower.
President Smith stated that as one outcome of the Board Retreat held last winter, the Board established the goal of participating early and often in the process of determining how EWEB will bridge its contracts. She said the proposed 30-day window of consideration seems insufficient. President Smith said that absent a completed Integrated Energy Resource Plan, this decision is difficult given that the Board has been presented no alternative prices for similar blocks of power to compare, consider, and discuss. President Smith stated her opinion that what BPA represents in terms of public purpose protection appears to be dissolving and she has no confidence in what BPA will stand for 2001. She said that in order to make this decision, she may need at least one work session in which Commissioners are provided with both a comparative analysis and the opportunity for considerable discussion concerning their thoughts about BPA.
Noting that delaying the process risks a decline in market conditions, Mr. Spettel said staff can accommodate President Smith's requests.
Noting that he does not believe the proposed purchase is crucial at this time, Mr. Berggren explained that presenting this proposal to the Board was
Vice President Osanka inquired as to the contract liability a replacement organization would have if BPA were to go out of business. Mr. Spettel responded that the contract would likely be sold to the new entity.
Commissioner Anderson concurred with President Smith in terms of wanting information regarding the comparability of other opportunities.
Commissioner Bishop requested information regarding how a decision by EWEB to not partake in this purchase might impact other OURCA members.
Mr. Berggren said he would review draft agendas of upcoming Board meetings in order to determine when further discussion of this matter might be scheduled. He said March 3 may be appropriate, given that discussion concerning the Integrated Resource Plan is scheduled for that evening.
ITEMS FROM BOARD MEMBERS
Commissioner Anderson reported that she had received a request that EWEB include in its brochure sent to new customers a letter welcoming new residents of the McKenzie River area. Mr. Berggren said he would look into the matter; however, he was concerned about the precedent that would be set if EWEB were to agree to such a request.
The meeting adjourned at 9:42 p.m.